sample of a client 'financial profile

Especially Prepared For:

By: Mr David G. Walsh, CFP®

Thomas and Beth

Table of ContentsTable of Contents

Assets and Liabilities 10

Financial Statements 13

Retirement 21

Education Goals 36

Survivor Needs 46

Disability 55

Personal DataPersonal Data

PERSONAL DATAPERSONAL DATA

Name Sex Birthdate SS Benefits*Thomas G Sample M 05/03/1955 Earnings BasedBeth Michele Sample F 09/27/1958 Earnings Based

20 Hull StreetNewton, MA 0Phone: Fax:

*Social Security benefit levels of "Maximum" assume that the worker earned the Social Security maximum earning base in years prior to the current year and that current earnings stay the same until Normal Retirement Age. "Earnings Based" assumes that the worker has received pay raises at a rate equal to the national average each year through the current year and that current earnings stay the same until Normal Retirement Age.

Dependents Birthdate SS Until AgeJane 07/02/1995 18John 01/02/1998 18

OCCUPATIONOCCUPATION

ThomasJob Title:Employer: Phone:

Fax:

BethJob Title:Employer: Phone:

Fax:

*DRAFT PRESENTATION*

Cornerstone Financial Group

Penn Mutual

June 21, 2011

Page 1

Thomas and BethPresented by: Mr David G. Walsh, CFP®

AdvisorsAdvisors

Financial AdvisorMr. David G. Walsh, CFP® Phone : (781) 229-0777Cornerstone Financial Group Fax: (781) 229-5516200 Wheeler Road E-mail: [email protected], MA 01803



Penn Mutual

June 21, 2011

Page 2


Analysis SummaryAnalysis SummaryPrepared for

Thomas and Beth

This summary is intended to give you a quick overview of the detailed analyses in the sections that follow, and is based upon your current financial situation and the information you provided. Please review the analysis reports for details concerning assumed rates of return, calculations, tax implications and other factors impacting the analysis results. Included in this summary are:

l Financial Statementsl Retirement Analysisl Education Funding Analysisl Survivor Needs Analysisl Disability Income Needsl Estate Analysis

FINANCIAL STATEMENTS

Thomas and Beth, your Net Worth is estimated at $2,803,815. This amount includes $176,975 in readily available assets for emergencies vs. your goal of $118,875. You have a current annual cash flow surplus of $102,807.

Net Worth Cash Flow

Assets $3,219,232 Income $475,500Liabilities (415,417) Expenses (372,693)

Net Worth $2,803,815 Surplus/Deficit $102,807


Continued...


Penn Mutual

June 21, 2011

Page 3


RETIREMENT ANALYSIS

Your goal is to retire at Thomas' age 60 and Beth's age 56. Your annual income objective at retirement is $289,206. In addition to anticipated income sources, your projected savings and investments of $2,610,700 at retirement will fund your income objective until Thomas' age 74 and Beth's age 70. At that time, your available retirement portfolio is estimated to be fully depleted, and there will be a shortfall in future income.

Objectives Results RemainingSuccessful years of retirement 31 14 17Capitalized value at retirement* $5,299,260 $3,472,568 $1,826,692Percent of goal 100% 66% 34%

*Capitalization is a way of treating a series of cash flows as a lump sum, deposited in a hypothetical account with a return of 6.50%

EDUCATION FUNDING ANALYSIS

This analysis estimates that you will need $529,802 to provide for all of your education goals. It is projected that you will have $425,500 available, which leaves a shortfall of ($104,301).

---------Funding Alternatives---------Amount Needed Existing Plan Surplus/ Additional Level Additional Inflating

Name (in future dollars) Provides Deficit Monthly Savings Monthly Savings

Jane $295,633 $260,477 ($35,156) $140 $117John 234,169 165,024 (69,145) 478 422

Total $529,802 $425,500 ($104,301) $617 $539


Continued...


Penn Mutual

June 21, 2011

Page 4


SURVIVOR NEEDS ANALYSIS

Thomas, in the event of your death today your goal is to provide your survivors with an initial annual income of $332,850. The additional capital required today to fund all immediate needs, provide for important identified goals and provide the desired income until Beth's age 90 is estimated to be $2,612,971.

Beth, in the event of your death today your goal is to provide your survivors with an initial annual income of $332,850. The additional capital required today to fund all immediate needs, provide for important identified goals and provide the desired income until Thomas' age 90 is estimated to be $4,277,828.

In the event of In the event ofThomas' death today Beth's death today

Assets Available $1,888,221 $1,888,157Life Insurance Death Benefits 5,700,000 1,750,000Less Immediate Cash Needs ($524,775) ($774,775)

Net Capital available for income and other needs $7,063,446 $2,863,382

DISABILITY INCOME NEEDS ANALYSIS

Thomas, in the event you have a disability lasting more than 90 days, your estimated monthly income objective is $10,000. This analysis estimates you will have a surplus of $8,750.

Beth, in the event you have a disability lasting more than 90 days, your estimated monthly income objective is $10,000. This analysis estimates you will have a surplus of $25,000.

Thomas' Disability Beth's Disability

Income Objective Income Objective

Monthly Income Objective After 90 Days

$10,000 $10,000

Total Income 18,750 35,000

Surplus/Deficit $8,750 $25,000


Continued...


Penn Mutual

June 21, 2011

Page 5


ESTATE ANALYSIS

A primary purpose of estate planning is to minimize estate shrinkage and maximize the estate left to survivors. Estate shrinkage occurs because of various estate settlement costs, including federal and state estate taxes. You may wish to consider various estate planning techniques and strategies to accomplish your goals.

Summary numbers assuming Thomas dies first

If Thomas dies at age 61Gross Estate $2,596,800Estate settlement costs ($217,091)

If Beth dies at age 62Gross Estate $3,074,784Estate settlement costs ($1,026,141)

Amounts passing to:Beneficiaries $2,053,485Charities $0



Penn Mutual

June 21, 2011

Page 6


Emergency ReservesEmergency Reserves

$200,000

$150,000

$100,000

$50,000

$0

YourYourNeedsNeeds

Your CurrentYour CurrentEmergency ReservesEmergency Reserves

$176,975

$118,875

Life Insurance Cash ValuesSavingsCash

Before preparing for any long-term needs or even short-term accumulation goals, you should always be prepared for the unexpected - those emergencies requiring immediate cash. Generally speaking, you should maintain liquid cash reserves of between three and six times your monthly income.

Emergency Reserves Needs $118,875

Current Emergency Reserves:Cash $51,700Savings 85,900Life Insurance Cash Values 39,375

Total $176,975

Surplus / (Deficit) $58,100



Penn Mutual

June 21, 2011

Page 7


Emergency ReservesEmergency Reserves

Emergency reserves are required to meet life'sunknown short-term financial crises.

Most financial services professionals often suggest that an emergency reserve fund should equal three to six months' total income. An early priority of any financial goal should be to establish a cushion of cash reserves to handle emergencies. Cash and other readily liquid assets are measured to determine whether sufficient reserves are available. Without adequate reserves, it is very difficult to concentrate on long-term objectives.

Based on your annual income of $465,000,your reserve fund should be maintained at:

$116,250 to $232,500



Penn Mutual

June 21, 2011

Page 8


Your Needs vs. Your Current PlanYour Needs vs. Your Current Plan

The Need is 100%The Need is 100%

Emergency $

Education

Accumulation

Thomas' Death

Beth's Death

Thomas' Disability

Beth's Disability

Retirement

80%60% 100%0% 20% 40%

100%

80%

76%

58%

100%

100%

66%

Current Plan

Your Needs (100%)vs. your Strategy %

Your goal is to be 100% funded

The above graph illustrates the percentage by which your current financial position meets your goal.

l Emergency Reserve provides 100% of the funds needed for unforeseen events or opportunities.

l Education Goals are 80% funded when needed.

l Accumulation Goals are 0% funded when needed.

l Survivorship Income available is 76% of your initial objective if Thomas dies and 58% if Beth dies.

l Disability Income requirements are 100% satisfied if Thomas becomes disabled for 90 days and 100%satisfied if Beth becomes disabled for 90 days.

l Retirement goal is 66% funded.



Penn Mutual

June 21, 2011

Page 9




Penn Mutual

June 21, 2011

Page 10


Asset SummaryAsset Summaryby Asset Type$3,322,857 Banking

QualifiedAnnuitiesInvestmentsEducationReal EstatePersonalBusiness

Assets Current Balance Percent of Total AssetsBank Accounts $137,600 4.1%Qualified Retirement Accounts $1,661,452 50.0%Investment Accounts $105,805 3.2%Education Investment Accounts $143,000 4.3%Real Estate and Residence $1,225,000 36.9%Personal Property $50,000 1.5%

Total Assets $3,322,857 100.0%



Penn Mutual

June 21, 2011

Page 11


Liability SummaryLiability Summary

$415,417

by Liability TypeReal EstateProperty LoansPersonal LoansCredit Cards

Percent ofLiabilities Current Liability Total Liabilities

Real Estate $405,900 98%Property Loans $4,367 1%Personal Loans $5,150 1%Credit Cards $0 0%

Total Liabilities $415,417 100%



Penn Mutual

June 21, 2011

Page 12




Penn Mutual

June 21, 2011

Page 13


Cash Flow SummaryCash Flow Summary

$500,000

$400,000

$300,000

$200,000

$100,000

$0

INCOME•Other

•Employment

SURPLUSDISBURSEMENTS•Living Expenses

•Liability Payments•Taxes

•Insurance•Savings

$475,500

$372,693

$102,807

For your financialpriorities!

Annual Amount Percentage of Total Income

Income Employment $465,000 98%Other 10,500 2%

Total $475,500 100%

DisbursementsLiving Expenses $119,308 25%Liability Payments 0 0%Taxes 191,660 40%Insurance 37,125 8%Savings/Retirement Plans 24,600 5%

Total 372,693 78%

Surplus $102,807 22%



Penn Mutual

June 21, 2011

Page 14


Cash FlowCash Flow

Annual Monthly Percent ofAmount Average Total Income

IncomeEmployment - Thomas $420,000 $35,000 88%Employment - Beth 45,000 3,750 9%Interest and Dividends - Thomas 5,500 458 1%Rental Property(Net) - Thomas 5,000 417 1%

Total Income $475,500 $39,625 100%

DisbursementsLiving Expenses

Housing $54,000 $4,500 11%Child Care 3,000 250 1%Transportation 1,200 100 0%Food & Beverages 12,000 1,000 3%Clothing 3,996 333 1%Furnishings 1,800 150 0%Personal Care and Cash 3,600 300 1%Medical/Dental/Drugs 1,500 125 0%Education/Self-Improvement 2,400 200 1%Entertainment 9,000 750 2%Vacations and Holidays 5,400 450 1%Charitable Contributions 1,000 83 0%Oil 1,500 125 0%Elec 600 50 0%Cable/Internet 1,680 140 0%Water & Sewer 900 75 0%Phone 780 65 0%Mobile Phones 900 75 0%House Cleaning 1,560 130 0%Gutters 144 12 0%Newspaper 168 14 0%Pest Cont/Chimney 180 15 0%Yard Maintenance 600 50 0%Credit Cards 600 50 0%Health Insurance 10,800 900 2%

Total Expenses $119,308 $9,942 25%

Liability PaymentsTotal Liability Payments $0 $0 0%

TaxesFederal - Thomas $150,000 $12,500 32%State - Thomas 24,000 2,000 5%OASDI/Medicare 17,660 1,472 4%

Total Taxes $191,660 $15,972 40%


Continued...


Penn Mutual

June 21, 2011

Page 15


InsuranceTerm Life 30yr $690 $58 0%First Colony Life 960 80 0%AIG 2,000 167 0%Penn Mutual UL 3,500 292 1%CNA 525 44 0%First Colony Life 400 33 0%Penn Mutual UL 2,250 188 0%Principal 3,500 292 1%Umbrella Liability 400 33 0%Homeowners 900 75 0%Medical 20,000 1,667 4%Auto 2,000 167 0%

Total Insurance $37,125 $3,094 8%

SavingsSEP IRA - Client A $7,200 $600 2%Investment Account - Joint 3,600 300 1%529 Plan for Jane 7,800 650 2%CollegeAmerica 6,000 500 1%

Total Savings $24,600 $2,050 5%

Total Disbursements $372,693 $31,058 78%

Surplus $102,807 $8,567 22%



Penn Mutual

June 21, 2011

Page 16


Net Worth SummaryNet Worth Summary

$2,803,815

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0Net WorthMarket Value Liabilities

Assets $3,219,232Bank Accounts $137,600Qualified Retirement Accounts $1,661,452Investment Accounts $105,805Real Estate and Residence $1,225,000Personal Property $50,000Life Insurance Cash Values $39,375

Liabilities $415,417Real Estate Loan $405,900Property Loan $4,367Personal Loan $5,150

Net Worth $2,803,815



Penn Mutual

June 21, 2011

Page 17


Net Worth StatementNet Worth StatementAs of 06/21/2011

Current TotalExpected Market Market

Assets Owner Rate of Return Value Value

Bank AccountsBOA Business Thomas 0.00% 30,000BOA Thomas 4.50% 50,000BOA (House) Joint 0.00% 4,700Sovereign Beth 1.00% 20,000Sovereign Beth 0.00% 17,000ING Thomas 3.00% 15,900Total Bank Accounts 137,600

Qualified Retirement AccountsIRA - Traditional IRA - Client A Thomas

Portfolio 9.00% 13,068SEP (SARSEP) - SEP IRA - Client A Thomas

Investments 9.00% 255,000IRA - Traditional IRA - Client A Thomas

Funds 9.00% 9,140401(k) - 401(k) Plan - Client A Thomas

Company 9.00% 858,000Other Retirement - Other Retirement Plan - Client A Thomas

Company 9.00% 25,000IRA - Traditional IRA - Client B Beth

Portfolio 9.00% 485,000IRA - Traditional IRA - Client B Beth

Etrade 9.00% 16,244Total Qualified Retirement Accounts 1,661,452

Investment AccountsInvestment Account - Client B Beth

Stocks 9.00% 3,000Investment Account - Joint Joint

Etrade 9.00% 11,607Investment Account - Joint Joint

Brokerage 7.00% 18,698Investment Account - Client A Thomas

Pershing 1.00% 7,500Investment Account - Client B Beth

JPMorgan ESPP (130shrs) 9.00% 65,000Total Investment Accounts 105,805

Real Estate and ResidenceCape House Joint 3.00% 325,000Home Joint 3.00% 900,000Total Real Estate and Residence 1,225,000

Personal PropertyAutos Joint 0.00% 50,000Total Personal Property 50,000


Continued...


Penn Mutual

June 21, 2011

Page 18


Life Insurance Cash ValuesPenn Mutual UL Thomas -- 22,500Penn Mutual UL Beth -- 16,875TotalLife Insurance Cash Values 39,375

Total Assets $3,219,232

Assumed Initial Current TotalLiabilities Owner Interest Rate Balance Balance

Real Estate LoanLoan for Home Joint 0.00% 230,900Loan for Cape House Joint 0.00% 175,000Total Real Estate Loan 405,900

Property LoanLoan for Autos Joint 0.00% 4,367Total Property Loan 4,367

Personal LoanMBNA Joint 0.00% 4,400Capital One Thomas 0.00% 750Total Personal Loan 5,150

Total Loans & Liabilities $415,417

Net Worth $2,803,815



Penn Mutual

June 21, 2011

Page 19


General InsuranceGeneral Insurance

Auto

Personal Property

Homeowner's

Medical

Umbrella Liability

$3,000,000$2,000,000 $6,000,000$1,000,000 $4,000,000$0 $5,000,000

$50,000

$500,000

$675,000

$1,000,000

$5,607,630

$5,607,630

$3,000,000

Approximate Insurable NeedsApproximate Insurable Needs

The NeedYour Plan

Automobilesl Liability - At least $300,000 may be appropriate. This amount is frequently the base for an umbrella policy.l Deductibles - May be practical to increase deductible amounts and reduce premiums. Some companies offer $500 and $1,000

deductibles.l Collision - For older cars, consider dropping this coverage if the cost is not worth the potential benefits.l Discounts - Determine whether you have taken advantage of proper classifications, including multi-car discounts, good student

discounts, safe driving programs, etc.Personal Propertyl Personal property - Determine if your jewelry, art, silver, collectibles, and other personal property are insured for their actual

replacement costs. You may want to have these items appraised and have them “scheduled” to insure full coverage.Homel Dwelling - Coverage should generally be based on estimated rebuilding costs, and should be reviewed annually.Medical Coveragel Your insurance policy should include major medical coverage for $1,000,000 or more.l Be sure that any internal policy limits are in line with customary hospital and medical expenses in your area.Umbrella Liabilityl Coverage for home and auto, providing an additional layer of coverage over and above the base amounts.l In view of substantial court judgments, this coverage may be essential, especially to high-income earners or those with significant

net worth. Two or three million dollar policies are available.



Penn Mutual

June 21, 2011

Page 20




Penn Mutual

June 21, 2011

Page 21


Save More–Earn MoreSave More–Earn More

*(Inflating)

Hypothetical Rate of ReturnHypothetical Rate of Return

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$09.71% 11.21%10.46%8.97%6.50% 11.95%

Achieving Your Retirement ObjectiveAchieving Your Retirement Objective

AdditionalMonthlySavings

$30,862

$17,832

$12,587

$7,920

$3,748

The analysis shows that there are not enough assets to provide for your retirement needs. There are only three ways to fix this problem: 1) Reduce or delay your retirement goal; 2) Save more money; or 3) Make your money work harder. Assuming you want to keep your goals intact, let's examine the last two.

Save More:At retirement, you need an additional $1,826,692 in a hypothetical taxable account earning 6.50% to meet your goals. Savings of $30,862/month into this account would accomplish this.

Currently, your assets are expected to earn an average of 8.97%. If the hypothetical account were earning this rate too, then you would need $1,118,971 at retirement, requiring $17,832/month.

Earn More:If, however, your retirement assets could earn 11.95%, no additional savings would be necessary to achieve your retirement goals. Frequently, however, an increase in return can mean an increase in the risks to your portfolio, so care should be taken before proceeding.

The Right Combination:Changing your portfolio rate from 8.97% to 10.46% reduces the additional savings to $7,920/month. Factors such as risk tolerance, timeframe and saving ability can help you find the right combination.

*Assumes that the monthly savings amount increases by 3.50% each year.



Penn Mutual

June 21, 2011

Page 22


Spend Less–Earn MoreSpend Less–Earn MoreAchieving Your Retirement Objective

$25,000

$20,000

$15,000

$10,000

$5,000

$011.21%10.46%9.71%8.97% 11.95%

MonthlyMonthlyIncomeIncome

Hypothetical Rate of Return

$24,100$22,442

$20,784$19,125

$17,467

According to the analysis, your retirement income need ($24,100 in the first month) is greater than the income sources and assets you have available to meet that need. When this is the case, and when additional savings is not an option, you are left with essentially two options: 1) Reduce the retirement income objective; or 2) Earn more in your portfolio. Looking at each, consider the following:

Spend Less:Currently, your assets are expected to earn an average of 8.97%. At this rate, your portfolio, combined with your income sources, will support 72% of your desired need. Therefore, in the first month, rather than covering $24,100/month of expenses, your resources can support $17,467.

Earn More:If you were to reposition your assets in such a way as to earn 11.95%, then 100% of your entire retirement goal ($24,100 in the first month) can be met. Frequently, however, an increase in return can mean an increase in the risks to your portfolio, so care should be taken before proceeding.

The Right Combination:If you change your portfolio rate from 8.97% to 10.46%, it would support a monthly income of $20,784 -- reducing your original objective to 86%. What is the right combination for you?



Penn Mutual

June 21, 2011

Page 23




Penn Mutual

June 21, 2011

Page 24


Retirement Objective TimelineRetirement Objective TimelineHow much do you need?

Income Liability Required Goals and TotalAges Need Payments Savings Gifting Needs

60/ 56 $275,406 $0 $13,800 $0 $289,20661/ 57 285,045 0 13,800 0 298,84562/ 58 295,021 0 13,800 0 308,82163/ 59 305,347 0 13,800 0 319,14764/ 60 316,034 0 13,800 0 329,83465/ 61 327,095 0 0 0 327,09566/ 62 338,544 0 0 0 338,54467/ 63 350,393 0 0 0 350,39368/ 64 362,656 0 0 0 362,65669/ 65 375,349 0 0 0 375,34970/ 66 349,638 0 0 0 349,63871/ 67 361,875 0 0 0 361,87572/ 68 374,541 0 0 0 374,54173/ 69 387,650 0 0 0 387,65074/ 70 401,218 0 0 0 401,21875/ 71 380,655 0 0 0 380,65576/ 72 393,978 0 0 0 393,97877/ 73 407,767 0 0 0 407,76778/ 74 422,039 0 0 0 422,03979/ 75 436,811 0 0 0 436,811--/ 76 452,099 0 0 0 452,099--/ 77 467,923 0 0 0 467,923--/ 78 484,300 0 0 0 484,300--/ 79 501,250 0 0 0 501,250--/ 80 518,794 0 0 0 518,794--/ 81 536,952 0 0 0 536,952--/ 82 555,745 0 0 0 555,745--/ 83 575,196 0 0 0 575,196--/ 84 595,328 0 0 0 595,328--/ 85 616,165 0 0 0 616,165--/ 86 637,730 0 0 0 637,730



Penn Mutual

June 21, 2011

Page 25


Retirement Income Sources DetailsRetirement Income Sources DetailsWhat income will be available?

AtAnnual Thomas' End Annual

Income Sources Amount Age Age Increase

Thomas' Social Security $25,121 62 90 2.00%

Beth's Social Security 16,845 66 94 2.00%



Penn Mutual

June 21, 2011

Page 26


Retirement Income Sources TimelineRetirement Income Sources TimelineWhat income will be available?

Thomas Beth TotalSocial Defined Annuity Social Defined Annuity Income

Age Security Benefits Benefits Earnings Misc. Age Security Benefits Benefits Earnings Misc. Sources

60 $0 $0 $0 $0 $0 56 $0 $0 $0 $0 $0 $061 0 0 0 0 0 57 0 0 0 0 0 062 25,121 0 0 0 0 58 0 0 0 0 0 25,12163 25,623 0 0 0 0 59 0 0 0 0 0 25,62364 26,136 0 0 0 0 60 0 0 0 0 0 26,13665 26,659 0 0 0 0 61 0 0 0 0 0 26,65966 27,192 0 0 0 0 62 16,845 0 0 0 0 44,03767 27,736 0 0 0 0 63 17,182 0 0 0 0 44,91868 28,290 0 0 0 0 64 17,526 0 0 0 0 45,81669 28,856 0 0 0 0 65 17,876 0 0 0 0 46,73370 29,433 0 0 0 0 66 18,234 0 0 0 0 47,66771 30,022 0 0 0 0 67 18,599 0 0 0 0 48,62172 30,622 0 0 0 0 68 18,971 0 0 0 0 49,59373 31,235 0 0 0 0 69 19,350 0 0 0 0 50,58574 31,859 0 0 0 0 70 19,737 0 0 0 0 51,59775 32,497 0 0 0 0 71 20,132 0 0 0 0 52,62876 33,147 0 0 0 0 72 20,534 0 0 0 0 53,68177 33,810 0 0 0 0 73 20,945 0 0 0 0 54,75578 34,486 0 0 0 0 74 21,364 0 0 0 0 55,85079 35,175 0 0 0 0 75 21,791 0 0 0 0 56,967-- 0 0 0 0 0 76 35,879 0 0 0 0 35,879-- 0 0 0 0 0 77 36,597 0 0 0 0 36,597-- 0 0 0 0 0 78 37,328 0 0 0 0 37,328-- 0 0 0 0 0 79 38,075 0 0 0 0 38,075-- 0 0 0 0 0 80 38,837 0 0 0 0 38,837-- 0 0 0 0 0 81 39,613 0 0 0 0 39,613-- 0 0 0 0 0 82 40,405 0 0 0 0 40,405-- 0 0 0 0 0 83 41,214 0 0 0 0 41,214-- 0 0 0 0 0 84 42,038 0 0 0 0 42,038-- 0 0 0 0 0 85 42,879 0 0 0 0 42,879-- 0 0 0 0 0 86 43,736 0 0 0 0 43,736



Penn Mutual

June 21, 2011

Page 27


Retirement Capital Available DetailsRetirement Capital Available DetailsHow Much Will You Have at Retirement?

Current Total Market TotalMarket Value Value at Value at

Accounts Owner Value Today Retirement Retirement

Bank AccountsING Client A 15,900 17,896

Total 15,900 17,896

Investment AccountsInvestment Account - Client B Client B 3,000 4,235Investment Account - Joint Joint 11,607 16,384Investment Account - Joint Joint 18,698 41,612Investment Account - Client B Client B 65,000 91,753

Total 98,305 153,984

Deductible Qualified AccountsTraditional IRA - Client A Client A 13,068 18,447SEP IRA - Client A Client A 255,000 453,499Traditional IRA - Client A Client A 9,140 12,902401(k) Plan - Client A Client A 858,000 1,211,137Other Retirement Plan - Client A Client A 25,000 35,290Traditional IRA - Client B Client B 485,000 684,617Traditional IRA - Client B Client B 16,244 22,930

Total 1,661,452 2,438,821

Total Capital Available for Retirement $1,775,657 $2,610,700

These results are hypothetical and are not a promise of future performance.



Penn Mutual

June 21, 2011

Page 28


Retirement Analysis Results TimelineRetirement Analysis Results TimelineHas the objective been met?Has the objective been met?

Applied Income Sources Applied AssetsTotal Social Additional Needed from Required Asset (Shortage)

Ages Needs Security Income Assets Distributions Withdrawals Unmet Needs

60 / 56 $289,206 $0 $0 $289,206 $0 $289,206 $061 / 57 298,845 0 0 298,845 0 298,845 062 / 58 308,821 25,121 0 283,700 0 283,700 063 / 59 319,147 25,623 0 293,524 0 293,524 064 / 60 329,834 26,136 0 303,698 0 303,698 065 / 61 327,095 26,659 0 300,437 0 300,437 066 / 62 338,544 44,037 0 294,507 0 294,507 067 / 63 350,393 44,918 0 305,475 0 305,475 068 / 64 362,656 45,816 0 316,840 0 316,840 069 / 65 375,349 46,733 0 328,617 0 328,617 070 / 66 349,638 47,667 0 301,971 26,714 275,257 071 / 67 361,875 48,621 0 313,255 22,358 290,897 072 / 68 374,541 49,593 0 324,948 17,115 307,833 073 / 69 387,650 50,585 0 337,065 10,860 326,205 074 / 70 401,218 51,597 0 349,621 5,750 141,366 (202,506)75 / 71 380,655 52,628 0 328,027 0 0 (328,027)76 / 72 393,978 53,681 0 340,297 0 0 (340,297)77 / 73 407,767 54,755 0 353,013 0 0 (353,013)78 / 74 422,039 55,850 0 366,190 0 0 (366,190)79 / 75 436,811 56,967 0 379,844 0 0 (379,844)-- / 76 452,099 35,879 0 416,220 0 0 (416,220)-- / 77 467,923 36,597 0 431,326 0 0 (431,326)-- / 78 484,300 37,328 0 446,971 0 0 (446,971)-- / 79 501,250 38,075 0 463,175 0 0 (463,175)-- / 80 518,794 38,837 0 479,958 0 0 (479,958)-- / 81 536,952 39,613 0 497,339 0 0 (497,339)-- / 82 555,745 40,405 0 515,340 0 0 (515,340)-- / 83 575,196 41,214 0 533,983 0 0 (533,983)-- / 84 595,328 42,038 0 553,290 0 0 (553,290)-- / 85 616,165 42,879 0 573,286 0 0 (573,286)-- / 86 637,730 43,736 0 593,994 0 0 (593,994)



Penn Mutual

June 21, 2011

Page 29


Retirement Capital Results TimelineRetirement Capital Results TimelineContributions, Withdrawals and Growth

Additions to Portfolio Withdrawals from Portfolio

Total Required TotalContribu- Lump Minimum Withdrawals Other Total Portfolio

Age tions Sum Amounts Distributions for Need Withdrawals Growth Balance

Beginning Balance $1,775,657

56 / 52 $21,600 $0 $0 $0 $0 $160,353 $1,957,61057 / 53 22,140 0 0 0 0 176,646 2,156,39658 / 54 22,696 0 0 0 0 194,447 2,373,53959 / 55 23,269 0 0 0 0 213,892 2,610,70060 / 56 0 0 0 289,206 0 208,935 2,530,42961 / 57 0 0 0 298,845 0 200,843 2,432,42762 / 58 0 0 0 283,700 0 193,385 2,342,11263 / 59 0 0 0 293,524 0 184,373 2,232,96264 / 60 0 0 0 303,698 0 173,634 2,102,89765 / 61 0 0 0 300,437 0 162,221 1,964,68166 / 62 0 0 0 294,507 0 150,316 1,820,49167 / 63 0 0 0 305,475 0 136,351 1,651,36768 / 64 0 0 0 316,840 0 120,107 1,454,63469 / 65 0 0 0 328,617 0 101,342 1,227,35970 / 66 0 0 26,714 275,257 0 83,285 1,008,67371 / 67 0 0 22,358 290,897 0 62,588 758,00672 / 68 0 0 17,115 307,833 0 38,975 472,03373 / 69 0 0 10,860 326,205 0 12,147 147,11574 / 70 0 0 5,750 141,366 0 0 075 / 71 0 0 0 0 0 0 076 / 72 0 0 0 0 0 0 077 / 73 0 0 0 0 0 0 078 / 74 0 0 0 0 0 0 079 / 75 0 0 0 0 0 0 0-- / 76 0 0 0 0 0 0 0-- / 77 0 0 0 0 0 0 0-- / 78 0 0 0 0 0 0 0-- / 79 0 0 0 0 0 0 0-- / 80 0 0 0 0 0 0 0-- / 81 0 0 0 0 0 0 0-- / 82 0 0 0 0 0 0 0-- / 83 0 0 0 0 0 0 0-- / 84 0 0 0 0 0 0 0-- / 85 0 0 0 0 0 0 0-- / 86 0 0 0 0 0 0 0

The highlighted row indicates the beginning of retirement.These results are hypothetical and are not a promise of future performance.



Penn Mutual

June 21, 2011

Page 30


Retirement Summary TimelineRetirement Summary TimelineAn Overview of the Results

Retirement Analysis Results Retirement Portfolio ResultsApplied (Shortage) Retirement

Total Applied RMD and Unmet RMD and Growth and PortfolioAge Needs Income Withdrawals Needs Withdrawals Additions Balance

Beginning Balance $1,775,657

60 / 56 $289,206 $0 $289,206 $0 $289,206 $208,935 $2,530,42961 / 57 298,845 0 298,845 0 298,845 200,843 2,432,42762 / 58 308,821 25,121 283,700 0 283,700 193,385 2,342,11263 / 59 319,147 25,623 293,524 0 293,524 184,373 2,232,96264 / 60 329,834 26,136 303,698 0 303,698 173,634 2,102,89765 / 61 327,095 26,659 300,437 0 300,437 162,221 1,964,68166 / 62 338,544 44,037 294,507 0 294,507 150,316 1,820,49167 / 63 350,393 44,918 305,475 0 305,475 136,351 1,651,36768 / 64 362,656 45,816 316,840 0 316,840 120,107 1,454,63469 / 65 375,349 46,733 328,617 0 328,617 101,342 1,227,35970 / 66 349,638 47,667 301,971 0 301,971 83,285 1,008,67371 / 67 361,875 48,621 313,255 0 313,255 62,588 758,00672 / 68 374,541 49,593 324,948 0 324,948 38,975 472,03373 / 69 387,650 50,585 337,065 0 337,065 12,147 147,11574 / 70 401,218 51,597 147,115 (202,506) 147,115 0 075 / 71 380,655 52,628 0 (328,027) 0 0 076 / 72 393,978 53,681 0 (340,297) 0 0 077 / 73 407,767 54,755 0 (353,013) 0 0 078 / 74 422,039 55,850 0 (366,190) 0 0 079 / 75 436,811 56,967 0 (379,844) 0 0 0-- / 76 452,099 35,879 0 (416,220) 0 0 0-- / 77 467,923 36,597 0 (431,326) 0 0 0-- / 78 484,300 37,328 0 (446,971) 0 0 0-- / 79 501,250 38,075 0 (463,175) 0 0 0-- / 80 518,794 38,837 0 (479,958) 0 0 0-- / 81 536,952 39,613 0 (497,339) 0 0 0-- / 82 555,745 40,405 0 (515,340) 0 0 0-- / 83 575,196 41,214 0 (533,983) 0 0 0-- / 84 595,328 42,038 0 (553,290) 0 0 0-- / 85 616,165 42,879 0 (573,286) 0 0 0-- / 86 637,730 43,736 0 (593,994) 0 0 0



Penn Mutual

June 21, 2011

Page 31


Retirement Capital Balances TimelineRetirement Capital Balances TimelineAssets At Work Over Time

Retirement Account BalancesDeferred Non-deductible Deductible Total

Bank Roth Investment Annuity Qualified Qualified PortfolioAge Accounts Accounts Accounts Accounts Accounts Accounts Balance

Beg Bal $17,896 $0 $153,984 $0 $0 $2,438,821 $2,610,700

60 / 56 $0 $0 $0 $0 $0 $2,530,429 $2,530,42961 / 57 0 0 0 0 0 2,432,427 2,432,42762 / 58 0 0 0 0 0 2,342,112 2,342,11263 / 59 0 0 0 0 0 2,232,962 2,232,96264 / 60 0 0 0 0 0 2,102,897 2,102,89765 / 61 0 0 0 0 0 1,964,681 1,964,68166 / 62 0 0 0 0 0 1,820,491 1,820,49167 / 63 0 0 0 0 0 1,651,367 1,651,36768 / 64 0 0 0 0 0 1,454,634 1,454,63469 / 65 0 0 0 0 0 1,227,359 1,227,35970 / 66 0 0 0 0 0 1,008,673 1,008,67371 / 67 0 0 0 0 0 758,006 758,00672 / 68 0 0 0 0 0 472,033 472,03373 / 69 0 0 0 0 0 147,115 147,11574 / 70 0 0 0 0 0 0 075 / 71 0 0 0 0 0 0 076 / 72 0 0 0 0 0 0 077 / 73 0 0 0 0 0 0 078 / 74 0 0 0 0 0 0 079 / 75 0 0 0 0 0 0 0-- / 76 0 0 0 0 0 0 0-- / 77 0 0 0 0 0 0 0-- / 78 0 0 0 0 0 0 0-- / 79 0 0 0 0 0 0 0-- / 80 0 0 0 0 0 0 0-- / 81 0 0 0 0 0 0 0-- / 82 0 0 0 0 0 0 0-- / 83 0 0 0 0 0 0 0-- / 84 0 0 0 0 0 0 0-- / 85 0 0 0 0 0 0 0-- / 86 0 0 0 0 0 0 0



Penn Mutual

June 21, 2011

Page 32


Retirement Distribution DetailsRetirement Distribution DetailsMeeting Your Needs with the Retirement Portfolio

In the analysis, withdrawals were made from your retirement assets for two reasons:

1. Required Minimum Distributions: For each qualified account, (e.g., 401(k)), the IRS requires that you pay out a portion of your funds (and pay the taxes!) starting at age 70½. In this analysis, these distributions were used to pay your retirement income needs after other income sources (e.g., Social Security) have been applied. Excess RMD, if any, was reinvested.

2. Withdrawals to Meet Needs: In years when your needs surpassed your income sources and RMD, the analysis withdrew money from your pool of retirement assets. Based on the types of assets you have, withdrawals were made with the goal of deferring income taxes as long as possible.

Retirement Withdrawals to Meet NeedsAge at 1st Total

Total Distribution Retirement Retirement Balance atName RMD Order Withdrawal Withdrawals End of Plan

ING $0 2 60 $17,896 $0Investment Account - Client B 0 3 60 4,235 0Investment Account - Client B 0 3 60 91,753 0Investment Account - Joint 0 3 60 16,384 0Investment Account - Joint 0 3 60 41,612 0Other Retirement Plan - Client A 0 4 60 58,641 0401(k) Plan - Client A 57,484 4 60 1,948,948 0SEP IRA - Client A 21,525 4 60 729,766 0Traditional IRA - Client A 876 4 60 29,684 0Traditional IRA - Client A 612 4 60 20,762 0Traditional IRA - Client B 2,225 4 63 1,351,462 0Traditional IRA - Client B 75 4 63 45,264 0

Totals $82,796 $4,356,405 $0



Penn Mutual

June 21, 2011

Page 33


High Withdrawal RatesHigh Withdrawal RatesWill Quickly Deplete Your AssetsWill Quickly Deplete Your Assets

Age to which a portfolio may last based on withdrawal rate(90% confidence level)

10%

9%

8%

7%

6%

5%

4%

3%

9065 70 95 100858075

WithdrawalRate

Portfolio

Stocks 50%Bonds 40%Cash 10%

Age

74

75

77

79

82

86

94

100+

Important: Projections generated by Morningstar regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary over time and with each simulation. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2010 Ibbotson Associates, Inc., a wholly owned subsidiary of Morningstar, Inc. All rights reserved. EISI has engaged Ibbotson to develop proprietary asset allocation tools for educational purposes. Ibbotson has granted to EISI a license for use thereof.

High Withdrawal Rates Will Quickly Deplete Your AssetsWithdrawal rates have a dramatic impact on determining how long a portfolio can last in retirement. How much can a retiree safely withdraw each year from his or her portfolio? Finding the answer is like hitting a moving target--the optimal withdrawal rate is dependent upon investment performance and the impact of inflation.

Several issues should be examined when determining an investor's withdrawal rate. Asset allocation, time horizon, and consumption patterns are all important factors in shaping how long portfolio wealth will last. The image shows how a portfolio of 50% stocks, 40% bonds, and 10% cash investments might have lasted given inflation-adjusted withdrawal rates between 3% and 10%. As illustrated, the higher the withdrawal rate, the faster an investor will run out of money. The lower the rate, the less likely a retiree will outlive his or her portfolio. Therefore, retirees who anticipate long payout periods may want to consider assuming lower withdrawal rates.


Continued...


Penn Mutual

June 21, 2011

Page 34


It is assumed that a person retires at age 65 and withdraws an inflation-adjusted percentage of the initial portfolio wealth (assumed $1 million) each year beginning at age 66. The image was created using Monte Carlo parametric simulation that estimates the range of possible outcomes based on a set of assumptions including arithmetic mean (return), standard deviation (risk), and correlation for a set of asset classes. The inputs used are historical 1926-2009 figures. The risk and return of each asset class, crosscorrelation, and annual average inflation over this time period follow. Stocks: risk 20.5%, return 11.8%; Bonds: risk 5.7%, return 5.5%; Cash: risk 3.1%, return 3.7%; Correlations: -0.01 (stocks and bonds), -0.01 (stocks and cash), 0.47 (bonds and cash); Inflation: return 3.1%. Annual investment expenses were assumed to be 0.88% for stock mutual funds and 0.74% for bond mutual funds and cash. Other investments not considered may have characteristics similar or superior to those being analyzed.

The simulation is run 5,000 times, to give 5,000 possible 35-year scenarios. While simulation can produce results that show probabilities of an outcome, the analysis included herein is presented as the 90% confidence level. A 90% confidence level indicates that there is a 90% chance of the outcome being as shown or better. Higher confidence levels are chosen in order to view tougher market conditions. A limitation of the simulation model is that it assumes a constant inflation-adjusted rate of withdrawal, which may not be representative of actual retirement income needs. This type of simulation also assumes that the distribution of returns is normal. Should actual returns not follow this pattern, results may vary.

Government bonds and Treasury bills are guaranteed by the full faith and credit of the U.S. government as to the timely payment of principal and interest, while returns and principal invested in stocks are not guaranteed.

About the dataStocks are represented by the Standard & Poor's 500®, which is an unmanaged group of securities and considered to be representative of the stock market in general. Bonds are represented by the five-year U.S. government bond, Treasury bills by the 30-day U.S. Treasury bill, inflation by the Consumer Price Index, and mutual fund expenses from Morningstar. The data assumes reinvestment of income and does not account for taxes or transaction costs.



Penn Mutual

June 21, 2011

Page 35




Penn Mutual

June 21, 2011

Page 36


Education GoalsEducation GoalsTotal Education Need $529,802Your Education Plan Provides $425,500

Jane

John

$50,000 $250,000$200,000 $300,000$0 $150,000$100,000

$295,633

$260,477

$234,169

$165,024

Education PlanNeed

This graph illustrates the projected capital needed to meet your education objectives and how your projected current savings and investments are helping meet the objectives.

_______Funding Alternatives1_______Amount Needed Additional Additional

Per Year Additional Monthly Level Monthly InflatingName (Today's $) Sum1 Savings Savings2

Jane $40,000 $14,356 $140 $117John 40,000 38,835 478 422

Totals $80,000 $53,191 $617 $539

1 Single-sum investment alternative assumes that existing savings will continue and Funding Alternatives earn an assumed rate of return of 8.00%.2 The amount shown is for the first year only; this amount must be increased annually by the assumed inflation rate of 3.50%.These results are hypothetical and are not a promise of future performance.



Penn Mutual

June 21, 2011

Page 37


Education GoalsEducation GoalsSummary

Education Goals: AmountAnnual Years Needed

Goal Amount Until Years Inflated FutureNumber Name School Needed Needed Needed at Dollars

1 Jane Northeastern University

$40,000 9 4 6.00% $295,633

2 John BC 40,000 5 4 6.00% 234,169

Total amount needed - future dollars $529,802

Assets and Savings Available:

Current ----------------------Monthly Savings --------------------Market Year Savings Number of Assigned

Accounts Value Amount Start Years to Save to Goal

529 Plan for JaneCollegeAmerica $75,000 $650 2011 9 1

CollegeAmericaCollegeAmerica $68,000 $500 2011 9 2

Total $143,000

Funding Alternatives:------Additional Amount Needed1 ------

Amount Existing Monthly MonthlyNeeded Plan Level Inflating

Future Dollars Provides Single Sum Savings Savings2

Jane $295,633 $260,477 $14,356 $140 $117John 234,169 165,024 38,835 478 422

Total $529,802 $425,500 $53,191 $617 $539

1 All additional savings begin today and assume a rate of return of 8.00%.2 Inflating savings will increase annually by 3.50%.



Penn Mutual

June 21, 2011

Page 38


Education GoalsEducation GoalsExisting Plan

for Jane

Amount needed$40,000 per year needed in 9 years for 4 years inflating annually at 6.00%

Needed in year 1 of goal, $40,000 inflated by 6.00% = $67,579Needed in year 2 of goal, $40,000 inflated by 6.00% = 71,634Needed in year 3 of goal, $40,000 inflated by 6.00% = 75,932Needed in year 4 of goal, $40,000 inflated by 6.00% = 80,488

Total amount needed $295,633

Capital availableCurrent Assumed AmountMarket Monthly Rate of Applied

Accounts Value Savings Return To Goals529 Plan for Jane $75,000 $650 7.00% $260,477

Total $75,000 $260,477

Distribution Plan:Year 1 Year 2 Year 3 Year 4

529 Plan for Jane $67,579 $71,634 $75,932 $45,332

Total Withdrawals 67,579 71,634 75,932 45,332Liabilities 0 0 0 0Net for Goal 67,579 71,634 75,932 45,332

(Shortfall) $0 $0 $0 ($35,156)



Penn Mutual

June 21, 2011

Page 39


Education GoalsEducation GoalsExisting Plan

for John

Amount needed$40,000 per year needed in 5 years for 4 years inflating annually at 6.00%

Needed in year 1 of goal, $40,000 inflated by 6.00% = $53,529Needed in year 2 of goal, $40,000 inflated by 6.00% = 56,741Needed in year 3 of goal, $40,000 inflated by 6.00% = 60,145Needed in year 4 of goal, $40,000 inflated by 6.00% = 63,754

Total amount needed $234,169

Capital availableCurrent Assumed AmountMarket Monthly Rate of Applied

Accounts Value Savings Return To GoalsCollegeAmerica $68,000 $500 7.00% $165,024

Total $68,000 $165,024

Distribution Plan:Year 1 Year 2 Year 3 Year 4

CollegeAmerica $53,529 $56,741 $48,754 $6,000

Total Withdrawals 53,529 56,741 48,754 6,000Liabilities 0 0 0 0Net for Goal 53,529 56,741 48,754 6,000

(Shortfall) $0 $0 ($11,391) ($57,754)



Penn Mutual

June 21, 2011

Page 40


Education GoalEducation GoalCapital Analysisfor Jane: Northeastern University

CCaa p

p ii tt

aa ll A

Avv

aa ii ll

aa bb l

l ee

$250,000

$200,000

$150,000

$100,000

$50,000

$0

$-50,00020242012 2014 2016 202220202018

Negative Capital BalancePositive Capital Balance

YearYear

Current assets available $75,000Current monthly savings $650

Current plan provides $260,477Total need1 $295,633

Funding Alternatives 2

Single sum investment $14,356Additional level monthly savings $140Additional inflating monthly savings4 $117

1 Assumes that the cost will increase annually by 6.00%2 Assumes that the additional savings earn a rate of return of 8.00%. All alternatives are in addition to the current

savings.4 The amount shown is for the first year only; the savings must increase annually by 3.50%.These results are hypothetical and are not a promise of future performance.



Penn Mutual

June 21, 2011

Page 41


Education GoalEducation GoalCapital Analysisfor John: BC

CCaa p

p ii tt

aa ll A

Avv

aa ii ll

aa bb l

l ee

$150,000

$100,000

$50,000

$0

$-50,000

$-100,0002014 2020201820162012

Positive Capital Balance Negative Capital Balance

YearYear

Current assets available $68,000Current monthly savings $500

Current plan provides $165,024Total need1 $234,169

Funding Alternatives 2

Single sum investment $38,835Additional level monthly savings $478Additional inflating monthly savings4 $422

1 Assumes that the cost will increase annually by 6.00%2 Assumes that the additional savings earn a rate of return of 8.00%. All alternatives are in addition to the current

savings.4 The amount shown is for the first year only; the savings must increase annually by 3.50%.These results are hypothetical and are not a promise of future performance.



Penn Mutual

June 21, 2011

Page 42


Education GoalEducation GoalTimeline

for Jane: Northeastern University

Annual Annual Capital Lump Capital Change in CapitalYear Need Savings Earnings Sum Withdrawals Liabilities Available

Today: $75,000

2011 $0 $7,800 $5,796 $0 $0 $0 $88,5962012 0 7,800 6,748 0 0 0 103,1442013 0 7,800 7,766 0 0 0 118,7102014 0 7,800 8,856 0 0 0 135,3652015 0 7,800 10,022 0 0 0 153,1872016 0 7,800 11,269 0 0 0 172,2562017 0 7,800 12,604 0 0 0 192,6602018 0 7,800 14,032 0 0 0 214,4922019 0 7,800 15,560 0 0 0 237,8532020 67,579 0 11,919 0 67,579 0 182,1932021 71,634 0 7,739 0 71,634 0 118,2982022 75,932 0 2,966 0 75,932 0 45,3322023 80,488 0 0 0 45,332 35,156 (35,156)




Penn Mutual

June 21, 2011

Page 43


Education GoalEducation GoalTimelinefor John: BC

Annual Annual Capital Lump Capital Change in CapitalYear Need Savings Earnings Sum Withdrawals Liabilities Available

Today: $68,000

2011 $0 $6,000 $5,180 $0 $0 $0 $79,1802012 0 6,000 5,963 0 0 0 91,1432013 0 6,000 6,800 0 0 0 103,9432014 0 6,000 7,696 0 0 0 117,6392015 0 6,000 8,655 0 0 0 132,2932016 53,529 6,000 5,933 0 53,529 0 90,6982017 56,741 6,000 2,797 0 56,741 0 42,7542018 60,145 6,000 0 0 48,754 11,391 (11,391)2019 63,754 6,000 0 0 6,000 57,754 (69,145)




Penn Mutual

June 21, 2011

Page 44


Four-Year TotalTuition & Fees

School 2009-2010¹

$37,380 $163,523Stanford University

$35,340 $154,599Princeton University

Ohio State University $38,085$8,706

Arizona State University $27,709$6,334

$4,373University of Florida $19,130

Four-year private average² $26,273 $114,934

Four-year public average² $30,710$7,020

$109,365$25,000

Cost of EducationCost of EducationJane

Cost in 2011 *

How will you meet the risingcost of education?

Tuition and Fee Levels over Time2

Private Four-Year Public Four-YearAcademic Tuition Annual Tuition Annual Consumer

Year & Fees % Change & Fees % Change Price Index3

2000-01 $16,072 3.6% $3,508 4.3% 3.5%2001-02 $17.377 8.1% $3,766 7.4% 2.6%2002-03 $18,060 3.9% $4,098 8.8% 1.5%2003-04 $18,950 4.9% $4,645 13.3% 2.3%2004-05 $20,045 5.8% $5,126 10.4% 2.5%2005-06 $20,980 4.7% $5,492 7.1% 4.7%2006-07 $22,308 6.3% $5,804 5.7% 2.1%2007-08 $23,745 6.4% $6,191 6.7% 2.8%2008-09 $25,177 6.0% $6,591 6.5% 4.9%2009-10 $26,273 4.4% $7,020 6.5% -1.3%

2000-2010 -- 5.4% -- 7.7% 2.6%*Assumes college costs increase at 6.00% annually.1 Source: Copyright © 2009 collegeboard.com, Inc. All rights reserved. Assumes in-state tuition and fees.2 Source: 2009 Trends in College Pricing Table 4a. Copyright© 2009 The College Board. All rights reserved.3 Source: Bureau of Labor Statistics - CPI-U based on September month-end index values..



Penn Mutual

June 21, 2011

Page 45




Penn Mutual

June 21, 2011

Page 46


Survivor NeedsSurvivor NeedsIn the event of Thomas' DeathIn the event of Thomas' Death

$12,000,000

$10,000,000

$8,000,000

$6,000,000

$4,000,000

$2,000,000

$0

CURRENT $ Insurance

Assets

REQUIRED $ Income

Immediate

NEW INSURANCE

$10,201,192

$7,588,221

$2,612,971

Objective: Initial annual income beginning today of $332,850

Amount required in today's dollars (present value)Capital needed to fund income objectives $10,593,113Less capitalized value of income sources (1,381,288)

Additional capital required for income needs 9,211,824Immediate cash needs 524,775

Total additional capital needed 9,736,599

Capital availableAssets 1,888,221Insurance death benefits 5,700,000

Total capital available 7,588,221

Additional capital required to maintain a $0 capital balance 464,593

Additional capital required to fund survivor needs $2,612,971



Penn Mutual

June 21, 2011

Page 47


Survivor NeedsSurvivor NeedsIn the event of Beth's DeathIn the event of Beth's Death

$8,000,000

$6,000,000

$4,000,000

$2,000,000

$0

REQUIRED $ Income

Immediate

CURRENT $ Insurance

Assets

NEW INSURANCE

$7,915,985

$4,277,828$3,638,157

Objective: Initial annual income beginning today of $332,850

Amount required in today's dollars (present value)Capital needed to fund income objectives $9,463,712Less capitalized value of income sources (2,373,401)

Additional capital required for income needs 7,090,312Immediate cash needs 774,775

Total additional capital needed 7,865,087

Capital availableAssets 1,888,157Insurance death benefits 1,750,000

Total capital available 3,638,157

Additional capital required to maintain a $0 capital balance 50,898

Additional capital required to fund survivor needs $4,277,828



Penn Mutual

June 21, 2011

Page 48




Penn Mutual

June 21, 2011

Page 49


Survivor NeedsSurvivor NeedsSummary TimelineIn the event of Thomas' Death

Total Annual Total Total Total SurvivorIncome Annual Income Surplus/ Withdrawal Additions Needs

Age Need Sources (Shortage) from Capital to Capital Capital Available

Beginning Balance: $7,206,446

52 $332,850 $96,373 ($236,477) ($236,477) $204,809 $7,184,78853 344,500 98,638 (245,862) (245,862) 203,577 7,153,21454 356,557 100,960 (255,598) (255,598) 202,017 7,111,09455 369,037 73,519 (295,517) (295,517) 199,212 7,027,05156 381,953 24,100 (357,854) (357,854) 194,453 6,876,77157 335,901 0 (335,901) (335,901) 191,815 6,742,97758 348,996 0 (348,996) (348,996) 188,443 6,590,30259 362,630 0 (362,630) (362,630) 183,217 6,419,32060 376,825 0 (376,825) (376,825) 177,409 6,228,92461 391,608 0 (391,608) (391,608) 173,010 6,015,24862 407,004 29,514 (377,490) (377,490) 169,025 5,807,03463 423,040 30,104 (392,936) (392,936) 162,423 5,576,52264 439,744 30,706 (409,038) (409,038) 155,024 5,322,50865 371,831 31,320 (340,510) (340,510) 149,460 5,131,45766 384,845 31,947 (352,898) (352,898) 143,357 4,921,91667 398,314 32,586 (365,729) (365,729) 136,686 4,692,87368 412,255 33,237 (379,018) (379,018) 129,416 4,443,27169 426,684 33,902 (392,782) (392,782) 121,515 4,172,00370 441,618 34,580 (407,038) (407,038) 112,949 3,877,91471 457,075 35,272 (421,803) (421,803) 103,683 3,559,79572 473,072 35,977 (437,095) (437,095) 93,681 3,216,38073 489,630 36,697 (452,933) (452,933) 82,903 2,846,35174 506,767 37,431 (469,336) (469,336) 71,310 2,448,32575 524,504 38,179 (486,325) (486,325) 58,860 2,020,86076 542,861 38,943 (503,919) (503,919) 45,508 1,562,45077 561,861 39,722 (522,140) (522,140) 31,209 1,071,51978 581,527 40,516 (541,011) (541,011) 15,915 546,42479 601,880 41,326 (560,554) (546,424) 0 (14,554)80 622,946 42,153 (580,793) 0 0 (613,207)81 644,749 42,996 (601,753) 0 0 (1,251,409)82 667,315 43,856 (623,459) 0 0 (1,931,115)83 690,671 44,733 (645,938) 0 0 (2,654,364)84 714,845 45,628 (669,217) 0 0 (3,423,289)85 739,864 46,540 (693,324) 0 0 (4,240,111)86 765,760 47,471 (718,289) 0 0 (5,107,152)87 792,561 48,420 (744,141) 0 0 (6,026,832)88 820,301 49,389 (770,912) 0 0 (7,001,676)89 849,011 50,377 (798,635) 0 0 (8,034,320)



Penn Mutual

June 21, 2011

Page 50


Survivor NeedsSurvivor NeedsSummary TimelineIn the event of Beth's Death

Total Annual Total Total Total SurvivorIncome Annual Income Surplus/ Withdrawal Additions Needs

Age Need Sources (Shortage) from Capital to Capital Capital Available

Beginning Balance: $3,006,382

56 $332,850 $448,507 $115,657 $0 $205,028 $3,221,42057 344,500 463,777 119,277 0 214,908 3,447,03958 356,557 479,573 123,016 0 225,206 3,683,70559 369,037 480,787 111,751 0 220,359 3,916,32660 381,953 15,428 (366,525) (366,525) 100,871 3,663,79461 335,901 0 (335,901) (335,901) 95,426 3,433,61062 348,996 25,121 (323,875) (323,875) 89,915 3,207,52963 362,630 25,623 (337,006) (337,006) 82,503 2,961,45664 376,825 26,136 (350,689) (350,689) 74,457 2,694,24465 391,608 26,659 (364,949) (364,949) 67,770 2,401,98666 407,004 27,192 (379,812) (379,812) 60,557 2,082,98367 423,040 27,736 (395,304) (395,304) 50,630 1,738,30968 439,744 28,290 (411,454) (411,454) 39,806 1,366,66069 371,831 28,856 (342,974) (342,974) 30,711 1,054,39770 384,845 29,433 (355,411) (355,411) 20,970 719,95571 398,314 30,022 (368,292) (368,292) 10,550 362,21272 412,255 30,622 (381,633) (362,212) 0 (20,003)73 426,684 31,235 (395,449) 0 0 (427,916)74 441,618 31,859 (409,759) 0 0 (862,805)75 457,075 32,497 (424,578) 0 0 (1,326,005)76 473,072 33,147 (439,926) 0 0 (1,818,908)77 489,630 33,810 (455,820) 0 0 (2,342,970)78 506,767 34,486 (472,281) 0 0 (2,899,709)79 524,504 35,175 (489,328) 0 0 (3,490,708)80 542,861 35,879 (506,982) 0 0 (4,117,622)81 561,861 36,597 (525,265) 0 0 (4,782,173)82 581,527 37,328 (544,198) 0 0 (5,486,163)83 601,880 38,075 (563,805) 0 0 (6,231,467)84 622,946 38,837 (584,109) 0 0 (7,020,043)85 644,749 39,613 (605,136) 0 0 (7,853,934)86 667,315 40,405 (626,910) 0 0 (8,735,269)87 690,671 41,214 (649,458) 0 0 (9,666,269)88 714,845 42,038 (672,807) 0 0 (10,649,248)89 739,864 42,879 (696,986) 0 0 (11,686,621)



Penn Mutual

June 21, 2011

Page 51


Survivor NeedsSurvivor NeedsTimeline Definitions

Survivor Needs Cash Flow Timeline

Annual Income NeedsIncome NeedThe Income Need column represents the annual income needed by the survivor. This need may be adjusted based on certain events such as the youngest child attaining age 18 and the survivor's retirement.

Goals NeedThe Goals Need column will list the projected value of all education goals and accumulation goals to be funded during the survivor's analysis.

Qualified Plan ContributionsThe Qualified Plan Contribution column illustrates the dollars needed to fully fund the survivor's savings to the survivor's retirement plans if you have elected in Qualified Plan Preferences to treat contributions to qualified plans as a required expense.

Total NeedThe sum of all income needs for the survivor.

Annual Income SourcesEarningsThe Earnings column will illustrate the expected earnings of the surviving client. The earnings in the survivor's analysis may be different than the surviving client's current salary and self-employment income due to assumptions made for the survivor's analysis.

Social SecurityThe Social Security column illustrates the estimated Social Security benefit for the surviving client and/or dependents. The Social Security benefit will be based on any Social Security income sources entered for the plan, or if none have been entered, they will be based on estimates consistent with the Social Security Administration using salary information entered in the plan.

Other SourcesThe Other Sources column provides totals for all incomes not defined in the other columns such as defined benefit plans and annuity payments.

Surplus/(Shortage)The Surplus/(Shortage) column is equal to the Total Income Sources minus the Total Income Needs.

Survivor Needs Capital Available Timeline

Withdrawals from CapitalWithdrawalThe Total Capital Withdrawals column is equal to the income shortage. If there is no income shortage then this column will be zero.

Additions to CapitalSurplus Income, Excess RMD & Employer ContributionsThis column illustrates the amount of money added to the Survivor Needs Capital Available due to the surplus of income over need, employee and employer contributions to retirement plans, and any excess required minimum distributions.


Continued...


Penn Mutual

June 21, 2011

Page 52


Lump Sum Income & Sale ProceedsThe Lump Sum Income and Sales Proceeds column illustrates all additions to capital made to the designated lump sum asset.

Total Investment ReturnThe Total Investment Return column illustrates the investment earnings on all assets available to meet survivor income needs including all survivor owned retirement plans. Each available asset will grow at its specified rate of return, subject to any rebalancing or reallocations.

Asset BalancesSurvivor Owned Qualified PlansThe Survivor Owned Retirement Plans column illustrates the projected value of all retirement plans owned by the survivor. These assets may be unavailable until the survivor's age 59½ based on the plan assumptions.

529 Plans and Coverdell AccountsThe 529 Plans and Coverdell Accounts column shows the projected value of education accounts included in the plan. Surpluses remaining after an education goal is funded may be used to fund survivor income needs based on the plan assumptions.

All Other Available AssetsThe All Other Available Assets column illustrates the total assets available to meet the survivor's income needs. Survivor owned retirement plans will be excluded from this column.

Total LiabilitiesThe Total Liabilities column illustrates the accumulated unmet shortages.

Survivor Needs Capital AvailableThe Survivor Needs Capital Available column illustrates the net amount of all assets that can be used towards meeting survivor needs shortages.

Survivor Needs Summary Timeline

Total Annual Income NeedThe Total Annual Income Need column is the total income needed to cover survivor expenses, goals to be funded in the event of death and survivor savings to retirement plans, if applicable.

Total Annual Income SourcesThe Total Annual Income Sources column illustrates the total of survivor earnings, Social Security and direct income sources.

Surplus/(Shortage)The Surplus/(Shortage) column is equal to the Total Annual Income Sources minus the Total Annual Income Needs.

Total Withdrawal from CapitalThe Total Withdrawal from Capital column is equal to the income shortage. If there is no income shortage then this column will be zero.

Total Additions to CapitalThe Total Additions to Capital column illustrates the total of surplus income, employee and employer contributions to retirement plans, excess RMD, lump sum income, sale proceeds and investment return on available assets.

Survivor Needs Capital AvailableThe Survivor Needs Capital Available column illustrates the net amount of all assets that can be used towards meeting survivor needs shortages.


Continued...


Penn Mutual

June 21, 2011

Page 53


Survivor Needs Solved Timeline

Solution AmountThe solution amount represents the amount of money necessary to prevent the timeline from dropping below a target balance, between now and the survivor's mortality. The solution amount is determined by increasing the value of the surplus income asset until there is no year in which the capital available falls below the target balance.



Penn Mutual

June 21, 2011

Page 54




Penn Mutual

June 21, 2011

Page 55


Disability Income NeedsDisability Income Needs

MMoo

nntt hh

ll yyII nn

cc oo m

mee

In the event of Thomas' disabilityIn the event of Thomas' disability

$20,000

$15,000

$10,000

$5,000

$06

Mos.Age64

2Mos.

1Mo.

14Days

7Days

To-Day

3Mos.

2Yrs.

5Yrs.

1Yr.

After65

Income Provided Income Objective

Length of DisabilityLength of Disability

-------------- Estimated Monthly Income Provided --------------Monthly Personal Income

Income Beth's Group Disability Surplus/

Need Objective1 Earnings2 Insurance Insurance Other (Shortage)

Today $10,000 $3,750 $0 $0 $0 ($6,250)After 7 Days 10,000 3,750 0 0 0 (6,250)After 14 Days 10,000 3,750 0 0 0 (6,250)After 1 Month 10,000 3,750 0 0 0 (6,250)After 2 Months 10,000 3,750 0 0 0 (6,250)After 3 Months 10,000 3,750 0 15,000 0 8,750After 6 Months 10,000 3,750 0 15,000 0 8,750After 1 Year 10,350 3,881 0 15,450 0 8,981After 2 Years 10,712 4,017 0 15,914 0 9,218After 5 Years 11,877 0 0 17,389 0 5,512Age 64 13,168 0 0 19,002 0 5,833After 65 13,629 0 0 0 0 (13,629)

1 Increases at the assumed rate of inflation of 3.50%.2 Increases annually by 3.50%.Potential Social Security Benefits have not been included.



Penn Mutual

June 21, 2011

Page 56


Disability Income NeedsDisability Income NeedsIn the event of Thomas' disability

-----------------Estimated Monthly Income Provided --------------MonthlyIncome Beth's Personal

Objective Earnings Disability IncomeInflating at Increasing at Group Income Surplus/

Need 3.50% 3.50% Insurance Insurance1 Other (Shortage)

Today $10,000 $3,750 $0 $0 $0 ($6,250)After 7 Days 10,000 3,750 0 0 0 (6,250)After 14 Days 10,000 3,750 0 0 0 (6,250)After 1 Month 10,000 3,750 0 0 0 (6,250)After 2 Months 10,000 3,750 0 0 0 (6,250)After 3 Months 10,000 3,750 0 15,000 0 8,750After 6 Months 10,000 3,750 0 15,000 0 8,750After 1 Year 10,350 3,881 0 15,450 0 8,981After 2 Years 10,712 4,017 0 15,914 0 9,218After 5 Years 11,877 0 0 17,389 0 5,512

Thomas' Age

62 12,293 0 0 17,911 0 5,61863 12,723 0 0 18,448 0 5,72564 13,168 0 0 19,002 0 5,83365 13,629 0 0 0 0 (13,629)

Need Consecutive periods of disability.

Thomas' Age Thomas' age starting at the beginning of the seventh year of disability.

Monthly Income Objective Monthly income needs increasing at the assumed inflation rate are shown for each respective period.

Beth's Earnings Ongoing earnings increasing at the assumed inflation rate are shown for each respective period.

Group Insurance Group long-term disability benefits.

Potential Social Security Benefits have not been included.1Disability Insurance Policies' benefits are as follows:

Elimination Benefit Monthly AnnualPolicy Name Period Period Benefit COLA%

Personal Principal 90 Days Age 65 $15,000 3.00%



Penn Mutual

June 21, 2011

Page 57


sample of a client 'financial profile

Education

retirement analysis

thomas age

survivor needs analysis

future income

analysis results

desired income

analysis estimates

analysis reports