FAQ

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Advisor details can be entered on both a global setting and a local setting. The global setting will apply to new plans moving forward. This can be changed under Settings - Advisor Details.

For an existing plan, however, you will need to go under the Client Information - Client Information page. On the Advisors tab, you are then able to update Advisor Details.

A client cannot be removed from a client file once it is created, once a client file is created as a Joint Analysis it cannot be converted to a Single Analysis. Recreate the client file on the Client List.

For ease of data re-entry, the Synopsis Report for the currently existing plan can be generated by navigating to the Quick Actions drop down - Reports - Summary - Synopsis Report. This will contain all data entries into the plan.

To ensure the information published to the account is as accurate as possible, accounts need to be:

1. Updated in the plan (go to the Net Worth page - Accounts tab and click the Update Accounts button).
2. Linked to funding Retirement (Goal Funding) in order to stay published on the Client Portal.

A plan can't be approved or published if an Approved or Published plan is already in the engagement. The plan must be duplicated into a new engagement.

To duplicate the plan into a new engagement:

1. Go to the Plan List page.
2. Select the plan within the Plans section.
3. Click the Plan Options button.
4. Click the Duplicate Plan option. Click Next.
5. Click the New Engagement option and enter a Engagement Name. Click Finish.

Account values update daily. Fluctuations in the account values will update the goal coverage that is established by way of the expenses (i.e. Goals).

To review the plan with updated information:

1. Duplicate the plan into a new engagement from the plan list.
2. Open the duplicate, navigate to the Net Worth page - Accounts tab.
3. Click the Update Plan button.
4. Make any other relevant changes and then publish the plan.

To model the future purchase of a home, go to the Net Worth page - Assets page. Click the Add Lifestyle Asset button and select Residence or 2nd Residence then click the to open up the Lifestyle Asset Details pop-up. Enter in the future purchase date under Purchase Date then enter in the rest of the desired information.

To link a mortgage, add a new liability (either a fixed or variable mortgage), and make sure to choose the residence under the Link to section. To bring the liability into the cash flow to pay for the home purchase, open the details () and make sure the loan date matches the purchase date of the house, then choose Bring into cash flow under the Renegotiate field. Enter in any other relevant information in the liability details.

Check the Itemized Cash Flow Projection report to ensure there are not outstanding deficits or surpluses from the new home purchase.

So long as the mortgage is linked to the lifestyle asset the mortgage will automatically be paid off and deducted from its proceeds. This can be verified by looking at the Link To drop-down found to the right of the liability.

To delay RMDs from an account:

• Create a $1 / year salary for the delay period under the Cash Flow page - Incomes section.
• Under the Net Worth page - Accounts tab, change the Account Type of the IRA to 401(k).
• Navigate to the Net Worth page - Accounts tab - Details pop-up - Qualified Account Setup tab, check Delay RMDs and set this field to the new salary.

The asset redemption requirements for the SECURE Act are not currently supported for inherited IRAs. To model accuracy, manual redemption strategies must be applied to the inherited IRA.

To set up a manual redemption strategy, follow these steps:

1. Go to the Enter Financial Data – Strategies – Redemptions page.
2. Under Redemptions, from the Choose Account menu, select the account to which you want to add a redemption strategy, and then click Add Redemption Strategy.
3. In the Amount ($ or %) field, enter either the percentage of the account to redeem or an amount to redeem periodically based on the selection from the Frequency menu.
4. Select the Frequency at which the redemptions will occur.
5. If applicable, for qualified accounts select the Waive Early Withdrawal Penalties option to exclude penalties due if the asset is withdrawn early.

6. Enter the Start Date and End Date of the redemption.

   Note: The End Date field is not accessible if Redeem All or Lump Sum is selected.

7. To index the strategy for inflation, select the Infl option. To index by an amount greater or less than the default inflation rate, enter a different percentage in the +/- Add’l field.

   Note: The Infl option is not accessible when Redeem All or Lump Sum is selected or a percentage of the account is entered.

If you enter a manual savings strategy for a 401(k), the system will not put a limit on how much you can save into the 401(k). However, there is a MAX contribution feature, which does take the limits into account.

To use the feature, go to the Net Worth page - Accounts tab - (Account Details pop-up). Under the Savings Strategy tab you can enter MAX under the Pre-Tax amount. This will auto-populate the maximum contributions that client is able to contribute during the time frame you set. The software also considers after 50 catch-up limits.

This MAX contribution will consider previous contributions as well. For example, if you put in a manual savings strategy in the account for $12,000 just for this year, and then input a MAX strategy starting next year and going for another 10 years, the software will contribute $26,000 next year (assuming the person started with the $19,000 limit). Another tool you might find helpful is in the Planning Assistant.

If you go to Quick Actions - Planning Assistant - Reports select Qualified Contribution Limits. This will show you if your client is over or under the contribution limits for each year.

The Accrued Income line item represents the money your investment accounts have made between January 1st and the valuation date on your accounts (which can be defined by going to the Net Worth page - Accounts tab - Account Details pop-up () ).

To get rid of this on your report:

• Navigate to the Net Worth page - Accounts tab - Previously Incurred Investment Activity pop-up, click Override and zero out these value.

OR

• Change the Valuation Date on all of your accounts to January 1.

You can activate deficit coverage during pre-retirement by going to Strategies - Deficit Coverage and ensuring that the checkbox is selected for "Redeem from accounts to cover deficits in the pre-retirement period".

Once this deficit coverage checkbox has been checked, go to Cash Flow - Expenses and/or Net Worth - Assets/Liabilities - Liabilities. In the details, you need to check the Cover any pre-retirement deficits caused by this expense/these liability payments checkbox.

To create a Surplus Savings Strategy, click the Enter Financial Data - Strategies page - Surplus tab. Select a surplus account from the dropdown menu and click Add Surplus Savings Strategy.

The strategy will default to begin in the current year and end at retirement. You may change the end year to the death of the client to show the surplus being saved in retirement (such as from RMDs).

Surplus income, as well as deficits, are eliminated at the end of each year, to ensure what is shown on each cash flow year is unique to that specific year.

To make sure surplus income is used properly at the end of each year, go to Enter Financial Data - Strategies - Surplus, and click either Add Surplus Savings Strategy (you will need to select a non-qualified account to use this) or Add Surplus Expense Strategy.

If you choose surplus savings, select the percentage of surplus to be saved, and select the time-frame for how long you wish this strategy to last (it is recommended to use 2nd to die to guarantee all surpluses in the plan are captured). If surplus expense is chosen, select the percentage of surplus you wish spent, and select the time-frame you wish this expense strategy to last.

To model a retirement account transfer strategy, first make sure the account you wish to transfer is linked towards the retirement goal (this can be viewed by going to Set Goals - Goal Funding). After verifying, go to Set Goals - Retirement and click the Transfer Strategies... button. Within this page, select the source account from the Choose Source Account... drop down, then click Add Transfer Strategy. Select a Destination Account from the drop down (this can be a brand new account if desired), the Transfer Amount or Percentage, and the Transfer Date. Once completed, press OK to finish the transfer strategy.

The Education goal module is intended for future education goals.

To enter in education costs for the current year, create an Expense on the Cash Flow page.

The most common cause of this is goal funding being improperly setup. To review goal funding, go to Set Goals - Goal Funding.

After confirming all accounts are allocated 100% to the desired goal(s), the Results - Analyze Goals page should now have a percentage coverage for the goal.

Federal Tax Brackets are automatically calculated when using the Detailed Income Tax tax method. Brackets are based on the income of the clients, and the brackets are indexed by inflation. Advisor-created tax brackets are only available in Average Income Tax method.

The Effective Marginal Tax Rate (EMT rate) is the rate at which the next dollar of ordinary income will be taxed. The combined federal and state marginal tax rate is the actual percent of total additional tax triggered by an additional dollar of ordinary income. The EMT rate considers the extra dollars overall impact on taxes that result from such items as taxable social security income, alternative minimum tax (AMT), capital gains and credits.

In most situations, the EMT rate can be verified by doing the following:

1. Review the total taxes value on the Income Tax Details report for the client.
2. Duplicate the plan.

3. Add a new Other Taxable income type worth $100.

   Note: NaviPlan uses only $1 but will require a higher amount to see decimal points.
4. Refresh the Income Tax Details report for the client. Note of the new total taxes.

The difference between the total taxes from step 3 and step 1 will equal the EMT rate.

The NaviPlan EMT rate helps illustrate the true percentage lost to taxation on an additional dollar of ordinary income. The combined rate may be more than the sum of federal and state marginal tax rates from income tax brackets. NaviPlan takes effective tax rates and marginal tax rates a step further providing vital information to assist in planning for the tax impact of adding an additional dollar of ordinary income.

Stating a pure marginal tax rate alone is less beneficial than using the EMT rate. A pure marginal rate excludes the impact of certain back-taxes such as AMT and capital gains, or the impact that the additional income may have on phase-outs, credits, etc. As a result, the combined marginal tax rate may be higher than the sum of the federal and state brackets due to AMT or taxable social benefits being triggered.

Monte Carlo analysis serves as a stress test of the likelihood of 100% coverage during a goal period using standard deviation on account growth. If a plan with no variability in its growth has a goal coverage less than 100% the Monte Carlo will almost always be 0%, as the calculation bases each trial as already a failure.

Monte Carlo should only be run on plans that have already reached 100% goal coverage in Results - Analyze Goals.

Monte Carlo and Probability of Success Analysis both are intended to provide a stress test on the percent probability of goal success, the major difference is how these models come up with their results.

Monte Carlo uses a binary approach to find its percentage of success. If a trial within Monte Carlo does not meet an assigned benchmark (by default this is a cash flow deficit of $10,000 for retirement, $500 for any other goal, during the goal period for each trial) the Monte Carlo considers the trial a failure, and decreases the percentage of success of the Monte Carlo.

Probability of Success uses an averaging approach for its percentage of success. The model runs the set number of trials and averages the results of all the trials into one averaged value. This value is the averaged value of goal success over the number of trials.

Each report type (Legacy Reports, Client Reports and Quick Action Reports) serve a unique purpose for analysis within NaviPlan.

Quick Action Reports are planner facing reports that give detailed spreadsheets on specific pieces of information within the plan. These reports are standalone and serve for analysis purposes only. These reports are not part of a comprehensive client presentation.

Client Reports serve as the bulk of a comprehensive client presentation, These reports allow for you to pick and choose which reports you wish to be included in a presentation. These reports feature colorful graphs, simplified charts and informative text that supplement an advisor meeting. Clients can take them home with them as something for them to review after the meeting.

Legacy Reports are older client reports that serve the same purpose of the Client Reports. Legacy Reports use a preset list of reports generated that cannot be reordered, and are not as modern looking as the Client Reports. Beyond this the quality of information is identical to the Client Reports.