Example:

User is 56 and uses info from social security statements, 401k statements, brokerage account statements, VUL (life insurance) policy, etc.. Each item in the statements represents a source of capital and can produce a cash flow. Income (e.g. Social security) is cash coming in, growth of capital is cash coming in, expenses is cash going out, and taxes is also an outgoing cashflow. The missing piece is the cost of living (budget) which represents a cash outflow.

 

1) Create a new scenario; Enter name, marriage status, retirement age, and life expectancy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2) Put in monthly income (and 401k contributions). The app will estimate the taxes and the surplus line is simply what is left with after taxes and expenses each year. The app starts from the current month (e.g. February 2020).

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3) Is user building up their savings account each year? If not, the surplus will show red. Enter the expenses under the expense tab.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4) Enter most recent balance of investments and other sources of capital (along with expected growth rate).

 

 

 

 

 

 

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6) Look through to the bottom of the grid and see if capital has run out by the end of the life expectancy age. In this case it runs out by age 85 and the user needs to consider working longer, spending less, etc.  Adjust the inputs and see the results of these financial decisions on your future.

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The real financial/fun planning starts at this point; trying to determine ways to reach your retirement goals and talk through ideas and areas you could improve on.