Sample Net Income Savings - Retired Couple

FLATFEECIO Sample Fiduciary Review

Retired Couple with $1,400,000   36 Months Cumulative Savings: $40,800

A 69 year old retired executive with 67 year old spouse have $700,000 in an IRA at a large national broker dealer. The IRA was funded from a rollover of the balance of the husband’s retirement plan. Couple are invested in individual stocks and bonds with several different managers seeking income and moderate growth that that is producing a 4% cash flow from dividends and income from the individual stocks and bonds.

Clients are taking all dividend and income distributions from the IRA and Joint Account of $700,000 to generate income. Both accounts are similarly managed income and growth allocation of stocks and bonds.

Total pre-tax annual income distribution of 4% from both accounts is $56,000 per year. After Federal and State taxes on the investment income the couple's net spendable income from their investments is $47,000 per year. The Percentage on Assets Legacy Fee Structure is as follows:

EXTERNAL FEES

LEGACY ADVISOR FEE of 1.0%  per year on $1,400,000                       = $14,000

(Dollar Amount of Fee Fluctuates and Grows Directly with Account Value)  

Third Party Manager Fee of .50% on $1,400,000                                          = $7,000    

(Dollar Amount of Fee Fluctuates and Grows Direclty with Account Value)

TOTAL ONGOING LEGACY FEES                            = $21,000

LEGACY FEE IMPACT ON INCOME

TOTAL ONGOING LEGACY ANNUAL FEES                                   =$21,000

NET AFTER TAX INVESTMENT INCOME                                       =$47,000            

NET SPENDABLE INCOME LESS ANNUAL LEGACY FEES        = $26,000

Legacy Advisor Fee $21,000 / Net Spendable Income $47,000

                        = 45% of Net Spendable Income

 

FLATFEECIO Efficient Wealth Plan Upgrade

FLATFEECIO FIXED ANNUAL FEE                             =$6,000

(Dollar Amount of Fee Does NOT Grow Directly with Account Value)

INTERNAL MUTUAL FUND ALTERNATIVE EXPENSE of                          = $1400

.10% on $700,000 IRA and $700,000 Joint Account

(Dollar Amount of Fee Grows Directly with the Account Value)

TOTAL FLATFEECIO ANNUAL FEES                          =$7,400

LEGACY ANNUAL PERCENT ADVISOR FEE            =$21,000

FLATFEECIO ANNUAL ADVISOR FEE                       =$7,400

ANNUAL NET SAVINGS                                             =$13,600

24 MONTHS CUMULATIVE SAVINGS                       =$27,200

36 MONTHS CUMULATIVE SAVINGS                       =$40,800

 

Hypothetical Client Fee Savings Illustration. Actual Savings Results May Vary. Percentage based advisor and product fees fluctuate which can increase or decrease potential annual and cumulative savings results.