Steve Chen walks through setting up income sources in the Bolden Planner, including work income, Social Security, passive income, pensions, annuities, and windfalls.
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Hi everyone, this is Nancy from Bolden and I want to welcome you to Day eight of our Get Started series designed to guide you in accurately setting up your plan. Today we're going to discuss how to account for current and future income sources in the Bolden Planner. Let's navigate to income the first area of income we'll look at is work income. In this plan, we see work income from both Jennifer and and Darnell. I highly recommend leveraging the retirement age in the drop down menus. Once you've done that, you can update the retirement age in the profile to easily update multiple areas of your plan. When you enter an income stream, you also have the ability to add a contribution and in this plan, Jennifer has a 6% employee contribution along with her employer match, and Darnell also has an employee contribution and employer match. You may want to attend our live events or see the HELP center to learn more about contributions. The second area I want to discuss is Social Security. When you create your plan, you initially indicate whether you're already receiving Social Security benefits or not. If you're already receiving Social Security benefits, you'll enter your actual benefit. If you are not yet receiving benefits, you'll enter your benefit at full retirement age from your most recent Social Security statement and use the pull down menu to select a claiming age. The software will calculate your benefit at claiming age and benefits are reduced if you claim prior to full retirement age and increased if you delay claiming. There are times when one spouse may have a low or no earnings history and be eligible for the spousal benefit, although it's not made evident here. The plan for the spousal benefit in the most common use cases in this plan, when Jennifer claims her benefit, Darnell receives the spousal benefit, which is 50% of her full retirement age benefit. See our resources to learn more about how the spousal benefit works in the planner. The next type of income we account for is passive income. This is typically used for income from rental properties or other income subject to state and federal income tax. You have the ability to model three types of pension in the monthly pensions, cash balance pensions and lump sum pensions. In this plan, Jennifer has a monthly pension which begins at retirement age with a COLA and survivor benefit. This pension is taxable at the federal and state tax levels. Darnell has a lump sum pension which will be deposited to a Xerox rollover IRA and the income will be included in the RMD modeling. Until then, no tax will apply to the pension income and Darnell has a cash balance pension deposited at retirement age as well. Current annuities operate in a manner similar to a monthly pension, and you may also model future annuity purchases which are assumed to be lifetime annuities. The planner has its own bond calculator which is updated monthly based upon current bond rates. If you plan to purchase a period specific annuity or your annuity is based upon a different rate, you may wish to enter the income as a pension. In this case, you don't have the option to debit an account and you'll need to enter the amount withdrawn to fund the annuity as a deductible disbursement. In the money Flow section, windfalls are considered after tax deposits and are not used to fund expenses in the year received. They may be used for inheritances, life insurance or other sudden wealth events. Thank you for joining me in today's video. I'll see you in Get Started series nine where we'll discuss the recurring and large Expense section of the Bolden Plan.
