Holelistic financial plan

MP1787 (09/2012)

Personal Financial Analysis

September 18, 2012Prepared for: Roger Abbott and Joanne Abbott

Prepared by:

Retirement AnalysisReportr Nt ame: Retire ent Analysis

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Insurance Disclaimer

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Disclaimer

Financial Information, Assumptions, and Limitations of Projections

The information you have provided has been used to prepare this report. Accordingly, the usefulness of this reportdepends on the accuracy and completeness of this information. Please review this information and all assumptionsto ensure they are accurate and reasonable. Financial projections should be reviewed on a regular basis, at leastannually or on the occurrence of any major life event such as a change of relationship status or change in familymembers. It is also important to note that small changes in assumptions, such as inflation or return rates, can have asignificant impact on the outcome of this plan.

The projections contained in this report are hypothetical in nature. Actual investment outcomes are the result ofnumerous variables and external factors which cannot be predicted; therefore, assumptions may not reflect actualinvestment return results, and are not guarantees of future results. The projections utilize return data that does notinclude commissions, trailing commissions, management fees or expenses. If included, these charges couldmaterially reduce these projections.

The federal and provincial income tax laws are complex and subject to continuous change. Financial planningprojections have limited capability to model any individual’s tax liability, particularly future tax liability, as futuretax laws may be significantly different from current tax laws. This report should not be construed as providinglegal, accounting or tax advice.

Confidentiality

Investors Group is committed to keeping your personal information confidential. The information collected whencreating this report may be used by Investors Group and shared with its affiliates in order to be able to inform youof investment opportunities, or to provide additional financial information to you from time to time and for otherinternal purposes.

Other Important Information

Investment products and services are offered through Investors Group Financial Services Inc. (in Québec, aFinancial Services firm) and Investors Group Securities Inc. (in Québec, a firm in Financial Planning). InvestorsGroup Securities Inc. is a member of the Canadian Investor Protection Fund.

Insurance products and services distributed through I.G. Insurance Services Inc. (in Québec, a Financial ServicesFirm). Insurance license sponsored by The Great-West Life Assurance Company (outside of Québec).

Page 18 of 18

Table of Contents

Introduction.................................................................................................................................................................. 4

Retirement.................................................................................................................................................................... 5

Net Worth....................................... ............................................................................................................................ 10

Current Financial Position......................................................................................................................................... 12

Cash Flow.................................................................................................. ................................................................ 13

Action Plan................................................................................................................................................................ 15

Conclusion..................................................................................................................................................... ............ 17

Disclaimer.................................................................................................................................................................. 18

Introduction

Dear Roger & Joanne,

This report is intended to provide you with a better understanding of your current financial position and whetheryou are on track to meet your financial life goals.

Many people find that managing their finances to achieve their goals is a challenge. Many families are too busydealing with day-to-day issues to think about next year, let alone retirement or other financial goals, which may bemany years into the future. Together, we can face these challenges and put you on the path to reaching your goals.

Every goal requires planning and adjustments along the way – just think of the planning that goes into a simpleshort-term goal like taking a vacation. Planning for your financial future is no different.

By setting financial goals, developing strategies and monitoring progress on a regular basis, the likelihood ofachieving your desired results is greatly increased.

Thank you for giving me the opportunity to provide this report. Please review the information within and contactme at any time if you have any questions.

Regards,

Page 4 of 18

Conclusion

Now that you have reviewed the Personal Financial Analysis report, where do you go from here? Ourrecommendations are as follows:

1. Ask Questions – Please be sure to ask questions about areas that need clarification. It is important that theinformation contained in this report is clear enough to help you make decisions to achieve your financial goals.

2. Validate your Objectives – After reviewing this report, are you still comfortable with your goals? Are youable to implement all of your strategies to meet your objectives? Do you need to make any changes to goalamounts, dates, investment options, etc.? We will work together to help you.

3. Analyze Alternatives – Where appropriate, we will help you analyze alternatives and help you decide whatoption is best for you.

4. Implement the Plan – Together, we will implement the alternative that is consistent with your objectives andyour financial ability. We will work with you to help find suitable product options to implement the strategiesthat we have agreed upon. This may also involve engaging other individuals.

5. Monitor the Plan – We will assist you in reviewing your plan periodically to make sure you stay on track tomeet your financial goals. We recommend you review your financial plan at least once a year, or when a majorchange occurs in your life (e.g. job changes, retirement, new incomes or new expenses).

A final thought.

Remember to maintain a long-term focus with your plan. We cannot anticipate every change to your personal orfinancial situation but we can help you to adjust your plan when necessary.

Roger Abbott Joanne Abbott

Date Date

Page 17 of 18

Consultant Full Name with Designation

Policy Payer Premium CoverageGroup LTD (Joanne) Joanne $1,500 Disability Insurance $7,500Total $3,360

Debt ReductionsLiability Contributor Amount CommentMortgage Joint $24,000 Regular Payments, Principal & Interest

($2,000/month)Car Loans Joint $6,000 Regular Payments, Principal & Interest

($500/month)

Activity for 2014

SavingsAsset Contributor Amount CommentRRSP Account (Roger) Roger $3,000 Regular Savings Plan ($250/month)RRSP Account (Joanne) Joanne $3,000 Regular Savings Plan ($250/month)Retirement Fund (Roger/RRSP) Roger $5,589 Regular Savings Plan ($466/month)Retirement Fund (Roger/TFSA) Roger $3,819 Regular Savings Plan ($318/month)Retirement Fund (Joanne/RRSP) Joanne $9,166 Regular Savings Plan ($764/month)Retirement Fund (Joanne/TFSA) Joanne $3,819 Regular Savings Plan ($318/month)Total $28,393

InsurancePolicy Payer Premium CoverageLife Insurance (Roger/Term 10 Life) Roger $900 Life Insurance $350,000Life Insurance (Joanne/Term 10 Life) Joanne $960 Life Insurance $500,000Group LTD (Joanne) Joanne $1,500 Disability Insurance $7,500Total $3,360



($500/month)

Other Transactions1) End of liability (Car Loans) on Jul 27 2014

Page 16 of 18

Retirement Overview – CurrentRe t i r e me n t

Objectives

Your retirement goals are for Roger to retire in the year 2030 at age 65 and for Joanne to retire in the year 2032 atage 65. Your desired base retirement income is $102,000* starting in the year 2030.

You have both described your dream of touring the United States and Canada on new motorcycles, and that youwould prefer to do this while you are younger and better able to handle life on the road. Again and again, you havestressed that it is more important to you to retire early than to have extra income during your later years.

One reason you are not too concerned about your retirement is that you feel you could easily sell your home andinvest the proceeds, while living in your cottage year round. Winterizing your cottage would only require a smallportion of the proceeds from the sale of your home.

You want to be able to afford a comfortable retirement. You would like to travel and make purchases withoutworrying about a budget.

You are prepared to sacrifice retirement income in order to retire earlier. Leaving your job sooner is moreimportant to you than accumulating retirement assets.

You would like to learn how to protect your purchasing power from inflation throughout your retirement.

You would like to avoid having your Old Age Security payments 'clawed back' because your retirement income istoo high.

*In today’s dollars – after tax. Retirement income reflects the first year of retirement and may change.

Needs vs. Abilities

Retirement Needs includes most expenses that occur during retirement. Other Needs may include liabilitypayments, insurance premiums and savings.

2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K$100K$150K$200K$250K$300K$350K$400K

Retirement NeedsOther Needs

Ability to Cover NeedsShortfall

SurplusAfter-Tax Cash Inflow

Analysis

Our analysis indicates that your savings strategies and retirement resources could provide you with the ability tocover approximately 91% of your expenses in retirement or $92,820* in the year 2030.

Another alternative to reach your retirement income goal of $102,000* is to delay Roger's retirement until 2033when Roger is 68 and to 2035 when Joanne is 68. You can also phase into retirement more gradually.

Note that these projections indicate your debts are expected to be paid off prior to Roger's retirement in 2030. Ifthis is not the case, your retirement income will need to support these payments until these liabilities are paid off.*In today’s dollars – after tax. Retirement income reflects the first year of retirement and may change.

Page 5 of 18

Key AssumptionsRoger Joanne

Retirement Age/Year 65/2030 65/2032Life Expectancy 90/2055 90/2057Desired Fixed Expenses Covered 100%Desired Discretionary Expenses Covered 100%Annual Inflation Rate 3.00%Investment Objective (ROR) Pre-Retirement Current - Not Rebalanced (6.22%)Investment Objective (ROR) Retirement Current - Not Rebalanced (6.22%)Total Monthly SavingsNon-Registered $0RRSP $250 $250RRSP Spousal $0 $0TFSA $0 $0RPP** $0 $0DPSP** $0 $0

**Includes employer contributions, if applicable.

RecommendationsYou can retire earlier by saving more to your RRSPs and TFSAs. We have looked at retirement at age 63, whichwould require additional montly savings of $739 for Roger and $1,020 for Joanne. Changes to the Current plan arehighlighted in bold text on the Key Assumptions table found in the following Retirement Overview -Recommended.

The Net Worth - Comparison graph and Total Income - Comparison graph on subsequent pages show theimprovements to your net worth and cash flow based on these recommendations.

I have also attached Retirement Income Summary - Current and Retirement Income Summary - Recommendedgraphs which show your major sources of retirement income based on your current plan and based on ourrecommendations. I can also provide you with this information in the form of reports showing dollar amounts ifyou prefer.

The budgeting exercise we undertook shows that you can afford the recommended savings to your RRSPs andTFSAs, which in turn will allow you to retire when you want to.

However, if you feel the amount of your required savings is unmanageable, we should review your various goals tofind an appropriate solution. You may wish to consider looking at an alternative asset allocation or reducing yourincome need in retirement.

Page 6 of 18

Action PlanAc t i o n P l a n

Personalized Action Items

Net WorthCalculate the adjusted cost base for your cottage by adding the cost of all capital improvements to the purchaseprice, and check with your accountant regarding your use of the $100,000 capital gains exemption in 1994.Cash FlowFocus on reducing the high interest rate debt that you are carrying. You indicated you would be willing to applythe proceeds of the sale of your '78 T-Bird against the car loan for the Jetta. We will incorporate the result of thatstrategy into this financial plan after you determine the sale price of the T-Bird.RetirementBased on your preference for retiring earlier than age 65, consider reducing your projected spending needs duringretirement, and how you can accomplish that. This, combined with the additional RRSP savings shown in theActivity report below, will provide a margin of comfort in meeting your early retirement goals.Activities

The following section illustrates action items for 2012 and the following two years.

Activity for 2012





($500/month)

Activity for 2013


InsurancePolicy Payer Premium CoverageLife Insurance (Roger/Term 10 Life) Roger $900 Life Insurance $350,000Life Insurance (Joanne/Term 10 Life) Joanne $960 Life Insurance $500,000

Page 15 of 18

Itemized Cash Flow Projection – Current

The following report shows your projected sources of income and expenses over 5 years.2012 2013 2014 2015 2016

Cash Inflows

Employment Inflows Annual Income (Roger) 82,500 84,975 87,524 90,150 92,854 Annual Income (Joanne) 125,000 128,750 132,613 136,591 140,689

Total Employment Inflows 207,500 213,725 220,137 226,741 233,543

Total Cash Inflows 207,500 213,725 220,137 226,741 233,543

Cash Outflows

Lifestyle Expenses Entertainment (e.g. restaurants, movies) (Joint) 6,000 6,180 6,365 6,556 6,753 Food (Joint) 9,000 9,270 9,548 9,835 10,130 Housing (e.g. utilities, repairs) (Joint) 12,000 12,360 12,731 13,113 13,506 Other (e.g. child care, travel) (Joint) 24,000 24,720 25,462 26,225 27,012 Personal (e.g. clothing, hobbies) (Joint) 9,000 9,270 9,548 9,835 10,130 Transportation (e.g. gas, insurance) (Joint) 12,000 12,360 12,731 13,113 13,506 European Vacation (Joint) 0 0 0 0 22,510 Surplus Lifestyle Expenses (Roger) 3,372 3,888 6,163 7,938 0 Surplus Lifestyle Expenses (Joanne) 32,510 34,063 37,407 40,310 27,969 Car Loans (Joint) 6,000 6,000 2,511 0 0 Mortgage (Joint) 24,000 24,000 24,000 24,000 24,000

Total Lifestyle Expenses 137,882 142,111 146,466 150,924 155,516

Employment/Business Expenses CPP/QPP contrib. - employment (Roger) 2,307 2,381 2,458 2,537 2,618 Employment Insurance premiums (Roger) 840 865 891 918 945 CPP/QPP contrib. - employment (Joanne) 2,307 2,381 2,458 2,537 2,618 Employment Insurance premiums (Joanne) 840 865 891 918 945

Total Employment/Business Expenses 6,293 6,493 6,698 6,909 7,127

Registered Contributions RRSP Account (Roger) 3,000 3,000 3,000 3,000 3,000 RRSP Account (Joanne) 3,000 3,000 3,000 3,000 3,000

Total Registered Contributions 6,000 6,000 6,000 6,000 6,000

Miscellaneous Expenses Life Insurance (Roger/Term 10 Life) 900 900 900 900 900 Group LTD (Joanne) 1,500 1,500 1,500 1,500 1,500 Life Insurance (Joanne/Term 10 Life) 960 960 960 960 960

Total Miscellaneous Expenses 3,360 3,360 3,360 3,360 3,360

Taxes Net Federal Tax (Roger) 12,241 12,627 13,025 13,435 13,857 Net Provincial Tax (Roger) 8,841 9,234 9,639 10,085 10,543 Net Federal Tax (Joanne) 22,726 23,430 24,156 24,903 25,673 Net Provincial Tax (Joanne) 10,157 10,470 10,793 11,125 11,467

Total Taxes 53,965 55,761 57,613 59,547 61,540

Total Cash Outflows 207,500 213,725 220,137 226,741 233,543

Current Surplus/(Deficit) 0 0 0 0 0 Previous Surplus/(Deficit) 0 0 0 0 0 Ending Surplus/(Deficit) 0 0 0 0 0

Page 14 of 18

Retirement Overview – Recommended

Objectives

Your retirement goals are for Roger to retire in the year 2028 at age 63 and for Joanne to retire in the year 2030 atage 63. Your desired base retirement income is $102,000* starting in the year 2028.*In today’s dollars – after tax. Retirement income reflects the first year of retirement and may change.

Needs vs. Abilities


2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K$100K$150K$200K$250K$300K$350K$400K




Analysis

Our analysis indicates that your savings strategies and retirement resources could provide you with the ability tocover approximately 100% of your expenses in retirement or $102,000* in the year 2028. Review this goal onan annual basis to ensure you stay on track.



Retirement Age/Year 63/2028 63/2030Life Expectancy 90/2055 90/2057Desired Fixed Expenses Covered 100%Desired Discretionary Expenses Covered 100%Annual Inflation Rate 3.00%Additional Lump-Sum Savings $0Investment Objective (ROR) Pre-Retirement Current - Not Rebalanced (6.22%)Investment Objective (ROR) Retirement Current - Not Rebalanced (6.22%)Total Monthly SavingsNon-Registered $0RRSP $689 $970RRSP Spousal $0 $0TFSA $300 $300RPP** $0 $0DPSP** $0 $0

Note: Numbers in bold indicate a change from the current plan.Note: Information in the table above is for the October 18, 2012 period. Any strategies occurring in the future are not displayed in this table.**Includes employer contributions, if applicable.

Page 7 of 18

Retirement Income Summary Graph – Current

The following graph illustrates a projection of major income categories during your retirement. RPP (DC) refers toDefined Contribution pension income, if applicable.

2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

$400K

$450K

CPP/QPP & OASDefined Benefit PensionTFSANon-Registered Income & Capital

RRSP/RRIF/DPSPLIF/LRIF/RPP (DC)Other

Page 8 of 18

Cash Flow Overview – CurrentCa s h F l o w

Objectives

The purpose of cash management is to ensure that you have enough cash and other liquid assets to cover yourexpected expenses, to establish an adequate emergency reserve to meet unforeseen expenses, to minimizeunproductive assets and to plan the repayment of your debt.

During our budgeting exercise, you were concerned about the income which you could not account for with yourregular expenses. These might be expenses you don't track such as miscellaneous expenses, gifts or infrequentrepairs. In your current plan, we have shown the gap between your incomes and your known expenses as 'SurplusLifestyle Expenses' on the following Itemized Cash Flow Projection - Current.

You want to create an emergency fund which is specifically set aside for large, unexpected expenses. You wouldlike advice in determining the size of this fund and strategies for its investment.

Analysis

The graph below illustrates a projection of your annual and accumulated cash flow surplus (and/or deficits)throughout your planning horizon. A surplus exists when cash inflows exceed cash outflows and a deficit existswhen cash outflows exceed cash inflows. Cash inflows include all sources of income including employment andinvestment income and return of capital. Cash outflows include lifestyle expenses, debt payments, income taxes,savings, insurance premiums and all other cash outflows. We have assumed that any accumulated surpluses ordeficit at retirement is eliminated and will not carry forward into retirement.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054-$900K

-$700K

-$500K

-$300K

-$100K

$100K

Accumulated Surplus/Deficit Current Surplus/Deficit

An analysis of your cash flow for the year 2012 indicates that:

You are expected to have no annual cash flow surplus or deficit .$123,535 or 60% of your total income* will be spent on your total expenses**.$30,000 or 14% of your total income* will be spent on loan and mortgage payments.$53,965 or 26% of your total income* is an estimate of your income taxes***.

*Total income includes all cash inflows including return of investment capital.**Total expenses include lifestyle expenses (less liabilities), savings and life insurance premiums.***Income tax amounts are estimates. Please consult with a professional tax advisor.

Recommendations

Since your income closely matches your expenses, we should review your discretionary expenses andidentify opportunities to improve your cash flow position. These opportunities could include reducingnon-essential expenditures and developing a plan to pay off any high interest debt that you may carry.Analysis of your cash flow indicates that you could afford the extra savings we are recommending. Thephrase "Pay Yourself First" applies here, in that a portion of the money you direct towards SurplusLifestyle Expenses can be used for these additional savings.

Page 13 of 18

Net Worth StatementCu r r e n t F i n a n c i a l P o s i t i o n

This net worth statement provides a detailed breakdown of your financial situation as of September 18, 2012.

Net Worth Statement

As of September 18, 2012Roger Joanne Joint Total

Non-Registered AssetsNon-Registered Account 152,760 152,760 Total Non-Registered Assets 152,760 152,760

Registered AssetsRRSP Account 236,426 236,426 RRSP Account 311,931 311,931 Total Registered Assets 236,426 311,931 548,357

Lifestyle AssetsResidence 360,600 360,600 Cottage 250,417 250,417 Total Lifestyle Assets 611,017 611,017

Total Assets 236,426 311,931 763,777 1,312,133

Liabilities Mortgage (183,536) (183,536) Car Loans (10,044) (10,044)

Total Liabilities (193,579) (193,579)

Total Net Worth 236,426 311,931 570,197 1,118,554

Page 12 of 18

Retirement Income Summary Graph – Recommended


2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

$400K

$450K

$500K

$550K



Page 9 of 18

Net Worth Overview (Future Dollars) – CurrentNe t Wo r t h

Objectives

Net worth is one benchmark from which you can measure progress toward your financial goals. By carefullymanaging your financial resources, you can allocate additional funds towards your investment savings accountsand build your net worth to be in a better position to achieve your financial life goals.

Analysis

The graph below illustrates a projection of your net worth and lifestyle assets throughout your planning horizon.The amounts are expressed in future (inflated) dollars. Total Net Worth is determined by taking the total of allassets less any liabilities. Lifestyle Assets include personal real estate and other personal property.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054$0.0M

$0.5M

$1.0M

$1.5M

$2.0M

$2.5M

$3.0M

$3.5M

$4.0M

Total Net Worth Lifestyle Assets

An analysis of your net worth as of September 18, 2012 indicates that:

You currently have a net worth of $1,118,554.Your current liabilities total $193,579.

RecommendationsA net worth statement is important because it helps check progress towards financial goals, plan for changes inassets or liabilities, estimate how well dependant survivors would be able to live on their current inheritance, givean estimate of retirement income potential, and provide a way to chart financial progress over the years. The mainitem currently missing from your net worth statement is the 'adjusted cost base' of your cottage, which we need inorder to better estimate future tax liabilities. Please forward this information to my team at your first opportunity.

The Net Worth - Comparison chart on the following page shows the positive effect which your additionalrecommended savings could have on your net worth.

Page 10 of 18

Net Worth – Comparison (Future Dollars)

The following graph compares your projected net worth between two plan scenarios for each year in the analysis.The amounts are expressed in future (inflated) dollars as of the end of the year.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054$0.0M

$0.5M

$1.0M

$1.5M

$2.0M

$2.5M

$3.0M

$3.5M

$4.0M

$4.5M

Current: Total Net Worth Recommended: Total Net Worth

Page 11 of 18

Net Worth Overview (Future Dollars) – CurrentNe t Wo r t h

Objectives

Net worth is one benchmark from which you can measure progress toward your financial goals. By carefullymanaging your financial resources, you can allocate additional funds towards your investment savings accountsand build your net worth to be in a better position to achieve your financial life goals.

Analysis

The graph below illustrates a projection of your net worth and lifestyle assets throughout your planning horizon.The amounts are expressed in future (inflated) dollars. Total Net Worth is determined by taking the total of allassets less any liabilities. Lifestyle Assets include personal real estate and other personal property.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054$0.0M

$0.5M

$1.0M

$1.5M

$2.0M

$2.5M

$3.0M

$3.5M

$4.0M

Total Net Worth Lifestyle Assets

An analysis of your net worth as of September 18, 2012 indicates that:

You currently have a net worth of $1,118,554.Your current liabilities total $193,579.

RecommendationsA net worth statement is important because it helps check progress towards financial goals, plan for changes inassets or liabilities, estimate how well dependant survivors would be able to live on their current inheritance, givean estimate of retirement income potential, and provide a way to chart financial progress over the years. The mainitem currently missing from your net worth statement is the 'adjusted cost base' of your cottage, which we need inorder to better estimate future tax liabilities. Please forward this information to my team at your first opportunity.

The Net Worth - Comparison chart on the following page shows the positive effect which your additionalrecommended savings could have on your net worth.

Page 10 of 18

Net Worth – Comparison (Future Dollars)

The following graph compares your projected net worth between two plan scenarios for each year in the analysis.The amounts are expressed in future (inflated) dollars as of the end of the year.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054$0.0M

$0.5M

$1.0M

$1.5M

$2.0M

$2.5M

$3.0M

$3.5M

$4.0M

$4.5M

Current: Total Net Worth Recommended: Total Net Worth

Page 11 of 18

Net Worth StatementCu r r e n t F i n a n c i a l P o s i t i o n

This net worth statement provides a detailed breakdown of your financial situation as of September 18, 2012.

Net Worth Statement

As of September 18, 2012Roger Joanne Joint Total

Non-Registered AssetsNon-Registered Account 152,760 152,760 Total Non-Registered Assets 152,760 152,760

Registered AssetsRRSP Account 236,426 236,426 RRSP Account 311,931 311,931 Total Registered Assets 236,426 311,931 548,357

Lifestyle AssetsResidence 360,600 360,600 Cottage 250,417 250,417 Total Lifestyle Assets 611,017 611,017

Total Assets 236,426 311,931 763,777 1,312,133

Liabilities Mortgage (183,536) (183,536) Car Loans (10,044) (10,044)

Total Liabilities (193,579) (193,579)

Total Net Worth 236,426 311,931 570,197 1,118,554

Page 12 of 18

Retirement Income Summary Graph – Recommended


2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

$400K

$450K

$500K

$550K



Page 9 of 18

Retirement Income Summary Graph – Current


2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K

$100K

$150K

$200K

$250K

$300K

$350K

$400K

$450K



Page 8 of 18

Cash Flow Overview – CurrentCa s h F l o w

Objectives

The purpose of cash management is to ensure that you have enough cash and other liquid assets to cover yourexpected expenses, to establish an adequate emergency reserve to meet unforeseen expenses, to minimizeunproductive assets and to plan the repayment of your debt.

During our budgeting exercise, you were concerned about the income which you could not account for with yourregular expenses. These might be expenses you don't track such as miscellaneous expenses, gifts or infrequentrepairs. In your current plan, we have shown the gap between your incomes and your known expenses as 'SurplusLifestyle Expenses' on the following Itemized Cash Flow Projection - Current.

You want to create an emergency fund which is specifically set aside for large, unexpected expenses. You wouldlike advice in determining the size of this fund and strategies for its investment.

Analysis

The graph below illustrates a projection of your annual and accumulated cash flow surplus (and/or deficits)throughout your planning horizon. A surplus exists when cash inflows exceed cash outflows and a deficit existswhen cash outflows exceed cash inflows. Cash inflows include all sources of income including employment andinvestment income and return of capital. Cash outflows include lifestyle expenses, debt payments, income taxes,savings, insurance premiums and all other cash outflows. We have assumed that any accumulated surpluses ordeficit at retirement is eliminated and will not carry forward into retirement.

2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054-$900K

-$700K

-$500K

-$300K

-$100K

$100K

Accumulated Surplus/Deficit Current Surplus/Deficit

An analysis of your cash flow for the year 2012 indicates that:

You are expected to have no annual cash flow surplus or deficit .$123,535 or 60% of your total income* will be spent on your total expenses**.$30,000 or 14% of your total income* will be spent on loan and mortgage payments.$53,965 or 26% of your total income* is an estimate of your income taxes***.

*Total income includes all cash inflows including return of investment capital.**Total expenses include lifestyle expenses (less liabilities), savings and life insurance premiums.***Income tax amounts are estimates. Please consult with a professional tax advisor.

Recommendations

Since your income closely matches your expenses, we should review your discretionary expenses andidentify opportunities to improve your cash flow position. These opportunities could include reducingnon-essential expenditures and developing a plan to pay off any high interest debt that you may carry.Analysis of your cash flow indicates that you could afford the extra savings we are recommending. Thephrase "Pay Yourself First" applies here, in that a portion of the money you direct towards SurplusLifestyle Expenses can be used for these additional savings.

Page 13 of 18

Itemized Cash Flow Projection – Current

The following report shows your projected sources of income and expenses over 5 years.2012 2013 2014 2015 2016

Cash Inflows

Employment Inflows Annual Income (Roger) 82,500 84,975 87,524 90,150 92,854 Annual Income (Joanne) 125,000 128,750 132,613 136,591 140,689

Total Employment Inflows 207,500 213,725 220,137 226,741 233,543

Total Cash Inflows 207,500 213,725 220,137 226,741 233,543

Cash Outflows

Lifestyle Expenses Entertainment (e.g. restaurants, movies) (Joint) 6,000 6,180 6,365 6,556 6,753 Food (Joint) 9,000 9,270 9,548 9,835 10,130 Housing (e.g. utilities, repairs) (Joint) 12,000 12,360 12,731 13,113 13,506 Other (e.g. child care, travel) (Joint) 24,000 24,720 25,462 26,225 27,012 Personal (e.g. clothing, hobbies) (Joint) 9,000 9,270 9,548 9,835 10,130 Transportation (e.g. gas, insurance) (Joint) 12,000 12,360 12,731 13,113 13,506 European Vacation (Joint) 0 0 0 0 22,510 Surplus Lifestyle Expenses (Roger) 3,372 3,888 6,163 7,938 0 Surplus Lifestyle Expenses (Joanne) 32,510 34,063 37,407 40,310 27,969 Car Loans (Joint) 6,000 6,000 2,511 0 0 Mortgage (Joint) 24,000 24,000 24,000 24,000 24,000

Total Lifestyle Expenses 137,882 142,111 146,466 150,924 155,516

Employment/Business Expenses CPP/QPP contrib. - employment (Roger) 2,307 2,381 2,458 2,537 2,618 Employment Insurance premiums (Roger) 840 865 891 918 945 CPP/QPP contrib. - employment (Joanne) 2,307 2,381 2,458 2,537 2,618 Employment Insurance premiums (Joanne) 840 865 891 918 945

Total Employment/Business Expenses 6,293 6,493 6,698 6,909 7,127

Registered Contributions RRSP Account (Roger) 3,000 3,000 3,000 3,000 3,000 RRSP Account (Joanne) 3,000 3,000 3,000 3,000 3,000

Total Registered Contributions 6,000 6,000 6,000 6,000 6,000

Miscellaneous Expenses Life Insurance (Roger/Term 10 Life) 900 900 900 900 900 Group LTD (Joanne) 1,500 1,500 1,500 1,500 1,500 Life Insurance (Joanne/Term 10 Life) 960 960 960 960 960

Total Miscellaneous Expenses 3,360 3,360 3,360 3,360 3,360

Taxes Net Federal Tax (Roger) 12,241 12,627 13,025 13,435 13,857 Net Provincial Tax (Roger) 8,841 9,234 9,639 10,085 10,543 Net Federal Tax (Joanne) 22,726 23,430 24,156 24,903 25,673 Net Provincial Tax (Joanne) 10,157 10,470 10,793 11,125 11,467

Total Taxes 53,965 55,761 57,613 59,547 61,540

Total Cash Outflows 207,500 213,725 220,137 226,741 233,543

Current Surplus/(Deficit) 0 0 0 0 0 Previous Surplus/(Deficit) 0 0 0 0 0 Ending Surplus/(Deficit) 0 0 0 0 0

Page 14 of 18

Retirement Overview – Recommended

Objectives

Your retirement goals are for Roger to retire in the year 2028 at age 63 and for Joanne to retire in the year 2030 atage 63. Your desired base retirement income is $102,000* starting in the year 2028.*In today’s dollars – after tax. Retirement income reflects the first year of retirement and may change.

Needs vs. Abilities


2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K$100K$150K$200K$250K$300K$350K$400K




Analysis

Our analysis indicates that your savings strategies and retirement resources could provide you with the ability tocover approximately 100% of your expenses in retirement or $102,000* in the year 2028. Review this goal onan annual basis to ensure you stay on track.



Retirement Age/Year 63/2028 63/2030Life Expectancy 90/2055 90/2057Desired Fixed Expenses Covered 100%Desired Discretionary Expenses Covered 100%Annual Inflation Rate 3.00%Additional Lump-Sum Savings $0Investment Objective (ROR) Pre-Retirement Current - Not Rebalanced (6.22%)Investment Objective (ROR) Retirement Current - Not Rebalanced (6.22%)Total Monthly SavingsNon-Registered $0RRSP $689 $970RRSP Spousal $0 $0TFSA $300 $300RPP** $0 $0DPSP** $0 $0

Note: Numbers in bold indicate a change from the current plan.Note: Information in the table above is for the October 18, 2012 period. Any strategies occurring in the future are not displayed in this table.**Includes employer contributions, if applicable.

Page 7 of 18


Retirement Age/Year 65/2030 65/2032Life Expectancy 90/2055 90/2057Desired Fixed Expenses Covered 100%Desired Discretionary Expenses Covered 100%Annual Inflation Rate 3.00%Investment Objective (ROR) Pre-Retirement Current - Not Rebalanced (6.22%)Investment Objective (ROR) Retirement Current - Not Rebalanced (6.22%)Total Monthly SavingsNon-Registered $0RRSP $250 $250RRSP Spousal $0 $0TFSA $0 $0RPP** $0 $0DPSP** $0 $0

**Includes employer contributions, if applicable.

RecommendationsYou can retire earlier by saving more to your RRSPs and TFSAs. We have looked at retirement at age 63, whichwould require additional montly savings of $739 for Roger and $1,020 for Joanne. Changes to the Current plan arehighlighted in bold text on the Key Assumptions table found in the following Retirement Overview -Recommended.

The Net Worth - Comparison graph and Total Income - Comparison graph on subsequent pages show theimprovements to your net worth and cash flow based on these recommendations.

I have also attached Retirement Income Summary - Current and Retirement Income Summary - Recommendedgraphs which show your major sources of retirement income based on your current plan and based on ourrecommendations. I can also provide you with this information in the form of reports showing dollar amounts ifyou prefer.

The budgeting exercise we undertook shows that you can afford the recommended savings to your RRSPs andTFSAs, which in turn will allow you to retire when you want to.

However, if you feel the amount of your required savings is unmanageable, we should review your various goals tofind an appropriate solution. You may wish to consider looking at an alternative asset allocation or reducing yourincome need in retirement.

Page 6 of 18

Action PlanAc t i o n P l a n

Personalized Action Items

Net WorthCalculate the adjusted cost base for your cottage by adding the cost of all capital improvements to the purchaseprice, and check with your accountant regarding your use of the $100,000 capital gains exemption in 1994.Cash FlowFocus on reducing the high interest rate debt that you are carrying. You indicated you would be willing to applythe proceeds of the sale of your '78 T-Bird against the car loan for the Jetta. We will incorporate the result of thatstrategy into this financial plan after you determine the sale price of the T-Bird.RetirementBased on your preference for retiring earlier than age 65, consider reducing your projected spending needs duringretirement, and how you can accomplish that. This, combined with the additional RRSP savings shown in theActivity report below, will provide a margin of comfort in meeting your early retirement goals.Activities

The following section illustrates action items for 2012 and the following two years.

Activity for 2012





($500/month)

Activity for 2013


InsurancePolicy Payer Premium CoverageLife Insurance (Roger/Term 10 Life) Roger $900 Life Insurance $350,000Life Insurance (Joanne/Term 10 Life) Joanne $960 Life Insurance $500,000

Page 15 of 18

Policy Payer Premium CoverageGroup LTD (Joanne) Joanne $1,500 Disability Insurance $7,500Total $3,360



($500/month)

Activity for 2014





($500/month)

Other Transactions1) End of liability (Car Loans) on Jul 27 2014

Page 16 of 18

Retirement Overview – CurrentRe t i r e me n t

Objectives

Your retirement goals are for Roger to retire in the year 2030 at age 65 and for Joanne to retire in the year 2032 atage 65. Your desired base retirement income is $102,000* starting in the year 2030.

You have both described your dream of touring the United States and Canada on new motorcycles, and that youwould prefer to do this while you are younger and better able to handle life on the road. Again and again, you havestressed that it is more important to you to retire early than to have extra income during your later years.

One reason you are not too concerned about your retirement is that you feel you could easily sell your home andinvest the proceeds, while living in your cottage year round. Winterizing your cottage would only require a smallportion of the proceeds from the sale of your home.

You want to be able to afford a comfortable retirement. You would like to travel and make purchases withoutworrying about a budget.

You are prepared to sacrifice retirement income in order to retire earlier. Leaving your job sooner is moreimportant to you than accumulating retirement assets.

You would like to learn how to protect your purchasing power from inflation throughout your retirement.

You would like to avoid having your Old Age Security payments 'clawed back' because your retirement income istoo high.

*In today’s dollars – after tax. Retirement income reflects the first year of retirement and may change.

Needs vs. Abilities


2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056$0K

$50K$100K$150K$200K$250K$300K$350K$400K




Analysis

Our analysis indicates that your savings strategies and retirement resources could provide you with the ability tocover approximately 91% of your expenses in retirement or $92,820* in the year 2030.

Another alternative to reach your retirement income goal of $102,000* is to delay Roger's retirement until 2033when Roger is 68 and to 2035 when Joanne is 68. You can also phase into retirement more gradually.


Page 5 of 18

Introduction

Dear Roger & Joanne,

This report is intended to provide you with a better understanding of your current financial position and whetheryou are on track to meet your financial life goals.

Many people find that managing their finances to achieve their goals is a challenge. Many families are too busydealing with day-to-day issues to think about next year, let alone retirement or other financial goals, which may bemany years into the future. Together, we can face these challenges and put you on the path to reaching your goals.

Every goal requires planning and adjustments along the way – just think of the planning that goes into a simpleshort-term goal like taking a vacation. Planning for your financial future is no different.

By setting financial goals, developing strategies and monitoring progress on a regular basis, the likelihood ofachieving your desired results is greatly increased.

Thank you for giving me the opportunity to provide this report. Please review the information within and contactme at any time if you have any questions.

Regards,

Page 4 of 18

Conclusion

Now that you have reviewed the Personal Financial Analysis report, where do you go from here? Ourrecommendations are as follows:

1. Ask Questions – Please be sure to ask questions about areas that need clarification. It is important that theinformation contained in this report is clear enough to help you make decisions to achieve your financial goals.

2. Validate your Objectives – After reviewing this report, are you still comfortable with your goals? Are youable to implement all of your strategies to meet your objectives? Do you need to make any changes to goalamounts, dates, investment options, etc.? We will work together to help you.

3. Analyze Alternatives – Where appropriate, we will help you analyze alternatives and help you decide whatoption is best for you.

4. Implement the Plan – Together, we will implement the alternative that is consistent with your objectives andyour financial ability. We will work with you to help find suitable product options to implement the strategiesthat we have agreed upon. This may also involve engaging other individuals.

5. Monitor the Plan – We will assist you in reviewing your plan periodically to make sure you stay on track tomeet your financial goals. We recommend you review your financial plan at least once a year, or when a majorchange occurs in your life (e.g. job changes, retirement, new incomes or new expenses).

A final thought.

Remember to maintain a long-term focus with your plan. We cannot anticipate every change to your personal orfinancial situation but we can help you to adjust your plan when necessary.

Roger Abbott Joanne Abbott

Date Date

Page 17 of 18

Consultant Full Name with Designation

Disclaimer

Financial Information, Assumptions, and Limitations of Projections

The information you have provided has been used to prepare this report. Accordingly, the usefulness of this reportdepends on the accuracy and completeness of this information. Please review this information and all assumptionsto ensure they are accurate and reasonable. Financial projections should be reviewed on a regular basis, at leastannually or on the occurrence of any major life event such as a change of relationship status or change in familymembers. It is also important to note that small changes in assumptions, such as inflation or return rates, can have asignificant impact on the outcome of this plan.

The projections contained in this report are hypothetical in nature. Actual investment outcomes are the result ofnumerous variables and external factors which cannot be predicted; therefore, assumptions may not reflect actualinvestment return results, and are not guarantees of future results. The projections utilize return data that does notinclude commissions, trailing commissions, management fees or expenses. If included, these charges couldmaterially reduce these projections.

The federal and provincial income tax laws are complex and subject to continuous change. Financial planningprojections have limited capability to model any individual’s tax liability, particularly future tax liability, as futuretax laws may be significantly different from current tax laws. This report should not be construed as providinglegal, accounting or tax advice.

Confidentiality

Investors Group is committed to keeping your personal information confidential. The information collected whencreating this report may be used by Investors Group and shared with its affiliates in order to be able to inform youof investment opportunities, or to provide additional financial information to you from time to time and for otherinternal purposes.

Other Important Information

Investment products and services are offered through Investors Group Financial Services Inc. (in Québec, aFinancial Services firm) and Investors Group Securities Inc. (in Québec, a firm in Financial Planning). InvestorsGroup Securities Inc. is a member of the Canadian Investor Protection Fund.

Insurance products and services distributed through I.G. Insurance Services Inc. (in Québec, a Financial ServicesFirm). Insurance license sponsored by The Great-West Life Assurance Company (outside of Québec).

Page 18 of 18

Table of Contents

Introduction.................................................................................................................................................................. 4

Retirement.................................................................................................................................................................... 5

Net Worth....................................... ............................................................................................................................ 10

Current Financial Position......................................................................................................................................... 12

Cash Flow.................................................................................................. ................................................................ 13

Action Plan................................................................................................................................................................ 15

Conclusion..................................................................................................................................................... ............ 17

Disclaimer.................................................................................................................................................................. 18

MP1787 (09/2012)

Personal Financial Analysis

September 18, 2012Prepared for: Roger Abbott and Joanne Abbott

Prepared by:

Retirement AnalysisReportr Nt ame: Retire ent Analysis

Team Member 1 Discipline 4

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Holelistic financial plan

Economy & Finance

retirement goals

year of retirement

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comfortable retirement

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retirement overview