Income data entry
Using PG for the first time. Need to confirm a few things to make sure I'm doing it right:
- Salary Deferral (aka Non-Qualified Deferred Compensation). Only place I could figure to add this in is as two separate income streams (first 5 yrs payments are twice as much as last five yrs so needed to do as two entries).
- Stock options and Restricted stock (aka RSUs) were entered as "windfall" income as this will be the last year we get them from employers before retiring
- When adding in tax-deferred (401k) amounts, am I entering the actual amount we've contributed YTD, or, the target amount we shoot for each year ($26k)? So does PG use the total and then prorate based on the specific retirement dates I entered for each of us? I assume it's prorating our salaries so wondernf if same logic applies to 401k and IRA entries (actual YTD or target amounts).
- We don't qualify for Roth contributions, nor get the tax break on TIRA contributions, but we still make after-tax contributions to our TIRA's. Where do these go?
- I get a little hung up on what to put in some cells based on specific , yet critical dates (specifically birthdays and retirement date), since both fall mid-year (so basically half what full year would be for 2021). Does PG make adjustments based on these specific dates instead of just using the whole year for calculations (i.e., My bday is in May, and I plan to retire in July - so will it prorate my salary (and any other numbers tied to dates) for this and future years to adjust for bday/retirement dates vs assuming I am employed the entire year?
1 and 2. Yes, I think that's a good approach.
3. These should be annual amounts and the tool will prorate that for partial years.
4. You can enter these on the $ Personal Contributions to TD Accounts (After Tax) row of the earned income streams on the Income page.
5. The tool does indeed make adjustments to your entries based on birthdates and retirement dates. That's the reason for the tool asking for those inputs. If you have a May birthday and tell the tool you'll be retiring when you reach a particular age, it will prorate the specified annual income amount in that year based on that May birthdate.
should i assume its ok then to delete the START and STOP ages on the Income Stream table since I'm entering specific dates when employment ends? Will that impact anything else?
and for Social security, do I enter the numbers as estimated if we claim at ages that are different than our FRA (66.67 and 67)? I plan to claim later (70) and she will claim at age 62, so these estimated numbers are different than what SSA.gov specifies for FRA
This is whats confusing me...when I go to the Tabular Projections Table, I expect to see our YTD income under the Employment columns for each of us...it shows nothing - same with our contributions to tax-deferred accounts (401k and after tax TIRA contributions). The only column with additional breakout is Social Security -- everything else appears combined (for each year) under the "Other Income Taxed as Regular Income" column.
We are contributing at a much greater rate (accelerated) to our 401K for 2021, and we've both also already made the full year contribution amounts ($7k) to our TIRA (as after tax contributions). The income sheet, however, wants to prorate these amounts given our retirement dates, so they appear in the Tablular sheet much lower than reality. Can I override this or make an adjustment somewhere so the entire contributions are recognized?
Every income stream must have a start and a stop specified, whether it be an age, year, specific date or an "R" to tie it to your retirement date.
This is clearly explained in the user manual: "PRC will compute your benefits and your spouse’s benefits, including any applicable spousal benefits, with appropriate reductions or increases relative to the FRA amounts based on the specified start ages."
PRC never generates YTD outputs; it only generates outputs on an annualized basis. As an example, any outputs for the year 2021 will be its projection for the entire year. If you think you've discovered an error in the tool or an error/inadequacy in the user manual, then please elaborate and send me an export file that illustrates the perceived problem and I'll be quick to investigate. Otherwise, we can address consulting and the associated fees independent of the forum.
Regarding contributions to tax-deferred accounts when you've already max'ed out your annual contributions but only plan to work for part of the year....
I see two basic options on this: 1) increase the contribution $ amount entered to compensate for the fact that the tool prorates it based on your retirement date or 2) since you seem to be referring to the current year, you could also specify the start/stop by the year (i.e., 2021) rather than stopping that income stream on a particular date (and then enter the earnings and contribution amounts expected for the whole year).
OK, but is it still recommended to enter a specific "Date at which full-time employment will cease" given this affects other calculations (healthcare spending, variable spending, consumption smoothing)? ?