View The Planner:
* All images below are screen shots of the planner. Due to the size reduction needed, the clarity is reduced, but we felt it was still important to illustrate the look and feel of working with the planner. Please let us know if you have any questions!
1. The Expenses Page
- Interview style questions, with notes to guide you, make all entries quick and easy.
- Entries for two mortgages, with the option to pay off early, or sell, either property.
- Annual mortgage interest and real estate taxes are calculated automatically to provide accurate tax deductions (real estate taxes are also inflation adjusted).
- Total expenses adjust automatically in the year that a mortgage ends.
- Enter an inflation rate for the planner to use (try fractionally different rates to see just how dramatic the effect can be!).
- The inflation rate applies to general expenses, but not to fixed expenses (e.g. auto loans, mortgage payments, etc.) so that your total expenses aren't artificially inflated over time. Also, Health Care Costs use a unique inflation rate of 6% (per projections from the U.S. Dept. Of The Actuary for the next decade).
- Select your tax filing status, and enter optional tax deduction amounts for State income/sales tax, Charity, and Medical expenses. The planner will use your Standard Deduction automatically if it is greater than your deductions.
Enter the following information, by spouse, if married:
- Your current taxable retirement savings balance (from 401k's and IRA's).
- Your desired retirement age.
- The age when you intend to claim Social Security benefits.
- Any cash/Roth IRA amounts that you would like to use to pay expenses.
- Optional - enter any significant one time events that may affect retirement savings (positively or negatively). Great for "what if" scenarios!
- Enter your current expenses first, then adjust how, and when, those amounts may change, start, or end, in future time frames. Over 40 expenses are listed, including the ability to enter a few of your own. This offers clarity on how money is being spent (note the % to total for each expense), creates the ability to calculate expenses for each individual year, and allows for inflation protection for any fixed expenses. Easily model different scenarios for various time frames. You're 80% done!
2. The Income Page
- For reference, the most common types of retirement savings options (with their separate contribution limits), and Required Minimum Distributions, are explained.
- Clear explanations for how to proceed when entering your income information (don't worry, it's easy!) helps to keep you on track, and avoid any confusion.
- The investment rate % that you expect to earn on your retirement savings.
- The income that you expect - every year doesn't have to be the same!
- The amount that you plan to contribute to your retirement savings (401k/Roth IRA).
- The amount that you expect your employer to contribute to your retirement savings (if they offer a matching funds policy).
- Your gross taxable income, after any pre-tax amounts withheld from wages. This identifies the amount of income available to pay expenses more accurately. There are worksheets right beside this section to make this quick and easy.
- Every year won't be the same, so why would you want to plan it that way?
- So that you can enter actual results after each year, automatically updating all future years so that you don't hold an inaccurate plan, or have to start over each year.
- Flexibility - so that you can try "what if" scenarios with different amounts of income, contributions, or investment return rates for various time frames.
You're Done! Now on to the Results!
3. The Results Page
- Gross taxable income
- Social Security income
- Retirement savings contributions
- Retirement savings balance
- Retirement savings distributions (based on total need, and proportionate to both spouse's balances, including tax due)
- Total cash/Roth IRA amounts used to pay expenses
- Separate graphs help visualize the effect on savings balances over time
- Total gross taxable income
- Taxable income (before any retirement savings distributions)
- Federal tax liability
- Income available to pay expenses
- Cash available to pay expenses
- Total expenses
- Total distributions from retirement savings
- Total retirement savings balance
- Federal tax deductions, and Child Tax Credit (if any)
- Separate graphs illustrate the effect on retirement savings over time, as well as the relationship of expenses to distributions
Above the total results you will see the note that's most important to you - will your money last as long as you need it to? The planner uses a life expectancy of age 90 for this purpose, but still calculates all data (listed below the note) up to age 95 for reference. If you have sufficient savings in the year when both spouses have reached age 90, it will tell you your savings balance for that year. It looks like this:
If you should come up short, it will tell you the year that your savings will run out, and how much more is needed. Don't despair! You'll be surprised at how just a few adjustments on the Expenses and/or Income pages (not just saving more) can make up a large shortfall. After all, learning what adjustments are needed to reach your goals is the whole point!
That's how it all works! Easy to use, informative, and with clear instructions helping you every step of the way!