inStream offers both a standard cash flow summary and an enhanced cash flow summary that you can use in your plan output. This article focuses on the enhanced cash flow summary.
The enhanced cash flow report presents a summary view of how distributions are handled over the life of the plan. The distributions are categorized by tax bucket for reference on how money flows in and out of the accounts.
ADDING THE ENHANCED CASH FLOW SUMMARY TO YOUR REPORT
If you would like to use the enhanced cash flow summary in your output, follow these steps:
1. Select your plan then select "View Output"
2. In report builder, make sure "Cash Flow" is added to your report then cick on the + sign beside "Cash Flow"
3. Check the "Enhanced Cash Flow" checkbox to include the table in the report.
REPORT OUTPUT
Using the path with the median ending value, we break down the cash flow for each year. There are thirteen data points for each year:
PLAN INPUTS
- Beginning Portfolio Value - The value of all of the investment portfolios included in the plan at the start of the year. (For more details see the Accounts Table)
- Total Net Inflow - The sum of all of the income streams included in the plan for that year. (For more details see Cash Inflow Report)
- Total Outflow- The sum of all of the goals. This column will also include the advisor fee if you opted to show the advisor fees as a distribution in the fees section in the client profile. (For more details see Cash Outflow Report)
TAXABLE
- Excess Income - The sum of all the incomes that weren’t directed towards goals. Note: If income and/or an RMD is in excess of the total goals for a year, then the excess will display in this column and be treated as a taxable bucket contribution.
- Contributions - Summary of all contributions to the taxable accounts.
- Gross Taxable Distributions - The amount of money taken out of the Taxable accounts to meet that year’s goals. This is a pretax number, so it may be higher than the Net Goals number.
TAX DEFERRED
- Contributions - Summary of all contributions to the tax deferred accounts.
- Gross Tax Deferred Distributions - The amount of money taken out of the Tax Deferred accounts to meet that year’s goals. This is a pretax number, so it may be higher than the Net Goals number.
TAX EXEMPT
- Contributions - Summary of all contributions to the taxable accounts.
- Tax Exempt Distributions - The amount of money taken out of the Tax Exempt accounts to meet that year’s goals. Since taxes have already been paid on this money, this number will always be either equal to, or less than the Net Goals.
PLAN ASSUMPTIONS & OUTCOME
- Simulated Net Return - This is the investment return used in this year for this run. Based on the model used in this year the program constructs a normal (bell) curve of the possible returns (based on the average return and standard deviation) then the program randomly plucks a return from that curve. The return shown is a net return with portfolio expenses removed. Note. If you opt to use the reduce return option in the fee section of the profile the return shown will be net of both portfolio expenses and advisory fees. Click here for more information on entering fees.
- Cumulative Wealth (Future Dollars) - The cumulative wealth is the simulated 50th percentile value of the portfolio at the end of each year in Future Dollars discounted at the rate you specify. To learn more about how to adjust the discounted rate, click here.
- Cumulative Wealth (Today's Dollars) - The cumulative wealth is the simulated 50th percentile value of the portfolio at the end of each year.
Note:
For Goal-Based plans funds are withdrawn from the plan in the following order Income, RMD, Taxable, Tax Deferred & Tax Exempt.
For Safe Savings rate plans funds are contributed to the plan in the following order Tax-Exempt, Tax-Deferred & Taxable.
For more information
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