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Lifetime Planner, Increases to Savings

James J

The lifetime planner allows me to enter increases to savings both as yearly percentage increases and as dollar amounts. The planner does not handle these are being mutually exclusive. In other words, I can enter a yearly percentage and then I can enter a dollar amount. The dollar amount need not equal the percentage. The planner will then display both the yearly percentage as well as the dollar amount that I entered.

Is the percentage, then, intended to represent the rate of return on a savings account? And the dollar amount represents my annual contributions? To make this more concrete, let's say I'm talking about a 529 plan. I expect its rate of return to average 5%. I also make annual contributions of $700. Is that the situation Quicken is allowing me to handle?

What's confusing me, is that the planner has a separate section where I specify before and after retirement rates of return. How does that entry impact the yearly increases I enter for each savings account?

Please see the highlighted sections in the attached pic.

Thank you,

Bubba

Image: https://us.v-cdn.net/6031128/uploads/editor/0d/yunhakbeczsy.png

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Sherlock

The percentage is intended to allow us to estimate how much more we will contributing annually in the future. Using your example of the 529 plan, if you will be contributing $700 annually, the percentage should be zero.

Scooterlam

James J said:

....What's confusing me, is that the planner has a separate section where I specify before and after retirement rates of return. How does that entry impact the yearly increases I enter for each savings account?

Please see the highlighted sections in the attached pic.

Thank you,
Bubba

Rate of return represents the future growth assumption of the market value of the account, as opposed to @Sherlock description of the annual increase (of your contribution) assumption. Rate of return relates to your investment return expectations.

The before / after return settings allows you to further refine your rate of return between taxable / tax deferred account types and before / after retirement time frames. Use this option if you think you believe you will have different return expectations by account type or time-frame. That is, perhaps you invest more aggressively in your tax-deferred account v. taxable account or you will become more conservative in your return expectations after retirement v. before retirement.

Image: https://us.v-cdn.net/6031128/uploads/editor/vh/48blxiq7dt60.png

LTP Help Pages
https://help.quicken.com/display/WIN/Plan+your+financial+future

James J

Sherlock said:

The percentage is intended to allow us to estimate how much more we will contributing annually in the future. Using your example of the 529 plan, if you will be contributing $700 annually, the percentage should be zero.

So in the Quicken planner, I should be entering either a dollar amount for a yearly contribution or a yearly percentage increase, but not both. That's what you mean?

James J

Scooterlam said:

James J said:

....What's confusing me, is that the planner has a separate section where I specify before and after retirement rates of return. How does that entry impact the yearly increases I enter for each savings account?

Please see the highlighted sections in the attached pic.

Thank you,
Bubba

Rate of return represents the future growth assumption of the market value of the account, as opposed to @Sherlock description of the annual increase (of your contribution) assumption. Rate of return relates to your investment return expectations.

The before / after return settings allows you to further refine your rate of return between taxable / tax deferred account types and before / after retirement time frames. Use this option if you think you believe you will have different return expectations by account type or time-frame. That is, perhaps you invest more aggressively in your tax-deferred account v. taxable account or you will become more conservative in your return expectations after retirement v. before retirement.

LTP Help Pages
https://help.quicken.com/display/WIN/Plan+your+financial+future

I wish I could specify rates of return for each account. For example, I have a Roth IRA earmarked for the kids' college (old dad here0. So the asset allocation there is different than what I have for my wife's Roth IRA, because the timelines are different. Similarly, I have various taxable accounts earmarked for different time horizons, causing them to have different asset allocations.

Sherlock

James J said:

Sherlock said:

The percentage is intended to allow us to estimate how much more we will contributing annually in the future. Using your example of the 529 plan, if you will be contributing $700 annually, the percentage should be zero.

So in the Quicken planner, I should be entering either a dollar amount for a yearly contribution or a yearly percentage increase, but not both. That's what you mean?

No. The yearly percentage increase applies to the amount you estimate you will be contributing annually.

Image: https://us.v-cdn.net/6031128/uploads/editor/6z/7sqcir9t45we.png

Scooterlam

James J said:

Scooterlam said:

...The before / after return settings allows you to further refine your rate of return between taxable / tax deferred account types and before / after retirement time frames. Use this option if you think you believe you will have different return expectations by account type or time-frame. That is, perhaps you invest more aggressively in your tax-deferred account v. taxable account or you will become more conservative in your return expectations after retirement v. before retirement.

LTP Help Pages
https://help.quicken.com/display/WIN/Plan+your+financial+future

I wish I could specify rates of return for each account. For example, I have a Roth IRA earmarked for the kids' college (old dad here0. So the asset allocation there is different than what I have for my wife's Roth IRA, because the timelines are different. Similarly, I have various taxable accounts earmarked for different time horizons, causing them to have different asset allocations.

Understand your need but so far the product only allows for what is defined in the image in the quote above. Perhaps if and when Quicken expands Roth and HSA functionality and transparency in LTP, this could be a next step.

Here are a few idea posts pertaining to adding those features. Have a look, comment and vote if you like them.

TAX FREE ACCOUNT ( ROTH IRA and HSA ) IMPROVEMENTS - updated 11.18.2021

IDEA: Add HSA Account Type as a Selectable Investment Account - added 11.18.2021

IDEA: Add Roth Conversion Modeling in LTP - added 10.16.2021

IDEA: Improve How ROTH IRAs are Displayed and Modelled in LTP - added 09.05.21

By the way, there is a curated list of LTP bug and improvement posts HERE - The list is in the OP. There may be others improvements that matter to you. Have a look, comment and vote.

James J

Sherlock said:

James J said:

Sherlock said:

The percentage is intended to allow us to estimate how much more we will contributing annually in the future. Using your example of the 529 plan, if you will be contributing $700 annually, the percentage should be zero.

So in the Quicken planner, I should be entering either a dollar amount for a yearly contribution or a yearly percentage increase, but not both. That's what you mean?

No. The yearly percentage increase applies to the amount you estimate you will be contributing annually.

Ha! Yes I see what you mean. That’s helpful.