You can view the excess RMDs (over and above what's used for spending) by looking at the amount transferred to taxable accounts as seen in the screenshot below. RMDs that are not spent are only transferred to accounts labeled as 'taxable,' and are distributed pro rata to these accounts based on their balances at the [...]
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126 ArticlesHow do I view my asset allocation by any mix of investment accounts?
You can view the holdings and asset allocation of any mix of investment accounts. You can also group by different account types and view the asset allocation of that group, such as by retirement accounts [...]
If I have Required Minimum Distributions (RMDs) that are not spent, where do they go?
RMDs that are not spent are distributed to accounts with an 'Account Type' of "Taxable". The distributions go into these accounts pro-rata based on their balances at that [...]
Where do I model the sale of a home in the future?
You should model this in the Additional Cash Inflows section. Enter the cost basis and toggle 'on 'Is Primary Home' if this is your primary home and you can receive the home sale tax exclusion. Note that when the sale occurs in the program, by defaults the after-tax proceeds are reinvested in 'Taxable' accounts pro rata based on their balances at the time of the sale. However, you can choose which [...]
I ran a Roth conversion scenario and applied the same amount to convert to my Roth account in my plan. The results are very different from the scenario. Why aren't they the same?
The Roth conversion scenario will assume that the account the conversion is going into will have the same annual return as the account the money is coming from. This way you are comparing apples to apples with the conversion scenario. If you add a conversion to a Roth investment in the actual plan, the program will not assume that the annual returns are the same. It will still use the annual [...]
I have a large annual contribution going into an investment account that has a low balance today. When I look at the ending balances of each investment in the account, the contribution does not appear to be going into that investment account. Where is it going?
The annual contribution is going into the correct account. But in this case, the 'Rebalance Investments Annually' toggle is set to 'Yes.' Because of this, investment accounts are rebalanced at the beginning of each period based on their percentage of the overall investment portfolio as it stands today. So an investment account with a small balance to start with will continue to have a small [...]
If my expenses decrease or my salary goes up before retirement how does the program take this into account since living expenses don't start until retirement?
Before retirement the program assumes that whatever you don’t save, you must have spent. So if your expenses are reduced pre-retirement, this means your contributions to investments must have gone up, which in turn means you should be increasing your to an investment account or investment accounts. If your increases you can increase the salary in the Gross Salary assumption, but this also means [...]
I want to optimize Roth conversions for my children to give them the most after-tax money possible.
How “Maximize the Investment Value for Beneficiaries” worksWhen you pick Maximize the Investment Value for Beneficiaries, the optimizer stops focusing primarily on your lifetime outcomes and instead prioritizes how much after-tax value your beneficiaries are expected to receive from what you leave behind.That changes the math in two big ways:It evaluates outcomes from the beneficiary’s perspective [...]
Where should I enter accelerated RSU vesting?
Enter the value of the vested restricted stock units as a taxable cash inflow in Cash Flow Inputs for the year they vest.Because RSU vesting is generally treated as ordinary taxable income, it should not be entered as an investment account contribution.What happens after vesting may need to be modeled separately:If the shares are retained, increase the balance of the appropriate investment [...]
When I have an expense, which sources of income are used to cover it first? What about investment assets?
The order is as follows: Additional Cash InflowsSocial SecurityPensionsRequired Minimum Distributions (RMDs)Deferred CompensationTaxable/Tax-Advantaged GrowthTaxable/Tax-Advantaged PrincipalNon-Qualified Tax-Deferred GrowthNon-Qualified Tax-Deferred PrincipalQualified Tax-Deferred GrowthQualified Tax-Deferred Principal This is usually the most tax-efficient way to withdraw money. You can also from [...]