Planned Expenses

[MikeR]

For example, I entered $58,000 as my planned expenses + $5,000 travel budget for 5 years, yet after running the simulation it shows my expenses as $64,029 for years with the travel item? Why?

Also, I am having difficulty understanding the column labeled "After tax income." Could you expound for those of us with thick skulls?

Thanks

[jimr]

I'm a little confused too. What's the column header or label on that $64,029 value?

One thing that might be adding confusion is the flexible spending policy. Do you see the same results if you set the spending policy to stable (on the main window)?

Jim

[MikeR]

Okay, I promise that is what I saw, but after running it again, the expenses add up properly. Go figure; stray electrons I guess.

Now about that "After Tax Income" column. With expenses of 65,000, it shows $36,375. I was using this with some clients today when it became obvious I could not explain how these numbers relate. Part of my confusion is that the after tax income and median withdrawals do not add up to the planned expenses. How do I explain this?

BTW, thanks for your prompt reply.

Mike

[jimr]

The after tax income column is the sum of all income cash flows that you enter for things like social security, pensions, annuities, and other income sources. It's not really connected to expenses except that each year's after tax income is subtracted from expenses and the remainder is withdrawn from the portfolio.

Jim