The Projection Calculator displays a summary worksheet of the present projection (on the left of the table) and a revised projection (on the right of the table). The client’s age is displayed between the present projection and the revised projection. The present projection is based on the clients inputs entered on the RRON Initial Assumptions screen. The present projection will stay the same, unless you return to the assumptions screen and change the initial assumptions. When the projection is displayed the first time, the revised projection is set equal to the present projection. However, you may change and recalculate the revised projection by clicking the buttons: ► Spend Less ► Work Longer ► Save More ► Increase ROR ► Change Inflation Each time you change one of these inputs, the Revised projection is recalculated and the new results are displayed on the right side of the summary spreadsheet. Clicking Documentation will display the actual worksheets used in the programs calculations. The summary worksheet, which is the one displayed on this screen, is just two columns (year-end balance and the annual withdrawal) from the Present Projection and two columns (year-end balance and the annual withdrawal) from the Revised Projection with age displayed in the center. You can either show the annual withdrawal in nominal dollars (future dollars for the current age or year) or in present value dollars (today’s dollars). To toggle between the two displays, click the Revised Projection Annual Withdrawal column header on the top right of the spreadsheet. ITERATIVE SOLUTIONS: For four of the top buttons (Spend More, Work Longer, Save More and Increase ROR), the program presents an option to automatically solve the problem using iteration. Iteration is the process where the program guesses at an answer (result), and then checks the results. If the result is too large or too small, the program changes the guess (result) in the appropriate direction (a larger or smaller guess) and tries again. Using this process, the calculation engine is able to determine the correct solution. RESET BUTTON: The Reset Button in the bottom center allows you to quickly reset the Revised Projection assumptions back to the initial assumption values. That is, it allows you to start over quickly. It is necessary to Reset after using an iteration solution, unless you wish to include the results of the iteration in the next calculation. SUMMARY OF RESULTS BUTTON: Clicking the button “Summary of Results” will display a one-page narrative summary showing the results of the automated solution to each of the four top left buttons (Save More, Spend Less, Work Longer, and Increase ROR). Defined Benefits: Provides the ability to manage the defined benefits used in the summary projection. Hidden benefits are still taken into account in the projection calculations. Excluded benefits are removed from calculations altogether. Worksheet Auto-Row Positioning: The top row of the worksheet is automatically positioned one year prior to retirement whenever projection is recalculated. This allows you to see the balances in the year before retirement without needing to scroll. INFLATING SAVINGS AND WITHDRAWALS: Selecting [x] Inflate Savings in the initial assumptions screen have the effect of increasing the savings amount by the inflation rate each year. For the present projection, the inflation rate entered on the input screen is used. For the revised projection, the inflation rate entered on the spreadsheet, (using the button on the top right) screen is used. Similarly, the withdrawals can be inflated or not inflated by checking the [x] Inflate Withdrawals option on the initial assumptions screen. If you inflate both Annual Savings and the Withdrawals in the Revised projection, be aware that changing the inflation rate may have surprising (or unexpected) results. For example, if you change the inflation rate to 10%, you would expect the retirement withdrawals to last fewer years. However, if that same 10% is being applied to the savings over many years, the withdrawals may last more years. That is, the inflated savings increased the fund’s growth during the accumulation years more than the inflated withdrawal reduced the fund in retirement years. Obviously, this is a function of the number of years of accumulation and the number of years of retirement. Which Inflation Rate is used where? The present inflation rate (entered on the initial assumptions screen) is used: •To calculate the required retirement withdrawal in the first year of retirement in both the present projection and revised projection. •To inflate the annual savings in both the present projection and revised projection. •To inflate the annual retirement withdrawal in the present projection during the retirement years. The revised inflation rate (entered by clicking the [Change Inflation] above the projection worksheet) is used: •To inflate the annual retirement withdrawal in the revised projection during the retirement period. •To calculate the Present Values of withdrawals (both including and excluding Defined Benefits). |
If in working together I could help you identify the areas of expense loss and return that money to you that will allow you to increase contributions to your personal savings and investment account, run more money through your company, or increase your present lifestyle and solidify your future lifestyle while at the same time reducing your risk, would that be of interest? On a scale of 1-10 how does what I do meet with what you are looking for? I am going to need the following information to do a more complete feasibility study. What is the best way to go about getting that information? |
All contributions and withdrawals occur at the beginning of the year. Calculations for the Present and Revised Projections are performed against and stored in a logical worksheet format. Therefore the calculation logic is best described by defining each worksheet column. |