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Aspire vs. Prosper

Moneytree Plan includes both goal-based and cash flow based reporting modules. Each module is geared towards different planning strategies optimized for the specific needs of the individual(s). Aspire is the goal-based module of Moneytree Plan. Prosper is the cash flow based module.

Goal-Based Planning with Aspire

Goal-based planning is most often used for individuals in the accumulation phase of retirement planning. It is best for individuals with stable incomes that are trying to determine how much to save and the best way to invest. The focus is ultimately on the big-picture question: Will I save enough by retirement?

In Aspire, that question is assessed by focusing on the amount of money individuals are explicitly saving. Standard incomes and expenses, like earned income and personal expenses are ignored. With Aspire, it is assumed individuals can cover their basic needs without having to withdraw from assets.

Certain special sources of income, such as Other Incomes, residence sales, or stock options sales will not be ignored pre-retirement. Conversely, certain special sources of expenses, such as Other Expenses, residence purchases, or Education costs (if elected), will not be ignored. Net incomes (reduced for taxes and any special expenses) will be reinvested according to the defined Surplus Allocation. Net expenses (reduced for tax deductibility and any special incomes) will be withdrawn according to the program's withdrawal order.

Summary

Aspire focuses on accumulation of assets before retirement, then evaluates if there is enough capital to succeed in retirement. To accomplish this, it makes a number of assumptions.

  • Ignores standard pre-retirement incomes, such as earned income.
  • Ignores standard pre-retirement expenses, such as personal expenses asset additions, insurance premiums, liability payments, and itemized deductions.
  • Uses effective tax rates, which can be calculated based on current year income, or manually entered in File Status / Options.
  • Forced withdrawals pre-retirement for special expense sources, such as Other Expenses, education costs, and property purchases, per the program's withdrawal order.
  • Reinvests pre-retirement for special income sources, such as Other Incomes, asset withdrawals, and residence sales, per the user defined Surplus Allocation.
  • Begins asset withdrawals for standard expenses in retirement.

Cash Flow Planning with Prosper

Cash Flow planning is commonly used for individuals at or near retirement. It is best for those who do not have many, if any years to save, or whose financial situation is not stable enough to save fixed amounts. These reports dig into the finer details of individuals' cash flow to answer the question: How do I make the most of my retirement?

In Prosper, that is answered by providing as much detail and precision to the clients' incomes and expenses as possible. Whether the clients are working or retired, all incomes and expenses are accounted for. Pre-retirement cash flow surpluses will be invested per the plan's Surplus Allocation. Shortages will be withdrawn according to the program's withdrawal order. In Prosper, there are no assumptions that the clients' earnings will cover their needs and so no incomes or expenses are ignored.

Prosper reports also include detailed annual tax calculations. Whereas Aspire reports use an effective tax rate, Prosper reports take a close look at the individuals' total income every year to make detailed tax calculations based on current Federal tax laws. This includes ordinary income taxes. capital gains taxes, Alternative Minimum Taxes, Social Security and Medicare taxes, etc. State taxes are calculated through customizable tables using more generalized assumptions. These tables can be modified by advisors or updated automatically by Moneytree.

Summary

Prosper takes a close look at cash flow both before and after retirement to help clients make the most out of their retirement. It does this by providing results that are as precise as possible.

  • Accounts for all incomes and expenses before and during retirement; nothing is ignored.
  • Calculates precise taxes, including Federal income taxes, capital gains taxes, AMT, state income taxes, FICA and SECA, etc.
  • Withdrawals from assets before and during retirement for cash flow shortages.
  • Reinvests into assets before and during retirements for cash flow surpluses.

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