Pre and Post Retirement Living Expenses

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Pre and Post Retirement Living Expenses

Finance Logix allows you to add pre and post retirement living expenses to a plan.

To access this, navigate to the Cash Flow / Goals tab and under the “Living Expenses / Incomes” section you can Enter estimated Combined Living Expense.

Fig. 1

You have the option to enter in a total amount in the field or you can click on the Budget button in order to calculate expenses.

*Note: Personal Insurance Premiums, Liability Payments, and Mortgages are already accounted for, so do not add them to the Living Expenses.

When utilizing the Budget button, you are able to enter in basic living expenses for the pre and post retirement periods. The grid format will calculate the relationship between the current expenses and the future expenses. The Budget tool will allow you to select your frequency of the expense (weekly, bi-weekly, semi-monthly, monthly, quarterly, or annually), the Budget tool will convert the value to annual. The Budget grid will also allow you to be able to select if the expense will increase or decrease by percentage in retirement.

Fig. 2

The system requests that you enter in the expenses based on today’s dollars. The reason for this is that inflation will be calculated into the plan based on the Assumed Inflation Rate entered in on the general Information section of Client Data

Fig. 3

***The Living Expenses / Incomes section is suggested to be used in Cash Flow mode because Cash Flow mode is Expense Based whereas Goal Mode is Income Based. Cash Flow mode will allow for a more detailed retirement plan based on After Tax. Goal mode operates on Current Income and is pre-tax. Typically Goal Mode is used for clients that are not ready to retire and all excess income is automatically spent.

Fig. 4

 

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