Data Input

The information below discusses the data input in the left hand column:

Note:For information about entering accounts, click here.
For information about the calculations, click here.

Left Hand Data Input

Income Tax Bracket

Enter the marginal income tax bracket for the client.

401(k) Account Information

Account Balance

Enter the current account balance of the 401(k) account.

# of Paychecks per Year

Enter the number of paychecks the client receives per year.

# of 401(k) Deposits per Year

Enter the number of times per year the client makes a 401(k) account deposit.

401(k) Deposit Value

Enter the dollar value the client is contributing to their 401(k).

Rate of Return

Enter the hypothetical rate of return that the account will earn.

401(k) Loan Information

Annual Percentage Rate

Enter the percent rate charged by the account for the loan.

Percent of Cash Value that is Loan-able

If the account restricts the amount that is loan-able, enter the percent here. If the account does not make any further restrictions than the IRS restrictions, enter 100%.

Note:TRAK will limit the total loan amount to the lesser of the loan-able percent entered above, or to the IRS limit which is the higher of 100% of the first $10,000 or 50% of the cash balance, not to exceed $50,000.

 

Base Rate of Return Earned on Borrowed Monies

Enter the rate of return earned on the monies when they are borrowed.

Account currently has an open loan

Check this box if the account currently has an open loan.

Current Loan Balance

Enter the balance on the current loan.

Payment to Service Loan

Enter the payment on the current loan.

Consolidating consumer debt...

When moving money from a high interest credit card to a low interest qualified account, a lower payment will often be required. This additional cash can be used for increased contribution to the qualified account, as additional income, or some combination of the two. Enter the percent of the difference to contribute to the qualified plan.

For Example

If moving the money from a high interest loan payment of $100 to a qualified plan loan payment of $80, there is a decrease in loan payment of $20 (in after-tax dollars). This is an effective increase in pay.

If the client wants all of the increase for their disposable income, enter 0%.

If the client would like to contribute it to their qualified plan, enter 100%. TRAK will net their income up by the amount.

A 50% value would keep $10 for the client's disposable income and use the other $10, netted up by their tax bracket, for their qualified plan.