Contributions

The Contributions tab allows you to model periodic contributions into accounts during each client’s pre-retirement period.

When using “Wages – W2” or “Wages – Self-Employed” Other Income types prior to a client’s retirement, contributions modeled into qualified accounts will be deducted from wages after calculation of payroll tax, but prior to the calculation of income tax for the year.

The Contributions table will have a row for each stream, showing its Destination Account, Timeline, and Amount.

Clicking the 👁️ icon in a row will toggle whether the contribution stream is included or excluded from the plan scenario.

Contributions to non-qualified accounts will end when the plan starts, and contributions to qualified and Roth accounts will end when the client who owns the account retires regardless of whether the End date is set to be later.

Adding & Editing Contributions

Clicking the ADD button in the bottom right will bring up a window where you can create a new contribution stream. Clicking the ⚙️ icon will open contribution stream for editing.

Destination Account is the account into which the contribution will be invested.

Amount is the periodic amount for investment. If the Frequency below is set to Monthly, the amount entered here will be modeled as invested every month. If the Frequency is Yearly, this amount will be modeled as invested once a year on the anniversary of the start month.

Monthly / Annual is a toggle that allows you to control how you wish to input contribution values.

• Monthly will apply the value in the Amount field based on the Frequency options below.
• Annual will assume that the value in the Amount field represents the total contribution that would be invested over the course of a full calendar year. That value will be divided by 12 and then treated as a monthly contribution from the Start date/event through the End date/event selected below. For example, setting the toggle to Annual and entering $60,000 will have the same behavior as the toggle set to Monthly with an Amount of $5,000.

Annual Increase is the percentage that the provided contribution will increase each January. This can be used to reflect contributions rising over time due to salary increases and/or increases in ERISA contribution limits.

Frequency can be set to Monthly, Once a Year, or One-Time.

• Monthly: The amount will be applied every month from specified start to end.
• Once a Year: The amount will be applied in full every year on the same month as the start month. For example: the client makes an additional investment every February from a bonus payout separate from their steady monthly contributions.
• One-Time: The amount will be applied once in full on the start month.

Start can be set to a specific month/year.

End can be set to specific month/year or an event such as the client’s retirement. Using events ensures that even if you change the date on which the event occurs, all items using that event as a start or end date will update accordingly as well.

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