Data Entry: Goals
Wow, that went fast! We're already at the end of completely creating a client! Great work!
For a brief overview on entering goals in a financial plan watch this short video.
RightCapital pre-populates a number of cards on the last step, which is where the client’s goals are indicated.
Start by indicating a number of retirement-related Goals: the intended retirement age(s), the retirement expense, and assumed health care and long-term care costs.
You can specify the client and co-client's retirement age. By default we will assume they retire at the start of the year, or you can check the box to indicate the specific month of retirement
If you choose to specify the calendar month, the age entered will determine the calendar year of retirement, and the month selected will indicate which month in that year they expect to retire. Note that this may be prior to or after their birthday at which they turn the retirement age.
The retirement expense number should not include taxes or expenses that you have previously captured, such as mortgages, loan payments, or insurance premiums.
You can either enter a single lump-sum number or break out retirement expenses by category. To enter expenses by category, select the 'A detailed worksheet' option in the Living Expenses card:
This will now give you the ability to break out expenses into different categories. Categories are shared between the retirement and pre-retirement expense entry and the Budget screen. You can add additional categories if you wish.
You can see the total expenses at the bottom of the card, and the total will also be displayed as the 'Monthly expenses' number.
Annual Retirement Long Term Care Cost
The default average Long Term Care costs of $51,480/yr, used in the default Long Term Care Goal, are based on published Long Term Care Cost research by Genworth Financial.
We plan to review the data on an annual basis.
Health and Long-term care cost default to assumptions based on recent research. These values are expressed in today’s dollars — the projections will use Health care cost inflation assumption to increase over time.
Adjust or zero-out those values by clicking on the cards if desired. Long-term care costs default to the last two years of each client's planning horizon; the timing can be adjusted in the LTC card.
If a child was added to the family profile, RightCapital will generate a College goal for each child associated with the client. You can also manually add a College goal by clicking the 'Add Goal' button and selecting "College".
Department of Education data has been loaded into RightCapital so that average costs for different types of colleges, or select a specific college or university and use their costs can be modeled. Or, indicate a specific amount using the 'Customized amount' option.
If portions of college costs are expected to be covered by a scholarship / grant or via student borrowing, you can enter those values to reduce the net cost that the client expects to cover.
All amounts are expressed in current dollars and inflated using the Education inflation assumption for use in the projection and in our Education tool.
Add additional goals by clicking Add Goal:
Use each of these to set up future financial goals.
Mouse over Property to enter property-related goals: Primary Home Relocation, Investment Property Purchase, or Vacation Home Purchase. For more information, see our page on Property Goals.
Mouse over Asset Purchase to enter goals to purchase a business or other asset.
Click here for additional information about the Cash Reserve goal.
There is a lot of flexibility in the timing of goals — use the Goal start and Goal end dates to indicate the period during which the goals will take place, and the frequency to determine when they occur.
A couple of tips
- To set a one-time goal, set the start year and end year to the year you want the goal to be funded, and the frequency to “One time”.
- To set an annual goal, set the start date to the first year you want the goal to be funded, the end date to the last year you want the goal to be funded, and the frequency to “Every 1 Year”.