Easy Money provides a comprehensive needs analysis including retirement, insurance, education funding, and estate planning. Easy Money uses a conservative goal-based planning method.
Key Assumptions of Easy Money
1. Planning Style
Goal-based planning is designed to identify certain goals, and then determine if what the clients are doing now will allow them to fulfill their goals.
The projection looks at the client’s goals (retirement, survivor, education, etc.), and if a deficiency is determined, the program will provide solutions to help the clients reach their goals.
2. Financial Life Cycle Phase
Best for Clients in Accumulation Phase
Designed to be used for clients in the accumulation phase, where there is still time to change the habits of saving and investing to make up for potential shortages.
Includes disability and life insurance need calculations important for accumulation phase clients as they in the process of building assets and are less likely to have an adequate capital to protect for a death occurring now or in the future.
3. Planning Approach
Worst Case Assumptions
Before retirement, the only deposits are the amounts scheduled as additions to assets. Any surplus cash flow is ignored (exceptions apply.)
The projection is determining if their planned actions will accumulate enough money to reach their goals.
This approach is intended to reflect what might happen in retirement if the clients continue saving at the current level.
4. Income Taxes
Annual Estimated Taxes
Taxes are computed the first year using full IRS tax calculations, and estimated using the client's marginal tax rate thereafter.
Current year – income tax is computed using full IRS tax rates, phase-outs, AMT, etc.
After first year - the client's current marginal rate is applied to taxable income unless an optional rate for ordinary items and for equity accounts is provided.
The portfolio is assumed to be turned over each year, meaning the full account earnings are taxed immediately and the after tax-return is reinvested.
5. Planning Focus
Focused on client's ability to reach goals and provide solutions.
Reviews the clients’ goals and objectives, assets available and estimates of how long the clients’ funds might last based on various assumptions.
Goals included for the analysis are retirement, education, insurance and single year “other” financial goals.
Solutions will be provided in the case of shortfalls for the goals of retirement, insurance, education, and other goals.
6. Planning Scope
Comprehensive Scope – Future Goals of Retirement, Insurance, Education, and Estate Preservation.
- Current Year Cash Flow Analysis
- Current Year Income Tax Analysis
- Current Year Net Worth Statement
- Retirement Needs Analysis
- Monte Carlo Analysis
- Annual Insurance Needs Analysis
- Education Needs Analysis
- Annual Estate Analysis
- Appendix Section:
Supporting projection details including expenses, incomes, assets and liabilities