Cash Flows

The Cash Flows page allows you to break down all of the details of the client's projections. Cash Flows are based on the values for the plan specified and straight-line returns. Each line in the Cash Flow report reflects a projection of twelve months of activity, starting at the point you specify in the Cash flow timing setting. The Year listed is the year at the end of the twelve-month period, and the Age shows the client/spouse's age at the end of the twelve-month period. The values shown reflect the end of the period.

This article details how values in the Cash Flows section are derived. To access the Cash Flows, go to Retirement > Cash Flows:

Maps

The Cash Flow Maps are a visual approach to our popular Cash Flow tables. Here you will find a Waterfall chart (Sankey-style) and a Breakdown chart providing a visual overview of the cash inflows and outflows for a specific year.

Utilize the timeline to select the year of the plan that you want to view. Above each chart is a timeline with a slider icon that can be toggled to select a specific year of Cash Flows. In the year of the Client’s and Co-client’s retirement, a tooltip will appear to help identify the milestones.

Waterfall

The Waterfall section is a Sankey-style flow chart displaying the total inflows and outflows in the financial plan. This chart displays how income inflows are dispersed throughout a specific year in the cash flows. Each inflow and outflow is proportional in size to the value of that item to help visualize the magnitude of the impact it has for that year. The amounts shown on this screen correlate directly with the cash flow detail in the Cash Flows > Summary page.

Breakdown

Transition over to the Breakdown chart for a visual overview of the inflow and outflow categories from the Cash Flow > Summary tab. Select the individual sections of the Breakdown chart to expand the area and drill down into the key details that make up each section of the chart.


Summary Tab

From the Summary tab, you can view and drill into details of the client's yearly cash flows, and everything they are receiving and spending.

Cash Flow Summary Tab

Definition

Income Inflows

Total income from salary, pensions, etc.

Planned Distribution

Includes: Required Minimum Distributions (RMDs) from tax-deferred accounts, Income distributions from qualified accounts, distributions from 529 plans to fund college goals, and distributions from HSA accounts.

Other Inflows

Additional inflows such as the sale of property/business and insurance proceeds.

Total Inflows

Equals the sum of Income Flows, Planned Distribution, and Other Inflows.

Expenses

Total expenses

Goals

Total financial goals

Tax Payment

Reflects an estimate of the client's taxes

Planned Savings

Total savings into qualified (tax-deferred or tax-free) accounts for the client (& spouse). Does not include savings specified into taxable accounts under the Modified Cash Flow or Goal Based calculation methods.

Total Outflows

Equals the sum of Expenses, Financial Goals, Tax Payment, and Planned Savings.

Spend Unsaved Cash (Modified Cash Flow Only)

Reflects the amount that is automatically spent under the Modified Cash Flow calculation.

Net Flows

When using Cash Flow Based planning method, this value equals total inflows less total outflows. When using Modified Cash Flow Based planning method, this value equals total inflows less total outflows & spend unsaved cash flows. Any positive values are assumed saved into the taxable assets.


Income Inflows:

Income Inflows

Definition

Salary

Reflects all amounts entered in Salary cards.

Self-employment

Reflects all amounts entered in Self-employment cards.

Social Security

Reflects all Social Security benefits based on the Social Security strategy, plus any amounts entered in an 'Other Income' card with Tax status of Social Security.

Pension

Reflects all amounts entered in Pension cards.

Annuity

Reflects all amounts entered in Annuity cards on the Income screen, plus income derived from annuity accounts set up in the Net Worth screen or in the Income Strategy section of the Retirement Analysis action items, whether through annuitization or lifetime income riders.

Investment Income

Reflects investment income (interest + dividends) from taxable accounts during retirement. This column will only appear if the appropriate methodology setting is checked off which distributes income from taxable accounts in retirement rather than reinvesting it.

Business Income

Reflects all amounts entered as business distributions in an Other Account card with a type of business.

Trust Income

Reflects income from investment accounts owned by a Trust.

Other Income

Reflects all amounts entered in Other, Child Support, Alimony, Royalties, or Inheritance income cards, as well as income from a Note Receivable, entered on the Profile > Net Worth screen under 'Other' account.

Total Income Inflows

Equals the sum of all of the prior values on this screen.


Other Inflows:

Other Inflows

Definition

Rental Income

Reflects rental income set up in an Investment Property card on the Net Worth screen.

Sale of Real Estate

Reflects the sale of properties, as specified in the cards for Investment Properties or Vacation Homes, or the sale of the primary home through setting up a Relocation Goal.

Sale of Businesses

Reflects the sale of businesses as specified in an Other Account card with a type of business.

Sale of Other Assets

Reflects the sale of assets as specified in an Other Account card with a type of Lifestyle.

Options and RSU

Income from Options, RSUs, or Restricted Stock, from the Options tab.

Inheritance

Reflects any inheritance income from the Profile / Inheritance screen.

Insurance Death Benefit

Reflects payout from life insurance upon the passing of the client/spouse.

Life Insurance Distribution

Reflects loans from whole/universal life policies, or the full surrender of such policies.

LTC Insurance Benefit

Reflects payout from long term care insurance to offset LTC expenses set up in the Goals screen.

Total Other Inflows

Equals the sum of all of the prior values on this screen.


Expenses:

Expenses

Definition

Living Expense

Reflects values set up in the 'Pre-retirement Living Expense' card on the Expenses screen prior to retirement, and values set up in the 'Retirement Expense' card on the Goals screen after retirement.

Housing

Reflects expenses associated with the Primary Home, including any adjustable-rate mortgage, interest-only mortgage, conventional mortgage, property tax, and insurance.

Debt

Reflects credit card payments and payments for all types of debt other than conventional mortgage debt, adjustable-rate mortgage debt, and interest-only mortgage debt.

Health Care

Reflects amounts set up as Medical expenses, amounts entered in the Annual Retirement Health Cost and Annual Retirement LTC Cost cards, and amounts entered in an 'Other' expense card with ‘Tax deductible’ status of ‘Self-employed health care premium’

Insurance Premium

Reflects amounts set up as premiums for life, disability, property & casualty, and long term care insurance.

Rental and Vacation Home

Reflects expenses associated with all Investment/Rental Properties and Vacation Homes, including any mortgage, property tax, insurance, and maintenance.

Other Expense

Reflects additional expenses such as business/property purchases, money used to exercise options, and most items entered in a 'Charitable Giving', 'Alimony' or 'Other' expense card.

Total Expense

Equals the sum of all of the prior values on this screen.


Goals:

Goals

Definition

College

Reflects all amounts set up as College Goals.

Car

Reflects all amounts set up as Car Goals.

Vacation

Reflects all amounts set up as Vacation Goals.

Wedding

Reflects all amounts set up as Wedding Goals.

Legacy

Reflects amounts set up as Legacy Goals in the last year of the plan.

Other Goals

Reflects all amounts set up as Other Goals.

Total Goals

Equals the sum of all of the prior values on this screen.


Taxes:

Taxes

Definition

Federal

Reflects the federal tax projection, as calculated in detail and reflected in the Tax > Details screen.

State

Reflects the state tax projection based on the Resident State set in the Client card on the Family screen.

FICA

Reflects the FICA tax projection.

Local

Reflects Local taxes, calculated using the Local tax percentage set in the Tax and Fees card on the Expense screen.

Total

Equals the sum of all of the prior values on this screen.

Cash Flow Details

You can click on all underlined column headers to see a further breakdown of the cash flow information. For example, if you click on 'Income Inflows', you will see a breakdown of the various income components


Net Worth Tab

On the Net Worth tab, you can see the various assets and liabilities that make up the client's projected Net Worth over time:

Net Worth

Definitions

Non-Qualified Assets

Reflects all taxable investment assets, including Bank assets.

Qualified Assets

Reflects all tax-deferred and tax-free investment assets.

Options and RSUs

Reflects the current value of vested but unexercised options.

Primary and Vacation Homes

Reflects the value of the Primary Home and all Vacation Homes.

Investment Properties

Reflects the value of all Investment Properties.

Business Assets

Reflects the value of all business assets set up as an Other Account with a type of business.

Trust Assets

Reflects the value of investment assets set up with an owner of 'Trust'.

Other Assets

Reflects the value of all assets set up as an Other Account with a type of Lifestyle.

Mortgages

Reflects the value of all mortgages.

Other Loans

Reflects the value of all non-mortgage loans.

Net Worth

Equals Non-Qualified Assets + Qualified Assets + Primary and Vacation Homes + Investment Properties + Business Assets + Trust Assets + Other Assets - Mortgages - Other Loans.


Invested Asset Tab

The Invested Asset tab allows you to see how assets grow or decline each year by progressing from the beginning balance for the year to the ending balance.

Invested Asset

Definitions

Beginning Balance

On the first line, represents the current value of all investments. Subsequently, equals the prior year's Ending Balance.

Planned Saving

Total savings into qualified (tax-deferred or tax-free) accounts for the client (& spouse). Does not include savings specified into taxable accounts under the Modified Cash Flow or Goal-Based calculation methods. Equals the Planned Saving value from the Summary tab. Click into the underlined column header to view additional details.

Employer Match

Equals the amount calculated as an employer contribution on qualified plans as set up in the 401(k) or Roth 401(k) savings cards, plus any amount entered in an 'Other savings > Tax Deferred' card, 'Other savings > Tax-Free' card, 'Other savings > Cash Balance Pension' card, 'Other savings > Profit Sharing' card, or "Other savings > Employee Stock Ownership Plan' card. Click into the underlined column header to view additional details.

Planned Distribution

Reflects the total of the following: (1) Required Minimum Distributions (RMDs) from tax-deferred accounts, (2) Income distributions from tax-deferred accounts (as specified as 'Distribution' Income), (3) Distributions from 529 plans to fund college goals, (4) Distributions from HSA accounts to fund medical expenses. Equals the Planned Distribution value from the Summary tab.

Net Cash Flows

Equals the Net Cash Flows value from the Summary tab.

Annuity Adjustment

Reflects the Annuitization of an annuity account and withdrawals from annuity accounts to generate guaranteed lifetime income.

Beneficiary Distribution

Reflects the percentage of the account that is assumed as inherited by the surviving spouse. You can update these figures in our Account Assumptions page.

Insurance Cash Value Change

Reflects changes in permanent life insurance Cash Value. This field will only be visible when a cash value approach is used within a permanent life insurance policy.

Portfolio Return

Reflects the total investment return of the investment accounts.

Ending Balance

Equals the sum of all of the prior values on the tab.


Accounts Tab

The Accounts tab allows you to see details for each type of account (Taxable, 401(k) / 403(b), Traditional IRA, etc.). You can use the drop-down box to the left of the plan name to see additional information for each account type.

Accounts

Definition

Ending balance by accounts

The end of period balance for each type of account - the Total will tie to the Ending Balance on the Invested Asset tab.

Addition to accounts

All contributions (including planned saving, employer contribution, and saving to taxable accounts) to each type of account.

Required Minimum Distribution

Reflects the required distribution of assets from tax-deferred accounts into the taxable account when the client reaches age 70 1/2.

Withdrawal from accounts

Reflects withdrawals from each account type to fund negative cash flows.

Net cash flows

Reflects the total of Addition to accounts, Required minimum distribution, and Withdrawal from accounts for each account type.


Options Tab

The Options tab contains information about stock options, restricted stock units, or restricted stock plans entered on the Profile > Net Worth page. The options tab will only appear when a stock plan is included within the financial plan.

Options

Definitions

New Grant

The year when shares of stock options or units are granted to an employee.

Shares Vested

The volume of shares that vest in that year. This is when the client takes ownership of the stock that was granted to them.

Shares Exercised

The volume of shares that are exercised in that year. This is when the client purchases the shares of stock that have vested.

Vested and Exercisable Shares

Reflects shares that have vested but not exercised.

Unvested Shares

Reflects shares that have been granted, but not yet vested.

Shares Sold

Reflects the number of shares sold in a given year.

Shares Held

Reflects the number of shares exercised, but not yet liquidated.

Cost of Exercise

Equals shares sold times the strike price.

Sale Proceed

Equals the shares exercised multiplied by the current price per share. Please note, the growth applied to the current price can be set within the Stock Plan plan on the Profile > Net Worth tab.

Net Cash Flow

Reflects the difference between the sale proceeds and the cost of exercise.

Ordinary Income

Income that is taxed at the marginal tax brackets.

Short-term Gain

A gain from stock that has been owned for one year or less. Taxed as Ordinary Income.

Long-term Gain

A gain from stock that has been owned for longer than 12 months. Uses its own tax brackets.


General Navigation

In the upper right-hand corner, you can choose which plan you wish to view the Cash Flow details for - Current, Proposed, or any additional plans you have added:

You can also choose how many cash flow rows display at once using the drop-down box in the lower right-hand corner. You can use the arrows and numbers to the left of the drop-down box to show additional cash flow pages if you are not displaying 'all years'.

If there are more than ten years per page, you can use the scroll bar at the right of the cash flow numbers to scroll up or down.

Downloading Cash Flows

To download the information from any cash flow screen into a .csv excel file, click the 'Download' button:


Modeling Custom Return Scenarios

Users can adjust the "Baseline" dropdown menu to illustrate the impact of different return sequences on the client's cash flows. The baseline scenario will reflect a straight-line growth projection. In contrast, the additional scenarios will include pre-built sequences and any customized scenarios added into the Advisor Portal > Models > Scenarios area. The following pre-built scenarios are available as a default for all users:

  1. Bad decade followed by slow growth

  2. Fed adverse scenario followed by modest growth

  3. Strong growth scenario

  4. Flat 0% return

This feature is only visible when enabled in the client settings. To enable this setting open the client plan > select the gear icon > Settings tab > Methodology tab > Select "Allow display of scenario-specific cash flows". Once checked, the return scenario dropdown menu will be available within the Retirement > Cash Flow tabs.

Generating Cash Flow Reports

To generate a Cash Flow report for a client, navigate to the "..." > Report tab of that client's plan. Within the Report checklist, choose the "Cash Flows" option in the Retirement section:

To further customize your Cash Flow report, click into the 'Cash Flows' hyperlink to open a drawer on the right side of your screen. Choose the specific cash flow tables you would like to include in the report using the checklist. To compare cash flows for multiple plans within a single report, toggle on the "Select Plans" button and choose the plans you would like to include.
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