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Savings Accounts |
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Savings Accounts |
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Savings Accounts
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Savings Accounts |
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Savings Accounts |
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An unlimited number of additional savings accounts, such as IRAs or 401(k) plans with previous employers, may be entered here.
New accounts are added by clicking the "Add Account" button.
The prompts are briefly discussed in the following:
Account Name
Enter the name of the account. (The account name must be unique).
Owner
Select either the Client or Spouse. (This prompt only appears if there is a spouse configured.)
Current balance
Enter the current balance of the account.
Pre-retirement rate of return
Enter the expected pre-retirement rate of return.
| Note: | For non-qualified accounts, enter the net (after-tax) rate of return for the account. |
Account type for contribution limits
If the account has contribution limits to be taken into consideration, select the type of account. If no limits are to be taken into consideration, select "(None)."
Notes: If "Maximum" is selected as a contribution method (below), the "(None)" option will not be available.
For "Retirement Investments" the limits for the account are the combined employee and employer contribution limits.
Limits are index to inflation in $500 increments.
Contribution method
Select Percent of Pay, Dollar or Maximum for the contribution method.
Contributions per year
Enter the number of times a contribution is made per year. Note that if Percent of Pay is selected as the Contribution method, this prompt will not be available.
Contribution value
Enter the value of each contribution: for the deposit type "Dollar," enter the dollar contribution. For the deposit type "Percent of Pay," enter the percent of pay that the employee contributes.
Annual increase method
Select the method for increasing the client's contribution in future years. Each method is discussed below.
No increase
Select this method if there is to be no future increase in the contribution value. Note if the Contribution method for the client is Percent of pay and the client has a raise, the dollar value of the contribution will increase when the client receives a raise, but the percent of the client's pay will remain the same.
Increase in value
This method will increase the value of the client's contribution as a value. If the Contribution method is Dollar then the increase value will be in a dollar value, and will be per contribution. If the method is Percent of pay then the contribution will be an increase in the contribution percent. Contribution increases occur when the client receives a raise.
| Examples: | If a client is currently contributing $100 monthly and selects Increase in value with a $25 increase, the future contributions will increase to $125 per contribution the first year, $150 the second year, $175 the third year, etc. |
If a client is currently contributing 5% per paycheck and selects Increase in value with a 1% increase, the future contributions will increase to 6% the first year, 7% the second year, 8% the third year, etc.
Percentage increase
This method will increase the contribution as a percentage. Contribution increases occur when the client receives a raise.
| Examples: | If a client is currently contributing $100 monthly and selects Percentage increase with a 10% increase in percentage, the future contributions will increase to $110 per contribution the first year, $121 the second year, $133.10 the third year, etc. |
Detail customization
This allows customizing the future changes in contribution in as much detail as desired.
If Annual increase method is either Increase in value or Percentage increase, the following prompts will be enabled
Annual increase in percent, Annual dollar increase in each deposit or Annual percentage increase
Enter the value to increase the contribution. This field is not available if Detail customization is selected for the Annual increase method.
Number of years to increase contributions
Enter the number of years to increase contributions. This field is not available if Detail customization is selected for the Annual increase method.
If Annual increase method is Detail customization, the following box will appear.
This dialog allows customizing when the contributions will change (either increase or decrease) at any point in the future. The prompts are discussed below.
Event types for changes in contribution
The events for increasing contributions are Age, Year and Date.
The columns in the grid are:
Age, Year or Date
The column type here corresponds to the method selected in the previous prompt and is when the change in contribution occurs.
Contribution type
Select if the contribution is a specific value or the maximum allowed.
Dollar Contrib or Percent Contrib
The value here corresponds to the Contribution method selected previously. If the Contribution type is a Specific value, enter the value the contribution will change to.
Distribution Start Method
If distributions from the account are to start after retirement, select the method to start the retirement benefits. Note that all qualified accounts will be subject to required minimum distributions on the last distribution of the year.
Starting Value
This corresponds with the prior prompt and is the value for starting the account distributions.
Estimated Value at Retirement
This is a calculated field and may not be edited. It calculates the estimated value at retirement.
RMD payments required
Check this box if RMD (required minimum distribution) payments are required from this account.
Distribution method
This is the method for distributing the account.
Rate of Return
Enter the retirement rate of return. For annuitized accounts, enter the annuity rate.
Payout Percent
For Percent of Account payout method, enter the percent of the account to payout on an annual basis.
If the Tax Wise Distribution Strategy is selected in the Setup tab, the following prompts will be required.
Tax Method
Select the tax method of the account. The options are Tax free, Above cost basis, Above cost basis and deposits, Fully taxable.
Taxed As
If the account is taxable, select how the money is taxed--either as ordinary income or capital gains.
Cost basis
If the Tax method indicated the account had a cost basis, enter the cost basis for the account.
The Tax Wise Distribution Strategy allows clients to move monies out of taxable accounts into after-tax accounts over retirement. This can reduce taxation on the client's estate at life expectancy.
| Note: | Transfers are only available for non-annuitized taxable accounts. |
Transfer funds to a different account
Check this box to illustrate a transfer.
Transfer start age
Enter the age to start the transfer. The age should be after retirement.
Years to make transfer
Enter the number of years to make the transfer.
Transfer method
TRAK supports 3 types of transfer methods:
Dollar value per year
Enter the amount to transfer per year.
Tax bracket limit
This method will keep all transfers at or below a specific tax bracket.
Annual minimum distribution
This method will require a minimum amount of distribution from the account during the transfer period.
Annual transfer value or Maximum tax bracket or Annual min. distribution
Enter the value corresponding to the transfer method
Increase in transfer: Before transfer and During transfer
If the transfer method is either Dollar value per year or Annual minimum distribution, enter the annual increase in the value both prior to and during the transfer.
Target account
Select the target account for the transfer. If the account does not yet exist, it can be created and then return to this tab.