The Gap Analysis calculator gives a quick visual illustration of retirement income sources, needs analysis, and shortfall analysis. A comparison can quickly be made between projected income sources and income needed and, if there is a projected shortfall, the required savings.
The Gap Analysis Calculator extends the functionality of the Quick Gap calculator by adding the following features:
1.The Tax Wise Distribution Strategy, a strategy designed to reduce a client's income tax in retirement.
2.Custom lump sum or monthly cash distributions, such as a one year vacation expense at retirement or a long term care event.
3.The Bucket Strategy allows advisors to illustrate time-segmenting all or portions of a client’s retirement savings into “buckets” which can be customized.
4.The Glide Path feature allows configuring various accumulation rates of return for Cash Balance Accounts prior to retirement.
5.Income modeling in retirement can be entered as:
a)a percent of income,
b)a specific dollar value, or
c)a categorized and itemized budget.
For all models, income needs can be adjusted in retirement.
6.Easy illustrations for federal retirement plans (CSRS, CSRS with Offset and FERS, as well as FEGLI).
7.Additional calculation screens are available, including a DB Buy-Back Comparison and FEGLI (related to the federal retirement plans).
8.Change the distribution order of accounts not only at retirement, but also after retirement starts.
9.Create multiple scenarios that can be easily printed for comparing changes in options.
Income sources can include:
1.The client's and, optionally, the spouse's retirement plans (including defined benefit plans).
3.Savings accounts (such as an IRA or retirement plans from previous employers).
4.Known cash flows (such as rental income or part time work).
5.Known lump sums (such as the sale of an asset or a life insurance settlement).
After the data entry, the projected retirement income is then compared to the client's retirement income need to determine if additional savings is required. If savings are needed, various solutions for retirement are calculated and displayed.
The data entry for the calculator is divided into tabs:
|Depending on configuration options and features, the tabs in TRAK may be different than shown above.
The tabs may be put into two categories: data input and calculations. Each category is discussed in its relevant link below:
If there is a data entry problem on a page, the tab(s) to the right of the tab with the data entry problem will be disabled or disappear. For example, in the image below, a data entry problem exists on the Retirement Income tab and the normal Calculations tab is not displayed on screen:
To determine what the data entry problem is, select the last available tab (the tab farthest right that is enabled). There will be a "View Error Messages" button at the top-right of the page.
A message will be displayed about the problem with the data on the current tab.