Contribution Analysis

The Contribution Comparison page allows for comparing different contribution rates, including delaying changes of contribution to the retirement plan,  and future increases in contribution to the retirement plan.

Note:The Contribution Comparison page is only available if the client or spouse (if applicable) has a defined contribution plan that allows employer contributions or if they have a retirement investment account.

The data entry and calculations are discussed below.

Data Entry

Account

If more than one account is available to modify contributions to, a combo-box will be displayed with the list of available accounts. Otherwise the available account will be displayed in a label. When applicable, select the account to make the changes in contribution to.

# of Strategies

Select the number of strategies to illustrate for this account. The Current Strategy counts as one, and up to three (3) strategies can be illustrated for any one account.

Second or Third Strategy

Years Before Changing

Enter the number of years to delay making changes in contribution.

Contribution Method

Select the contribution method for the new strategy.

Note:If a value is entered for Years Before Changing the Contribution Method cannot be altered.

Contribution

Enter the value of the contribution to the retirement plan.

Annual Increase Method

Select the appropriate method to make changes to future contributions.

No Increase

Select this method if there is to be no future increase in the contribution value. Note if the Contribution Method for the client is Percent of Pay and the client (spouse) has a raise, the dollar value of the contribution will increase when the client receives a raise, but the percent of the client's (or spouse's) pay will remain the same.

Increase in Value

This method will increase the value of the client's contribution as a value. If the Contribution method is Dollar then the increase value will be in a dollar value, and will be per contribution. If the method is Percent of pay then the contribution will be an increase in the contribution percent. Contribution increases occur when the client receives a raise.

Examples:If a client is currently contributing $100 monthly and selects Increase in value with a $25 increase, the future contributions will increase to $125 per contribution the first year, $150 the second year, $175 the third year, etc.
If a client is currently contributing 5% per paycheck and selects Increase in value with a 1% increase, the future contributions will increase to 6% the first year, 7% the second year, 8% the third year, etc.

Percentage Increase

This method will increase the contribution by a specified percent. Increases occur when the client receives a raise.

Examples:If a client is currently contributing $100 monthly and selects Percentage Increase with a 10% increase in percentage, the future contributions will increase to $110 per contribution the first year, $121 the second year, $133.10 the third year, etc.
If a client is current contribution 10% of their paycheck and selects Percentage Increase with a 10% increase in percentage, the future contributions will increase to 11%, 12.1%, 13.31%, 14.46%, etc.

Annual Increase in Percent

This prompt is available when the Contribution Method is Percent of Pay and the Annual Increase Method is Increase in Value.

This increases the value of the contribution by the value entered.

Example:With a 10% current contribution, a 1% increase would increase the contribution to 11% with the next raise, 12% with the following raise, etc.

Annual Percentage Increase

This prompt is available when the the Annual Increase Method is Percentage Increase.

Examples:With a 10% current contribution, a 10% increase would increase the contribution to 11% with the next raise, 12.1% with the following raise, 13.31%, etc.
With a $100 current contribution, a 10% in would increase the contribution to $110, $121, $131.10, etc.

Annual Increase per Deposit

This prompt is available when the Contribution Method is Dollars per Deposit and the Annual Increase Method is Increase in Value.

Example:With a $100 current contribution, a $10 increase would increase the contribution to $110 with the next raise, $120 with the following raise, etc.