Lifetime Planner IDEA: Fix Surplus Cash Model & Improve Reporting

Scooterlam SuperUser, Windows Beta Beta
edited October 2023 in Budget and Planning Tools

Lifetime Planner IDEA: Fix Surplus Cash Model & Improve Reporting


LTP does not handle surplus cash correctly when the user sets the Living Expense>Surplus Cash Sweep assumption to a number other than 100%. Image 1.

When the user sets a surplus cash sweep percentage, LTP only accounts for the surplus cash, taxable savings deposit but disregards the portion NOT swept to savings. The portion NOT swept to savings is essentially a "surplus cash expense" or the amount of surplus cash that was spent.

Fundamentally, Surplus Cash is either Saved or Spent, This is a common model assumption in many retirement planning tools. In LTP's model, the percent of surplus cash is only saved. Image 2.

By not accounting for the "surplus spent" portion, this design error or bug has the effect of understating total expenses and ultimately overstating end-of-plan balance (sucess or failure). Magnitude of this error is based on surplus cash sweep setting, with 0% setting generating the greatest plan error and 100% generating no plan error.


1. Improve "surplus cash" model to account for both "Surplus Cash" Saved AND "Surplus Cash" spent, based upon the user's sweep setting.   Surplus cash spent is not currently modelled.

2.  Expand LTP Plan Summary tables to include surplus-specific line-item(s) showing HOW the "surplus cash" assumption is allocated.   In other words, show how "surplus cash" is either saved and/or spent - both of which are expenses. 

Please Vote below!   Add your comments and ideas!

Image 1 - Surplus Sweep Setting under Living Expense Assumption


By definition, in Lifetime Planner, "Surplus Cash" occurs in plan years when the user's Total Income exceeds their Total Expense. In other words, the user has more income than expenses in a given year. LTP is basically asking, "do you want to save the excess"?

In the Living Expense dialog, the user chooses how much of this surplus cash (if any) is swept into the taxable savings account:

Image 2 - Simplified Illustration of How Surplus Cash Sweep Works TODAY

Image 3 shows an example from my LTP test file for three cases. Surplus cash sweep to Taxable Savings = 0%, 50%, and 100%. Enlarge image > Right-click and open in new tab.

This example shows the % excess cash swept into savings but leaves the excess cash NOT SAVED unaccounted for. And, IMV along with other planning tool designs, excess cash is either saved or spent.

Image 3 - Plan Results based upon 3 Surplus Cash Settings 0%, 50% and 100%


1. Evaluate Surplus Cash model
and determine if Surplus Cash that is NOT saved should be represented in the model as Plan Expenses. 

2.   Breakout additional line-item expenses in the Plan Summary Tables
- Delineate Surplus Cash savings and Surplus Cash Spent in the Expense section of the summary tables.  This helps alert the user how the assumption setting impacts cash flows.

3.   Reconsider change to default Surplus Cash Setting from 0% (present) to 100% (future) for new plans. 
Since one of the first steps in retirement planning is determining retirement expenses, then the assumption can be set to 100%, as future expenses have been "determined". In practical and real terms (at least for me), if I have excess cash at the end of the month, it either gets returned to my brokerage (saved) or sits in my cash bucket till next month. In the latter scenario, excess cash in my cash bucket means less taken from the brokerage account the following month.

4. Update Surplus Cash dialog window language to reflect change in model and/or default condition.

5. BETA Test….Avoid a half-baked and broken solution put into production by implementing entire change at once. Avoid the situation with the R44.20 RMD change where only the lifetime tables were updated but the actual RMD age WAS NOT!

6. Update HELP content.

7.   Tell Users (and support) about the change in release notes. Avoid some vague, wrongly written note like the one LTP RMD change in R44.20

Please Vote below!   Add your comments and thoughts! What am I Missing?

See, Comment & Vote on Additional Lifetime Planner Enhancements HERE

4 votes

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