Planit:Analyse des objectifs de retraite
From Planipedia
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The Retirement Goal Needs Analysis helps your client achieve specific financial goals. NEW to an upcoming release, we are introducing an exciting further enhancement to this calculator. This being the option to use graduated tax rates during the retirement years for a client as opposed to using average tax rates.
Below you’ll see all the highlights illustrated using the Retirement Goal Needs Analysis.
1. You can specify to use a Full Tax Calculation, which commence in the year of retirement. For the period of pre-retirement it will use a single tax rate that you select. That rate would be the client’s marginal tax rate since they will have employment income that will not be included in this single need analysis tool. The end result is a high quality and accurate single need retirement analysis.
2. You can specify when you want to assume CPP will start as opposed to assuming it will start early.
3.The retirement income goal can be done in 1, 2 or 3 tiers. This let’s you recognize a need for higher income during the client’s young and healthy retirement years scaling their income down as they age and have smaller requirements. This tiering of the retirement goal is also available on the Objectives screen for clients where you are using the Life Goals approach as opposed to the Single Need Calculator.
4.Average Tax Rate is set under Assumptions for the tax rate to apply prior to retirement during the accumulation period and then a separate ATR’s can be set each tier of the retirement income goal. Thus up to 4 separate average tax rates over the entire analysis period. This will only show up if you are not using the “Full Tax Calculation”.
5.You can use the rate of return associated with the client’s target portfolio, any of the standard portfolios or set the return to any amount you want by choosing custom which will let you set the rate of return.
6.You can specify how much of any account you want to be used for this goal. For example, here you’ll see above we have identified two tax free savings accounts. You will also notice on the joint non-registered account that we have indicated that only 50% of these funds are to be used for this goal. This let’s you recognize certain funds are earmarked for other purposes.
7.Under the Annual Savings for any account you can tier the savings to recognize changes. You can also recognize any employer match amount right on the calculator screen.
8.The Pensions and Other Revenues section is where you can identify any revenues the clients will receive. You will notice that the CPP and OAS are already created for you. There is also room to add in a couple of more revenue records.
9.Under the Summary section the calculator will evaluate the total net present value of all investments and other revenues we have identified. In this case it has identified the present value of the investments and revenue at $920,892. It then identified the net present value of the after tax requirement which in this case was our tiered retirement goal of $50,000 and $40,000. Finally it will subtract the requirement from the available capital to determine whether there is a shortfall or a surplus. In this case there is a shortfall of $216,221. That’s a today’s dollar number.
10.You will notice the section called planning alternatives you can use the + sign to expand this section down. The “Planning Alternatives” identifies a variety of actions that could eliminate the shortfall that’s been identified. The radio buttons beside each of these alternatives allows you to select which one you wish to view. The example above shows you that if you were to reduce the two tiered goals to these amounts then it will eliminate the shortfall. You can view each of these alternatives by clicking the on radio buttons and clicking on calculate. Not one of these alternatives will be feasible for your clients, however usually a combination of a couple of them will help eliminate the shortfall.
Below is a definition of some of the various fields within the calculator and what those fields are looking for as per information.
Requirement: The total amount of money needed annually to meet the objective expressed in current dollars after tax, or how much it would cost today.
Inflation %: The requirement dollars will be indexed or increased annually by this rate.
From Year: The first year, or the age, when funds are required to be paid out. It must be at least one year from the current date.
To Year: The final year or age when funds are required. In a retirement calculation this would be an assumed mortality age.
Principal: The current amount of capital in the Registered or Non-Registered investment portfolio.
Rate of Return %: The annual rate of interest on the investments. For a pretax portfolio use a nominal or pretax rate, otherwise an after tax rate of return should be used.
Savings: Annual savings between now and the last year before you start paying out the funds.
Index: Will allow you to specify an index rate for savings.
Taxable %: What percentage of the money is taxable
Enhanced Single Need Reports
A series of reports are generated by the Goal Calculators that are easy to understand and to present to your clients. You can choose on a client by client basis which report to use and when. These include:
- Client Summary Report
- Summary Analysis
- Analysis of Investment Accounts
- Other Revenues Analysis
- Tax Summary
- Reliability Forecast
- Client Consolidated Report
