Net Worth Scenarios

Lifestyle Assets:

• As time passes many people choose to sell old real estate assets or acquire new properties. You can model the effects of these decisions on your clients' plan using the Scenario Manager.
• Rental incomes and return rates on real estate assets may vary over time; you can use the Scenario Manager to show your clients the effects of these variables on their personal plan.

Real Estate Assets:

• As time passes many people choose to sell old real estate assets or acquire new properties. You can model the affects of these decisions on your clients' plan using the Scenario Manager.
• Rental incomes and return rates on real estate assets may vary over time, you can use the Scenario Manager to show your clients the effects of these variables on their personal plan.

Business Entities:

• Income from business entity assets and business expenses are likely to vary over time. Use the Scenario Manager to model the effects of this variation on your clients' personal plan.
• Your clients may wish to sell a business entity asset at retirement or upon the death of a particular client/co-client. Use the Scenario Manager to model the effects of this sale.

Liabilities:

• Use the Scenario Manager to demonstrate the effects of paying off liabilities early.
• You can also use the Scenario Manager to show your clients the effects of liquidating assets to cover pre-retirement cash flow deficits caused by liability payments.

Accounts:

• You can use the Scenario Manager to model the effects of an alternate reinvestment strategy.
  • A reinvestment strategy dictates whether to reinvest all investment growth, reinvest only net of tax investment growth, or not to reinvest investment growth.
  • You can dictate a reinvestment strategy for both the retirement and pre-retirement periods.

Annuities:

• Use the Scenario Manager to model the effects of purchasing additional annuities.

Stock Options:

• Use the Scenario Manager to modify the expiry information for any stock options entered in the plan.
• You can also use the Scenario Manager to model a new exercise schedule for any stock options entered in the plan.

1. From the Assets/Liabilities page (Enter Financial Data category — Net Worth category), click Add Lifestyle Asset and select Residence from the menu.
2. Click for the newly-created residence and enter any relevant information.
3. Under Sale Information, select Sell Asset and set the Sale Date to Retirement from the Calendar menu.
   Note: You can further specify the sale date of Retirement to 1st to retire, 2nd to retire, or to Client\Co-Client's retirement.
4. Navigate to the Lifestyle Assets subtab in the Scenario Manager (Results section - Analyze Goals category - Scenario Manager - Modify Financial Data - Net Worth - Lifestyle Assets).
5. Select Add Lifestyle Asset and select Residence from the menu.
6. Select for the newly-created residence and enter any relevant information.
7. Set the Purchase Date using theCalendar. To avoid cash flow irregularities, ensure that the date set here matches the sell date for the first residence.

• The Scenario Manager reflects the information entered in the clients' current plan. To override this information with scenario-specific assumptions and strategies select the Override option for the appropriate item.
• The Override option will appear in one of two ways in the Scenario Manager:
  • As an unlabeled check box beside a disabled field: .
  • As a labeled check box: .
• Once you have selected Override, the relevant fields will become editable.
• Clearing the Override option will undo any changes you have made and revert information back to match the Current Plan scenario.

From the Lifestyle Assets subtab, follow these steps to edit an existing lifestyle asset:

1. Select Override for the lifestyle asset you want to edit.
2. If your clients plan to sell the selected asset, select the Sell Asset option.
   • Define the Sale Date. You can enter a date or use the Calendar to set the sale date to an event (such as retirement or death).
   • Indicate where the after tax proceeds of the asset sale should be directed using the Direct After Tax Proceeds To menu.
3. You can also modify the asset's return rate. Select for the lifestyle asset.
4. From the Return Rates section, you can enter new values for Deferred Growth and Standard Deviation for the retirement and pre-retirement periods.
5. When you as satisfied with these options, click OK.

Note: For information on entering new lifestyle assets, see the Lifestyle Asset Details Help page.

From the Real Estate subtab, follow these steps to edit an existing lifestyle asset:

1. Select Override for the real estate asset you want to edit.
2. Select for the real estate asset.
3. From the Rental Information subtab, enter new information where applicable.
   • You can add new incomes or expenses related to the real estate asset using Add Income/Expense.
4. From the Sale Information subtab, make a selection from the Sale Option menu.
   • Do not sell entity: All other options are unavailable.
   • Sell entire entity: Define the Sale Date, Selling Cost, and make a selection for Direct After Tax Proceeds To.
     Note: You can also select Account Details to enter more information about the destination account for the asset sale's proceeds. For more information see the Account Details Help page.
   • Sell in installments: Define the Sale Date, Selling Cost, and make a selection for Direct After Tax Proceeds To.
     Then, enter information for the Installment Sale Details section.
     • Enter the percentage of the asset being sold in installments under Seller Installment % of Sale Amount.
     • Define the Annual Interest Rate, Payment Frequency, Compound Frequency, and Payment Type.
     • Define the Length of Installment Sale and the Length of Amortization in years and/or months.
5. From the Return Rates subtab, you can enter new values for Deferred Growth and Standard Deviation for the retirement and pre-retirement periods.
6. When you as satisfied with these options, click OK.

Note: For information on entering new real estate assets, see the Real Estate Details Help page.

From the Business Entities subtab, follow these steps to edit an existing business entity asset:

1. Select Override for the business entity asset you want to edit.
2. From the Activity tab, enter any changes to the business entity asset's activity that apply in the selected scenario.
3. From the Sale Information subtab, make a selection from the Sale Option menu.
   • Do not sell entity: All other options are unavailable.
   • Sell entire entity: Define the Sale Date, Selling Cost, and make a selection for Direct After Tax Proceeds To.
     Note: You can also select Account Details to enter more information about the destination account for the asset sale's proceeds. For more information see the Account Details Help page.
   • Sell in installments: Define the Sale Date, Selling Cost, and make a selection for Direct After Tax Proceeds To.
     Then, enter information for the Installment Sale Details section.
     • Enter the percentage of the asset being sold in installments under Seller Installment % of Sale Amount.
     • Define the Annual Interest Rate, Payment Frequency, Compound Frequency, and Payment Type.
     • Define the Length of Installment Sale and the Length of Amortization in years and/or months.
4. From the Return Rates subtab, you can enter new values for Deferred Growth and Standard Deviation for the retirement and pre-retirement periods.
5. When you as satisfied with these options, click OK.

Note: For information on entering new business entities, see the Business Entities Help page.

From the Liabilities subtab, follow these steps to edit an existing liability:

1. Select Override for the liability you want to edit.
2. Select for the liability.
3. To model the effects of your clients paying off a liability early, select Make Early Payoff on the Other Options subtab.
   • Enter a Date and Penalty associated with the early payoff.
4. To model the effects of liquidating assets to cover pre-retirement deficits caused by liability payments, select Cover any pre-retirement deficits created by these liability payments.
5. When you are satisfied with these options, click OK.

Note: For information on entering new liabilities, see the Liabilities Help page.

From the Accounts subtab, follow these steps to edit an existing account:

1. Select Override for the account you want to edit.
2. Select for the account.
3. To modify the reinvestment strategy for the account, navigate to the Return Rates subtab.
   Note: A reinvestment strategy dictates whether to reinvest all investment income, reinvest after tax realized investment income or reinvest none of the investment income from an account.
   • Make a selection for both the retirement and pre-retirement periods.
4. When you are satisfied with these options, click OK.

Note: For information on entering new accounts, see the Accounts Help page.

From the Annuities subtab, follow these steps to add an annuity:

1. Select Add Deferred Annuity or Add Annuitized Annuity.
2. Enter information for the new annuity in the Annuity Details dialog box.
   • For more information on entering annuities, see the Annuities Help page.
3. When you are satisfied with these options, click OK.

Note: For information on entering new annuities, see the Annuities Help page.

From the Stock Options subtab, follow these steps to edit an existing account:

1. Select Override for the stock option you want to edit.
2. To edit the expiry for the selected stock option, navigate to the Vesting and Expiry subtab.
   • Select either No Expiry or All options expire <value> years and <value> months after granting.
3. To model a new exercise strategy, navigate to the Exercise Schedule subtab.
   • Specify when the stock options will be exercised by entering an event or date. Then, enter any details regarding the exercise.
4. When you are satisfied with these options, click OK.

Note: For information on entering new stock options, see the Stock Options Help page.

• The Net Worth graph presents the clients' projected net worth over time. The value of lifestyle assets appears separately. Use this information to help you when modifying assumptions on this page.