“It’s Your Money”A Financial Planning Workshop

May 8, 2020

Gina Chironis, CPA/PFS President & CEOClarity Wealth Management

16440 BAKE PARKWAY, STE. 100, IRVINE, CA 92618 (949) 579-9893 WWW.CLARITYWEALTH.NET1

Gina Chironis, CPA/PFS

Gina Chironis is the CEO of Clarity Wealth Management, an independent, fee only, fiduciary Registered Investment Advisory firm based in Irvine, CA.Gina obtained her MBA from Vanderbilt University. She has worked with KPMG, and with Met Life’s Private Placements group. She served on the AICPA PFP Exec Committee, chaired the CalCPA PFP State Committee, and volunteers with Impact Giving, a womens’ collective giving nonprofit.Gina and her husband live in Laguna Beach, CA. They share four adult children and an amazing yellow lab.Her ideal weekend: a morning hike or bike ride followed by time in the garden and dinner with family andfriends (with wine).

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“Ask First!”This form is to be filled out by any person who is offering legal, financial,

retirement, insurance, accounting, estate, long-term care or similar planning

Some High School Respond HtoigAhLSLcchaotoelgDoripielosmcoampletely;sign and dBaatcehaetlothrse Dbeogttroeme of the page.

GED Some College ✔ Masters or other Advanced Degree

MY EDUCATION- I have achieved the following level of educationse(rcvhiceecsk. HIGHEST levelachieved):

License Type Covers What Activities Issued By License No.Registered Investment Advisor Investment Advice CA Securities Reg Div 1182589

CPA Public Accounting and TaxPlanning State of CA 135420

Name of attorney: Telephone:

Address:

OUR BUSINESS RELATIONSHIP- Check TRUE or FALSE:✔ True / False: In our business relationship, I will at all times serve as a fiduciary and put your interests before my interests and those of my employer.

MY COMPENSATION- I will be paid in the following way (commission, fee, salary, etc.), by the named person or company, in connection with the services I am offering toyou:

Way(s) I’ll Be Paid Payment W ill Be Made By (name each person orcompany)Fee Only (No commissions or product sales) Client

Hourly Fee:$250

Asset Management: $1M minimum; 1.25% on first

$1M, declining thereafter as assetsincrease.

FINANCIAL PRODUCTS / AFFILIATED ORGANIZATIONS- Check TRUE or FALSE:True / ✔ False: I offer or sell annuities, insurance, mutual funds or other financial products; or I am, or my

employer is, affiliated with a person or organization that offers or sells annuities, insurance, mutual funds orother financialproducts.

I certify under penalty of perjury that the responses herein are true to the best of my knowledge.Date: 5/6/2020 BusinessName: Clarity Wealth Management, Inc.

Signature: Address: 16440 Bake Parkway, Suite 100, Irvine, CA92618Print Name: Gina Chironis Telephone: 949-579-9893

Copyright© 2010 H.E.L.P. (Healthcare and Elder Law Programs Corporation)

MY CREDENTIAL(S)- I have the following specialized credential(s) and training (examples: CFP, ChFC, CLU, CPA, JD, MBA, years of relevantexperience):

CPA/PFS, MBA WITH CONCENTRATION IN FINANCE. 30 YEARS EXPERIENCE AS A CPA INCLUDING 12 YEARS EXPERIENCE AS A FEE ONLY FIDUCIARY REGISTERED INVESTMENT ADVISOR

MY RELEVANT LICENSE(S)- I have the following license(s) giving me the legal authority to provide the services I am offering to you (examples: bar license (attorney); securities license; insurance license):

LEGAL SERVICES- (CheckONE):✔ I DO NOT practice law, and the services I am offering to you do not involve practicing law.

I DO practice law, and have an active license to practice law inCalifornia.I DO practice law, but DO NOT have an active license to practice law in California. I am, however, under the

supervision of the following attorney who has an active license to practice law inCalifornia:

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Clarity Wealth Management, Inc.

REGISTEREDINVESTMENT

ADVISORNot affiliated with a broker.

FEE ONLY No product sales, ever.

We act in our clients’ best interest.FIDUCIARY

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WHAT IS A CPA/PFS?The PFS Designation: CPA/Personal Financial Specialist. Issued by the American Institute of Certified Public Accountants (AICPA).

PREREQUISITE/ EXPERIENCE REQUIREMENTS: Be a member of the AICPA and hold a current CPA license issued and regulated by a

state authority 2 years business experience in personal financial planning-related services

EDUCATIONAL REQUIREMENTS: CPA educational requirements (5 year degreein accounting or related) plus personal financial planning specific education

EXAMINATION REQUIREMENTS: Final Certification Exam

CA CONTINUING EDUCATION REQUIREMENTS: 40 hours per year

CONFLICT DISCLOSURE: A material conflict of interest cannot exist – the CPA/PFS must always act in the best interest of the client. All compensation in any form must be disclosed in writing.

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WHAT IS A CFP?The CFP Designation: Certified Financial Planner. Owned and awarded by the Certified Financial Planner Board of Standards, Inc.

PREREQUISITE/ EXPERIENCE REQUIREMENTS: 3 years professional experience or 2 yearsapprenticeship No professional license issued by a governmental authority

EDUCATIONAL REQUIREMENTS: Bachelor’s degree from any accrediteduniversity or college in any major plus personal financial planning specific education

EXAMINATION REQUIREMENTS: Final Certification Exam

CONTINUING EDUCATION REQUIREMENTS: 30 hours per year

CONFLICTS: A material conflict of interest can exist but must be disclosed. Written consent by the client is not required. A CFP must act in a fiduciary duty when providing financial planning, but not when providing investment advice.

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WHAT IS A CFA?Chartered Financial Analyst. Owned and awarded by the CFA Institute

PREREQUISITE/ EXPERIENCE REQUIREMENTS: 4 years experience in professional investment decisionmaking Not a professional license issued by a governmental authority

EDUCATIONAL REQUIREMENTS: Bachelor’s degree from any accrediteduniversity or college in any major. No financial planning education is required.

EXAMINATION REQUIREMENTS: 3 Exams: Level I, Level II and Level III

CONTINUING EDUCATION REQUIREMENTS: 20 hours per year

CONFLICTS: A CFA is not required to act as a fiduciary by the CFA Institute when providing investment advice.

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TODAY’SLINEUP Who is a financial planner?

What is financial planning?

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WHO IS A FINANCIAL PLANNER?

These terms are interchangeable and have no legal meaning: Financial Planner Financial Advisor Financial Consultant Wealth Manager/Advisor Investment Advisor Investment Consultant Financial Analyst

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WHO IS A FINANCIAL PLANNER?

Financial services entities that employ “financial planners”: Independent Registered Investment Advisor (RIA) Broker/Dealer Banks, many affiliated with Broker/Dealer Insurance companies Trust companies

https://adviserinfo.sec.gov/

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FOLLOW THE MONEY:

Various methods of compensation for financial planners: Commission Fee plus commission Fee-based Fee-only

Hourly Fee Based on Assets Under Management Retainer

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WHO IS A FINANCIAL PLANNER?

Now I’m scared/confused! How do I select my financial planner?!?! Credentials/Regulation – they should be affiliated with a

Registered Investment Advisor CPA Personal Financial Specialist (CPA/ PFS) Certified Financial Planner (CFP) Chartered Financial Analyst (CFA)

Fiduciary at all times – not registered with a broker Investments are held at an Independent Custodian Experience Rapport/trust

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Fiduciary Standard of Care

Suitable adviceA broker is a salesperson

and may or may not serve

your best interests.

Usually compensated by

undisclosed commissions

on product sales.

Client’s best interest

is a legal obligation.Investment advice and

actions must be suitable

and in your best interest.

All fees are disclosed.

VS.

Non-fiduciary brokersFiduciary

investment advice

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3 Most Important Considerations in Choosing a Financial Advisor

REGISTEREDINVESTMENT

ADVISORNot affiliated with a broker.

FEE ONLY No product sales, ever.

Legally required to act in your best interest.FIDUCIARY

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Today and next week we’re here to talk about:

?Q&A Next week -

How to Get You There:Choosing Your Investments

Where you are now? Where do you want to go?SMART Goals

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THE BENEFITS OF PLANNING AHEADPlanning has its benefits. According to the 2012 Household Financial Planning survey, planners feel more confident than non-planners in several areas including managing money, savings and investments. Planners are also less likely to feel they are lagging on any specific goal and are more likely to describe themselves as living comfortably.

% Living comfortably

% Not feeling behindon any specific goal

% Feeling very confident in managing money, savings

and investments

Statistics for households with incomes of $100,000 or more.2012 Household Financial Planning Survey, Certified Financial Planner Board of Standards, Inc. and the Consumer Federation of America. July 23, 2012.

46%

35%

34%

68%

50%

48%

Planners Non-Planners

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WHAT IS FINANCIAL PLANNING?

A process designed to help you define and achieve your financial goals. It includes analysis, integration & implementation of:

Goals & assumptions Cash flow & budgeting Tax planning Retirement planning Education planning Risk management/insurance Estate planning Investment planning Miscellaneous & special situations planning

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What’s important to me about money?

If I woke up in 5 years, and my life was just as I wanted it, what would that look like? What would that feel like?

If I only had 6 months to live, what would I want to do? 1 week?

What do I want my tombstone/memorial to say about me?

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WHERE AM I NOW?

My important relationships: Spouse or significant other Children Grandchildren Parents Siblings Friends Pets

Don’t forget to take careof yourself FIRST beforehelping others.

Do I need to plan for their financial needs as well as

my own?

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ESTABLISH YOUR GOALS

FORMULATE GOALS Together with spouse/partner

CONSIDER BEST CASE/WORSTCASE/MOST LIKELY CASE What if you’re disabled? What if you die early?

RANK OR PRIORITIZE GOALS

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Examples:

I want to go on a $30k vacation every 2 years and additionally spend $100,000 per year including taxes (in today’s dollars) until my death at age 100, with $200,000 remaining for my children at my death.

At age 75 I want to sell my current home valued at$1Million with a $200,000 mortgage remaining and downsize to a single-story residence valued at $750,000 in a county that qualifies for Prop60 property tax treatment with no mortgage.

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How Do I Get There?

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PREPARE YOUR BALANCE SHEET

What are your resources (Net Worth)?START with what you OWN:

Cash (include cash value of life insurance) and investments (include retirement accounts & annuities)

Your home and other real estate (note who owns it and how it’s titled, e.g., trust? Joint with rights of survivorship? Community property?)

Be sure you have original cost or “basis” information on everything you own and when it was purchased

MINUS what you OWE: Mortgage(s) Credit card balances Auto loans Student loans

EQUALS your Net Worth (and the resources you have to achieve your goals)

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WHAT WILL YOUR FUTURE INCOME BE?

What are your income sources?Social Security

Benefit increases with Cost of Living adjustments each year At death generally the widow(er) can switch to the deceased spouse’s benefit if

higher

Other Income Annuities Rental Real Estate Pensions Income from your investment portfolio – how much does this need to be to safely

sustain your spending needs?

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Social Security can’t cover everything.│ Social Security will only account for about 40% of

your pre-retirement salary after retirement.*

│ And most people anticipate needing 80-100% of their pre-retirement income to live comfortably.

│ That leaves 40-60 % of your pre-retirement income that needs to be covered through withdrawals from your savings or other income sources.

│ If you retire at age 65, and live to be 100, that’s a long time!

RETIREMENT PLANNING: HOW MUCH IS ENOUGH?

* SSA.gov—“Understanding Your Benefits”

Social Security

Retirement Savings

Income Gap

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HOW MUCH ARE YOU SPENDING?

A Secret ShortcutHunt down last year’s tax return (2019): START with Form 1040, pg. 1, Line 8b (your adjusted gross income, aka AGI)

MINUS Form 1040, pg. 2, Line 16 (your total federal taxes)MINUS Form 540, pg. 2, Line 33 (CA state income taxes paid) EQUALS your after-tax income

MINUS Your annual savings (don’t deduct if it was taken out before tax, i.e. 401k) PLUS any increases in credit card debt

EQUALS your annual expenses

Where did it go?

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HOUSINGMortgage (P&I) / RentEquity Line (P&I)Property TaxesProperty / Renters InsuranceUmbrella Liability InsuranceEarthquake InsuranceGardener / Pool ServicesCleaningHomeowners AssociationMaintenance / ImprovementsPest Service / Alarm System

UTILITIESElectricGasWater / Sewer / TrashPhones (Home + Wireless)

FOODGroceriesMeals Eaten OutPet Food / VetBottled Water

AUTO / TRANSPORTATIONLoan / Lease PaymentsInsurance PremiumsGas & OilRepairs / MaintenanceRegistrationParking / WashesToll RoadsTrains / Metrolink

CHARITABLE DONATIONSReligious DonationsOther Cash Donations

ENTERTAINMENT /RECREATIONClub / Gym DuesAdmissionsCable / Digital TVInternetMedia (Movies, Music, etc.)Books/Magazines/NewspaperLessonsHobbiesAlcohol & TobaccoVacations / Trips / CampDaycare / BabysittingAllowances to Children

MEDICAL EXPENSESMedical PremiumsDental PremiumsPrescriptionsDoctor / Dentist / HospitalVision CareMental Health

MAJOR PURCHASE PAYMENTS(on Balances Carried)

Furniture / AppliancesVISAMaster ChargeAmerican Express

OTHER INSURANCE PREMIUMSLifeDisabilityLong Term CareProfessional Liability

FAMILY & PERSONAL NEEDSGifts Given (include X-mas)Clothing PurchasesLaundry / Dry CleaningToiletries / CosmeticsBarber / Hairdresser / NailsPostage / StationaryHousehold SuppliesTuition / Continuing EducationProfessional DuesTax Preparation Fees

TOTAL EXPENSES $

MONTHLY LIVING EXPENSESPersonal ONLY - Do NOT Include Business or Rental Expenses Here

MISCELLANEOUSChild SupportAlimonyOther 28 28

TAX PLANNING

TAX SAVINGS STRATEGIES Defer income Accelerate deductions Maximize pre-tax savings: 401k/IRA Roth Contributions/Conversions Retirement Drawdown Strategies Investment Income Tax Minimization CA Prop 60/90 Strategies

DEDUCTIONS Medical expenses SALT (state income, property, state sales) Interest (mortgage, points, investment) Charitable contributions (cash, non-cash, in kind)

BEWARE THE ALTERNATIVE MINIMUM TAX(AMT)

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Inflation is here to stay (and won’t be low forever) 2019 Inflation = 2.28% 1979-2019 average Inflation= 3.14% 2020 Social Security increase 1.6% 5% average health care costs increase

40 Year Return on Investments* U.S. Stocks = 11.97% a year U.S. Bonds = 7.37% a year Global 60/40 Portfolio = 10.73% a year

How long are you going to live?

What will be your health and/or cognitive condition when you’re 80? 90?100?

ASSUMPTIONS

* Estimated 1979-2019. Past performance is no guarantee of future returns.

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Once you’ve developed your: Specific financial goals – SMART goals Balance Sheet Spending needs

The next step is to: Understand and Assess Your Risk Tolerance, Stay Tuned Folks…

Develop Your Investment Policy

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Maximum Retirement SpendingBase FactsPreparedfor Barbara JonesDepending upon whether you have a surplus or a shortfall, you may be able to change the amount of money you spendannually during retirement. If a surplus exists, you may be able to spend more and still achieve your retirement objectives. If a shortfall exists, reducing the amount you spend could allow you to avoid delaying your retirement.

Barbara is already retired. Annual living expenses during retirement are $82,300 and are projected to grow at the specified inflation rate(s). Desired assets remaining at death are$0.

Currently, you are spending $82,300 annually. The most you can spend while still funding your retirement is $110,000per year.

Under current assumptions, portfolio assets remaining are projected to be $610,900. Using the above result, portfolio assets remaining are projected to be $15,417.

SUMMARYRetirementStarts Age 86Living Expenses$82,300 (current)$110,000 (new)Cost of Retirement$2,052,109(current)$2,483,538 (new)Assets in 2033$610,900 (current)$15,417 (new)

Portfolio AssetsThe chart below shows the amount of portfolio assets you can expect to have in each of the retirement scenarios, oneusing current assumptions and the other using the above result.

This analysis must be reviewed in conjunction with the limitations and conditions disclosed in the Disclaimer page. Projections are based on assumptions provided by the advisor/representative, and are not guaranteed. Actual results will vary, perhaps to a significant degree. The projected reports are hypothetical in nature and for illustrative purposes only.

Return assumptions do not reflect the deduction of any commissions. They will reflect any fees or product charges when entered by the advisor/ representative. Deduction of such charges would result in a lower rate of return. Consult your legal and/or tax advisor before implementing any tax or legal strategies.

Version 10.3.392.17298 § Prepared on May 02, 2019 by Gina Chironis § Personal and Confidential § Page 19 of 20

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EDUCATION PLANNING

529 SAVINGS PLANS: after tax contributions grow & distributed tax free for qualified expenses Individual funds Age-based and risk-based funds Tax-free withdrawals for qualified expenses Contribution limit $529,000 for CA (varies by state) Small initial investment – as low as $25

FOR CA RESIDENTS: www.scholarshare529.com Passive Enrollment Year Portfolio Fees are 0.12 – 0.15% per year

Want more information? www.savingforcollege.com

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EDUCATION PLANNING

Regular InvestmentAccounts Pay ordinary and long-term capital gains as with any accounts

UGMA/UTMAAccountswww.scholarshare529.com Contribute up to $15,000/year ($30,000 for a married couple filing

jointly) without incurring gift tax Child gets money at age of majority (can be up to age 25 in California)

EE Bonds

Coverdell Savings Accounts

529 Pre-Paid Tuition Plans

Want more information? www.savingforcollege.com

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RISK MANAGEMENT

Obtain objective advice to be sure you have proper types and coverage

Life, disability and long term care insurance – if you are over 70 you may not need this

Health insurance Homeowner’s and auto Umbrella liability insurance!!

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ESTATE PLANNING

Basic Estate Planning Documents: Living Trusts Wills (for both of you) Advanced Health Care Directive (for both of you) Durable Power of Attorney for Finance (for both of you) Durable Power of Attorney for Healthcare (for both of you) Letter of Instruction (last wishes, burial instructions, etc.)

Your estate planning documents speak for you when you can’t speak for yourself.

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ESTATE PLANNING

Thoughts on beneficiary designations on accounts: Be sure they’re up-to-date (so the ex- doesn’t get them) Naming a trust vs. naming a person Remember that named beneficiaries take priority over those named in a

will Joint accounts – gift issues

General rule of thumb: Your estate planning documents should be reviewed every three to five years. Even if your goals haven’t changed, the laws and

regulations governing youhave.

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Questions?NEXT WEEKInvesting for success in retirement: risk tolerance, asset allocation & diversification

If you have questions for Gina you can email her at: gina@claritywealth.net

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