Question:
How is the income handled prior to retirement. For example if I have a client who is retiring at age 64 and he needs $96,000 net a year once he retires. If he is now making $160,000 will the program put the difference between 96,000 and 160,000 into the plan as cash less the extra tax he is paying while working. It appears to me this is the case. I need to confirm.
Answer:
It only does this if you are doing a couples plan AND one spouse retires before the other one.
Then it does this with the still working spouse.
In a one person plan this is never an issue.
If you don’t want it to do this… you can either:
- set spouse retirement age to still working spouse especially if they aren’t working
- (had several people set spouse retirement age to now just because they aren’t working)
- if other spouse did work and has their own savings and are retiring early, then it makes sense for the program to do this analysis… the problem is the retirement income goal is too low for that period when big earner is still working… thus, you will need to zero out the retirement income goal… use 2 lines in special expenses… the one line for the period while mr. big earner is still working… where you need to set expense level much higher… 2nd line is after he retires