Compare and contrast the distributions from each of the three scenarios. The screen initially targets the specified spendable income generated by the insurance contract. Click the Flatten Button to flatten the first two accounts. This action determines the maximum annual withdrawal without consuming principal. Typically the resulting spendable income will remain constant (flat) except when capital gain taxes start to occur. The Flatten button will toggle between Flatten and Specific SI modes when clicked. Clicking the Specific SI Button restores the original display of Spendable Income with the first two accounts consuming principal as necessary to maintain the specified income level. The documentation worksheets change as you toggle between Specific SI and Flatten modes to represent the calculated values for the currently display scenario. |
No script provided for this screen. |
The math for Distribution Solution is contained in three worksheets: 1.Taxable Investment Worksheet 2.Tax Deferred Investment Worksheet 3.A Summary Worksheet The Taxable Investment Worksheet This worksheet calculates the growth of the taxable investment during working years and the consumption (thru withdrawals) of the taxable investment during retirement years. Notice that: •the annual Traditional earnings are taxed each year or row •the annual increase in capital gains are NOT taxed in the year they are earned •the capital gains are taxed when realized (withdrawn) The Tax Deferred Investment Worksheet This worksheet calculates the growth of the tax deferred investment during the working years and the consumption (thru withdrawals) of the tax-deferred investment during retirement years. Notice that: •the annual Traditional earnings are NOT taxed each year or row during accumulation •the interest (as opposed to principal) is withdrawn (by the program) first •thus, the cost basis is not withdrawn tax-free until the last years of the investment (assuming the investment is depleted in the client’s life time) •taxes are paid at the Traditional tax bracket, as opposed to the capital gains tax bracket, on all withdrawals The Summary Worksheet The summary worksheet just displays the Spendable Income results of the calculations in the two spreadsheets as well as the results from an Insurance Proposal (entered on the data entry screen). The summary worksheet is always displayed on the screen. The documentation worksheets change as you toggle between Specific SI and Flatten modes to represent the calculated values for the currently display scenario. Term Insurance Premiums If term insurance premiums are included, they are assumed to be after-tax amounts and paid at the beginning of the year from available contributions (or spendable income if premiums extend into the distribution phase.) |