Hi, just purchased Pralana online and trying to get my basic information setup. At this point I have not ended any expenses.
I have entered my accounts (Roth, TIRA, Brokerage, etc) and put a number in the 'Initial Long-Term Capital Gains Unrealized' for each taxable brokerage account.
Under Income, I filled in 'Employment income' for a part time gig I have (I'm already retired), and 'Other Income' I entered the Dividends from my taxable brokerage accounts and marked them 'Qualified Dividends'. I also entered our Social Security payout information, but that does not come into play for us for at least 10 years.
When I review 'Income Statement' for this year I see what I expect (a combination of my job income and my dividend income).
When I look at 'graphical projections' for income, things look different. I see my Employment income in light blue, the dividends I entered (labelled 'Other Income' in Dark orange, and a THIRD category labelled "Taxable Interest/Dividends".
Where is this third category representing? I also see it in the Cash Flow as 'Schedule Withdrawals'.
@stevejames I think what you're misunderstanding is that as the tool models the growth of your accounts, a portion of that for your taxable accounts can be Interest and Dividends and, further, the interest and dividends can be reinvested or deposited into your cash account (based on your settings). If you're using Simple Portfolio Modeling, the controls for this are on the Build > Financial Assets > Simple Portfolio Modeling > Growth Taxation page. Otherwise, they're on the Build > Financial Assets > Advanced Portfolio Modeling > Growth Taxation page. You should not be specifying the income associated with interest and dividends as Other Income because that will cause it to be counted twice, which is what (I suspect) you're seeing.
Stuart
Hi, I just tried to find Pralana again to check..and I think it repurchased. I clicked cancel...can you confirm it didn't go through? I have initial subscription #42865 and another #42975 saying pending cancellation.
I now have two pending charges on my credit card. I do like the product, but one copy is enough:)
Can you point me to the link the actual product? I can no longer find it (I originally got there by clicking get the product and it took me there). I can't find how to open the actual product up again anywhere on the Pralana website..
@stevejames I've confirmed that you did indeed purchase a second subscription, and this has been refunded. To access the product, you have to first login. So, click the Member Login at the upper right of virtually any page on the Pralana website, then login and go to the Members page. From there, you'll see the button to click to access Pralana Online.
Stuart
@smatthews51 Thanks..back to the original question. I made the following tweaks:
On the simple portfolio modeling page/growth taxation page I changed 'Growth is Tax Free' to 100%, and checked 'Reinvest Interest and Dividends'
Is there a better way to do things? I know how much in Dividends each of my taxable accounts generate each year. Is there a way to specify that dollar amount as a base dividend each year that will grow at some estimated percentage?
@stevejames No, there's no other way. The tool models the overall account growth and then determines how that growth is partitioned into the categories shown on the Growth Taxation page to model the taxes on that growth. Doing it this way is essential for the various forms of analysis done by the tool (i.e., not only deterministic but also Monte Carlo and Historical). Your modeled dividends are going to vary considerably during Monte Carlo and Historical analysis. Once you get used to using the tool, I'd recommend using the Advanced Portfolio Modeling capability (mode 2 in particular) which enables you to work with asset allocations, but taxation of the account growth is the very similar to that of the Simple Portfolio Modeling. This enables higher fidelity modeling of your accounts and the associated taxes.
Stuart
@smatthews51 thank you, I feel like I'm making progress. I've switched to Advanced mode 2, and set 'Growth Taxed as Qualified Dividends' to a percentage that matches the dollars per year in dividends I am currently getting as a starting point, that let me remove dividends from other income.
I've setup Roth Conversion and looked at tax forms for my desired scenario, and everything looks as I would expect numbers wise.
However, I've hit a problem after adding 100,000 a year living expenses, with spending strategies 'specified expense only'.
In the cash flow statement I now see a large 'unscheduled withdrawal' from 'taxable investments' to make up the shortfall; so there does appear to be recognition I have the expense.
This makes no changes to my tax forms/tax projections for the year. How does the software handle deciding which part of withdrawals from the taxable accounts each year are cost basis, and which parts are taxable as LTCG? I do have values entered for 'Initial Long-Term Capital Gains Unrealized' in my taxable accounts.
As I currently have it setup it appears to be treating the entire 'unscheduled withdrawal' all as non taxable.
@stevejames This is controlled via the Build > Financial Assets > Management > LTCG Withdrawal Strategy page.
Stuart
