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Master Plan Software User`s Manual

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1. Print Preview SEES 6 EH EB E o4 waft gt gt I Clase A Money Mastery Retirement Cash Flow Report Type Description Amount Interest Rate Payout Start Years Months Monthly Payout American Fund 38 000 5 50 6 25 2028 174 17 F Insurance Anuity 1 2 2028 25 00 300 00 1 200 00 P Joyce s Roth IRA 175 000 6 50 1146 2030 25 00 300 00 1 181 61 P Mark s 401 k 100 000 5 00 6 25 2028 25 00 300 00 584 59 F Property on E Street 6 25 2022 25 00 300 00 700 00 F Social Security 6 25 2028 25 00 300 00 1 450 00 Totals 313 000 5 290 37 Type P Principal and Interest Spend Down Interest Only Payment F Fixed Monthly Amount NOTE The Monthly Payout amount is a gross figure and does not take into account any taxes or distribution issues to which the monthly payout may be subject In this case because Mark and Joyce have applied the Money Mastery Principles and powered down their debt they will be in good shape to receive a fairly large monthly payout during retirement by utilizing a variety of passive income cash streams To print the Retirement Cash Flow Analysis Report 1 Select Retirement from the main menu then click on Retirement Cash Flow Analysis Report The report will be displayed 2 To print click the printer icon at the top left corner of the screen as outlined in previous sections of this manual 47 Chapter 6 Using Master Plan Tools Using the Menu Bar Getting Help Cha
2. Amount and an Annual Deposit in the fields provided In this example for Mark and Joyce the Taxed savings drawer Taxed Savings Accounts Examples Savings Accounts Checking Accounts Reserve Funds Mutual Funds i E Description American Fund screen is shown displaying information about one of their a ed Annual Deposit 1 200 00 sav ngs accounts Annual Rate 3 50 Effective annual rate 280 Fiure Amount Future Rates d i Year of Change Change Amount Lump Sum 4 Inthe Annual Rate field enter the annual rate of return for this savings item b ji l Note The annual deposit amount should come from your Spending Planner analysis of annual savings If you plan to enter a l l l l lx a ome a lump sum in the future or if the annual deposit or annual rate will change at a future date you will want to use the Future Amount and Future Rates tabs in the middle portion of the Investments and Savings screen Refer to the next section on Future Amount and Future Rates for information on how to do this 4 5 Repeat this process for every savings item you wish to enter in the Taxed Tax deferred and Tax free drawers Note Use the plus sign button at the bottom of the screen to add new savings items You can switch among different drawers by clicking the drawer buttons on the left side of the screen Ea
3. 1 320 00 20 880 00 480 00 200 00 Gifts 420 00 4 800 00 Charitable Contributions Cleaning amp Laundry Clothing Debt Payment Eating Out Family Activities Groceries 25 00 50 00 12 00 110 00 1 740 00 40 00 25 00 35 00 400 00 i 30 r 50 00 12 00 110 00 1 740 00 40 00 25 00 35 00 400 00 0 00 0 00 0 00 0 00 1 740 00 0 00 0 00 0 00 0 00 O 1 740 00 1 685 00 130 00 70 00 50 00 0 00 12 00 0 00 110 00 30 00 60 00 50 00 12 00 80 00 55 00 20 00 25 00 40 00 20 00 25 00 0 00 35 00 0 00 35 00 400 00 0 00 400 00 36 636 m gt e 3 053 3 139 1 885 2 312 827 Income less Expenses and Savings 0 00 Close This amount should equal zero The balance of your income and expenses is also updated based on the total from the New Monthly Spending Total field and the amount shown in the Total Spendable Monthly Income field at the top of the Spending Planner screen Note Both these totals are flagged with an asterisk and green color codings to help bring your attention to their importance The difference between the two totals is displayed at the bottom of the screen in the Income Less Expenses and Savings field 10 Income less Expenses and Savings ae This amount should equal zero Chapter 2 Projecting Your Spending
4. 3 5 13 2007 Medical Dental 2 420 00 215 00 158 00 12 00 8 10 13 2007 AT amp T Credit Card 2 236 00 110 00 373 00 16 50 12 2 13 2008 Auto 4 866 00 325 00 483 00 9 50 14 4 13 2008 Furniture 6 000 00 220 00 308 00 12 00 17 7 13 2008 Home 116 032 00 815 00 1 028 00 7 50 96 2 13 2015 1 740 00 Standard Debt Accelerated Debt Repayment 29 50 Years Repayment 8 00 Years Original Debt 132 014 00 132 014 00 Total Payments 306 465 19 176 401 93 Total Interest Paid 174 451 19 44 387 93 Savings Balance 0 00 489 684 00 if you save 1 898 00 per month for 21 50 years at 0 00 Beginning on the left the report lists a description of each debt I tem you have entered in Master Plan the principal amount of the debt and the monthly payment In the Power Payment column the effect of an Accelerator Payment and or a Power Down amount is displayed The report also lists the interest rate of the debt the total number of payments you will make based on Power Down or Accelerator Payments and the estimated date on which each loan with all interest will be paid in full In the lower left portion of this report is an itemization of how much you will pay in principal and interest and the amount of time it will take you to pay all debt if you do not apply any Power Down or Accelerator Payments to your debt load This is called the Standard Debt Repayment column The Accelerated Debt Repayment column in the low
5. AO Mone ene Principle Based Money Management i 4 Master Plan Software User s Manual Version 5 2 for Microsoft Windows No part of this document may be copied photocopied reproduced translated microfilmed or otherwise duplicated on any medium without written consent of Time amp Money L L C Use of the software programs described herein and this documentation is subject to the license agreement enclosed in the software package This software and its documentation are intended to provide guidance in regard to the subject matter covered They are sold with the understanding that the author and publisher are not engaged in rendering legal accounting investment tax or other professional services All other product names and service names referenced herein are trademarks or service marks of their respective companies Copyright 2007 by Time amp Money L L C All rights reserved Welcome to Money Mastery Welcome to Master Plan Software the powerful personal money management tool designed to make forecasting and monitoring your financial future easy Master Plan Software gives you these benefits e Makes it easy to use Money Mastery s principle based methods of money management e Helps you control spending eliminate debt maximize retirement savings and reduce taxes e Lets you take control of your financial future through financial calculating and forecasting What Is the Money Mastery Concept Money Mastery
6. Important The number that appears in the Income Less Expenses and Savings field should equal zero If the amount shown is greater than zero you have not allocated enough income to your savings categories or created an Accelerator Payment for debt see the next section on Savings as an Expense and Chapter 3 on Understanding Debt for more information on how to do this If the number is a negative amount you are overspending and will need to adjust your expenses to match income Remember you shouldn t plan to spend more than you make See the following section for more information on how to reduce your spending STEP 6 Adjusting for Overspending If you are overspending you will need to adjust your expenses to match your income Following are five options that may help you do this Fixed and Variable Expenses Assign each category either a fixed or variable expense using these columns in the Spending Planner These columns help determine which expenses could be Expenses reduced if you are spending more than your income Example Fixed amounts 0 00 130 00 include such things are house or car payments These are difficult to change A 0 00 50 00 variable amount would be grocery or entertainment expenses These amounts can 0 00 12 00 be adjusted if necessary 0 00 110 00 1 740 00 0 00 Note The Variable Expense column will automatically be calculated based on the 0 00 40 00 amounts you en
7. Using the Master Worksheet Using the Retirement Worksheet to Project Savings Using the Retirement Cash Flow Analysis Chapter 5 Forecasting the Future Accessing and Changing Plans As instructed in Chapter 1 your first step in using the Master Plan software is to create an initial plan Information about current spending debt load and savings and investments is retained by Master Plan in that plan This section outlines a simple way to access this plan or create additional ones with which to experiment with different alternatives By trying out multiple plans you can create what if scenarios to forecast retirement amounts and debt payoff dates You can create different plans to assume various retirement ages or plans that utilize the Power Down method to pay down debt The options are endless Master Plan will Add new plans or change existing ones there is no limit to the number you can create e Play what if scenarios to project the consequences of your spending debt and savings decisions e Keep separate all savings and debt items from plan to plan Items do not overlap e Keep plans in alphabetical order Remember You can only follow one plan at a time and you will find that your control of finances is more sure once you establish a single plan and follow it STEP 1 Copying an Existing Plan Using an established original set of spending debt and savings items you can make a copy of this original pl
8. 71312007 81312007 91312007 103 2007 1143 2007 121312007 0 00 Medical Dental VISA 55 00 6 90 55 00 6 18 65 00 5 45 55 0 4 70 55 00 3 95 55 00 3 18 55 00 241 55 00 1 62 55 00 0 82 3021 411 90 7 13 2007 363 08 13 2007 3135a 9713 2007 263 23 1043 2007 215 00 1 448 72 16 45 215 00 1 248 19 14 47 215 00 1 043 85 12 46 215 00 839 09 10 44 S231248 11432007 215 00 632 48 160 36 12713 2007 107 77 173 2008 5439 2 13 2008 so21 373 2008 0 00 3113 2007 8 39 215 00 423 80 6 32 21500 213 04 4 24 215 00 s047 2 13 3047 0 00 AT amp T Credit Card 110 00 30 7 2 158 74 81312007 31312007 1043 2007 44713 2007 1213 2007 173 2008 2 13 2008 33 2008 41312008 513 2008 3110 00 25 14 3110 00 23 98 110 00 22 79 110 00 21 60 110 00 20 38 110 00 19 15 110 00 17 90 110 00 16 63 110 00 15 35 110 00 14 05 91 743 82 91 857 80 1 570 59 1 48219 91 392 57 91 301 72 91 209 62 91 116 25 1 021 60 925 65 Chapter 3 Powering Down Debt Using the Power Down Method To Eliminate Debt Once your debts have been entered into the system and assigned a priority for pay off you can use the software to apply Money Mastery s fourth principle Power Down Your Debt and Power Up Your Fortune The Master Pla
9. Windows versions video monitor type VGA SVGA etc e Write down the steps you were performing in Master Plan that led to the problem e Repeat those steps to see if the problem can be duplicated If you are concerned about losing information call Money Mastery before attempting to duplicate the problem e Re boot your computer Money Mastery Technical Support 801 292 1099 Note Money Mastery s technical support is available from 9 00 a m to 5 00 p m MST Monday through Friday Your purchase and registration of Master Plan software entitles you to 2 free calls following the date the registration card is received by Money Mastery Thereafter all support calls will be charged to your credit card at the rate of 65 per hour with a minimum call charge of 15 for the first 15 minutes The option to purchase an annual technical support contract is also available which reduces the hourly support charge from 65 to 50 per hour This annual contract entitles you to one call at 50 per hour and expires 12 months from the date of purchase If you have purchased coaching services you can receive free unlimited support through your Money Mastery coach Money Mastery can provide additional telephone support for answers to personal financial questions Contact Money Mastery for information concerning personal coaching or visit us on the Web moneymastery com System Requirements For maximum performance optimize your system to the confi
10. 005 Note LV the T key on your Wan n to CurentAge 385 e move etween fie Se Enter a Current Age oo HEK MEN for the primary provider The Current Age i Capital Gains Tax Rate 25 00 is th f the individual h Both fields are required for You If you 1s the age O e individual upon whom you dn ak a r Estimated Annual Inflation Rate 4 00 will base your retirement For example if you plan to retire at age 62 and you are currently 45 and your spouse is 44 then enter 45 as the current age Accelerator Payment Cancel 3 Enter the Retirement Age at which you would like to retire You will use this figure later to play what if scenarios Leave the Accelerator Payment field blank Note After learning more about powering down debt in subsequent chapters you can come back to the Accelerator Payment field and enter an appropriate amount 4 Enter your estimated Present Income Tax Rate This rate is the total of the various state and federal taxes you pay Estimate this amount if you are not sure Enter the estimated income Tax Rate at Retirement This rate is the total income tax rate for federal state and local income taxes that you will pay after retirement Remember Principle 6 The Rules Are Always Changing and government policies will not be the same at retirement Estimate rate based on current policies 5 Enter the current Capital Gains Tax Rate This is the current tax rate charged by
11. 13 19 41 48 Expense planning 9 11 F Face values 26 29 30 Federal tax 5 8 FICA tax 8 Filing system 31 Financial records 7 Find field 16 26 28 30 32 Fine art 26 Fixed Expenses 10 13 48 Fixed Monthly Amount 43 Fixed Monthly Amount Payout 46 Forecasting 4 5 16 20 21 26 31 33 34 39 46 Future Amount 27 28 Future date 27 28 Future rates 27 28 30 G Get Out of Debt Report 20 22 44 Getting organized 4 Gross monthly income 7 Growth rate 24 38 H His Her 7 12 13 House payment 11 I Income 4 13 23 30 35 39 41 50 Income estimates 9 Income Less Expenses and Savings 10 12 Income tax 5 Index inflation factor 9 Inflation rate 40 Installation 2 3 Insurance 4 8 9 26 28 30 44 Annual rate 27 30 Insurance Drawer 29 30 Insurance item 28 30 Interest 17 18 21 22 32 41 43 45 Interest Only Payments 43 45 Interest rate 4 15 17 22 26 28 32 36 37 41 44 46 Investments 4 5 22 26 28 29 34 36 43 IRA accounts 26 42 43 K Keogh accounts 26 L Last 12 months Average Per Month 9 Life insurance 2 4 24 30 Limited partnerships 26 Liquid funds 20 Loan 4 16 18 22 31 32 36 Shortest maturity 16 Long term savings 12 13 Lowest basis 31 Lump sum amount 27 28 M Main menu 4 5 7 13 15 17 18 21 22 27 32 34 36 38 39 42 Master Worksheet 24 35 39 44 45 Master Worksheet Report 38 44 45 Maturity date 30 Menu bar 7 18 23 38 44 45
12. Annual amount from Social Security Using the Social Security 17 400 00 0 00 Estimates Table j Check to enter an amount from SSA 5 Enter the annual income from company pension plans not 401 k or 5 000 00 0 00 personal savings asta 6 Enter other annual income 2 400 00 0 00 7 This is the total income received from outside sources for your 24 800 00 0 00 retirement Factors in this worksheet assume an average 4 inflation rate and a 5 growth rate during retirement lt is also assumed that the participant will live to age 90 which is longer than the statistical life expectancy and that there will be no retirement money remaining for heirs lt Back OK Cancel Click on Tab 2 Retirement Income From Outside Sources or click Next at the bottom of the screen This tab helps you understand what outside sources will contribute to the total funds you will need to meet your annual retirement income The amount displayed in line 4 is automatically calculated for you using the Social Security Estimate Table from the Retirement Savings Worksheet included in the Appendix of this manual 2 You can also enter your own estimate based on an amount from a Social Security check To do so click the SSA Check box then enter an amount in line 4 Note Figures for the Social Security Estimate Table are based on annual income and the percentage of that income which will be replaced by Social Security as outlined by the fed
13. Item Editing or Deleting an Existing Insurance Item Editing or Deleting an Existing Savings Item w Cone 2 From the main menu on the Technical Support screen select Index to display an alphabetical listing of Help topics 3 Select the topic you wish to review and click the Display button 4 You can also locate Help topics by clicking on the Find tab Money Mastery File A218 Bookmark Options in the Help section Cont Copy Ctrl C Annotate Using the E mail Report Feature Chapter 6 Using Master Plan Tools 5 Use the main menu items within the Help utility to select the option to copy print annotate or bookmark any of the Help topics available Master Plan includes the option to save various Spending Debt and Savings reports as PDF files that can be sent to a Money Mastery coach via e mail This functionality lets Money Mastery mentors assess your current financial situation and determine ways in which to help you better forecast the future Email Report Select and Export Report Select Help from the main menu and click on Email Report to Money Mastery Select AO Expor Report 1 Select the report you wish to export out of Money Mastery from the list below From the Select and Export Report window use Spending Planner the pull down arrow to display a list of VALIQUS 2 Choose the folder on your computer where you wish to save the report reports Highlight the one you w
14. Money Mastery Principles 43 46 Money market account 22 Monthly income 6 8 10 12 35 Monthly payment 4 16 18 24 37 44 47 Monthly Payout 44 47 Monthly tax rate 8 Mortgage 11 31 Moving debt payments to savings 20 22 Municipal bonds 26 Mutual funds 22 26 Needs Factor 41 50 New Plan Description 35 O Online help 2 Ordering debt 16 Organizing finances 2 Overspending 11 P Paper trail 9 Partial Power Down payments 20 Passive income 43 46 Payout Date 46 Payout Start Date 44 46 Payout Type 44 46 Pay stubs 4 7 Paycheck 8 Payment schedule 18 20 21 44 Payoff date 34 37 Pension funds 4 Pension plans 26 39 40 44 46 Percentage of taxable income 30 Permanent life insurance 26 30 Plans Accessing 34 Adding 5 34 44 Changing 34 35 44 Copying 34 35 44 Current 7 15 34 47 Deleting 35 44 Multiple 34 Power Down 16 19 22 24 34 37 44 Power Down Amount 19 21 47 Power Down Payments 20 22 24 37 47 Power Down to the next debt 19 Power Payments 16 19 22 23 Power up your fortune 19 Precious metals 26 Prediction 43 Premiums 26 29 Premium payment 29 30 Principal 4 16 18 21 22 31 32 43 45 Principal amount 22 31 32 45 Principal and Interest Spend down 43 44 Principle 1 ii Principle 2 ii Principle 3 ii 12 Principle 4 ii 19 Principle 5 ii 31 Principle 6 ii 5 Principle 7 ii 39 43 Principle 8 ii 13 26 Principle 9 ii 11 Principle 10 ii Printer icon 13 18 23 38 42 Printin
15. Planner 6 7 9 13 15 20 27 35 42 44 48 Categories 8 9 12 13 Printing 12 Spending Planner Report 13 Spouse 5 10 12 39 42 48 SSA Check box 40 Standard Debt Repayment 22 State taxes 5 8 Stocks 26 31 T Taxes 5 8 26 27 31 35 39 44 46 Tax amounts 8 32 Tax drawers 13 26 34 Tax rates 5 8 35 Capital gains 5 31 Current 5 Projected 5 8 Retirement 5 Tax sheltered annuities 26 Technical support 2 Term life insurance 26 Total projected spendable monthly income 8 10 12 Total current spendable monthly income 8 Tracking income and expense 12 T bills 43 46 Vv Valuable collections 26 Variable Expenses 11 13 48 Variable life insurance 26 Y Year of Change field 28 30 Year of maturity 30 Years depreciated 31 7
16. Powering Down Debt 4 Enter the number of Months Remaining on the loan the Monthly Payment and the Principal in the provided fields Note You can leave any of the Monthly Payment Principal or Months Remaining fields blank and the software will calculate the amount for that field if you have entered amounts in each of the remaining fields 5 Prioritize your debts by using the drag and drop feature in the grid section on the left side of the Debt window Debt year eee Priority is used to determine which debts you will pay off your debts by dragging them to a first To set a priority for payoff click on the debt item in enc cena the list and drag it to the desired position on the grid In the HEWE 460 example on the right for Mark and Joyce the VISA debt has Medical D al 542 002 2420 12 Principal a Priority 1 ranking and will be the first debt on their list ATE Creditcard ae ee z they work to eliminate Experiment with what priority will A Tm eyan work best for you by dragging debt items to different Home 7 50 116 032 354 positions on the grid Hint Order debts from either highest to lowest interest rates or in order from lowest to highest remaining principal or from shortest to longest maturity See Step 2 below on Prioritizing Debt Payoff for more information on this important concept l 6 Ifyou wish to enter additional debt items simply click the plus sign button in the bar at the b
17. a CD enter 2010 in the Year of Change column 2 000 in the Change Amount field and check the Lump Sum box If the interest rate on a particular savings or investment Future Amount Future Rates item will change in the future click the Future Rates tab Ysarot Change A window letting you note changes to the annual rate will appear Enter the anticipated year and rate change in the provided fields In this example for Mark and Joyce they anticipate a rate change to 8 5 on Joyce s five year CD in the year 2010 Harry To add additional notations in the Future Amount and Future Rates categories use the plus sign button at the bottom of the window STEP 4 Editing or Deleting an Existing Savings Item To change or delete an existing savings item in the Taxed Tax deferred or Tax free drawers 1 Select Savings from the main menu and click Investments and Savings Locate the desired savings item by clicking on the drawer in which it is located then use the arrows in the record bar or the Find field at the bottom of the screen Once you have located the desired item simply click within the fields to make changes When finished click Close Updates are automatically saved by Master Plan To delete any savings item click the minus sign button at the bottom of the screen Chapter 4 Savings amp Investments STEP 5 Entering Insurance Items Insurance items are unique in the big pic
18. amounts monthly annuity payments and the approximate amount of money you plan to collect from rental properties each month 43 Chapter 5 Forecasting the Future STEP 1 Entering a Principal and Interest Spend Down Retirement Cash Flow Item 1 ry Master Plan 5 2 Select Retirement from the main menu and click on Retirement Retirement Cash Flow Analysis Retirement Worksheet Report 2 The Retirement Cash Flow Analysis Add Edit window will appear Blank Retirement Worksheet Report Cash Flow Analysis Mark 8 Jd Retirement Worksheet Retirement Cash Flow Analysis Report Mark amp Joyce Sample Retirement Cash Flow Analysis Add Edit a 3 Inthe Payout Type pull down menu at the Principal and Interest Spend Down top of the screen select the type of Interest Only Payment j Fixed Monthly Amount he principal and interest as a source retirement asset you wish to enter Note Payout Type Principal and Interest Spend Down of retirement cash Examples Savings and IRA Accounts In this example to the left for Mark and Description Mark s 4011 Interest Rate 5007 Joyce they have selected Principal and Payout Start Date 6 25 2028 v mm dd yy Monthly Payout 584 59 Interest Spend Down as the payout type Amount 100 000 00 Months 300 for Mark s 401 k They will use the e wan Deno sofiware to calculate how much money they Yes No can withdraw each month before
19. becomes the basis for controlling your spending In the following example for Mark and Joyce their New Monthly Spending Plan total equals 3 139 Mark amp Joyce Sample Spending Planner Spendable Monthly Income His J Curent Projected J Current TProjectea Ceren RTN Gross Monthly Income sa3550 00 3 650 00 Iji 3550 00 3 650 00 Less Taxes FICA Tax s22000 226 00 D TT z20 00 4226 00 Medicare Ta 51 00 5300 TC sof 5300 Federal Tax seo s s2nn Tin ezoa State Ta seooof 6200 CT TT T e000f 6200 ather sa00 Tan TT TT ds a0 Total Spendable Monthly Income 3 053 00 3139 00 sof n 3 053 00 SEAE Current average past 12 months Projected forecasted monthly average Spending Category Expenses Spending Category Expenses Last 12 Months Next 12 Months Spending Category Avg Mo Avg 4 Mo Fi 1 500 00 125 00 130 00 Charitable Contributions 600 00 50 00 50 00 Cleaning amp Laundry 144 00 12 00 12 00 Clothing 1 320 00 110 00 110 00 Debt Payment 20 880 00 1 740 00 1 740 00 Eating Out 480 00 40 00 40 00 Family Activities 300 00 25 00 25 00 Gifts 420 00 35 00 35 00 4 800 00 36 636 400 00 3 053 400 00 3 139 Groceries Total Last 12 Months Next 12 New Monthly Spending Plan Months Serino Cacao Tt ion Wo Wo Fed Vane HERB Ts Ez 500 a 600 00 144 00
20. general guidelines toward retirement planning 2 In line 12 enter the annual interest rate you 1st Retirement Needs 2nd Income from Outside Sources 3rd Savings Goals 4th Annual Savings Account hope to receive on your retirement savings Use TER AEA A You Spouse A ai s elect e Estimated annual interest rate you hope to receive on 6 00 0 00 the down arrows or simply click within the field your savings x 13 This the amount you will need to save in order to maintain your 13 956 53 0 00 and type 1n the amount desired standard of living 14 Enter the amount your employer contributes to your 401 k 2 000 00 0 00 annually 3 Based on the interest rate you have entered in gt torent SA Sa dhe line 12 and your desired retirement age Money eho Si de R K em Mastery will automatically calculate the annual amount you will need to save in order to maintain Factors in this worksheet assume an average 4 inflation rate and a 5 growth rate during retirement It is also assumed that the participant will live to age 90 which is longer than the statistical life expectancy and that there will be no retirement money remaining ha aia standard of living and display it on cive Zika Cancel 41 Chapter 5 Forecasting the Future In this example for Mark and Joyce they hope to receive 6 interest on their retirement savings amount of 452 745 noted in line 11 by the time they retire at age 65 Mone
21. is the amount of income you will need to generat 8 7 300 23 200 0 O pr nt cl ck the pr nter 1con personal savings If this number is less than zero you have planned very well 9 Use the Retirement Needs Table on page 2 Enterthe total amount you will neec 9 161 330 512 720 0 at the top of the screen as ine a 10 Enter the amount of your current savings balances for retirement Include any savii 10 20 000 20 000 0 outlined in previous sections of acounts IRA 4016 balances 10a This is the future value of your retirement savings assuming the growth rate 10a 35 000 102 234 in box 12 at your desired retirement age ANA this manual 11 Subtract line 10a from line 9 This isthe amount of savings you will need to acour 11 126 330 410 486 0 the time you retire Annual Savings Amount 12 Select the estimated annual interest rate you hope to receive on your savings 42 Chapter 5 Forecasting the Future Using the Retirement Cash Flow Analysis Using the Retirement Worksheet profiled in the last section is a powerful way to predict how much money you will need in your future With that number in hand and by applying the Money Mastery Principles over a lifetime you will likely build up a certain amount of cash surplus that can be used to fund your retirement Once you reach the point at which you wish to retire or have enough passive income to wake up in the morning and elect to work or not it can be diffic
22. money to go to Remember When assigning Power Down amounts you wish to contribute to savings you msut first set up a saving item from the Investments and Savings screen 1 Chapter 6 Using Master Plan Tools You will get the message to the right if you have entered a Power Down amoutn larger than the payment you have been making to pay down the debt each month The Power Down amount must be same amount or less than the monthly payment you entered in the software for that debt item Warning n Total debt allocations are greater than the monthly payment Please reenter the amounts Power Down Error Message You have just lowered your monthly payment Sine your Power Down amount cannot be higher than you monthly payment your Power Down payment has been lowered to match your monthly payment If you have entered a Power down amount for a debt item then lowered your monthly payment for that item below your Power Down amount you will get this message Your Power Down amount cannot be larger than a monthly payment Ey Appendix Master Plan Software Social Security Estimate Table Retirement Needs Table Savings Factor Table Estimate Tables Social Security Estimate Table This is an estimate of the amount of Social Security you will receive after retirement For a more accurate estimation call the Social Security Administration SS at 1 800 1213 or visit www ssa org Obtain Social Security form 7004 Complete
23. the de BEE EEE gla cna 401 k is entirely depleted 4 In the Description field enter the name of the asset then enter the date you wish to begin receiving payments from this asset in the Payout Start Date field ST Using the pull down arrow to the right of the Payout Start Date Payout Stat Dae 572570009 r field will reveal a long term planning calendar to help you determine the date you wish to begin taking payments depending on your desired retirement age Amount Find In the Amount field enter the total accumulation of cash for that account at the time you wish to begin withdrawing from it In the Today Cea ER Sinus Sub Ree example for Mark and Joyce they have accumulated 100 000 in Mark s 401 k at age 65 Description Mark s 401 k Payout Start Date 6 25 2028 x mm dd yy 6 Enter the interest rate the account is earning in the Amount 100 000 00 Interest Rate field If you know the desired amount of Include money you wish to receive from this account each yr ae month enter it in the Monthly Payout field the number of months the account will last based on that monthly payout amount will then be automatically calculated for you and will be displayed in the Months field Note If you do not know how much you want to receive each month from the account but simply want to know how long the asset will last over your retirement term you can enter the number of months from the
24. the form and send it to the address listed on the form With in 4 6 weeks the SSA will return an estimate to you In the chart below find your current gross income Under the income amount is the estimated percentage from line 13 of the Retirement Worksheet Multiply line A by the percentage of to determine the dollar amount A i 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000 60 000 65 000 P t Calculate Your Social Security Income Example You Spouse A Enter your current gross income 35 000 B Percentage from chart above x 38 C Approximate Social Security income 13 300 Retirement Needs Table Find the desired retirement age below and the related needs factor Enter the factor on line E Multiply line D by line E This gives the total amount needed in personal savings at retirement Transfer this amount to page 1 line 9 of the Retirement Worksheet Retirement e s gt e e Needs Factor 29 5 28 8 28 0 27 4 26 7 25 9 25 1 24 4 23 6 22 1 Retirement Needs Calculation Example You Spouse D Enter the amount from line 8 on page 1 of the Worksheet 7 300 E Enter the Needs Factor from the table above x 22 1 F Multiply line D by line E Enter amount on line 9 161 330 Savings Factor Table Find the number of years until you retire in the chart below Then find the annual interest you hope to receive on
25. well for retirement Important If you have planned well for your retirement the amount in line 8 should be 0 or less This means you have invested and saved wisely and will generate enough outside income so that you will not need to use personal savings to offset the cost of retirement 2 In line 9a select your desired retirement age Master Plan will automatically calculate the total amount you will need by your selected retirement age and display it on line 9b Note This figure is calculated using the Retirement Needs Table from the Money Mastery 10 Principles Guidebook it also appears in the Appendix of this manual In the case of Mark and Joyce the amount in line 8 of 23 200 is multiplied by the Needs Factor 22 1 percent associated with their desired retirement age of 65 The total not annual amount they will need to retire is 512 720 3 In line 10 enter your current savings balances from all accounts Based on what you have already saved Master Plan will automatically calculate the amount of savings you will need to accumulate in order to retire comfortably and display it in line 11 STEP 4 Entering the Annual Savings Amounts Needed for Retirement 1 Click on Tab 4 Annual Savings Amounts Mark amp Joyce Sample Retirement Worksheet x This worksheet is designed for anyone to obtain a basic understanding of financial needs at retirement The numbers and estimates will not be exact but can be used as
26. you to save the additions you have made to the Spending Category The X button lets you cancel any changes The circle arrow button allows you to refresh the data Pasadas AA NAN M After you have determined all necessary spending categories and entered those in the Spending Planner add all the receipts and or expenses together for 12 months for a total in each category If you are unable to find more than three months multiply the total by four to give you an estimated annual total If you are unable to construct a paper trail of expenditures for either 12 or three months it is better to estimate expenditures than leave the total blank Do not include one time expenses Spending Category Expenses 4 Enter totals in the Last 12 Months Totals REIRE column as shown in the example on the left 5 Note Notice that the Last 12 Months 150000 12500 1 Avg Mo Column amount to the right of Charitable Contributions 600 00 5000 e Orar CORAT S a duayan You Cleaning amp Laund y 144 00 12 00 This amount is the basis for your future Clothing 132000 1000 expense planning Totals for each column Debt Payment 20 980 00 1 740 00 1 7 Gee d ye GALANE Eating Out 480 00 40 00 Use the scroll bar to the right of the screen Family Activities 300 00 25 00 to maneuver through your list of categories Important The total income estimates must match the totals for expenses When these two amou
27. you will need to save in order to retire comfortably The Retirement Worksheet helps you apply Principle 7 Always Look at the Big Picture It can aid you in seeing where you want to go financially by conceptualizing what will happen in the future based on your current financial habits You can then set goals to correct processes that are not working Remember In the absence of financial goals most people make financial decisions they cannot afford STEP 1 Assessing Your Retirement Needs 1 Select Retirement in the main menu and click on Retirement Worksheet 2 The Retirement Worksheet will appear Mark amp Joyce Sample Retirement Worksheet This worksheet is designed for anyone to obtain a basic understanding of financial needs at retirement The numbers and estimates will not be exact but can be used as general guidelines toward retirement planning 3 Under Tab 1 Retirement Needs 1st Retirement Needs 2nd Income from Outside Sources 3rd Savings Goals 4th Annual Savings Account 5 A You Spouse enter on line 1 a current annual income 1 Enter your current annual income This is your gross income before 60 000 00 E d other deductions j for both you and your spouse This is aie hanna b 2 Estimate th t f it that ll need at p your gross income before taxes and other l ker n fis estimare hodki be bekweer 702 nd 05 Ti 300 deductions Note Use the Tab key to ae your approximate annual n
28. 2 486 47 of unallocated assets for a period 2 Enter the Contract Balance or the of 5 years i amount you will require the borrower to pay you This represents only the principal amount and does not include interest Plan to collect interest as well Enter the Number of Years or the length of the contract in years This will help determine the amount you will receive from the contract Enter the Annual Interest Rate you will charge to carry the loan The Annual Pre tax Amount is automatically calculated for you based on the figures entered in the other fields This amount represents the funds that will be distributed to you each year from the item sold under contract When you have entered all information press the Close button Follow this process for every capital gains item you enter in the system STEP 9 Editing or Deleting an Existing Capital Gains Item 1 Select Savings from the main menu and click Investments and Savings Click on the Capital Gains drawer To locate the desired item click on the Find field or toggle through items using the arrows in the record bar at the bottom of the screen Make changes to the desired item by tabbing through the fields Updates to the capital gains item are automatically saved by Master Plan To delete any item click on the minus sign button at the bottom of the screen then click OK 32 A Money Mastery Chapter 5 Forecasting the Future Accessing and Changing Plans
29. 40 40 20 20 Family Activities 300 25 25 0 25 25 0 26 Gifts 420 35 35 0 35 35 0 35 2 Click on the printer icon in the upper left corner of the screen This will send the report to your default printer 3 You can also view the report from the main Master Plan menu screen by selecting Spending from the main menu and clicking on Spending Planner Report 4 You may also wish to sort the Spending Planner by various columns within the Spending Planner screen and then print the report based on that sort Click within the gray column headings for Spending Categories 12 Month Spending Fixed and Variable expenses and His and Her column totals to sort alphabetically or from smallest to largest monetary amounts in the columns where monetary figures are represented You can then view the Spending Planner window based on assigned sort criteria and print the report to reflect sort options A Money Mastery Chapter 3 Powering Down Debt Understanding Your Debt Using the Power Down Method to Eliminate Debt The Get Out of Debt Report Moving Debt Payments to Savings Chapter 3 Powering Down Debt Understanding Your Debt Once you have used the Spending Planner to see how you have spent money over the last year you are ready to use Master Plan to understand your debt and learn to control it Important Before beginning this chapter be sure to gather all information about yo
30. 483 00 18 24 3 13 2008 808 00 8 44 13 18 6 80 6 41 83 2007 373 00 9994 73 2 13 2008 18 49 0 00 43 2008 8 51 0 00 9 58 0 25 0 07 Auto Furniture 913 2007 373 00 227 68 3 13 2007 325 00 4 579 52 3 13 2007 220 00 5 840 00 5 95 38 52 60 00 2 Debts with the highest priority are listed first Monthly payments based on applying Power Down and Accelerator Payments the amount of interest to be paid and the remaining principal are listed for each debt item Use this schedule to see how much faster you can pay off debt by applying Power Down methods for eliminating debt Note Mark off each payment as you make it using the Debt Payment Schedule The Get Out of Debt Report The Get Out of Debt report is a powerful tool that lets you forecast the date you will be completely debt free The report displays the Power Down amounts assigned to each debt item includes any Accelerator Payments then displays the debt items in priority order and lists the date each debt will be paid off Note Dates appearing on the report are estimates based on information you enter in the software You can use this report to experiment with different Power Down and accelerator payments to decrease the time it will take you to become debt free a1 Chapter 3 Powering Down Debt 1 To view or print the report select Debts in the main menu then click Get Out of Debt Report 2 The screen to the right will be displayed Accel
31. Click Close Master Worksheet figures will be recalculated and the newly updated Master Worksheet will be displayed b W E li ind A lt l l l l l al close STEP 3 Changing Debt Items or 4ssuming 4dditional Debt The lower portion of the Master Worksheet displays information on each debt item you have entered in the current plan It includes the debt s priority for payoff a description of the item the monthly payment interest rate balance and payoff date It also lists a New Payoff Date that the loan will be paid in full should Accelerator and or Power Down payments be applied to the debt item Debts Descitin NortvPament Rate PincpalAno Pay Dato New Parot Date T 460 00 k 2415 2007 12 15 2007 0 Medical Dental 21 500 1 20 2 420 00 3 15 2008 2 15 2008 20 AT amp T Credit Card 110 00 16 5 2 236 00 3 15 2009 2 15 2009 30 Auto 325 00 95 4 866 00 6 15 2008 6 15 2008 1 740 00 132 014 00 37 Chapter 5 Forecasting the Future Description visa Monthly Payment 55 00 Interest Rate 18 00 Principat s6000 l To change a debt item double click on the Months Remaining 3 Real Debt 495 20 item The Debt screen for that item will be displayed as shown in the following example for Mark and Joyce s VISA card After THIS debt is paid off apply the payment to Power Down Amount AND 0R TU JN KN j Sara are TAME NERE 2 Click within any field to change it
32. Principle 5 Know The Rules Bad financial decisions are made without knowing the rules that govern the financial issue Take the time to learn the rules Principle 6 The Rules Are Always Changing Be aware of tax laws and other changes than can reduce your earnings or change your financial plans Principle 7 Always Look At the Big Picture Always know where you want to be in the long run to avoid high pressure spending and to ensure that you will have enough to retire Principle 8 Organizing Your Finances Enables the Creation of Additional Money Get your financial information in order and protect valuable assets from theft loss and over taxation Principle 9 Understanding Taxation Enables You to Retain More of Your Money Become familiar with tax free and tax deferred investments Learn how to analyze various investment options within your own situation and how you can save valuable tax dollars by knowing actual tax law Principle 10 Money in Motion Creates More Money Learn how to get your dollars to do more than one thing at a time to create a cash surplus and a wealth of resources iii Table of Contents Chapter 1 Getting Started LELE EEE kk kk k K k k k 1 Technical Support System Requirements Installation Getting Organized Starting a Master Plan Creating a New Plan Chapter 2 Projecting Your Spending LELE Ek 6 Using the Spending Planner S
33. Term Life Municipal Bonds Checking Accounts Annuities Mutual Funds Permanent Life Roth IRAs Credit Union Defined Benefit Plans Limited Partnerships Variable Life Accounts IRA Accounts Precious Metals Annuities Certificates of Deposit Keogh Accounts Stocks common amp Reserve Funds S E P Plans preferred Savings Bonds Breeding Stock Mutual Funds some Commodities Pension Plans Fine Arts Tax Sheltered Valuable Collections Annuities Other Retirement Plan 26 Chapter 4 Savings amp Investments STEP 2 Entering Taxed Tax deferred and Tax free Savings Items 1 Select Savings in the main menu and click Investments and Savings The Investments and Savings screen will be displayed Mark amp Joyce Sample Investments and Savings Taxed Savings Accounts Examples Savings Accounts Checking Accounts Reserve Funds Mutual Funds Tax Deferred Savings Accounts Examples IRA Annuities 401K 403B bi ji Tax Free Savings Accounts Examples Municipal Bonds Roth IRA i Insurance Examples Permanent Life Term Life Annuities Capital Gains Examples Real Estate Stocks Automobiles Limited Partnerships Fine Arts Commodities Precious Metals En a i p ol l4 l a Close 2 Double click on the Taxed Tax deferred or the Tax free drawers The corresponding window will be displayed 3 Enter a unique Description for each savings item a Current
34. Using the Master Worksheet Once you have entered information about your current spending debt load and savings and investments in a plan Money Mastery will retain this original data and provide a simple way to access and view it using the Master Worksheet The Master Worksheet gives you a clear picture of what you need to manage your spending pay down your debt understand what your financial future will look like based on current savings and investments and reduce your tax burden Use the data from the Master Worksheet to compare with your personal goals and for subsequent exploration of alternative strategies Refer to Using the Retirement Worksheet section in this chapter for more information on how to Power Up your fortune through better retirement planning You can use the Master Worksheet to Try different what if scenarios with your retirement goals Get an immediate response to each new alternative such as trying a new interest rate or moving savings dollars to a new tax drawer Show projections for your retirement savings e Access all the debt and savings items in a plan changing any item to reflect new estimates or values See how much of your retirement funds will be subject to tax STEP 1 Estimating Monies Available at Retirement Access the Master Worksheet 1 Select Master Worksheet from the main menu The Master Worksheet for the current plan will be displayed Note The Master Worksheet w
35. al Power Down Payments or Applying Accelerator Payments It is possible to use only part of the monthly payment from a paid off debt in the Power Down Amount Sometimes it may be necessary to use these liquid funds to compensate for shortfalls in other areas of your Spending Plan You may also want to increase the amount you deposit to savings Description VISA Monthly Payment f 55 00 1 To apply partial Power Down payments Interest Rate 1800 Principat 480 00 enter the amount you have elected to roll Months Remaining 9 Real Debt 495 20 over from a paid debt in the Power Down Amount field In Mark and Joyce s case After THIS debt is paid off apply the payment to for example if they wanted to deposit ee ees Dr 30 per month to savings they would ek se e e debt is paid off enter that amount in the Savings o SavingeAccount E 30 00 American Fund EI Account field and direct the remaining Mark IRA zj sso 25 of the 55 they had been paying on m the VISA card to the Power Down Amount field Important You must first designate a Savings item before you can enter an amount in the Savings Account field See the section Moving Debt Payments to Savings in this chapter for more details 2 You may also wish to apply Accelerator Payments to your debts As outlined in the Spending Planner it may be possible to find additional money to help reduce debt Mark and Joyce for instance were able to f
36. an and use it to experiment with different scenarios using the Money Mastery Principles A copy of a plan includes all debt savings and spending plan information You can use the copy of a plan and change some of the items without any effect on the original plan To make a copy of a plan 1 From the main Master Plan screen click on the Current Plan pull down menu to reveal all the plans you have currently saved in the program Select the plan you wish to copy In the following example the plan called Retirement 55 is being selected as the current plan so that it can then be copied Money Mastery Master Plan 5 2 File Spending Savings Debts Retirement Master Worksheet Help Current Plan Mark amp Joyce E Mark amp Joyce Mark amp Joyce Sample Retirement 55 34 New Plan Description EAJ EAEE M Make the new plan the active plan Copy Plan Cancel Chapter 5 Forecasting the Future 2 Select File from the main menu and select Copy Plan The Copy Plan window will appear as shown on the left Enter a unique name for the new plan in the New Plan Description field Hint Including brief information about the plan will aid you in finding it later For example if you have Plan To Copy Mark amp Joyce Sample MV Copy Debts Info IV Copy Monthly Income Info M Copy Expenses Info M Copy Retirement Info M Copy Investments and Savings Info 55 Retirement created one plan for retiremen
37. an interest rate of 18 Should the AT amp T credit card which is currently third in line for payoff become a debt that Mark and Joyce feel must be paid off more quickly they can drag this item to the number 1 position on the priority grid in the Debt screen Chapter 3 Powering Down Debt STEP 3 Changing or Deleting Existing Debt To locate a debt item you wish to change or delete Money Mastery Master Plan 5 2 File Spending Savings Jade Retirement Master Worl 1 From the main Master Plan menu screen select Debts and click on Current Plan if EE ji Add Edit The Debt screen will be displayed C ke c HC RA Debt Payment Schedule Amortization Report 2 From the Debt screen click on the debt listed in the priority grid on the left side of the screen you wish to change The desired debt item will be displayed Mark amp Joyce Sample Debts Add Edit You can change the payoff priority of Description VISA your debts by dragging them to a different position on the grid Interest Rate 18 00 Medoa Den a 120 2420 T2 After THIS debtis paid off app the pa redit Car i Power Down Amount 55 Auta 9 5 4 966 16 ower Down Amoun 55 Furniture 12 00 6 000 32 AND OR Home 7 50 116 032 354 Savings Account s How Muct e You can then make changes as needed 3 You can also locate a debt item by clicking on the right or left arrows in the record bar located at the bottom of the screen this
38. as designed to display and work with only one plan at a time To locate a different plan to change or review click on the down arrow to the right of the Plan field at the bottom of the screen A list of all your plans will appear Click on the desired plan and Master Plan will display the Master Worksheet for that plan Mark amp Joyce Sample Master Worksheet Investments and Savings Retirement Age Description Current Amount Annual Rate Annual Deposit Retirement Amount 1936 Hudson American Fund 6 500 00 2 00 1 200 00 52 110 50 Beneficial Life 100 000 00 6 25 1 200 00 631 658 44 __ Mark s IRA 75 000 00 5 00 2 000 00 419 627 13 1 563 625 75 Percent Taxable 29 75 Debts Description Monthly Payment Rate Principal Amo Payoff Date New Payoff Date 0 8 0 460 00 0 00 10 Medical Dental 215 00 120 2 420 00 3 15 2008 2 15 2008 20 AT amp T Credit Card 110 00 16 5 2 236 00 3 15 2003 2 15 2009 30 Auto 325 00 935 4 866 00 6 15 2008 6 15 2008 1 740 00 132 014 00 List Actions Taken List Benefits Achieved ee A Close 36 Chapter 5 Forecasting the Future 2 Once you have located the desired plan you can try different what if scenarios to project your retirement future Begin by changing the Retirement Age Changing this age will allow you to see the effect different ages will have on your Retirement Age available monies STEP 2 Changing or Reviewing Sav
39. aster Plan can then be used to calculate the forecast for your savings and investment future Important Before beginning this chapter be sure to gather all information about your current savings and investments as outlined in the Getting Organized section in Chapter I of this manual You must have the annual interest rates current balances and estimated annual deposits for each of your investments accounts You will also need to gather insurance documents including current premiums and projected future premiums face values cash values and estimated growth rates for permanent life insurance products Capital gains items may also be included in the program if you intend to use them to fund your retirement If you will not use the capital gains items such as homes boats cars etc do not enter these items in the program STEP 1 Selecting the Correct Savings Drawer or Category Each savings item will need to be placed in the correct savings category The Master Plan program as outlined in the CD s and Guidebook describes these categories as drawers Forecasting calculations will differ with each drawer Important How an item is taxed is the key to proper placement If you re not sure where to place a savings item consult a financial coach Inaccurate placement can result in significant errors in the financial forecasts which Money Mastery will make Tax Drawers Savings Accounts 401 k Plans Real Estate
40. avings as an Expense Printing the Spending Planner Chapter 3 Powering Down Debt L LE 14 Understanding Your Debt Using the Power Down Method to Eliminate Debt The Get Out of Debt Report Moving Debt Payments to Savings Chapter 4 Savings amp Investments 00 ccc cece kk 25 Forecasting Your Savings and Investment Future Chapter 5 Forecasting Your Financial Future j j j 33 Accessing and Changing Plans Using the Master Worksheet Using the Retirement Worksheet to Project Savings Chapter 6 Using Money Mastery Tools cece cece eee e eee es 48 Using the Menu Bar Getting Help AD Money Mastery Chapter 1 Getting Started Technical Support System Requirements Installation Getting Organized Starting Master Plan Creating a New Plan Chapter 1 Getting Started Technical Support This user s manual contains sufficient information to help you take full advantage of the Master Plan software In addition Money Mastery offers free online support For more information on how to get help refer to the Getting Help section of this manual If you experience any difficulties you are unable to resolve using online help please call our technical support department for assistance Before calling Money Mastery please do the following e Obtain as much information about your hardware as possible such as memory processor speed
41. beginning of retirement to your projected end of life in the Months field In the following example for Mark and Joyce they want to begin drawing from the 401 k when Mark is 65 and will make assumptions about Mark s life expectancy by assuming he will nnac 11621 vuu live to age 90 This equates to 25 years of retirement or 300 months By entering 300 in the Months field Master Month Payout 584 53 Plan automatically calculated a monthly payout amount of Months 300 584 59 and displayed it in the Monthly Payout field To include the asset in the Retirement Cash Flow Analysis Report Chapter 5 Forecasting the Future Include in Report Yes C No click on the Yes button in the Include in Report section of the screen To save the item use the arrow bar and click on the check mark button 4 4 gt le ee xX STEP 2 Adding an Interest Only Retirement Cash Flow Item 1 To add an Interest Only cash flow item into the software simply click on the plus sign button at the bottom of the Add Edit screen to display a new Retirement Cash Flow Analysis Add Edit window In the Payout Type pull down menu at the top of the screen select Interest Only Payment from the list as shown in the example for Mark and Joyce below Mark amp Joyce Sample Retirement Cash Flow Analysis Add Edit Payout Type ees Only Payment ha Interest Only Payment This is an account where only asset s i
42. ch item is saved as it is entered in the software Note To move among various savings items click on the right or the left arrow buttons in the record bar at the bottom of the screen or use the Find field 2z Chapter 4 Savings amp Investments STEP 3 Using the Future Amount and Future Rates Tabs Future Amount Future Rates If you plan to enter a savings amount in the future to a current savings item like a lump sum from an zz i inheritance for example or if you plan on changing the annual deposit of a particular savings account at a future date locate the desired savings item then click the Future Amount tab in the middle portion of the screen Within this section you can note changes you expect to make to your annual investments as shown in the screen example for Mark and Joyce to the left Enter the year the change will be made For example a five year CD will change rates every five years so if a CD was purchased in 2006 then 2007 should be entered in Year of Change Enter the new deposit amount or lump sum amount in the Change Amount field Note Be sure to enter the actual new amount not just the amount of change For example if you plan to change your deposit from 100 to 300 in 2007 enter 300 in the Amount field If the new future amount is a lump sum check the Lump Sum box For example if you plan to sell your stamp collection in the year 2010 for 2 000 then deposit the money in
43. ch month Mark and Joyce have a rental property from which they collect 700 each month in rent This provides them a perpetual source of income that they can use to fund their retirement Other fixed sources of income include annuities T bills bonds pension plans and Social Security Enter a unique description for the item in the Description field and the date you will begin receiving payments from the asset in the Payout Start Date field Note The Amount and Interest Rate fields are inactive for this type of cash flow asset since it will provide a perpetual source of income that will not be depleted and does not earn interest In the Monthly Payout field enter the amount of income you expect to receive each month from this type of asset In the example above Mark and Joyce will collect 700 each month from a duplex they own In the example below they have entered Social Security into Master Plan as a Fixed Monthly Amount asset that will pay them 1 450 every month until Mark s death Description Social Security Interest Rate Payout Start Date 6 25 2028 mam dd yyyy Monthly Payout 1 450 00 Amount Months 300 They have entered 300 in the Months field or 25 years as an estimate of how long they will receive this monthly amount The total amount they will be paid during the course of retirement based on this assumption will be displayed in the Retirement Cash Flow Analysis Report Information on this repor
44. e Refer to Principle 8 on Tax Drawers in the 10 Principles Guidebook for a definition of the long term savings categories that should comprise 60 of your savings 12 Chapter 2 Projecting Your Spending Printing the Spending Planner To print the Spending Planner and use it as a reference for the next 12 months 1 Click on the report icon at the bottom of the Spending Planner window the Spending Planner Report will be displayed Print Preview ome fm waft gt Close A Money Masterys Spending Planner Report Mark amp Joyce Sample A Spendable Monthly Income His Her Total Current Projected Current Projected Current Projected Gross Monthly Income 3 550 3 650 3 550 3 650 Less Taxes FICA Tax 220 226 220 226 Medicare Tax 51 53 51 53 Federal Income Tax 158 162 158 162 State Income Tax 60 62 60 62 Other 8 8 8 8 Total Spendable Monthly Income 3 053 3 139 0 0 3 053 3 139 B Spending Category Expenses New Last 12 Last 12 Next 12 Monthly Months Mo Avg Mo Avg Fixed Variable Spending Spending Category Totals Per Month PerMonth Expenses Expenses Plan His Her Auto Gas amp Repair 1 500 125 130 0 130 130 70 60 Charitable Contributions 600 50 50 0 50 50 0 50 Cleaning amp Laundry 144 12 12 0 12 12 0 12 Clothing 1 320 110 110 0 110 110 30 80 Debt Payment 20 880 1 740 1 740 1 740 0 1 740 1 685 55 Eating Out 480 40 40 0
45. e Retirement Cash Flow Analysis Help Help Help Displays a list of all Help topics and allows you to search by Lee topic name The Help utility also includes this user s manual as a PDF file in electronic format Note See the Getting Help section in this chapter for more information on how to use Master Plan About Money Mastery E mail Report to Money Mastery Allows you to save various Spending Debt and Savings reports as PDF files that can be sent to a Money Mastery coach via e mail About Money Mastery Provides information on the date and version of the software Email Report To Money Mastery Getting Help Using Help Utilities Help Topics Money Mastery bj Index Find 1 From the main menu bar select Help then click on the Help option The online Technical Support screen will appear 1 Type the first few letters of the word you re looking for 2 Click the index entry you want and then click Display Assessing Retirement Income From Outside Sources Assessing Your Retirement Needs Assigning a Debt Payment to Savings Accounts Assigning All Debt Payments to Savings Accounts Balancing Income With Expenditures Capital Gains Sold on Contract Changing or Assuming Debt Changing or Deleting Existing Debt Items Changing or Deleting Existing Plans Changing or Reviewing Savings and Investment Items Copying an Existing Plan Creating a New Plan Editing or Deleting an Existing Capital Gains
46. ed tax amounts the Total Spendable Monthly Income under the Current column will be displayed In the example shown above for Mark and Joyce their current total spendable income is 3 053 Complete the Projected income section by imputing expected annual increases or other types of additional income You can project income by looking at your last 12 months of income and adjusting for anticipated changes you are confident will occur in the next 12 months Calculate the taxes for the projected income by using the same percentage of taxes withheld from your current income Enter those amounts in the appropriate fields under the Projected column Example If current income is 2 500 with 500 in taxes then dividing 500 by 2 500 reveals a 20 tax rate If projected income is 2 700 then that amount would be multiplied by 20 to calculate projected tax Once you have entered the projected tax amounts for federal state FICA etc the Total Spendable Monthly Income under the Projected column is automatically calculated for you as shown above for Mark and Joyce at 3 139 This is the total amount of money they have to spend each month after taxes STEP 3 Entering Current Expenses 1 Determine spending categories you will use to project your expenditures This is best done by examining how you spent money over the last 12 months You may establish as many categories as you like and group expenses as convenient We recomme
47. eeds at retirement The higher the 48 000 00 0 00 move amon g fi e l d S percentage in line 2 the more comfortable you will live at retirement 4 Estimate the percentage of your income that you will need at retirement and Factors in this worksheet assume an average 4 inflation rate and a 5 growth rate during retirement lt is also assumed that the A DM articipant will live to age 90 which is longer than the statistical life expectancy and that there will be no retirement money remainin enter on line 2 Note This is usually Pa gaia aa TA EO i a aay between 70 and 80 percent The higher lt back Lovet ox cancel the percentage the more comfortable will be your retirement Master Plan will automatically calculate what your retirement needs will be based on the percentage of your current income you want to have available at retirement and display it in line 3 In this example for Mark amp Joyce they will need 48 000 a year to retire 39 Chapter 5 Forecasting the Future STEP 2 Assessing Retirement Income From Outside Sources Mark amp Joyce Sample Retirement Worksheet This worksheet is designed for anyone to obtain a basic understanding of financial needs at retirement The numbers and estimates will not be exact but can be used as general guidelines toward retirement planning 1st Retirement Needs 2nd Income from Outside Sources 3rd Savings Goals 4th Annual Savings Account You Spouse 4
48. ems or Savings Account 30 00 add new debt items to see the effects of Mark slRA s500 assuming additional debt Click Close EE ee Master Worksheet figures will be recalculatd and the newly updated Master Find 7 lt 106 Chose Worksheet will be displayed STEP 4 Recording Changes in the Notes Field Once you have experimented with changing debt and savings items in the Master Worksheet you can record those changes and the accompanying benefits or liabilities 1 To record actions taken and benefits achieved simply click within the List Actions Taken and the List Benefits Achieved fields in the Master Worksheet then enter any desired notes In the example for Mark and Joyce they have listed in the List Actions Taken field at the bottom of the Master Worksheet that they have added a tax free savings item List Actions Taken List Benefits Achieved 1 Added tax free investment on 2 17 07 1 Increased retirement savings by 10 500 2 These changes are automatically saved by Master Plan and the Master Worksheet is updated STEP 5 Printing the Master Worksheet 1 From the main menu select Master Print Preview _ e 4 E E BE mE Maal Kuh Close Worksheet then click on Master ra Worksheet Report The report will be MQ Money Mastery displayed as shown in this example for Master Worksheet Report Mark and Joyce Mark amp Joyce Sample Retirement Age 65 2 Click on the print
49. ension funds qualified retirement plans or capital gains Starting Master Plan Once Master Plan has been installed and you have taken the time to gather all your necessary financial information simply double click on the Master Plan 5 2 icon from within Programs to launch the software The Master Plan main menu screen will appear You are now ready to begin using the program Money Mastery Master Plan 5 2 File Spending Savings Debts Retirement Master Worksheet Help Current Plan NENERH ETETIT z New Edit Copy Delete A Money Mastery Principle Based J Money Management Chapter 1 Getting Started Creating a New Plan Once you have launched Master Plan you will need to create a plan that contains information about your current spending debt load and savings and investments What Are Plans A plan is a complete set of debt items and savings items that includes information about how you spend money an estimated retirement age current and projected tax rates and a forecast of retirement savings STEP 1 Creating a New Plan 1 From the main menu select File and click New Plan ls Spending Savi Edit Plan i Copy Plan Delete Plan Backup Restore Exit The Add Plan window will be displayed Add Plan 2 Enter a unique Plan Description for the initial new plan This original plan represents pons a snapshot in time of your current situation AET Present Income Tex Rale 25
50. er icon in the menu bar VANERI located in the upper left portion of the Description Amount Annual Rate Deposit Amount screen to print Anaia Fund am smx pao sem Beneficial Lite 100 000 6 25 1 200 631 658 Mark s IRA 75 000 5 00 2 000 419 627 3 You can also print from within the Master Sores necoint rer Ee signa ios Hi Totak 1 571 276 Worksheet itself by clicking on the Percent Tectia 20 80 printer icon at the bottom of Debts Monthly New Payoff the screen Description Payment Interest Rate Principal Payoff Date Date VISA 55 00 18 00 460 00 1245 2007 1215 2007 Medical Dental 215 00 12 00 2 420 00 35 2008 25 2008 AT amp T Credit Card 110 00 16 50 2 236 00 3415 2009 25 2009 Auto 325 00 9 50 4 866 00 65 2008 515 2008 Furniture 220 00 12 00 6 000 00 1145 2009 15 2009 Home 815 00 7 50 116 032 00 8 5 2036 1145 2017 1 740 00 132 014 00 38 Chapter 5 Forecasting the Future Using the Retirement Worksheet to Project Retirement Savings Using the Master Worksheet you should be able to get a fairly clear picture about your retirement options based on your current rate of spending borrowing and saving and what percentage of your savings will be subject to tax But what if the Master Worksheet reveals that you have not planned like you should for retirement Using the Retirement Worksheet option of the Master Plan software you can forecast how well you have invested your money and how much
51. er right corner of the report shows how quickly you will pay off debt how much less you will pay in interest and the total amount of money V7 Chapter 3 Powering Down Debt you will earn over a given period of time if you pay off debt more quickly using a Power Down or Accelerator Payment In this example for Mark and Joyce if they apply Power Down payments to each of their six debt items and a 158 Accelerator Payment they will not only pay off all debt in 7 75 years but they will also save an estimated 1 15 million by investing the 1 898 per month that they would have been paying on debts for 29 5 years at an estimated 7 interest rate Standard Debt Accelerated Debt Repayment 29 50 Years Repayment 8 00 Years Original Debt 132 014 00 132 014 00 Total Payments 306 465 19 176 401 93 Total Interest Paid 174 451 19 44 387 93 Savings Balance 0 00 489 664 00 if you save 1 898 00 per month for 21 50 years at 0 00 6 To print the report simply click the printer icon in the menu bar at the top of the screen Moving Debt Payments to Savings A good way to increase your savings rate is to move payments into savings that you have been making toward a debt that is now paid off Master Plan software allows debt payments to be assigned to savings accounts in two ways 1 Payments on a debt that has been paid off can be applied to one or more savings accounts 2 When all debt is paid off Power Payments from previ
52. eral government Factors in this table assume an average 4 inflation rate and a 5 growth rate during retirement It is also assumed that the participant will live to age 90 and that no retirement money will remain for heirs For a more accurate estimation call the Social Security Administration 800 772 1213 and ask for Social Security form 7004 3 In line 5 enter the annual income from company pension plans Note This is not 401 k funds or personal savings 4 In line 6 enter any other annual income you expect to receive at retirement Note This is not 401 k funds or personal savings Funds for this line could include an inheritance the proceeds from selling an asset etc 5 Line 7 will automatically display the total retirement income you can expect to receive from outside sources In the above example for Mark and Joyce the 24 800 from outside sources can be applied towards the 48 000 they will need for an annual retirement income AN Chapter 5 Forecasting the Future STEP 3 Entering Your Retirement Savings Goals Mark amp Joyce Sample Retirement Worksheet This worksheet is designed for anyone to obtain a basic understanding of financial needs at retirement The numbers and 1 Click on Tab 3 S avings Go als estimates will not be exact but can be used as general guidelines toward retirement planning B ase d on the in forma tion ou en tere d 1st Retirement Needs 2nd Income from Outside Sources 3
53. erator Payment 158 00 InterestRate 3 If you wish to apply an Accelerator Payment to your overall debt load check the Include Accelerator Payment in this Cancel report box then enter the amount of the Accelerator Payment in the provided field Mark and Joyce will enter an amount of 158 as noted previously 4 In the Interest Rate field enter a conservative rate of return on investment which you hope to receive by powering down your debt early through Accelerator and Power Down payments Note The interest rate is an arbitrary number determined by you It should be based on rates of return on such things as passbook savings money market accounts mutual funds etc Since interest rates for various investment options vary choose a conservative figure that will help you best conceptualize how much money you will actually earn if you pay off debt early using Power Down techniques 5 Click the Run Report button The following example for Mark and Joyce includes an Accelerator Payment of 158 plus Power Down payments for each debt item Using Power Payments Mark and Joyce can completely eliminate their debt in just 7 75 years Print Preview DER amp ome for wef gt Close A Money Masterys Get Out of Debt Report Power Down and Accelerator Mark amp Joyce Sample Monthly Power Interest Total No of Estimated Description Principal Payment Payment Rate Payments Payoff Date VISA 460 00 55 00 158 00 18 00
54. erstanding of financial needs at retirement The numbers and estimates will but can be used as general guidelines toward retirement planning Retirement Needs e Example You Spouse sections of the Retirement 4 Ertaroan ipa d a binek tas ba d t GBs elo Worksheet displayi t OT S ee isp aying amoun S 2 Estimate the percentage of your income that you will need at retirement This esti 2 80 80 00 h t d f d should be between 70 and 90 Enter the percentage on line 2 you ave entere or you and or 3 Multiply line 1 by line 2 This is your approximate annual needs at retirement Th 3 28 000 48 000 0 It l 1 d the percentage in line 2 the more comfortable you will live at retirement ee your spouse also includes an Retirement Income from Outside Sources example section to help you 4 Enter the annual amount from Social Security Use the Social Security Estimate 4 13 300 17 400 0 on page 2 Enter the amount from line C get a general idea of how to best 5 Enter the annual income from company pension plans not 401 k or personal savir 5 5 000 5 000 0 use the worksheet to plan for 6 Enter other annual income like rental income annuity income etc 8 2 400 2 400 0 7 Add lines 4 5 and 6 This is the total income received from outside sources foryo 7 20 700 24 800 0 retirement ftement Era EDA Retirement Savings Goal How Much You Will Need T li k h 8 Subtract line 7 from line 3 This
55. f what the item will be worth in the year it will be sold Enter the Annual Rate of Appreciation If the item has a set rate of appreciation or an estimated rate of appreciation enter it here 7 Enter the Number of Years Depreciated if any Some assets are depreciated which can have an effect on taxes For example real estate can be depreciated over a 39 year period Enter the length of the depreciation period at the time the asset will be sold 8 Enter the Lowest Basis or the smallest amount that you have invested in this property For example if a house was appraised at 100 000 but you only purchased it for 50 000 the lowest basis is 50 000 9 Enter the Ending Mortgage Amount or the remaining principal on any loan for the item at the time it will be sold Estimate this amount using amortization schedules or bank statements 21 Chapter 4 Savings amp Investments STEP 8 Capital Gains Sold on Contract Some capital gains items can be sold on contract meaning you will act as the bank and collect regular payments for the item If this is the case complete the following steps for this portion of the Capital Gains screen Capital Gains Sold on Contract 1 Enter the Down Payment you will Down Payment 5 000 00 Number of Years 5 require when the item is sold This Se iis 31059000 0590 00 ene 6505 z can range from 0 to 99 percent of the selling price Annual Pretax Amount 2 486 47 You have an annual amount of
56. from the main menu and click on Examples Real Estate Stocks Automobiles Limited Partnerships Fine Investments and Savings Description 1936 Hudson Tax free Residence a eginning Value 2 The Investments and Savings window will be a Ban displayed Click on the Capital Gains drawer ol BETI Tax Free Annual Rate of Appreciation 10 00 No of Years Depreciated 3 The Capital Gains window will be displayed As ZER ae shown in this example for Mark and Joyce they will Capital Gains Sold on Contract use capital gains from the sale of a fully restored kuy Kesk j Tne e 5 Contract Balance 0 00 Interest Rate 2 70 1936 Hudson automobile to help fund their FE REE 010 retirement You have an annual amount of 0 00 of unallocated assets for a period of ane ce 4 In the Description field enter a unique name for Fc e v x _ the item Check the Tax free Residence box to differentiate between your personal residence and income producing property which is subject to certain capital gains taxes Apply Money Master Principle 5 by learning the current capital gains tax laws that apply to various real estate interests in order to protect your savings and investments 5 In the Beginning Value field enter the dollar value at the time of purchase Enter the anticipated Year Asset Will be Sold 6 Enter the estimated Selling Price which could be based on an annual appreciation rate or an estimate o
57. g Amortization Report 18 Master Worksheet 38 Debt Payment Schedule 21 Get Out of Debt Report 22 23 Real Debt Report 17 Retirement Savings Report 42 Retirement Cash Flow Report 46 Spending Planner 12 Prioritizing debt payoff 16 Projected expense 9 10 Projected income 8 10 Projected tax rate 5 8 Projecting future expenditure 9 Projecting retirement savings 5 36 39 Projections 36 R Rate of growth 4 30 Rate of inflation 5 40 Rate of return 22 27 37 Real debt 16 17 Real Debt Report 16 18 44 Real estate 26 31 Receipts 7 9 Reducing spending 11 20 Refinancing 11 Retirement 43 Remaining principal 4 16 18 21 31 47 Reserve funds 26 Restructuring debt 11 Retirement 44 46 Retirement age 44 Retirement Cash Flow Analysis 43 46 Retirement Cash Flow Report 45 46 Retirement savings 5 36 39 42 45 Retirement Worksheet 36 39 40 42 43 Risk protection 28 Roth IRAs 26 43 S Savings accounts 20 23 24 26 28 43 Assigning all debt to 24 Assigning debt payments to 23 Savings as an expense 12 Savings bond 26 Savings categories 11 13 26 Savings Drawer 27 Saving is delayed spending 12 Savings item 5 20 23 24 26 28 30 34 38 Self employed 42 S E P plans 26 Sharing responsibility 12 Social Security 40 43 46 Social Security Estimate Table 40 50 Sorting 6 13 Spendable Monthly Income 7 8 10 12 13 Spending 5 13 20 34 36 38 41 42 44 46 48 Spending plan 8 20 Spending
58. gurations specified below Minimum Requirements Recommended Requirements Pentium processor Pentium processor 4X CD ROM drive 6X CD ROM or better Super VGA graphics card with 256 colors Super VGA card with 256 colors or better 32 MB RAM 128 MB RAM 40 MB of available hard disc space 50 MB of available hard disc space Windows 95 Windows XP Internet Explorer 6 0 Internet 7 0 Note Many actions within the Money Mastery software are the same as Windows actions Chapter 1 Getting Started Installation Important Close all applications and programs before Installing Master Plan 1 Insert the Master Plan install CD in the CD ROM ney Mastery Master Plan 5 2 Software drive 2 Click on the Install Master Plan 5 2 Software 4 button ee Mo a 3 As each installation window appears follow all necessary prompts Maste 4 When the screen below appears enter user name and organization if applicable Click Next a Principle Based Money Management i Money Mastery Master Plan InstallShield Wizard 5 When installation is complete a confirmation screen will Customer Information 7 appear Click FINISH Place the CD ina safe place as a lease enter your information eer en aa backup User Name ji Organization ome _____________ Install this application for Anyone who uses this computer all users O Only for me lt Back Next gt Cancel Uninstalling Money Mastery Should you wish t
59. ind an additional 158 by using the Spending Planner to reduce spending in areas where it was not necessary Here s how they applied accelerator payments to their debt e They applied the additional 158 to their regular VISA payment of 55 e This increased the monthly VISA payment to 213 e Paying 213 instead of 55 reduced the number of months to payoff the card from nine to three e After the VISA card was paid off they used the entire VISA payment of 213 and applied it to the medical bill of 215 e This increased monthly payments on the medical bill to 428 per month e Paying 428 instead of 215 let them pay off the medical bill in six more months e After just nine months Mark and Joyce have two fewer debts and 428 per month they can use to Power Down their next debt Applying an Accelerator Payment of only 158 and using the Power Down method Mark and Joyce are able to reduce the time it will take them to pay off all their debt from 29 5 years to only 7 8 years Note For more details on how to apply an Accelerator Payment and how it can affect your debt see the following sections on Get Out of Debt report and Debt Payment Schedule 20 Chapter 3 Powering Down Debt STEP 3 Using the Debt Payment Schedule The Debt Payment Schedule helps you see on a monthly basis how much you should be paying on each debt The schedule lists monthly payments based on the Power Down amounts and or Accelerator Payment
60. ings and Investment Items Mark amp Joyce Sample Master Worksheet The upper section of the Master D ee ec Worksheet lists every savings and investment item you have entered for 1936 Hudson that plan Master Plan displays the American Fund 6 500 00 200 1 200 00 52 110 50 gt Beneficial Life 100 000 00 6 25 1 200 00 631 658 44 __ savings or investment items description Mark s IRA 75 000 00 5 00 2 000 00 419 627 13 the amount the item is worth the annual 1 563 525 75 j Percent Taxable 23 755 rate of return on investment the amount of deposit you are making to the item annually and how much the item will be worth at your current retirement age This amount is listed in the Retirement Amount column at the far right of the screen The total is displayed below this column along with the percentage of the retirement amount that will be taxed Current Amount Annual Rate Annual Deposit Retirement Amount 1 To change a savings item double click on the item The Investment and Savings screen for that item will appear as shown on the right in this example of Description American Fund Current Amount 6 500 00 Annual Deposit 1 200 00 2 NN a e Teyeran C N Mark and Joyce s American Fund taxed savings Future Amount Future Rates account Year of Change Change Amount Lump Sum 2 Make desired changes to the selected savings item
61. is a principle based system of personal money management that helps you get in control of every area of your financial life including spending debt savings and taxation This system has been tested and developed over a 15 year period with thousands of individuals and couples Money Mastery is based on applying proven principles and procedures to financial decision making rather than relying on specific financial products or rates of return Money Mastery s 10 Principles The Money Mastery Principles are standards by which financial decisions can be made and which can empower you to stay in line with your financial goals Note Take time to understand these principles before you attempt to apply them using the software Each principle is explained in detail in the Money Mastery How to Manual and the 10 Principles Guidebook Principle 1 Spending is Emotional Many purchasing decisions are made on impulse Make decisions about how to spend money appropriately by developing a spending plan Principle 2 When You Track Your Money You Control It Track your money according to a spending plan and then compare that tracking with your income to see what s left Principle 3 Saving Is Actually Just Delayed Spending Treat your savings as an expense something you must do each month Principle 4 Power Down Your Debt and Power Up Your Fortune Financial independence is based on learning how to manage and eliminate your debt
62. is paid off apply the payment to Savings Account When ALL Debt is Power Down Amount 0 00 Paid Off field on the right side of the Debt AND 7 OR Savings Account when ALL foal debt is paid off screen A pull down menu of all your Savings Accounts HOA MUER Joyce s Roth IRA savings and retirement accounts will be AmericenFund E 0 00 displayed Remember you must first enter Money Market 0 00 these savings items beforehand Refer to al Maney Market Chapter 4 for more information on how to Savings Account do this 3 Select the savings or retirement account to which you would like the payment for that debt item to be applied after ALL debt has been paid Note All amounts entered in savings will be calculated up to your retirement age and displayed on the Master Worksheet For information on Retirement and Master Worksheets refer to Chapter 5 4 Continue this process for every debt item you wish to assign to savings after ALL debt is paid off 24 Chapter 4 Sav ngs amp Investments Forecasting Your Savings and Investment Future Chapter 4 Savings amp Investments Forecasting Your Savings and Investment Future Once you have a clear picture of your debt load and a plan on how to power it down you re ready to use Master Planner to help Power Up your fortune by taking a closer look at your current savings situation After entering savings and investment information in this section M
63. ish to send then click on the report icon at the bottom right corner of the screen Fun Benort Cancel A Save As screen will then be displayed asking you to verify where you want the report saved on your computer Select the desired location then Email Report Send Email Send Email click Save The report will be saved as a PDF 3 Open vet ened beram end caine feke file and you will be returned to the Select and a Create a new email M b Enter the email address of the recipient Export Window Sample ecoach moneymastery net c Add a subject to your email Sample Spending Planner e e d Attach the file you saved C Documents and Click Run Report The screen to the right will Settings suzanne Desktop S pending Planner pdf be displayed listing instructions for attaching the e Add any additional information to the body of the email PDF file to an e mail and sending it to Money Mastery Close Troubleshooting Problems Should you encounter error messages while using the Master Plan software refer to the following troubleshooting tips to correct some of the most common errors you may make using Master Plan Within the Debt Screen n You must select a savings account to allocate the money to before you can enter an amount You will encounter the error message on the left if you try to enter an amount as part of a Power Down assignment to savings without first selecting an account for the
64. n software can help analyze your debt repayments and help you try different Power Down methods to determine how to eliminate debt as quickly as possible By learning the Power Down system you can actually turn the debt you have into a fortune The following example illustrates Mark and Joyce s six outstanding debts with VISA listed as the highest priority for payoff Interest Monthly Remaining Months Rate Payment Balance Remaining 12 a 7 In nine months when the VISA debt is paid the 55 payment they have been making can then be applied to the next debt for medical expenses Combining the former VISA payment of 55 with the medical debt payment of 215 increases the amount that can be applied to the remaining medical debt to 270 per month When the medical bill is paid the entire power payment of 270 can then be applied to the auto debt The power payment of 270 that was being paid on the medical debt plus the regular 325 amount on the auto debt can be combined for a total of 595 per month that can be applied to the AT amp T debt Using this Power Down method of payment the AT amp T debt can be paid 12 months earlier than if Mark and Joyce had simply paid each debt without applying Power Payments Debts can be paid off much more quickly without requiring additional money or risk STEP 1 Power Down to the Next Debt Description VISA TT Monthly Payment 55 00 After your debts are arranged in priority orde
65. nd creating between 18 and 22 categories Note The more specifically defined the categories the more precise you can be in determining how money was spent You must determine how you personally define each category For example when buying groceries do you also purchase postage stamps and medicine as part of your grocery category Hint Sort all canceled checks into piles to help establish specific categories of spending Chapter 2 Projecting Your Spending 2 The Master Plan software includes sample categories to aid you in Spending Category Expenses creating appropriate titles for your various areas of spending To change any of the category names provided for you simply highlight that category in the Spending Category column and type over the Spending Category name To add a row in which you can type in a new category click 1500 01 the plus sign button at the bottom of the screen To delete an SEREN TENA keren entire row click on the minus sign button at the bottom of the Clothing 1320 01 screen A confirmation screen will appear asking you to verify that Debt Payment 20 880 01 you want to delete that particular category Click OK You can Eating Out 480 01 toggle through your categories sequentially using the left and right Fa Activities iG its arrow buttons To move to the I gt mi Jel top or bottom category in the list use the far left and right arrows The check mark button allows
66. nterest is used for your retirement cash flow The Principal providing the payment stream is not itself utilized Examples Savings accounts large enough to generate a revenue stream Description American Fund Interest Rate 5 50 Payout Start Date 6 25 2028 mm dd yyyy Monthly Payout 174 17 Amount 38 000 00 Months Include in Report Yes C No Find v m v x Close Enter a unique description for the item in the Description wish to begin receiving payments from the interest on the account in the Payout Start Date field In the Amount field enter the total amount of money available in the account at the time you will begin receiving payments from it Note In the example on the left for Mark and Joyce their investment fund is large enough to generate a revenue stream from the interest alone from which they can then draw to fund retirement In the Interest Rate field enter the amount of interest the savings account or investment fund is earning Note Once you have entered each of these items the Monthly Payout amount will be automatically calculated for you based on the total amount available in the account or fund at the time of retirement and how much it will earn in interest each month Because the monthly payout amount is based on the interest only and not on withdrawing the principal as well the monthly payout on this type of asset will last indefinitely and the
67. nts are equal then your spending is balanced In order to control your spending you must be able to live within your income The Spending Planner is an invaluable tool to help you determine if you are spending more than your income STEP 4 Projecting Future Expenditures 1 Use your knowledge from the history of your past 12 months of expenditures to predict average monthly spending for the future This amount should be based on both past and future expenses Hint Use the figure for the past 12 months and apply an estimated index inflation factor For example suppose your car insurance for last year averaged 50 per month Take 50 and multiply that amount by an estimated inflation factor of 10 Add that percentage to the total for last year s car insurance for a projected expense Chapter 2 Projecting Your Spending 2 Enter the projected expenses for each category in the column as shown in the example for Mark and Joyce to the right Master Plan will automatically total this column This total will give you an idea of how your projected expenses match your projected Next 12 Months Avg Mo income STEP 5 Balancing Income With Expenses Once you have entered spending amounts for the last 12 months and projected amounts for the next 12 months the Total column under the New Monthly Spending Plan section marked with an asterisk is updated and the total is displayed at the bottom of this column This amount
68. nts listed in the His and Her column to your Spending Master registers Refer to the Money Mastery Spending How to manual and the 10 Principles Guidebook for information on how to use the Spending Master registers 30 00 80 00 1 685 00 55 00 20 00 20 00 Savings as an Expense Savings are important and should be part of your Spending Plan You should look at savings as actually delayed spending as based on Money Mastery Principle 3 Be sure to include savings as spending categories and allocate enough funds to those categories so that the Income Less Expenses and Savings field equals 0 If you have extra money leftover after all expenses are entered in the Spending Planner then you have not allocated enough money to savings categories Designate three categories in your Spending Planner for savings to accommodate the 60 20 20 rule 60 for long term savings 20 for emergency savings 20 for emotional savings Create three categories in the Spending Planner with these titles for savings amounts and then include funds for each Using a percentage for long term emergency and emotional savings create a plan that works for you using the 60 20 20 percentage as a guide Initially the amount budgeted for savings may be small Work to achieve the goal of saving 10 of your spendable income each month At first you may only be able to put aside 1 but as you gain control of your spending saving 10 will become more attainabl
69. o remove Money Mastery from your system select Control Panels click on Add Remove Programs and select Money Mastery from the displayed list Windows will automatically delete the program from your system Chapter 1 Getting Started Getting Organized Before using Master Plan take time to gather all your most current financial information The forecasting features of the software are only as accurate as the information you enter Time spent in preparing this information will be reflected in the accuracy of the forecasts 1 Gather all expenses and income from the past 12 months This may take time but is worth the effort Find old checks or copies and all pay stubs or invoice payments If you use software to record your expenses print a report by category for the last 12 months 2 Gather all current information about your debt Find the following for each loan and call the bank or lending institution if necessary Interest rate Current balance sometimes called the remaining principal Remaining length of the loan months left until the loan is paid in full Monthly payment 3 Gather information on all savings investments and insurance Current interest rates annual rate on all investments Current balance and predefined length of the investment i e 12 month CD Current life insurance information establishing a cash balance or rate of growth may require assistance from an insurance professional Information about any p
70. of Income That Is Taxable i e the cash value that can be taxed For term insurance this is always zero since no cash values are accrued For most permanent insurance this value is also zero Contact your insurance agent if you are not sure Enter the Year of Maturity This is the year when the face value will be given to the insured or the point at which you have outlived your insurance Note Term insurance will not have a maturity date Permanent insurance will usually mature near the age of 100 Enter the year not the age that the insurance will mature In the Rate of Growth field enter an Future Rates Year of Change 2012 4 50 estimate or average rate for the item Term insurance does not have a rate of growth Permanent insurance will typically have a guaranteed rate and an estimated rate If the rate will change or is variable click within the Year of Change field within the Future Rates tab in the lower portion of the screen This will allow you to make changes to the rate and the year in which that change will take place as shown in the screen example to the right Note Your insurance agent can also help you determine this rate Follow this procedure for each insurance item you want to enter in Master Plan All information entered is automatically saved STEP 6 Editing or Deleting an Existing insurance Item 1 30 Select Savings from the main menu and click Investment and Savings Click on the Insu
71. off will be displayed in the report 18 00 12 00 15 50 9 50 12 00 7 50 9 0 12 0 24 0 16 0 32 0 354 0 460 00 2 420 00 2 236 00 4 866 00 6 000 00 116 032 00 495 20 2 580 18 2 640 47 5 199 89 7 040 95 288 508 50 132 014 00 Interest you will pay is 306 465 19 174 451 18 2 To print the Real Debt Report click on the printer icon in the menu bar at the top of the screen STEP 5 Using the Amortization Report The Amortization Report shows the current payment schedule for each of your debt items It lists the item the regular monthly payment for the item the amount of interest to be paid monthly and the remaining principal The report details how much interest you must pay each month and how long it will take before the loan is paid in full if paid at the current rate To view and print the Amortization Report 1 Select Debts from the main menu then click on Amortization Report A screen similar to the one on the right for Mark and Joyce will be displayed 2 To print the report click on the printer icon at the top of the screen 10 nom far M4 i KH Close Payments A Money Mastery De bt Amortization Mark amp Joyce Sample Remaining Date Ipterest Paid Principal Date Payment Remaining Interest Paid Principal Date Payment Interest Paid Remaining Principal 33 2007 41312007 53 2007 63 2007
72. ottom of the screen A blank Debt screen will appear allowing you to enter additional debt items 7 Once you have entered all debt items click Close to exit out of the Debt screen and return to the main Master Plan window STEP 2 Prioritizing Debt Payoff As mentioned in STEP 1 the Debt screen lets you assign a priority to each debt item using the drag and drop feature of the priority grid Once you have entered all debt items into the Money Mastery software be sure to experiment with prioritizing your debts in order to pay them off more quickly The power of the Master Plan software is that it lets you assign priorities to debts and thus experiment with different forecasts for debt payoff Suggestion for Setting Priorities Highest priority debts are usually those with the longest maturity or the highest interest rate Be sure to experiment with what works best for your particular debt load The priority grid will be particularly useful as you begin to use the Power Payment system explained in the next section of this chapter Using the Power Down Method to Eliminate Debt Be sure to spend time experimenting with debt prioritization Example Mark and Joyce have decided that the highest priority debts are those with the highest interest rate and have thus ordered their debts to reflect this VISA 1 Medical Dental 2 AT amp T Credit Card 3 Furniture 4 Auto 5 Home 6 They plan to pay off the VISA card first since it has
73. ous debts can be rolled into savings Note To apply debt payments to savings accounts you must first designate accounts in the Master Plan software You will need to create at least one savings item before you can move debt payments Refer to Chapter 4 on Entering Current Savings and Investments for more information on how to do this STEP 1 Assigning a Debt Payment to Savings Accounts The first way to assign debt payments to savings accounts is to allocate all or a portion of the debt payment to savings as soon as that debt is paid off You can assign amounts to one or more savings accounts Important You must first designate a Savings item before you can enter an amount in the Savings Account field Refer to Chapter 4 for more information on how to do this To assign a payment to savings 1 From the Debts menu select Add Edit Debts The Debt screen will be displayed Find the debt item to be assigned to savings 23 Chapter 3 Powering Down Debt Note To review how to change a debt item refer to the Changing or Deleting Existing Debt step previously outlined in this chapter 2 Inthe Savings Account field click the down arrow to the After THIS debt is paid off apply the payment to right of the field to activate a pull down menu of all the savings Power Down Amount items you have entered in Money Mastery Select the desired AND 7 OR savings account into which you would like to move a debt Savings Account s Ho
74. p Joyce Spending Planner x Spendable Monthly Income His Her Total Current Projected Current Projected Current DEEEH Gross Monthly Income Less Taxes FICA Tax Medicare Tax Federal Tax State Tax Other Total Spendable Monthly Income Es Current average past 12 months Projected forecasted monthly average Spending Category Expenses Last 12 Months Newt 12 Expenses New Monthly Spending Plan Months Spending Category Totals Ava Mo Avo Mo Fixed Variable EE Hi 5 Hers auto Bas amp Repair Charitable Contributions Cleaning amp Laundiy Clothing a Debt Payment Eating Out Family Activities Gifts Groceries 0 0 0 0 s ME 0 oje MIR D E a E q 7 Income less Expenses and Savings HETI Bl EEE This amount should equal zero Note The name at the top of the Spending screen identifies the current plan in which you are working STEP 2 Projecting Income Using the Spending Planner Mark amp Joyce Spending Planner Spendable Monthly Income His J Her Total Current Projected Current Projected Current Projected I 3 550 00 0 00 0 00 Gross Monthly Income 0 00 ETA M F BRAN f 3 550 00 n nn nnn 0 00 1 In the Spendable Monthly Income section at the top of the Spending Planner window enter your gross monthly income in the Current field This is your average monthly income from the las
75. pter 6 Using Master Plan Tools Using the Menu Bar Following are explanations and definitions of each menu option in the Master Plan software File M New Plan Click this to create a new plan GO Spending savings Edit Plan Make changes to existing plans using this option jy Copy Plan Lets you make copies of existing plans em n Delete Plan Lets you delete unwanted plans from the system opy Plan Delete Plan Backup Backs up data to a hard drive or removable media Barki Restore Restores backup files to the Master Plan directory Restore Exit Closes the Master Plan program Exit Spending Spending Planner Opens the Spending Planner window Spending Planner Report Prints a completed Spending Planner worksheet as a hard copy report Blank Spending Worksheet Use this option to print a blank hard copy Spending Planner worksheet Money Mastery Master Plan File iting Savings Debts Retir CL Spending Planner Spending Planner Report Blank Spending Worksheet Savings Investments and Savings Lets you add or change spending items Accesses a menu for taxed tax deferred tax free insurance and capital gains Current p EZKEHWEEETWE 9 m f Master Worksheet Accesses the Master Worksheet aster Worksheet Report Money Mastery Master Plan 5 2 File Spending JEEPERS Debts Retirement Ma Debts Add Edit Debts Add or change debt items Real Debt Report Prints current debt items and cur
76. r you Interest Rate 18 00 Principa 460 00 should assign a Power Down amount for each item Months Remainin 3 Real Debt 495 20 1 Locate the highest priority debt item In this Ara de e paid oN ZEBEN ho Pes Dens case for Mark and Joyce it is the VISA bill DUAN Me Savings Account when ALL z debt is paid off 2 Enter an amount in the Power Down Amount SarresAccans Hon Much IRA z field In this case Mark and Joyce decided to apply the whole VISA monthly payment of 55 to their Power Down amount for the next debt ja la fa Find lt lt vl x s Close Important The Power Down amount cannot be greater than the amount of the monthly payment that will now be transferred from the paid up account 19 Chapter 3 Powering Down Debt 3 Repeat these steps for every debt item Mark and Joyce will use the Get Out of Debt report to forecast how powering down each debt will affect their debt load Note Although Mark and Joyce decided to apply the whole VISA payment of 55 to their Power Down amount Master Plan offers other options for applying Power Down amounts Refer to the next section on Partial Power Down Payments and Accelerator Payments in this chapter for information on other Power Down options In addition refer to the Get Out of Debt report in this chapter for more information on viewing how Power Down payments are applied to debts STEP 2 Using Parti
77. r Spending Income less Expenses and Savings 0 00 Once you have made the necessary adjustments to your spending the new amounts will appear in the New Monthly Spending Plan column The amount that appears in the Total column the Total column is marked with an asterisk and the Total Spendable Monthly Income Projected column also marked with an asterisk should be the same The amount shown at the bottom of the Spending Planner in the Income Less Expense and Savings field should now equal zero STEP 7 Taking and Sharing Responsibility 1 If you are married determine how you and your spouse will share financial responsibility To do this divide the responsibility for each of the categories between the two of you This amount should equal zero Suggestion The Money Mastery program is more effective if both spouses are sharing responsibility When only one person handles all the finances there is no communication or sharing Hold weekly meetings with your spouse to analyze your past expenditures and plan for the upcoming week If you are single you should still plan to hold weekly planning evaluations see STEP 5 in the Money Mastery Spending How to Manual 2 After deciding who will track the income and expense for each category Her enter those amounts in the His and Her columns as shown in the example 70 00 60 00 on the right 0 00 50 00 0 00 12 00 Note You will want to transfer the amou
78. rance drawer To locate an item use the arrows in the record arrow bar to toggle among items or use the Find field at the bottom of the screen Click on the desired item To make changes click within the desired field Updates to the insurance item are automatically saved by Master Plan To delete any insurance item click on the minus button in the bar at the bottom of the screen then click OK Chapter 4 Savings amp Investments STEP 7 Entering Capital Gains Items Capital gains items can range from corporate stocks to a stamp collection Capital gains are those items that are purchased at one price then sold at a higher price at a later date These items have appreciated in value and are subject to capital gains tax Note Enter only those items that will appreciate in value and only those that you plan to use to finance retirement Gather all information on capital gains items in one place and use the Money Mastery filing system to organize the information Use Master Plan to forecast how much money you will have available at retirement Be advised that since there are so many kinds of capital gains items many fields in Master Plan will not apply to all items Enter the information to the best of your understanding using the explanations below T nt ra a ital ain it m Mark amp Joyce Investments and Savings o enter a capital gains item y z 5 N A Capital Gains 1 Select Savings
79. rd Savings Goals 4th Annual Savings Account in T b 2 t id y f You Spouse n la on outside Sources O Dd if ater let her EDET asin o retirement income Master Plan will very well a 4 9a Select your desired retirement age 65 display how much additional money you 9b This is the total amount you will need for retirement 512 720 00 0 00 will need to generate from personal 10 Enter the amount of your current savings balances for retirement j 20 000 00 0 00 savings in order to meet your annual Include any savings accounts IRA s 401 k balances etc A 10a This is the future value of your retirement savings assuming the 59 974 07 retirement income goal this amount growth rate in box 12 at your desired retirement age ican N a 11 This is the amount of savings you will need to accumulate by the 452 745 93 0 00 will be displayed in line 8 In the li J een example for Mark and Joyce for Factors in this worksheet assume an average 4 inflation rate and a 5 growth rate during retirement It is also assumed that the participant will live to age 90 which is longer than the statistical life expectancy and that there will be no retirement money remaining instance they will need to plan on lt Back ok Cancel saving an additional 23 200 each year in order to meet their retirement income goal of 48 000 This figure indicates that at their current rate of spending borrowing and saving they have not planned
80. refore the number of months does not need to be calculated The Months field will remain blank Important The amount displayed in the Monthly Payout field is a gross figure You will need to take into account any taxes or distribution issues to which the monthly amount may be subject 45 Chapter 5 Forecasting the Future STEP 3 Adding a Fixed Monthly Amount Retirement Cash Flow Item 1 To add a Fixed Monthly Amount cash flow item into the software click on the plus sign button at the bottom of the Mark amp Joyce Sample Retirement Cash Flow Analysis Add Edit Add Edit screen to display a Payout Type Fei Moriri Amount E new eee riye v yeren Cai Moy Analysis Add Edit window Fixed Monthly Amount This is an asset or capital investment that will provide a fixed monthly amount to your retirement cash stream 2 In the Payout Type pull Examples Rental Properties Pension Plans Social Security Payments down menu at the top of the Description Property on E Street Interest Rate screen select Fixed Monthly Payout Start Date 6 25 2022 mm dd yyyy Monthly Payout 700 00 Amount from the list as i shown in this example for Amount Months 300 ETE Mark and Joyce on the left nelude in Repor ter NEIN Note A Fixed Monthly Amount includes any cash 4 lt gt hit lv x Close stream at retirement that will provide a guaranteed or set amount of money on which you can count ea
81. rent amount of total Mep ALA interest owing on all debts gs OIJ Retirement Master Workst Get Out of Debt Report Displays the time frame for paying off all HW EEE j debt if Power Down and Accelerator payments are applied Real Debt Report Debt Payment Schedule Displays a monthly payment schedule for all Get QUt of Debt Report debt Debt Payment Schedule ebt Amortization Report Amortization Report Prints an amortized schedule of debt payments 49 Chapter 6 Using Master Plan Tools Master Worksheet t Roa eee Help Master Worksheet Displays the Master Worksheet Master Worksheet Report Displays a report of all ce Master n savings investment and debt items you have entered in the software Master Worksheet Report and lets you print a hard copy report Retirement Retirement Worksheet Displays the Retirement Worksheet Retirement Master Worksheet Help and helps calculate various retirement savings scenarios Retirement Worksheet i Retirement Cash Flow Analysis Displays the Retirement Cash Flow Analysis screen for calculating how long retirement funds will last into a projected retirement term Retirement Worksheet Report Blank Retirement Worksheet Report Retirement Cash Flow Analysis Report Retirement Cash Flow Analysis Retirement Worksheet Report Prints Retirement Worksheet Blank Retirement Worksheet Report Prints a blank Retirement Worksheet Retirement Cash Flow Analysis Report Prints a report of th
82. ries see Spending Certificates of deposit CDO 4 26 28 Checking accounts 26 Checks 4 7 9 Coaching services 2 Commodities 26 Communication 12 Confirmation screen 3 9 Contract balance 32 Contract length 32 Controlling debt 15 Corporate stocks 31 Credit union accounts 26 Current age 5 29 34 Current balance 4 26 Current expenditures 8 Current income 8 39 EL Current plan see Plans Current rate 17 18 39 41 Customer support 2 D Death benefits 29 30 Debt 4 5 14 24 26 34 38 44 48 Debt consolidation 11 Debt elimination 19 21 22 Debt item 5 15 24 34 37 38 4 45 47 Debt load 4 16 20 22 26 34 36 Debt payment 16 19 21 23 24 44 Debt Payment Schedule 20 21 44 Debt payoff dates 34 Debt repayments 18 22 Defined benefit plans 26 Delayed spending 12 Deleting 9 17 28 30 32 35 44 Capital gains items 32 Debt items 17 Insurance items 30 Plans 35 Savings items 28 Deposit 4 20 26 28 37 Deposit amount 4 27 28 Depreciation period 31 Description 5 14 22 27 29 31 35 37 43 48 Down payment 20 22 24 32 37 47 Distributions retirement 44 46 E Editing Capital gains items 32 Debt items 17 44 Insurance items 30 Savings items 28 Emergency Savings 12 Emotional Savings 12 Ending cash value 30 Ending face value 29 30 Ending mortgage 31 Ending premium 29 Entertainment expense 11 Estimated selling price 31 Estimating monies available at retirement 36 Expenditures 8 9 11 12 Expense 4 6 8
83. s if applicable applied to each debt the amount of interest you will pay each month and the remaining principal Use this schedule to get an overall view of your debt load month by month 1 To view or print the Debt Payment Schedule select Debt in the main menu and click Debt Payment Schedule Your schedule which can be viewed on screen or in hard copy format will be similar to Mark and Joyce s Print Preview Ee 6 OBB jaz oat gt gt I Close A Money Masterye Debt Payment Schedule Mark amp Joyce Sample Payment Remaining Payments Remaining Payments Remaining Date interest Paid Principal Date Interest Paid Principal Date interest Paid Principal VISA 33 2007 213 00 253 90 5 13 2007 110 00 1 912 38 813 2007 325 00 3 112 74 6 90 27 43 27 00 413 2007 213 00 44 71 73 2007 110 00 1 828 68 9 13 2007 325 00 2 812 38 3 81 26 30 24 64 53 2007 45 38 gooo 83 2007 110 00 1 743 82 10 13 2007 325 00 2 509 64 0 67 25 14 22 26 Medical Dental 3113 2007 215 00 2 229 20 9 13 2007 110 00 1 657 80 11 13 2007 325 00 2 204 51 24 20 23 98 19 87 413 2007 215 00 2 036 49 10 13 2007 253 04 1 427 55 1243 2007 325 00 1 896 96 22 29 22 79 17 45 5 3 2007 382 62 1 674 23 11 13 2007 483 00 964 18 1413 2008 325 00 1 586 98 20 36 19 63 15 02 63 2007 373 00 1 317 97 1243 2007 483 00 494 44 2 13 2008 789 51 810 03 16 74 13 26 12 56 743 2007 373 00 958 15 1 13 2008
84. scription Beneficial Life annual amount paid for premiums Enter Beginning Annual Premium 1 200 00 Income ha 0 00 the Ending Annual Premium Ending Annual Premium 1 200 00 Year of Maturity 2036 Beginning Face Value 100 000 00 Rate of Growth 6 25 Note The ending premium for term u ji hi Ending Face Value 100 000 00 insurance is different from the beginning Tax F j Bi m piii Ending Cash Value 0 00 premium if you want the same death benefit face value If you want the same level of bear premium payment for term insurance the ending face value death benefit will decrease For permanent insurance ending and beginning premiums are usually the same nA Chapter 4 Savings amp Investments 10 Enter the Beginning Face Value This is the current death benefit of the insurance or the amount that will be paid to survivors Enter the Ending Face Value Note This will differ from the beginning face value in term insurance if you wish to maintain the same premium payment Permanent life insurance may have an increasing face value but many times will be the same as the beginning face value Enter the Ending Cash Value or leave this field blank For term insurance this value is always zero You may or may not be able to determine this amount for permanent insurance If you enter a rate of growth below zero the cash value will be automatically calculated for you Enter the Percentage
85. t 12 months If your monthly income varies from month to month total your annual income and divide by 12 Enter amounts for both His and Her if you are a two income household Note To enter amounts place the cursor in a field or use the Tab key to move between fields As information is entered in the various fields totals are automatically calculated and related fields are updated When entering amounts it is not necessary to include dollar signs and commas 7 Chapter 2 Projecting Your Spending Determine tax amounts being withheld from your paychecks or calculate your monthly tax rate from quarterly or annual tax filings Enter tax amounts for federal state FICA Medicare and other taxes in the appropriate fields Do not include other withholding items such as 401 k insurance etc Mark amp Joyce Spending Planner Spendable Monthly Income j His Her Total Current Projected Current Projected Current DEE Gross Monthly Income 3 550 00 3 650 00 0 00 0 00 3 550 00 3 650 00 Less Taxes FICA Tax 22000f 22600 soof 0 00 s22000f 226 00 Medicare Tax 51 00 53 00 0 00 0 00 51 00 53 00 Federal Tax 158 00 162 00 0 00 0 00 158 00 162 00 State Tax 60 00 62 00 0 00 0 00 60 00 mm 62 00 Other 8 00 8 00 0 00 0 00 8 00 8 00 Total Spendable Monthly Income 3 053 00 3133 00 g0 0 00 2 053 00 3139 00 Once you have enter
86. t at age 65 and want another plan showing retirement options at age 55 you could name the new plan Age 3 Click the Copy Plan button The entire plan including debt and savings items will be replicated You can also check the boxes on this screen to customize which debt savings retirement and monthly income information is copied The newly copied plan will be the most current plan displayed in the Master Plan software STEP 2 Changing or Deleting Existing Plans To change or delete an existing plan 1 Select File from the main menu and click Edit Plan The Edit Plan window for the current plan will be displayed Note If you want to Plan Description edit another plan in the program you must EEA D AT EE first select it from the main Master Plan oo BEJ EN r a window from within the Current Plan field eae BEJ MEN a x E Both fields r rea for You lf you ku SL 50 The current plan is displayed in the Plan ge a eez a e TA aig E neted manln ikn Ras 4007 Description field Tab between fields to make accelerator Payment TT changes to the current age retirement age tax rates and to add an Accelerator Payment __ Cancel Click OK when finished This plan will be the most current plan in the Master Plan software program To delete an existing plan select File in the main menu and click Delete Plan When the verification screen appears click OK 24 Chapter 5 Forecasting the Future
87. t is detailed in STEP 4 Important The amount displayed in the Monthly Payout field is a gross figure You will need to take into account any taxes or distribution issues to which the monthly amount may be subject AL Chapter 5 Forecasting the Future STEP 4 Reviewing and Printing the Retirement Cash Flow Analysis Report Once you have entered all cash flow assets in the Retirement Cash Flow Analysis module of the software Master Plan can create a report you can use as a guide in planning for retirement and in playing what if scenarios with retirement distributions and monthly payouts from your various assets The report details the following Type of retirement cash flow assets you have entered Description of the asset Total amount of money available in the asset and the interest rate it is earning at the time you begin taking monthly payments if it is an asset from which you will draw both principal and interest e Payout date you will begin receiving payments from the asset e Number of years you have projected you will need the asset to pay you e Number of years converted to months Monthly payout amount In the following example for Mark and Joyce their Retirement Cash Flow Report indicates that they will have a total of 313 000 in principal and interest assets and a total monthly amount of 5 290 37 they will be paid by their assets over the term of their retirement which is 300 months or 25 years
88. ter in the Fixed Expense column 0 00 25 00 0 00 35 00 Re examine Expenses Expenses such as recreation and entertainment can vary greatly and are often among the highest expenditures To balance your spending these expenses must sometimes be sacrificed Add these to your variable discretionary expenses and reduce or eliminate where needed Adjust Fixed Expenses Consider consolidating debt or refinance your mortgage Refer to Chapter 3 on Understanding Debt for more information on how the Master Plan software can help you restructure and eliminate debt Sell Assets If you are in serious financial difficulty you may have to sell items Such items include land cars boats or sports equipment In very rare cases declaring personal bankruptcy is the only option Seek competent legal counsel before doing so Increase Income Consider finding a second job work from home or start a small business see Principle 9 Tax Strategies and Part II of MONEY What Financial Experts Will Never Tell You by Alan Williams Peter Jeppson and Sandy Botkin to understand why starting your own business can be very lucrative You may be able to get a raise from your present employer or consider looking for a better job Important Regardless of which option you choose it is imperative that our income and expenses balance Your entire personal success is based upon living within your income 11 Chapter 2 Projecting You
89. the federal government on capital gains items When you are finished click OK You are now ready to enter your spending savings and debt information Chapter 2 Projecting Your Spending Using the Spending Planner Savings as an Expense Printing the Spending Planner Chapter 2 Projecting Your Spending Using the Spending Planner Once you have created a new plan your next step will be to launch the Spending Planner which is the most fundamental part of learning to control your finances It can help you get a clear picture of how and where you spend your money Almost all the calculations you will need are done automatically for you in the Spending Planner Worksheet As noted in the previous section on Getting Organized be sure to gather your financial records for the last 12 months or at the very least the last three months Note Sorting through old receipts pay stubs etc to see how you have spent your money will be very emotional This will help you understand Money Mastery s first principle Spending is Emotional STEP 1 Accessing the Spending Planner Planner Select Spending from the main menu bar and click on Spending The Spending Planner window will be displayed Money Mastery Master Plan File EGE Savings Debts Retire Cu Spending Planner Spending Planner Report Blank Spending Worksheet Mark am
90. ture of your financial future Insurance can serve to utilize your money in two ways 1 risk protection and 2 investment Insurance products may or may not have any investment potential but in all cases they serve to protect your investments by providing death benefits To understand this portion of Master Plan you must have a basic understanding of two types of insurance 1 term insurance and 2 permanent insurance Term Insurance e Lasts for a specified period of time e Generally less expensive than permanent insurance Can be expensive if you want to maintain the same level of death benefits cash paid to survivors as you grow older e Must renew insurance based on current age and health condition at the end of the term Permanent Insurance whole life or universal e Based on your current age premiums typically do not increase from year to year More expensive then term insurance at first Payment for term insurance eventually catches up with permanent insurance as you grow older e Usually includes a cash value which you could use for your retirement To enter an insurance item 1 Choose Savings from the main menu and click Investments and Savings 2 The Investments and Savings window will be displayed Click on the Insurance drawer a Insurance 4 Enter a unique Description for each Examples Permanent Life Term Life Annuities insurance item and the Beginning Annual Premium this should be the De
91. ult to know how much money to withdraw each month from your various assets if you don t know how many years the money within them will last Master Plan software lets you enter your cash flow assets and calculates how long they will last based on the amount of money you wish to withdraw from them each month and how many years you plan to use them Master Plan helps you analyze this cash flow using the software s Retirement Cash Flow Analysis module based on the following three types of assets you can use to fund your retirement Interest Only Payments These are funds where only the asset s interest is used for retirement cash flow The principal providing the payment stream is not itself utilized Examples Savings accounts and investment portfolios large enough to generate a revenue stream Fixed Monthly Amount This is an asset or capital investment that will provide a fixed monthly amount to your retirement cash stream Examples Rental properties pension plans Social Security annuities T bills bonds etc Principal and Interest Spend Down These are accounts where both the principal and interest are utilized as a source of retirement cash Examples IRAs Roth IRAs savings accounts 401 k accounts etc Note Before beginning this section be sure to gather all information about monthly Social Security payments and company pension plans amounts available for withdrawal from 401 k IRAs and Roth IRAs savings account
92. ur current debt as outlined in the previous section of this manual on Getting Organized For best results have the accurate interest rate available for each debt item If this isn t possible guess at the rate examine the results and adjust as needed STEP 1 Entering Your Debt 1 From Master Plan s main menu select Debts then click on TOUTE TEND emoe the Add Edit Debts option as shown File Spending Savings ESS Retirement Master Wor Current Plan Boe IEE Dents Real Debt Report Get Out of Debt Report Debt Payment Schedule Amortization Report 2 The Debt Window will be displayed Mark amp Joyce Debts Add Edit You can change the payoff priority of Description j Monthly Payment your debts by dragging them to a different position on the grid Interest Rate Principal Description Rate Principal Remain Months Remaining Real Debt After THIS debt is paid off apply the payment to Power Down Amount Savings Account when ALL BA er ise debt is paid off Savings Account s How Much Note Notice that the name at the top of the Debt screen identifies the current plan in which you are working description for that item in the Description field at the top of the screen then enter Interest Rate 18 00 cm the Interest Rate as shown Months Remaining Real Note If you leave the Interest Rate field blank it will be assumed the rate is 0 15 Chapter 3
93. w Much payment American Fund Au 55 00 American Fund Joyce s Roth IRA 3 In the How Much field enter the desired payment from a debt tally ie that has been paid off In this example for Mark and Joyce Savings Account they have selected the American Fund as the savings account ind mil 4 in which to assign the 55 debt payment from the VISA card they have recently paid off After THIS debt is paid off apply the payment to 4 You may also select additional sav ngs Power Down Amount 25 00 accounts in which to assign portions of a AND OR pbk eternal oa debt payment In this example to the left Savings Accounts How Much OZ once Mark and Joyce paid off the VISA card American Fand x 1800 E they assigned a Power Down payment for Money Maket 15 00 the next debt of 25 and applied 15 to two EIN savings accounts Note All amounts entered in savings will be calculated up to your retirement age and displayed on the Master Worksheet For information on Retirement and Master Worksheets refer Chapter 5 STEP 2 Assigning All Debt Payments to Savings Accounts The second way to assign debt payments to savings accounts is to apply debt payments to a savings after all debts have been paid in full 1 From the Debt menu select Add Edit Debts The Debt screen will be displayed Locate the first priority debt in your list 2 Click on the down arrow to the right of the After THIS debt
94. will allow you to toggle among records To move to the top record in the list based on priority use the far left arrow to A a e move to the bottom record use the far right arrow 4 To delete an item from the list press the minus button at the bottom of the screen STEP 4 Printing the Real Debt Report The Real Debt Report is designed to show you how much money you will actually pay in both principal and interest if you continue to pay off debt at the current rate This report is almost guaranteed to shock you The report contains a list of the debt items you have entered in priority order The Real Debt column of the report shows the total amount of payments plus interest on each debt item To print the Real Debt report 1 Select Debt from the main menu and click on Real Debt Report 17 Chapter 3 Powering Down Debt The Real Debt report will be displayed A Money Masterye Real Debt Report Principle 4 Power down your debt and power up your fortune Mark amp Joyce Sample Current Debt Monthly Interest Description Payment Rate No of Payments Remaining Debt Real Debt VISA 55 00 Medical Dental 215 00 AT amp T Credit Card 110 00 Auto 325 00 Furniture 220 00 Home 815 00 1 740 00 As shown in this example for Mark and Joyce an itemization of each debt item and the total amount of interest that must be paid at the current rate of pay
95. y Mastery has displayed on line 13 of this example the 13 956 they will need to save annually in order retire comfortably 4 In line 14 enter the amount your employer contributes to your 401 k annually If you are self employed enter the amount that you contribute to IRA accounts annually Based on these annual contributions which help offset the costs of retirement Master Plan will then calculate how much you need to be saving annually and display it in line 15 5 Master Plan breaks down the annual amount in line 15 into monthly increments and displays that amount in line 16 Note You will need adjust your Spending Planner accordingly to be sure to save this amount 6 When you are finished click Done STEP 5 Printing the Retirement Worksheet Report Once you have entered all figures in the Retirement Worksheet Master Plan allows you to print a report of the worksheet You can use this hard copy as a reference in planning for retirement and as a guide while using the Master Plan software to play what if scenarios To print the Retirement Worksheet Report 1 Select Retirement from the main menu then click on Retirement Worksheet Report screen similar to the following for Mark and Joyce will be displayed TA lr A Money Masterye Principle 7 Retirement Worksheet Report 6 00B bi Close The Retirement Worksheet Report outlines each of the This worksheet is designed for anyone to obtain a basic und
96. your savings When the two meet this is your savings factor Enter this on line 12 of the Retirement Worksheet Yrs To Retire 5 7 9 11 f 13 s 20 25 30 35 40 45 Interest _6 193 135 103 083 069 058 042 032 025 020 o o a Rate 8 185 127 095 075 061 051 034 025 018 014 O11 099 KA A Money Master Index Master Plan Software 401 k 44 401 k s 43 A Accelerated Debt Repayment 22 Accelerator Payment 5 11 20 22 34 36 Adjusting spending 10 12 42 44 Amortization Report 18 44 Amortization schedules 31 Annual deposit 4 26 28 Annual income 7 39 40 Annual interest rate 4 26 28 32 40 Annual investments 28 Annual rate see Insurance Annual rate of appreciation 31 Annual retirement income 38 40 Annuities 26 43 46 Appreciation rate 31 Assessing retirement needs 39 41 50 Assets 11 31 40 44 46 Assuming debt 36 Average monthly income 7 B Balancing income 10 Bankruptcy 11 Beginning face value 29 30 31 Bonds 43 46 Borrowing 36 40 Breeding stock 26 C Calculations 5 26 Calculator 44 Calendar planning 44 Capital gains 4 28 30 32 44 Capital gains tax 5 31 Capital investment 43 Capital Gains Drawer 30 32 Captial gains items 5 29 32 Captial gains sold on contract 30 Car insurance 9 Car payment 11 Cash balance 4 Cash flow 43 43 46 Cash surplus 43 Cash value 26 29 30 Catego

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