Lifetime Planner double counting some expenses?

BK

Question on Lifetime Planner on double counting expenses.

In Home and Assets > Loans (marked 1 in attached screenshot), it already shows my home loan's monthly payment.  Same place in Home and Assets > Asset Expenses, I entered my annual property tax payment.

Question is in the Expenses section > Living Expenses (marked 2 in attached screenshot): If I select "Category detail", it too shows my monthly expenses for mortgage payment as well as property tax.  It appears that those expenses are being double-counted and hence I should zero them in "Category detail", right?  In other words I should think carefully which "Category detail" expenses I have already considered elsewhere in the planner and omit them accordingly. Is my understanding correct? TIA for your input.

Scooterlam

Correct.  For sure, double counting expenses is a common mistake when first starting out in LTP.

The category detail option for entering living expenses, might very well include your mortgage payment and as you guessed it, leaving it selected would indeed double count your expenses, and possibly others.  Category Detail feature simply looks at your expenses in your spending accounts and doesn't try to organize things when it comes to Lifetime Planner.  See highlighted item in image below.



The way I approach this is:

1.  I disregard Category Detail feature but instead create a "Retirement Budget" in Planning>Budget to hold what I think will be my retirement expenses and categories.  Much better feature than Category Detail, IMO.

2.  I use this "retirement budget" yearly figure in my Living Expenses>Rough Estimate in LTP.

3.  Going forward, every year, I revisit my "retirement budget" and make tweaks and update the Living Expenses>Rough Estimate assumption in LTP.

4.  My home related expense (mortgage, property taxes, improvement, maintenance, lawn, landscape and garden expenses) I enter them in the Current Home and Asset dialog.  Image. When expenses are included in this home asset section, when you setup a plan sale, these expenses will end when you reach that sale year. That is convenient IMV.

Hope this helps.

Scooterlam

BK said:

@Scooterlam ,  Thank you and VERY helpful.  I will try your approach as well to see which works better for me.  You are excluding all the home related "Asset Expenses" in you image from your "Retirement Budget" right?  (to avoid double-counting). It is logical but I just want to verify that I understand Quicken's behavior.  Cheers

Good question,  I wasn't as clear as I could be!

No  in my "retirement budget", I budget for everything, including the home asset related expenses I mentioned.   This retirement budget doesn't change and is not linked to LTP.  It just gets parsed into two categories in LTP:

1. From the "retirement budget", I enter the home and asset related expenses in LTP's Current Homes and Assets>Mortgage or Expense, and
2. From the "retirement budget", I enter the balance (total retirement budget less the asset expenses) into Living Expenses>Rough estimate assumption.

I started using the above approach in the last few years as I knew, in the future I would be making some home sale and buy v. rent scenarios in LTP and wanted the convenience of turning off old home related expenses when the home was sold.  Also, if there is a mortgage, then LTP pays down the balance from proceeds automatically. 

A second option and perhaps simpler one when first starting out:

Prior to a few years ago, when I first started out with LTP, I would put my entire "retirement budget" under Living Expense>Rough Estimate to keep things simple and avoid potential double counting.   This was really simple and I didn't confuse myself by having "some expense here and some expenses there"!

Scooterlam

Correct.  For sure, double counting expenses is a common mistake when first starting out in LTP.

The category detail option for entering living expenses, might very well include your mortgage payment and as you guessed it, leaving it selected would indeed double count your expenses, and possibly others.  Category Detail feature simply looks at your expenses in your spending accounts and doesn't try to organize things when it comes to Lifetime Planner.  See highlighted item in image below.



The way I approach this is:

1.  I disregard Category Detail feature but instead create a "Retirement Budget" in Planning>Budget to hold what I think will be my retirement expenses and categories.  Much better feature than Category Detail, IMO.

2.  I use this "retirement budget" yearly figure in my Living Expenses>Rough Estimate in LTP.

3.  Going forward, every year, I revisit my "retirement budget" and make tweaks and update the Living Expenses>Rough Estimate assumption in LTP.

4.  My home related expense (mortgage, property taxes, improvement, maintenance, lawn, landscape and garden expenses) I enter them in the Current Home and Asset dialog.  Image. When expenses are included in this home asset section, when you setup a plan sale, these expenses will end when you reach that sale year. That is convenient IMV.

Hope this helps.

BK

@Scooterlam ,  Thank you and VERY helpful.  I will try your approach as well to see which works better for me.  You are excluding all the home related "Asset Expenses" in you image from your "Retirement Budget" right?  (to avoid double-counting). It is logical but I just want to verify that I understand Quicken's behavior.  Cheers

Scooterlam

BK said:

@Scooterlam ,  Thank you and VERY helpful.  I will try your approach as well to see which works better for me.  You are excluding all the home related "Asset Expenses" in you image from your "Retirement Budget" right?  (to avoid double-counting). It is logical but I just want to verify that I understand Quicken's behavior.  Cheers

Good question,  I wasn't as clear as I could be!

No  in my "retirement budget", I budget for everything, including the home asset related expenses I mentioned.   This retirement budget doesn't change and is not linked to LTP.  It just gets parsed into two categories in LTP:

1. From the "retirement budget", I enter the home and asset related expenses in LTP's Current Homes and Assets>Mortgage or Expense, and
2. From the "retirement budget", I enter the balance (total retirement budget less the asset expenses) into Living Expenses>Rough estimate assumption.

I started using the above approach in the last few years as I knew, in the future I would be making some home sale and buy v. rent scenarios in LTP and wanted the convenience of turning off old home related expenses when the home was sold.  Also, if there is a mortgage, then LTP pays down the balance from proceeds automatically. 

A second option and perhaps simpler one when first starting out:

Prior to a few years ago, when I first started out with LTP, I would put my entire "retirement budget" under Living Expense>Rough Estimate to keep things simple and avoid potential double counting.   This was really simple and I didn't confuse myself by having "some expense here and some expenses there"!