Goals can be thought of as planned distributions. The primary objective of a plan is to satisfy all your client's Goals. These goal categories have their own columns on the cash outflow statement.
Retirement Goals are used to determine annual spending objectives for the plan. This amount should reflect the spending necessary to meet standard of living expenses, e.g. mortgage, rent, clothing, utilities and day-to-day expenses should be reflected in the annual spending goal. Multiple consecutive goals can be set up to show an increase or reduction in spending over the life of the plan.
Education Goals are defined as the amount required to pay for education expenses. The start year of the education goal should be set to coincide with the recipient's high school graduation year so preparations and timelines can be as accurate as possible. The end year should be adjusted to plan for the number of expected years in the educational program.
Lifestyle Goals represent larger, less frequent expenses that are not captured in the retirement spending goals. Lifestyle expense may include:
- Children's Wedding Expenses
- Second-home purchase
- New boat purchase
Tax Planning Goals represent amounts you would like to set aside specifically for taxes. This helps the advisor and client to capture unique tax situations.
Note: RMD distributions are automatically calculated and distributed
Legacy goals are used for one point in time outflows. Examples include a bequest or a large one-time charitable donation that would typically occur at the end of Life Expectancy.
Unlike other goals, legacy goals are one-time distributions rather than an annual distribution amount over a range of years. While these could be used as a single-distribution goal anywhere in a plan, we recommend setting these at the end of a plan. A legacy goal can serve as a Target Ending Portfolio goal to fund a trust, charity, or end of life expense.