Savings

The Savings section of the Profile is where you will enter prospective annual contributions to a client's various investments. This includes contributions to 401(k) and IRAs, taxable brokerage accounts, Roth accounts, 529s, and much more.

By default, the Savings section is also the 3rd step of the initial data entry process for newly created clients (this can be changed via the Onboarding tab):

Looking for our training video?

If you'd prefer a hands-on, visual overview of the Savings section, click the link below to watch our dedicated Savings training video:

Savings - Training Video

Default Savings Cards

There will be a handful of savings cards pre-populated within this section when you create a new client plan. You will always find one 401(k) savings card for each client. You may also see a Taxable savings card, depending on your plan settings.

401(k) Savings Card

For clients with 401(k) accounts, you can use the pre-populated 401(k) savings cards for one or both clients. Click on this card to open a data entry drawer on the right side of your screen, allowing you to input the details:

1
The Saving name will default to [Client's] 401(k), but you can enter a custom name if you'd like. In joint plans, you will also want to choose either the client or the co-client as the Owner.
2
Enter the client's annual Contribution to their 401(k). Depending on the option you choose in the Target field, this can be an annual dollar amount, a % of the client's income, or the maximum contribution amount.
3
Specify the duration of the contributions using the Saving starts and Saving ends fields. By default, these will be set to 'Already started' and '[Client's] retirement' respectively.
4
Enter the details of the employer match, starting with the Primary match (full or partial) and the Primary match to (% of client's contribution). If necessary, you can also specify the Secondary match and Secondary match to percentages.

A common example might look like a full match of 100% up to 3% of the client's contribution, and a partial match of 50% up to 5% of the client's contribution:

5
For non-elective employer matches, you can skip the primary and secondary matches and instead enter a Flat percent match or a Flat dollar match. These will occur regardless of employee contributions.
6
If some or all of the employer match is designated as a Roth contribution (as per Secure Act 2.0), indicate this percentage in the % of match to Roth field.
What does "Self-employed" do?
Checking the Self-employed box will cause this card to calculate employee/employer contributions based on the client's Self-employment income, rather than Salary income.

Please click on the dropdown arrows below for more information on...

Taxable Savings Card

If your Planning Method setting is set to 'Modified Cash Flow Based' or 'Goal Based' as a default, a Taxable savings card will also be pre-populated in the Savings area. Use this card to reflect after-tax contributions into a taxable investment / brokerage account:

Start by choosing the client, co-client or joint as the Owner. Depending on your chosen Target option, enter the Contribution as an annual dollar amount or as a percentage of income. Lastly, dial in the Saving starts and Saving ends dates to determine the duration of the contributions.

If you have 'Annual dollar amount' chosen as your target you can enter an optional Annual Increase, which will be applied to the contribution amount each year within the cash flow projections.
Don't see a Taxable savings option?

If you are using a 'Cash Flow Based' planning method, any and all excess cash flows will be automatically saved and reinvested into the client's taxable account bucket. This function eliminates the need for you to manually enter taxable savings.

To learn more about the planning method setting and its impact on your client plans, feel free to reference the article below:

Taxable savings can be easily tracked within the Cash Flows module in the Retirement section. Within the Cash Flows > Summary, taxable savings will be reflected in the Net Flows column to the far right. Negative numbers in this column (numbers within parenthesis) indicate cash flow shortfalls. Excess income that is not being saved into the taxable bucket will be displayed in the 'Spend Unsaved Cash Flows' column:
Important Note on Taxable Savings:

Please note that taxable savings will only occur in years that clients have adequate income to make those savings. For example, if you enter $10,000 in taxable savings and the clients only have a $5,000 cash flow surplus in a given year, only $5,000 will be saved. In years with cash flow deficits, taxable savings will not occur.

Add Saving

To add additional savings to a client plan, click the blue 'Add Saving' button in the upper right. This will allow you to choose from a long list of savings options:

Below you will find a brief overview of each savings type, followed by additional information on data entry, taxation, and cash flow location. Remember that if you ever have any questions while entering client data, you can always reach out to the RightCapital Support Team for assistance!

401(k)/403(b)/457(b)

Use these savings cards to reflect employee and employer contributions into employer-sponsored retirement plans (such as 401(k), 403(b), 457(b), and their Roth equivalents). Contributions to employer-sponsored plans will always occur within the cash flow projections, even in years with cash flow deficits.
Total contributions to all defined contribution plans (employee plus employer) will be capped at the IRS maximum value ($69,000 for 2024, plus an additional $7,500 'catch up' for those 50 and over). You can track client savings and employer matches within the Cash Flows > Invested Asset tab.

Click on the dropdown arrows below for more details on data entry, contribution limits, and tax implications:

Traditional IRA

Traditional, SEP and SIMPLE IRA contributions can be reflected via these savings cards. By default, IRA contributions will be funded using taxable assets in years with inadequate cash inflows.

If the "Use taxable account to fund IRA and 529 saving when current year cash flow is inadequate" setting is unchecked, IRA contributions will not occur in years with cash flow deficits. You can find this setting in the Gear Icon > Settings > Methodology tab of each client plan.

IRA savings can be tracked within the Cash Flows > Summary > Planned Savings column, or within the Cash Flows > Invested Asset tab. Click on the dropdown arrows below for more details on data entry, contribution limits, and tax implications:

Roth IRA

Roth IRA contributions (including SEP and SIMPLE) can be reflected via these savings cards. There is an additional Backdoor Roth IRA savings card that reflects nondeductible IRA contributions that are then converted to a Roth IRA.

By default, Roth IRA contributions will be funded using taxable assets in years with inadequate cash inflows. If the "Use taxable account to fund IRA and 529 saving when current year cash flow is inadequate" setting is unchecked, Roth IRA contributions will not occur in years with cash flow deficits. You can find this setting in the Gear Icon > Settings > Methodology tab of each client plan.

Roth IRA savings can be tracked within the Cash Flows > Summary > Planned Savings column, or within the Cash Flows > Invested Asset tab. Click on the dropdown arrows below for more details on data entry, contribution limits, and income phase outs:

HSA

HSA savings cards are used to reflect both employee and employer contributions into a client's Health Savings Account. HSA contributions are pre-tax and will always occur within the cash flow projections, even in years with cash flow deficits.
Click on the dropdown arrows below for more details on:

529

529 savings cards allow you to reflect contributions from the clients themselves, or from an individual outside of the plan. Please note that this card should also be used for UTMA, UGMA, and Coverdell ESA contributions, as all education savings accounts are lumped into the 529 account bucket in RightCapital.

Click on the dropdown arrows below for more details on:

Other

Cash Balance Pension

Allows you to reflect outside contributions to the Qualified Pension account bucket. These savings will be shown as an employer contribution, and can be tracked within the Retirement > Cash Flows > Invested Asset tab.

If the 'Self-employed' box is checked, the contribution will reflect as a client contribution, reducing the client's cash flows (Cash Flows > Summary > Planned Savings). Contributions will occur regardless of cash flow deficits, and will be treated as Adjustments to Income (Line 16 of the Schedule 1, Line 10 of the 1040).

Deferred Compensation

Allows you to reflect employee or employer contributions to the Non-Qualified Pension account bucket. Client contributions are pre-tax, and will occur each year regardless of cash flows deficits. These contributions will be deducted from the client's wages on Line 1 of the 1040. Both employee & employer contributions can be tracked in the Retirement > Cash Flows > Invested Asset tab.

Profit-Sharing

Allows you to reflect contributions to a profit-sharing plan, which will be added to the 401(k)/403(b) account bucket. For salaried clients, all contributions are employer contributions. The contribution will be capped at the lesser of 25% of the client's salary, or the IRS maximum ($69,000 for 2024, plus $7,500 catch up for ages 50+).

With the 'Self-employed' box checked, all contributions are employee contributions. The contribution will be capped at 18.47% of the client's self-employment income, and contributions will be treated as Adjustments to Income (Line 16 of the Schedule 1, Line 10 of the 1040).

Employee Stock Purchase Plan (ESPP)

Allows you to reflect the purchase of shares in an ESPP. If the ESPP allows for the purchase of shares at a discount, you can enter the percentage discount as part of the savings card. ESPP savings will flow through to the Taxable account bucket. You will see the value reflected in the Retirement > Cash Flows > Summary > Net Flows column, just like Taxable savings. The incremental value provided by the discount will be shown as an employer contribution, which can be tracked in the Cash Flows > Invested Asset tab. ESPP contributions will be taxed like any other taxable assets; we do not factor in short-term capital gain rates for withdrawals within a year.

Employee Stock Ownership Plan (ESOP)

Allows you to reflect contributions to an ESOP, which will be added to the 401(k)/403(b) account bucket. For salaried clients, all contributions are employer contributions. The contribution will be capped at the lesser of 25% of the client's salary, or the IRS maximum ($69,000 for 2024, plus $7,500 catch up for ages 50+).

With the 'Self-employed' box checked, all contributions are employee contributions. The contribution will be capped at 18.47% of the client's self-employment income, and contributions will be treated as Adjustments to Income (Line 16 of the Schedule 1, Line 10 of the 1040).

Bank

Allows you to model cash savings into the client's bank accounts / cash reserve. These funds will grow at the rate of return associated with your return assumption for Cash. Like taxable savings, bank savings will only occur in years that clients have adequate income inflows. Bank savings can be tracked within the Retirement > Cash Flows > Summary > Net Flows column.

The Bank savings card will only be visible if your Planning Method setting is set to 'Modified Cash Flow Based', and your Cash Management Method setting is set to one of the 'Treat Bank Acct as Cash' options.

Tax-Deferred

This card can be used to reflect outside contributions to a tax-deferred account. Anything entered as part of a Tax-Deferred savings card will be shown as an employer contribution, and be tracked in the Retirement > Cash Flows > Invested Asset tab.

There will be an additional variable in each card that allows you to select which account bucket the savings will flow to. The options for tax-deferred savings are:

  • 401(k), 403(b), or other retirement plan

  • Traditional IRA or other IRA

Tax-Free

This card can be used to reflect outside contributions to a tax-free account. Anything entered as part of a Tax-Free savings card will be shown as an employer contribution, and be tracked in the Retirement > Cash Flows > Invested Asset tab.

There will be an additional variable in each card that allows you to select which account bucket the savings will flow to. The options for tax-free savings are:

  • Roth 401(k), Roth 403(b), or other Roth plan

  • Roth IRA or other tax-free plan

Employee vs. Employer Savings

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. It also lists where employee and employer contributions can be found in the Retirement > Cash Flows > Accounts tab. Retirement savings will be capped at the IRS contribution limits, which increase by your tax inflation assumption as they are projected into the future.

Type of Savings

Contribution Can Come From

Employee contributions location (Retirement > Cash Flows > Accounts)

Employer contributions location (Retirement > Cash Flows > Accounts)

401k, 403b, 457b, Solo 401k

Employee + Employer

401k/403b

401k/403b and/or Roth 401k/403b

Roth 401k, Roth 403b, Roth 457b, Roth Solo 401k

Employee + Employer

Roth 401k/403b

401k/403b and/or Roth 401k/403b

After-tax 401k

Employee

Roth IRA

401a

Employee + Employer

401k/403b

401k/403b

Traditional IRA

Employee

Traditional IRA

SEP IRA

Employee (Self-Employment) / Employer (Salary)

Traditional IRA

Traditional IRA

SIMPLE IRA

Employee + Employer

Traditional IRA

Traditional IRA and/or Roth IRA

Roth IRA, Backdoor Roth IRA

Employee

Roth IRA

Roth SEP IRA

Employee (Self-Employment) / Employer (Salary)

Roth IRA

Roth IRA

Roth SIMPLE IRA

Employee + Employer

Roth IRA

Traditional IRA and/or Roth IRA

HSA

Employee + Employer

Health Savings Account

Health Savings Account

529

Employee / Outside Individual

529

529

Taxable

Employee

Taxable

Cash Balance Pension

Employee (Self-Employment) / Employer (Salary)

Qualified Pension

Qualified Pension

Deferred Compensation

Employee + Employer

Non-Qualified Pension

Non-Qualified Pension

Profit-Sharing

Employee (Self-Employment) / Employer (Salary)

401k/403b

401k/403b

Employee Stock Purchase Plan

Employee + Employer Discount*

Taxable

Taxable

*The value provided by the discount is reflected as an employer match

Employee Stock Ownership Plan

Employee (Self-Employment) / Employer (Salary)

401k/403b

401k/403b

Tax-Deferred

Outside Contribution

401k/403b or Traditional IRA

Tax-Free

Outside Contribution

Roth 401k/403b or Roth IRA

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