Income - Other Income
Other Income is used to model various sources of income that cannot be modeled elsewhere. Common uses are gifts, inheritances, or annuities with guaranteed income riders. Be cautious with Other Income items in Aspire.
Pre-retirement Other Incomes will not be ignored like earned income or personal expenses. Other Incomes are best seen as special sources of income that the clients would likely reinvest. If it assumed that the income will be spent, it is best to simply ignore them.
For Prosper reports greater flexibility can be used since all incomes and expenses will be accounted for. This also applies during retirement years in Aspire reports.
Table
The Other Income table is simple. It shows the description of the income, entered start age in the top fields, and the annual amount in the top fields. The amounts shown in the table may not match what is reported. Ultimately, the Future Changes table determines what is reported and when. Clicking on an item in the table will expand additional inputs.
To add a new Other Income item, click the Add button to the left of the table. To delete an Other Income item, single click the desired item in the table, then click the Delete button to the left of the table.
Other Income
The topmost fields for Other Income inputs cover general assumptions. After entering information in those fields, that information will be automatically populated into the Future Changes section after navigating to another page, or when adding a new Other Income item, selecting a different Other Income item, or deleting an Other Income item.
Description: Use this field to enter an identifying description of the Other Income item. This will not affect the behavior of the income on the reports.
Increase Prior to Start Age: Check this box if the income starts in the future and is expected to increase from today until it begins. Common examples increase incomes that increase to match inflation, or investment driven incomes that would increase at some rate of return. When checked a Future Change entry will be created at individual 1's current age with an increase rate equal to the field to the right. If the income starts in the future, all other fields will be 0.
Increase After Start Age: For incomes that occur over several years, check this box if that income will increase in subsequent years. When checked a Future Change entry will be entered with the income amount to ensure that it increases after it begins.
Amount: Enter the amount of the income. If the box Increase Prior to Start Age is checked, enter the value in today's dollars.
Increase Rate: If the income increases before and/or after it begins, enter the rate here.
Start Age: Enter individual 1's age that the income will begin. Since Other Income items have no assigned owner, the program bases all income start ages off of individual 1's age.
Example: Using only these topmost fields, with both boxes checked, consider a couple where individual 1 is 65, an income amount of $50,000, a 3% increase rate, and a start age of 67, the Future Changes section would look like something like this when you return to the income item:
Age | Annual Amount | Increase % |
65 | $0 | 3% |
67 | $50,000 | 3% |
68 | 0 | 0 |
NOTE: The table above does not cover the survivor or taxable percentage fields. Those will be covered in the next section.
Other Income Details
The Other Income Details section allows users to quickly model more detailed assumptions for an Other Income item.
Recurring: Check this box then use the fields below for incomes that recur over several years. This allows users to efficiently model incomes over a period of time, whether they are received annually, or once every few years.
Every [x] Years: Enter how often the income will occur, such as every 5 years,
Until Age [x]: Enter the last year the income should be reported, based off individual 1's age. After clicking the Apply Future Changes button, the final entry in the table will be 1 year past the entered age.
Apply Future Changes: After filling out all desired information for the Other Income click this button to have the program apply the information to the Future Changes table below, which drives what is seen on the reports. Clicking this button will overwrite whatever existing information there may be for the income in the Future Changes table.
Percentage Taxable: If the income is taxable, enter the percentage of it that should be reported for taxes. The taxable amount will be reported as ordinary income. There is no way to change the taxable income to capital gains, or any other type of taxable income.
Amount Available if [Individual 1] Survives: This amount is only used for the Life Insurance reports. Enter the amount that individual 1 would expect in the event of Individual 2's death.
Amount Available if [Individual 2] Survives: This amount is only used for the Life Insurance reports. Enter the amount that individual 2 would expect in the event of Individual 1's death.
Future Changes
The Future Changes table ultimately determines what will appear on reports for Other Income items in Moneytree Plan. This table will be populated automatically based on entries in the topmost fields, or with data from the Other Income Details section when clicking the Apply Future Changes button. This table can also be used to manually enter adjustments to an Other Income item.
The 2 middle columns with the individual names represent the amounts in the event that the named individual survives. Amounts in corresponding cells will be used for survivor needs reports.