Income - Pensions
Use this section to model client's monthly pension benefits. This is of benefits paid out over throughout their lifetime, not for lump sum pensions. Moneytree Plan allows for 2 pensions per individual. Pensions cannot be deleted. If no information is entered for a pension then it will not appear on reports.
Related: Lump sum pensions in Moneytree Plan
Table
The table summarizes each client's pensions. Select a row to expand additional inputs for the corresponding pension. Moneytree Plan allows for 2 pensions per individual. The 2 pensions per client is a hard limit. Pensions cannot be deleted entirely. If no information is entered, then that pension will not appear in the reports. The table divides information across the following columns:
Client: Name of the pension beneficiary. Each individual's name will always appear twice.
Start Age: The entered age for pension benefits to begin.
Plan Name: The name of the pension entered. Moneytree Plan has default names for each pension:
Individual 1: Client Pension 1, or Client Pension 2
Individual 2: Spouse Pension 1, or Spouse Pension 2
Monthly Amount: The initial monthly benefit amount entered for the pension.
Increase Rate: Entered rate that the corresponding pension will increase by each year. This does not correspond with the dollar amount increases for pensions with monthly benefits that increase by a fixed dollar amount each year.
Pension Details
Select a pension from the table above to expand the inputs to enter specific pension details.
Primary Inputs
These correspond to the topmost inputs for pension details.
Plan Name: Enter a name for the pension, if desired. This will be used to identify the pension on a select number of reports, but otherwise has no affect on projections.
Monthly Amount: Enter the expected benefit amount once the pension begins. By default, this is future value and will not increase by the rate entered below. If pension benefits are expected to increase at a reliable rate from now until they begin, use Future Changes to add an entry with their current age, a monthly amount of $0, and a desired increase rate.
Start Age: The age that the pension will begin.
Increase Rate: The expected increase rate that the pension will increase by each year after they begin. If pension benefits are expected to increase at a reliable rate from now until they begin, use Future Changes to add an entry with their current age, a monthly amount of $0, and a desired increase rate.
Increase $ Amount: If the monthly pension benefits increase by a dollar amount after each year, enter that figure here. Every year the benefits will increase by the amount entered here. For instance, if an individual has a starting pension benefit of $1,000 per month now, and $10 is entered in this field, then the second year of benefits will be $1,010, the third year will be $1,020, and so on.
State Tax Exempt: Check this box if the selected pension is not subject to state taxes.
Federal Tax Exempt: Check this box if the selected pension is not subject to Federal income taxes.
Survivor Inputs
These 2 fields determine the expected benefits once the primary beneficiary passes away.
Percent Available to Spouse: Enter the percentage of benefits available to the spouse after the main pension beneficiary has passed away. This will be used for the retirement and cash flow projections. If the primary beneficiary of the pension predeceases their spouse, then the pension benefit will continue reduced by the entered rate until the spouse passes away. If 100% is entered, the benefit will not decease until both individuals reach life expectancy.
Monthly Amount to Spouse if Death Occurred Today: Enter the amount that would be available to the beneficiary's spouse in the event of untimely death occurring today. This amount will be used for the Life Insurance and Survivor reports.
Future Changes
Future Changes ultimately drives what is reported on the retirement and cash flow reports of Aspire and Prosper. When entering the benefit information in topmost fields, a Future Change entry is created automatically. Future Changes can also be used to change benefits at a future date, the rate of increase, or to apply an increase rate starting now until benefits begin.
TIP: To have pension benefits increase to a future value from now until the begin follow these steps:
Enter their monthly benefit in today's dollars.
Add a future change entry, enter their current age, the desired increase rate, and leave the monthly amount as $0.