The Baseline Present and the Proposed What-If Projection Retirement Reports are created in essentially the same way. They extract the information needed to complete the retirement projections from either the Present or Proposed Financial Overview Reports.
IMPORTANT: The "Retirement" Reports always begin in the year the first spouse retires. They then run to the life expectancy age entered in the EditClient | Projection Assumptions Tab. The Audit Trail for the "Retirement" Reports are the appropriate Detailed Projection Overview Reports.
The Retirement Summary Report aggregates all income listed (in Line 21 on the Detailed Baseline Overview Report) and subtracts all expenses (Lines 22 through Line 27) to arrive at the Annual Free Cash or Shortage (Line 28) for each year. It then adds or subtracts this figure from your client's net worth (Line 34).
If you need to reposition the client's portfolio, then you should enter the what-if instructions and run the Proposed What-If Retirement Summary.
The Retirement Summary Report includes seven columns. Read these columns from left to right:
The report begins in the first year of retirement. The Summary and Detailed Overview reports display the information with the years marching horizontally across the page. If you print these reports using Times New Roman font (size 10), only about five years at a time will fit nicely on the page.
However, by summarizing the information from this Detailed Overview report into just a few columns, and by displaying the years vertically, MasterPlan gives you a summary report with a good "bird's eye view" of the entire retirement period.
Note: All figures in this report, are year-end annual figures.
MasterPlan divides the Total Cash Flow from Line 21 of the Detailed Report into two parts.
In the Earned Income Column, it displays any salary or self-employment income earned by either client. If neither client works, then this column will contain all zeroes. If there is any earned income, MasterPlan will calculate the FICA and Medicare taxes and include these in the Tax & Other Expenses Column.
In this column, MasterPlan displays the annual total of all other cash flow available to the client, such as Social Security, payouts from retirement assets, interest or dividends that are not being reinvested in assets, rental income from rental properties, etc.
MasterPlan displays the Living Expenses from Line 22 on the Overview Reports.
This column totals Extraordinary Living Expenses, Federal & State Taxes, Social Security Taxes, Loan, Property & Other Expenses, and Investments (Lines 23 through Lines 27) on the Overview Reports.
In this column, MasterPlan displays the annual Surplus Cash, if any, or the annual shortage. If you told MasterPlan to Zero Surplus Cash on the EditClient | Projection Assumptions Tab, then this column will include shortages.
From Line 34 on the Overview Reports, MasterPlan displays the remaining net worth. This includes the net worth of all assets minus the remaining balance of any liabilities.
CAUTION: This column does not include the net worth adjusted for inflation, so be sure your client understands the effects of inflation and the difference between the future inflated dollar value and its equivalent current value.