Property assets displayed in the net worth statement are purely informational, ie: they will not affect the plan success rate or cash flow table in any way. As a result, the sale of a primary residence or any other real estate should be modeled as a one-time Contribution to the account the proceeds are being added to.
- Click on, or create the account you want to add the funds to. If you are adding the contribution to a new account, both the Account Value and Cost Basis should be zero. When the contribution occurs the cost basis of the account will automatically be updated.
- Click the “Add Contribution” button. Remember: this can be done within an existing plan, or within the plan wizard for a new plan.
- Add the expected proceeds from the sale in the net contribution field ($400,000). Remember that contributions are a net figure, and should be inputted accordingly.
- Input the start and end date in the year you expect the sale to occur.
- Add inflation to model the amount you expect your contribution to increase by, or, if you want to keep the “Net Contribution” value the same, simply input a zero for the inflation rate.