Quicken 2014 Deluxe Planning Setup - Investments Are Not Accumulating Interest

Aristotle

Hello,
Thank you for helping me with my issue. I am setting up a retirement plan for the first time and am having a learning curve question. The investments that I have set up in Quicken 2014 Deluxe are not showing interest accumulation. I have several IRAs and annuities with the balances showing but under annual increase in the Planning assumptions window they are all blank. When I go to the Plan:Results window it does not show my accounts growing.
How do I setup for annual increase due to interest accumulation?
Thanks again...
Aristotle

Bob_L

While historic returns could be a starting point, it seems to me you need to factor in the nature of your portfolio and how long before retirement.  (For example, When you say “interest” that suggests bonds to me).  

I suggest that the value of planning isn’t to predict a specific result; rather, it is to identify the range of possibilities and sensitivities to the various assumptions going into the plan. Therefore consider return as a key sensitivity where for example you will be able to identify that I need x% return in order to generate what I need to live on.  FWIW, a starting point for all equity based on history is probably something around 8%, but as I said that is just a starting point.

Bob_L

I agree,  but that is what the S&P 500 has done.  See this:
https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

Asset allocation is very important.  Check out the allocations tab under the investing menu to get some representative returns and risks associated with various mixes of debt and equities in your portfolio.

Aristotle

Hello again,
So I found the problem. In the help section it states that "The Life Event Planners don't project each individual investment. Instead the value of your entire portfolio is projected." This is actually another window where it asks Rate Of Return. I had 1% inserted. Does anyone have any idea what would be a more accurate average given the historical averages of the markets?
Thanks,
JB

Bob_L

While historic returns could be a starting point, it seems to me you need to factor in the nature of your portfolio and how long before retirement.  (For example, When you say “interest” that suggests bonds to me).  

I suggest that the value of planning isn’t to predict a specific result; rather, it is to identify the range of possibilities and sensitivities to the various assumptions going into the plan. Therefore consider return as a key sensitivity where for example you will be able to identify that I need x% return in order to generate what I need to live on.  FWIW, a starting point for all equity based on history is probably something around 8%, but as I said that is just a starting point.

Aristotle

Hi Bob,
Thank you so much for taking the time to help me out. 8% looks pretty high based on todays trends in my humble opinion but in the Quicken 2014 Deluxe Retirement Calculator 8% is the default setting. :) Thanks for hitting that spot on. When calculating my retirement at the 8% default setting my retirement nest egg looks like it may sustain the Mrs. and I. However when I adjust it to what I believe it is (through total ignorance) down to about 2% the retirement outlook for us looks like dry dogfood for dinner for the next few decades.
I will keep tweaking per your suggestions in order to get other projections.
Thanks again.....

Bob_L

I agree,  but that is what the S&P 500 has done.  See this:
https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

Asset allocation is very important.  Check out the allocations tab under the investing menu to get some representative returns and risks associated with various mixes of debt and equities in your portfolio.

Aristotle

Hi Bob,
Thanks for the great article. Truly resets my thinking on the stock market.