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F
I N A N C I A L I N D E P E N D E N C E
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Matthew
Retires at age 62
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Matthew & Tammy
McCarthey
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To
achieve financial independence for your retirement in 2032 you must maintain
a solid financial
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position.
This is achieved if your projection shows that you have a positive liquid net
worth at the
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end
of the planning horizon. Non-liquidate assets such as your home, business
interest, or life
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insurance
policies are considered unavailable to fund any ongoing cash shortfalls. In
addition
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company
retirement plans are not self directed and thus not considered liquid. You
will need to
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rollover
these assets to an IRA to be considered avaliable on an as needed basis.
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At
the end of 2060, you will be in a sound financial position. You will not have
a deficit, and your
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assets
available for liquidation will be worth $6,406,980, which will be available
as an emergency
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reserve.
Assets that are considered available for liquidation are liquid assets such
as cash
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accounts,
bonds, stocks, mutual funds and IRAs.
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This
analysis of your capital needs is based on the following assumptions:
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Matthew will retire in 2032 at the age of 62. Matthew will continue to live for
another 28
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years, until reaching an age of 90 in 2060.
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Tammy will retire in 2033 at the age of 62. Tammy will continue to live for
another 28
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years, until reaching an age of 90 in 2061.
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Inflation
will average 1.5% over the course of the plan. This rate of inflation is a
user defined
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rate
used for all federal and state tax related calculations including indexing of
tax tables,
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personal
exemptions, standard deduction, retirement plan contribution limitations,
gifting
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limitations,
and any other tax related phase in or phase out that is indexed to inflation.
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Your
projected investments will appreciate at an average rate of 6%. This does not
reflect the
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cumulative
average rate of return for investment assets. It reflects the average growth
in value
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for
liquid investment capital over the planning horizon, including unrealized
appreciation,
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reinvested
interest and dividends, and ongoing contributions.
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