This post goes over frequently asked questions from advisors. If you ever ever wish to speak with someone, please do not hesitate to reach out to Support by calling 1-877-421-9815 ext 0, or email firstname.lastname@example.org.
Q: I’m new to using Moneytree Advise, can I get a walkthrough of the program?
A: Weekly demos are offered for our online programs. Moneytree Advise demos are on Wednesdays at 10 AM PT / 1 PM ET. Find a time that works for you.
Q: How can I get my name and the client’s name on the cover page?
A: Customize the rest of the report cover page information by clicking the “Settings” link in the top right. Select to the “Cover Page” or “Cover Page Logo” options in Personal Settings to modify cover page information used for all clients. The same options exist in Company Settings. The information in Personal Settings will supersede the information in Company Settings. Use Company Settings to set defaults for new advisors in the company.
To add the client names to the report, enter the information as you would like to see it in the “Names for Report Heading” field in the Name/Ages input section of their plan. By default, the program will populate the field with the names entered for the clients.
Q: How is the life expectancy calculated for each client? Can I override it?
Moneytree Advise calculates life expectancy based on the Single Life Expectancy table from the IRS. It adds 5 years to individual 2’s life expectancy. This is to increase the likelihood of showing a few years of a surviving spouse. The minimum life expectancy for individual 1 and individual 2 are 85 and 90 respectively. The calculated life expectancy is not based on gender.
Q: Can you help me break down the numbers shown on the Cash Flow Illustration?
A: Moneytree Advise provides a significant amount of information on the Cash Flow Illustration report. For an in-depth explanation, visit this blog post: Moneytree Advise – Understanding the Cash Flow Illustration
Q: What impact does the clients’ cash flow shortages or surpluses have on the clients’ assets?
A: Prior to retirement, the cash flow displays cash flow surpluses. However, it is important to note that Moneytree Advise ignores standard pre-retirement incomes and expenses. Instead, the program focuses on additions the clients explicitly make to their assets and how those assets are growing with rates of return.
Note: The Special Income/Expense Planners provide an exception to this rule – allowing items entered in the Special Income section to be reinvested or items entered in the Special Expense/Goal section to be pulled from assets prior to retirement. Education costs included prior to retirement will also be pulled from assets.
After retirement, the cash flow changes gears. At that point, it will show the withdrawals required to meet the living expenses and taxes number. Post-retirement, the Cash Flow will never show a shortage unless they are out of savings and do not have enough capital to cover their spending needs.
Q: Why would I see the clients’ retirement capital go down prior to retirement? They have enough income to cover the expenses entered in the program.
A: If the clients’ assets getting depleted prior to retirement, look at the Retirement Capital Analysis to see if shortages are displaying before retirement. Prior to retirement, this would only result from two potential items: Special Expenses and Education Funding.
Q: How should I handle a mortgage? The expenses continue a set number of years.
A: Insurance and property taxes continue even if there is no mortgage, so we recommend keeping those expenses in personal expenses. You can then model the principal and interest payments in the Debts input section. Make sure to check the box “Include Current Monthly Payments in Expenses.” With that box checked, the program includes debt payments in personal expenses for the lifetime of the debt.
We highly recommend not using the Special Expenses section to model debt payments. Special Expenses pre-retirement will force withdrawals from assets, even if the client(s) have surplus income.
Q: I entered the client’s Social Security benefit, but it is not showing the amount I entered on the reports. What is going on?
There are a few things to know about the Social Security benefit displayed on the Cash Flow and Retirement Capital Analysis reports.
- The program will inflate the SS benefit prior to the start age (as well as after the start age), by the increase rate entered.
- Social Security benefits appear after-tax, assuming an 85% tax rate.
- The program automatically accounts for potential spousal and survivor benefits. Check the “Use Amount” box in the Income/Pension/SS input section to prevent this.
Q: What method does the program use to calculate growth on investments?
A: Moneytree Advise uses monthly compounding to calculate interest on investments. The instructions below provide a quick to replicate the monthly compounding method used in Moneytree Advise.
- Shortage Occurs:
- Take the “End of Year Balance of the following year” + “1/2 year account addition” x “the interest rate”
- Then take “1/2 of the Cash Flow shortage” x “the interest rate”
- Take the “Total from A” – “Total from B” = “Annual Growth”
- “End of year account balance” = “End of Year Balance of the following year” + “Account Additions” + “Annual Growth” – “Income Tax Account” – “Cash Flow Shortage”
- Surplus Occurs:
- Take the “End of Year Balance of the following year” + “1/2 year account addition” x “the interest rate”.
- Then take “1/2 of the Cash Flow surplus” x “the interest rate”.
- Then take the “Total form A” + “Total for B” = “Annual Growth”.
- Calculating the year end balance:
- “End of Year Balance of the following year” + “Account Additions” + “Annual Growth” – “Income Tax Account” + “Cash Flow Surplus” = “End of year account balance”.
Q: Can I include “What If?” scenarios in the reports I print for the clients?
A: Up to 3 saved “What If?” scenarios can be included with reports. To save What If? scenarios, click the Save/Report button after making the desired changes. In the resulting window, enter a name for the What If? scenario in the top field then click the Save/Report button to save the What If? scenario to the corresponding slot.
Check the “Print with reports?” box to include the What If? scenario to any Moneytree Advise reports that include the What If? pages. If your report set does not include the pages, you can add them to the report set by going to the Report Customization section in settings. Custom report sets can be created in either Personal or Company Settings.