WealthTrace can show a 0% Monte Carlo success probability when your taxable funds run out before you can access your qualified, tax-deferred retirement accounts.For example, if you retire before age 59½ and your taxable accounts are depleted, WealthTrace considers your plan unsuccessful even if you have significant funds remaining in your IRA or 401(k).A 0% success probability does not mean you [...]
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126 ArticlesI have a home sale in the Additional Cash Inflows section. How is this invested when the sale takes place?
Income listed under Additional Cash Inflows, if not needed for , will go into investment accounts with an Account Type of "Taxable" on a pro-rata basis as the default behavior. You can set which investment account the cash inflow goes into in the [...]
Why is WealthTrace using taxable account principal when income appears sufficient?
This can happen when a withdrawal from a taxable account generates capital gains taxes. WealthTrace may use additional principal from that same account to pay the taxes created by the withdrawal.As a result, it may appear that the program is drawing from the account balance even when dividends, interest, Social Security, pensions, or other income are available elsewhere.WealthTrace currently [...]
I can't find where to tell the program I will have a Roth IRA conversion. Where is this done?
You must have an investment set up with an 'Account Type' of Roth IRA. You can then add the conversion information in the 'Roth Conversions' section as you see in the screenshots below. In this example this person is converting a manually entered dollar amount by year. You can also convert from more than one account at a time. To convert from more than one account to the Roth IRA, select the [...]
I created an additional cash inflow that gives me income for five years. It starts three years from now. Where do the cash inflows go, and what rate of return do they generate?
Additional Cash Inflows grow at the rate you specify before you receive them. In the screenshot below, this income for a part-time job grows at the inflation rate until the cash inflow begins. When the income starts, it goes into investment accounts that have an 'Account Type' of 'Taxable' pro rata based on their estimated balances at the time. Once added to those accounts, the money will generate [...]
Which account does WealthTrace use to pay the taxes generated by a Roth conversion, and can I choose which account is used?
When WealthTrace calculates taxes resulting from a Roth conversion, those taxes are treated as an expense within the plan.Currently, WealthTrace pays those taxes in the following order:Taxable investment accounts - funds are taken from taxable accounts in the same order they would normally be used to pay other expenses.The IRA being converted - if there are no taxable funds available, WealthTrace [...]
How do I change the order in which funds are withdrawn from my investment accounts?
If the program needs to use investment income and/or principal it will use money from the Taxable & Tax-Advantaged accounts first, then Non-Qualified accounts, then Qualified Tax-Deferred accounts last. However, within those sections you can control the order of withdrawal by clicking on the re-order icon and then dragging and dropping rows as you see in the screenshot [...]
I want to set a date when the money from an investment account can be used. I want it to be "locked out" for a certain number of years.
You can "lock out" an investment account from being used until the owner of the account reaches a certain age. You can see this setting in the screenshot below. One important note: If it's a taxable account, only the principal is locked out from being used. Interest and dividends can still be used during the lock out [...]
I have an expense in the Goals & Additional Expenses section that I want funded by a specific investment account. How can I do this?
You can select one investment account to fund a goal in the Goals & Additional Expenses section as seen below. If that account runs out of money before the expense is fully funded, the program will use other investment accounts to fund [...]
What is the order of how income and investments are used for expenses in retirement?
When the primary plan participant is retired, expenses are funded in the following order:Salary from a spouse/partner who is still workingRequired minimum distributionsDeferred compensation paymentsIncome from entries in the Additional Cash Inflows sectionSocial SecurityPensionsInvestment growth and principal from taxable and tax-advantaged accounts first, then non-qualified accounts, and finally [...]