Expense Information Window

[Kathleen Reynolds]

#4430

Click the Add Expense button on the Income, Expenses, Contributions, and Distributions section to create a new Expense item and display the Expense Information window.

The Expense Information window prompts you for information about the expense. Enter:

• a description,
• the annual amount needed,
• how much that amount should increase each year,
• where the expense should be paid from,
• and the years the expense must be paid.

If the expense starts in a future year, you also have the opportunity to apply the annual percentage increase in the amount from the first year of the analysis (instead of from the first year the expense starts). This lets you type in the amount in today’s dollars, and then use an inflation rate for the annual increase.

To distribute enough to pay that expense, plus any taxes that are caused by paying that expense, check the Distribute Enough to Pay Taxes as Well as the Amount Needed checkbox. This is a great way to illustrate the true cost of paying expenses out of a tax deferred account (like the Retirement Plan).

If you wish to enter the expense on a year-by-year basis, check the Use Custom Year-by-Year Expense checkbox.

Expenses are paid first out of income before being drawn from the accounts.

Note: Do not add the minimum distribution to the Amount Needed. The program always enforces minimum distributions, distributing whatever is necessary to avoid penalty.

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