MasterPlan includes three types of retirement reports, and eight different graphs specifically designed for retirement.
The Present Baseline Scenario | Retirement Summary Report knows everything about the client's current situation and projects the data you have entered out to life expectancy. The report begins in the first year of retirement and comes directly from the Present Baseline Overview Reports.
Many planners choose to run this report for the clients just at the verge of retirement or for those clients already retired.
The Proposed What-If Scenario | Retirement Summary Report builds on the first, but drops all the assets sold by What-If sells, includes all assets purchased in successful What-If buys, and all changes to liabilities incurred by What-If loans. This report also begins in the first year of retirement and comes directly from the Proposed What-If Overview Reports.
Many planners run this report when they realize they must reposition the client's portfolio—again for those clients about to retire or who have already retired.
The Worksheets | Retirement Needs Analysis Report is a worksheet report. It is designed to answer the question:
"How much do I need to save to meet my retirement goals?"
You can run it as an ad hoc mini-plan, or as part of a client's complete plan.
Most planners select this report for those clients who have some time to save before reaching retirement. These planners use it as a "motivator" to encourage their clients to begin saving now for retirement. The report generally is not meant to be run for those clients who are just retiring now or are already retired.
This report assumes the clients are "maxing" out their contributions to their qualified plans, so it tries to determine what they need to save in addition to those plans.
Note: If the client is on the verge of retirement, the Projection Date must be at least one year before retirement. Otherwise, MasterPlan will project the first year of retirement two years into the future.
Because it is designed to be a "needs analysis" report, the Retirement Needs Analysis Report is not meant to coincide with either of the other two retirement reports. The numbers generated will be very different.
These reports read the living expenses directly from the Living Expenses Line on the Cash Flow Tab of the Tax and Cash Flow Data Entry Form. These reports also add in all the taxes, extraordinary living expenses, loan, property, and other expenses, and the investments directly from the asset and liabilities database—essentially everything from Rows 22 through Rows 27 and 28 on the Overview Detailed reports.
The assumptions are different. For example, the Retirement Needs Analysis Report takes a "snapshot" of the client's working capital as of December of the current year and grows it according to three different rates of return; you enter two of them, and MasterPlan calculates the third rate.
When you select this report, MasterPlan picks up relevant client income and expenses from the database and brings the totals into the Future Values data input window.
You can then control different assumptions about the client's retirement needs and expectations. In fact, you might want to present the client with several different retirement scenarios. In this case, create one scenario, print the reports, create a different scenario, print the reports, etc.
You can print the analysis report directly from the input window, or you can switch between the Present Assumptions and the Future Values Tabs. After changing the desired fields, you can print the report. It shows the client how much additional money needs to be set aside each year to meet those retirement needs.
MasterPlan divides the Retirement Needs Analysis Worksheet into three sections:
Present Values Tab
Future Values Tab
Preview Area
When you first come into the Worksheet window, MasterPlan displays the Future Values Tab. It resembles a spreadsheet with rows and columns.
Just below the spreadsheet area are the tabs. The "Future Values" Tab is selected and displayed with a white background.
To switch from one section to another, click on the tabs.
To scroll out to the future years, use the scroll bar just to the right of the tabs.
The bottom area of the window is the Preview Area. It repeats a few items that are on the Present Values Tab, and shows the results of the calculations before you run the report.