Data Entry: Savings
This is the third step in the process to Add a Client, where the client’s prospective savings is entered into different accounts, including their 401(k), IRA, Roth, and any other retirement plans or saving vehicles.
For a brief overview of adding savings to a financial plan watch this short video.
Employer Retirement Plans
The 401(k) card is a good representative of editing any of the savings cards. You can indicate the client’s savings as well as the employer’s matching schedule.
Enter savings either as a percentage of the client’s salary or an annual dollar amount through the Target drop-down. If % of salary is selected, it will multiply the percentage by the value shown in the respective Salary cards on the Income screen. Use the Max option to have the system calculate the maximum allowable contribution for that savings type based on IRS guidelines.
If the client is self-employed, check the Self employed checkbox. The savings will reflect a percentage of Self-employment income rather than Salary, and to flow through the tax projections as self-employment savings.
For employer matching, indicate a primary match, secondary match, or flat match, all as a percentage of the salary indicated in the Salary card.
If you want to reflect a scenario where the employer is matching 100% of contributions up to the first 3%, indicate 100% as the “Primary match” and 3% as the “Primary match to”.
The secondary match is above and beyond the primary match. If in the prior example the employer also matched 50% of contributions between 3% and 5%, you would set that up by indicating 50% as the “Secondary match” and 5% as the “Secondary match to”.
If you enter a flat percent match or flat dollar match, it will contribute the indicated percentage of salary or dollar amount irrespective of what the employee is contributing.
All matching information will apply to the value input in that card.
Adding other forms of savings
For details about all of the available savings types, visit our Savings Details page.
You can also enter numerous additional savings types by clicking the Add Saving button.
You can mouse over each line with an ">" to see additional options:
You can enter multiple cards for each savings type.
The generic Tax-Deferred and Tax-Free options allow you to enter amounts that are contributed from outside of the plan – they will be treated the same as employer contributions.
Below is a table that illustrates which savings are funded from the client's income and which savings are funded by the employer, from outside the plan. Advisors can also use this graph to see which column in the Retirement > Cash Flows > Accounts area are funded when using each savings option. Retirement Savings will be capped at the IRS contribution limits which grow by the tax inflation assumption as they are projected into the future.
|Type of Savings Card||Contribution Comes From:||Employer Match Available within Card:||Where funds are added in Retirement > Cash Flows >Accounts Tab|
|Roth 401k||Client (Employee)||Yes||Roth 401k/403b (Client) 401k/403b (Employer Match)|
|After-tax 401k||Client (Employee)||No||Roth IRA|
|Roth 403b||Client (Employee)||Yes||Roth 401k/403b (Client) 401k/403b (Employer Match)|
|Roth 457b||Client (Employee)||Yes||Roth 401k/403b (Client) 401k/403b (Employer Match)|
|Solo 401k||Client (Employee)||Yes||401k/403b|
|Traditional IRA||Client (Employee)||N/A||Traditional IRA|
|SEP IRA||Client (Employee) if Self Employment income card is used & Employer if Salary income card is used||No||Traditional IRA|
|SIMPLE IRA||Client (Employee)||Yes||Traditional IRA|
|Roth IRA||Client (Employee)||N/A||Roth IRA|
|Backdoor Roth IRA||Client (Employee)||N/A||Roth IRA|
|HSA||Client (Employee)||N/A||Health Savings Account|
|Cash Balance Pension||Employer (Not the Client)||Employer Only||Pension|
|Deferred Compensation||Client (Employee)||N/A||Pension|
|Profit-Sharing||Employer (Not the Client)||Employer Only||401k/403b|
|Employee Stock Purchase Plan||Client (Employee)||Yes||Taxable|
|Employee Stock Ownership Plan||Employer (Not the Client)||Employer Only||401k/403b|
|Tax Deferred||Employer (Not the Client)||Employer Only||401k/403b|
|Tax Free||Employer (Not the Client)||Employer Only||Roth 401k/403b|
Planning Method and saving calculations
Taxable Savings is only available if you use the Modified Cash Flow or Goal Based calculation methods. In the standard Cash Flow calculation we will automatically save any excess cash flows that are not explicitly spent. Visit this page for more information.