Tips for using the Lifetime Planner
Here are some suggestions to help you get the most out of the Lifetime Planner:
Adding, editing, and deleting items
To manage items in the Lifetime Planner:
Add an item: Click New. If you are adding a new account from within the Lifetime Planner, set it up as you normally would. The newly created account will appear in the list of accounts displayed on the screen you are working with if you add an appropriate type of account for that screen (for example, a brokerage, IRA, or 401(k) account would appear on the investments screen).
Edit an item: Click Edit to change the information about a selected item.
Delete an item: Click Delete to remove an item.
Exclude an item from your plan: Click Exclude from plan to keep information about an item (such as a salary or investment) but not take it into account in your plan. You can add an excluded goal back into your plan at any time.
Try to fill in the information the Lifetime Planner asks for as completely as possible. You don't have to do it all at once, and you can change your plan assumptions at any time.
Account types and tax status
The Lifetime Planner groups your accounts into three types:
Taxable accounts
Contributions to these accounts are made after taxes; there is no tax advantage to saving to these accounts. The taxable group consists of stocks, bonds, mutual funds, or cash investments in regular bank or brokerage accounts.
Your tax-deferred accounts
This group contains all your IRA, 401(k), Keogh plan, and other tax-deferred accounts. All tax-deferred plans have limits on how much you are allowed to save. If you try to save more than the legal limit into one of these accounts, the Lifetime Planner "caps" the amount you save and enters only the legal limit.
Spouse's tax-deferred accounts
This group contains all your spouse's IRA, 401(k), and other tax-deferred plans. All the same rules on limits apply to your spouse's tax-deferred plans.
When you enter savings and investments, you specify how you contribute to them in either the Savings or the Investments section. You define their tax status when you choose the type of investment. The Lifetime Planner automatically places your accounts into the three groups. You set the investment return on these groups in the Return section. For additional information, see How does the Lifetime Planner use tax-deferred savings information.
The As Of date
Most amounts that you enter in the Lifetime Planner have three components:
The initial dollar value.
The date as of which the value is valid.
A yearly growth rate for the value.
All three components are required to determine future values.
If you do not explicitly specify the As Of date, the Lifetime Planner assumes it is the date you enter the item. If you do not explicitly specify the growth rate (usually in the Increased By box), the Planner sets it as 0 percent or the inflation rate specified in the Inflation section, depending on the nature of the value.
If you enter an amount this year and then run the Lifetime Planner next year, the amount displayed will be indexed forward by the growth rate. For example, if you enter a salary of $100,000 growing at 5 percent this year, then next year when you run the Planner, that salary will be displayed as $105,000: $100,000 x 1.05 = $105,000.
Fixed and variable assumptions
The Lifetime Planner uses two types of assumptions:
Fixed assumptions: These are fixed amounts, dates, or quantities that are automatically calculated by the Lifetime Planner or governed by federal regulations (such as tax-deferred savings plan contribution limits). See Assumptions in the Lifetime Planner calculations.
Variable assumptions: These are amounts, dates, or quantities that you enter as you create or modify your plan. They are shown in the Assumptions window. You can change these assumptions whenever you wish.
Not Available in Canada
This tool is unavailable for users of our Canadian products.