Enter and edit Annual Living Expenses in Retirement in the Cash Flow Inputs > Expenses section. This entry is for annual, recurring expenses once retired. For example, utilities, groceries, auto insurance, and other expense items that will never go away. For expenses that will occur before retirement or will not happen every year, enter these as separate entries in the Expenses section. Enter this [...]
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168 ArticlesWhy is NIIT showing a value greater than zero when I’m below the income threshold?
The Net Investment Income Tax (NIIT) income thresholds are not indexed to inflation, similar to the income thresholds used for benefits.If your WealthTrace projections are displayed in , your MAGI may appear lower than the actual nominal amount used to determine whether NIIT applies.For example, a future-year MAGI shown as $200,000 in today’s dollars could be above the applicable NIIT threshold [...]
Does the program estimate Medicare premiums based on my income each year? And how does it handle medical expenses that Medicare doesn't cover?
WealthTrace can estimate Medicare Part B and Part D premiums based on your projected income. You should also add a separate expense for other medical costs in retirement.Turn Medicare Premium Estimates On or OffClick Plan Settings in the navigation menu. Select the Other tab.Turn Use Program Estimate for Medicare Parts B & D Premiums on or off.Your changes will automatically save.When turned on, [...]
How do I change my spending behavior in Monte Carlo simulations based on how my portfolio is doing?
Dynamic Spending Monte Carlo GuardrailsDynamic Spending Guardrails let you model a simple, rules-based spending change inside the Monte Carlo simulation:If the portfolio value rises above an upper threshold, the simulation assumes you increase spending on living expenses in retirement by a set percentage.If the portfolio value falls below a lower threshold, the simulation assumes you decrease [...]
Should I enter my pension benefit in today’s dollars or future dollars?
When entering pension income in WealthTrace, enter the future dollar amount you expect to receive when the pension begins.Why Pension Income Is Entered in Future DollarsPension benefit estimates are typically presented as the actual dollar amount that will be paid at the future retirement date.For example, if your pension statement says you will receive $4,000 per month beginning at age 65, enter [...]
I have an account that is mostly in a regular 401(k), but a portion is in a Roth 401(k). How do I tell the program that a portion of the account is in a Roth?
You can designate the portion of a 401(k) plan that is in a Roth 401(k) as seen in the screenshot [...]
Does the program deduct medicare premiums from Social Security payments?
The software does not deduct Medicare payments so you should either deduct from Social Security or put it in as an expense in the Goals & Additional Expenses [...]
Should the estimated amount from Social Security be used as the initial payment or should it be the SSA estimate less estimated Medicare payment?
The program estimate for Social Security does not include any deductions for Medicare. You should either deduct this from Social Security or put it in as an expense in the Goals & Additional Expenses [...]
Does the input for Annual Living Expenses in Retirement include taxes?
The input for Annual Living Expenses in Retirement is before taxes, but the program calculates income and investment taxes for you, so do not include those taxes. Expenses such as property taxes should be entered separately under Cash Flow Inputs → [...]
How are the average returns each year calculated? Does the program look at the average return of every investment based on its underlying holdings or does it simply use an average for the entire portfolio?
WealthTrace does not simply use an average annual return for the portfolio. It looks at the annual return for every investment, which is much more accurate. The average annual return for each investment is the weighted average annual return using the balances of the underlying holdings. When making projections the program uses the weighted average annual return of each [...]