Setting Up and Changing Your Planner Assumptions


Quicken gathers certain information about you and your finances to help you set up the different planners. For example, your age, income, and expenses are used to determine how much you need to save in order to retire. You can set up, change, and review your assumptions at any time. You should review your assumptions on a regular basisfor example, every six months or whenever your financial situation changesso that Quicken can make adjustments, as needed, to ensure that your goals and plans are as accurate as possible.

Review Planner Assumptions

From Planning menu, select Go to Planning Center and then click the Planning tab.

Scroll down to the Plan Assumptions section to review your assumption information. Click any of the links to view or change the information.

To set up or change all assumptions, click Change Assumptions.

Review and Change Your Personal Information

In the About You section of the Planning Assumptions window, review your age, retirement, and dependent information. To change any of the information, click Edit.

Change any of the information about yourself or your spouse.

To add new dependent information, click New.

Enter the new dependent information and click OK.

To change dependent information, select the dependent you want to update and click Edit, make the changes and click OK.

To delete a dependent, select the dependent you want to remove and click Delete. A message appears asking if you want to remove the dependent.

For Your Information

To determine your life expectancy, click the Calculate button. From the Calculate Life Expectancy window, select the answers to the questions. Quicken determines your life expectancy based on the options you choose. You can choose to use this age or change it. Click OK to return to the Quicken Planner: About You window.


Click Yes to remove the dependent or No to keep it.

When you are finished making changes, click Done.

Did You Know?

You can exclude specific information from your plan. If you don't want certain information (for example, dependents or a specific salary) to be used when calculating your plan, you can select the Exclude from Plan option. If you later decide you want that information included, you can go back and clear Exclude from Plan. This option appears throughout the planner.


Review and Change Your Salary Information

Scroll down to the Salary section of the Planning Assumptions window and review your salary information. To change any of the information, click Edit.

To make changes to a specific salary, select the salary and click Edit.

Make the changes and click OK.

To add a new salary, click New.

Did You Know?

Adding and editing salaries does not change your paychecks in Quicken. The salary information you enter in the Planning Assumptions window does not affect the paychecks you have already set up in Quicken. Quicken uses the information in the Planning Assumptions window solely to make projections for plans, such as your retirement income.


Select to whom the salary belongs.

Type the source of the salary and enter the yearly salary amount.

Leave the inflation amount as is. Quicken updates the inflation rates on a regular basis when you update your accounts and download quotes.

Select salary beginning and ending dates.

Select the employment status, and whether Social Security is taken from the salary.

Click OK.

When you are finished with the salaries, click Done.

Did You Know?

You can add future salary adjustments to see how they affect your bottom line. If you anticipate your salary or work schedule being affectedfor example, working part-time instead of full-time, or visa versayou can add a salary adjustment. To do so, in section 2 of the Quicken Planner: Salary Income window, click New. From the Add Salary Adjustment window, select an adjustment option, complete the information, and click OK. If you decide to change or remove the adjustments, you can go back to the Planning Assumptions window and edit or delete the adjustments.


Review and Change Retirement Information

Scroll down to the Retirement Benefits section of the Planning Assumptions window and review your retirement information. To make changes, click Edit.

Type the age at which you and your spouse (if applicable) would like to retire and the amount of Social Security you will be receiving per year. If you are not sure of the amount, click Estimate.

Complete your estimated Social Security benefits information and click OK.

If you do not want to count on Social Security being there by the time you retire, select Yes and enter the reduction figure. Otherwise, click No for Quicken to estimate the Social Security you could receive.

If you and/or your spouse have a pension, click New.

Complete the pension information. Be sure to use the standard inflation rate and click OK when you are finished.

To change pension information, select it and click Edit.

To remove a pension, select it and click Delete.

Did You Know?

Exclude pensions to view the impact to your overall plan results. You can exclude a pension from your plan by selecting the Exclude from Plan option so that Quicken does not add the income from that pension into your overall plan. You can use this to view the impact to your retirement plan and then make adjustments to your plan, if needed. Excluding the pension does not remove it. You can return to the Retirement benefits section of the Planning assumptions window to add it back into the plan totals by clearing the option.


When you are finished setting up and changing retirement information, click Done.

Review and Change Other Income

Scroll down to the Other Income section of the Planning Assumptions window and review your other types of income: for example, one-time payments. To make changes, click Edit.

If you have income that is not retirement or salary-related but that you will be receiving through your retirement, click New to add it.

Select the type of income and then complete the information for that income type. When you are finished, click OK.

Repeat steps 23 to add additional income sources.

To change income source information, select the source and click Edit.

To remove an income source, select it and click Delete.

When you are finished, click Done.

Review and Change Tax and Inflation Rates

Scroll down to the Average Tax Rate and Inflation sections of the Planning Assumptions window and review your tax and inflation information.

Did You Know?

It is recommended that you use the standard tax and inflation rates. However, to see how changing either the standard tax and/or inflation rates might affect your plans, you can experiment with different rates in the Average Tax Rate and Estimated Inflation windows.


To make changes to the average tax rate, from the Average Tax Rate section, click Edit.

To change your tax rate information, select Demographic Average to use an average rate based on where you live or select Tax Returns to enter the tax information from your last tax return.

Select or change the state you live in and select the range for your total household income.

If you know the adjusted rates you want to use, you can change the percentage rates that Quicken has estimated for you.

When you are finished, click Done.

To change the inflation rate, from the Inflation section of the Planning assumptions window, click Edit.

To change the inflation rate, type the adjusted percentage rate and click Done.

Review and Change Savings Information

Scroll down to the Savings section of the Planning Assumptions window and review your savings account information. To make changes, click Edit.

To exclude an account from this plan, select the account and select Exclude from Plan. To view excluded accounts, select Show Excluded Accounts or clear it to see the accounts that are used in the plan.

To change the category for which an account is used, select the account and click Details.

Change the category and click OK.

To enter regular contributions to a savings account (Quicken uses these contributions to figure your future retirement, debt, and savings goals), select the account and click New.

Select how contributions will be made to this account (using a percentage of a specific source of income or an inflation percentage). Your options after this step differ depending on which option you choose. Then click Next.

Type the contribution amount, enter start and end dates, and click Next.

Select when the contributions are to begin or enter a specific date, if applicable.

If this is a one-time contribution, select One-Time Contribution: otherwise, enter an end date.

Click Done.

When you are finished making changes to your savings accounts, click Done.

Review and Change Investment Information

Scroll down to the Investments section of the Planning Assumptions window and review your investment information. To make changes, click Edit.

To exclude an account from this plan, select the account and select Exclude from Plan. To view excluded accounts, select Show Excluded Accounts or clear it to see only the accounts that are used in the plan.

To change the intended use for an account, select the account and click Details.

From the Account Will Be Used For drop-down menu, select another option, if desired, and click OK.

To enter regular contributions to an investment account (Quicken uses these contributions to figure your future retirement, debt, and savings goals), select the account and click New.

Select how contributions will be made to this account (using a percentage of a specific source of income or an inflation percentage). Your options after this step differ depending on which option you choose. Then click Next.

Type the contribution amount, enter start and end dates, and click Next.

Enter the employer contribution information and click Done.

When you are finished making changes to your investment accounts, click Done.

For Your Information

Financial experts recommend you save 10% of your salary to ensure that you have enough money for retirement. In step 8, you can choose to save 10% of your salary (or another percentage if you can't save 10%) or a set amount that will change with inflation. Choosing the second option ensures that you save the appropriate amount even though inflation increases the cost of living.


Review and Change Rate of Return Information

Scroll down to the Rate of Return section of the Planning Assumptions window and review your return rates for before and after retirement. To make changes, click Edit.

Type the rate of return you expect to receive for your investments and savings accounts. If you and your spouse expect different rates, select Use Separate Rates of Return for Taxable and Tax-Deferred Accounts and enter the rates for each of you.

Did You Know?

Quicken uses the rate of return to help determine how much money you need in order to retire. The rate of return you enter is used to determine whether you will have the money you need to cover your expenses when you retire. The higher the rate, the more risk you should take with your investments.


To err on the side of caution, keep 100% for the taxable return. This ensures that you plan adequately for taxes on your returns.

Click Done.

Review and Change Current and Future Asset and Property Information

Scroll down to the Current Homes & Assets section of the Planning Assumptions window and review your assets information. To make changes, click Edit.

If you are planning to sell any of your property or assets, select the asset or property and click Sale Info. The option you select determines the options you see in the Asset Account Sale Information dialog box. This example uses a home.

Change any of the purchase or inflation information, if needed, and click Next.

If the property is your primary residence, select This House Is or Will Be My Primary Residence and then select whether you intend to sell the property.

If you intend to sell the property, select approximately when you will sell it or enter an approximate date. Click Next.

Type an approximate total amount for home improvements between now and when you plan to sell and the expected sales fee. Use the defaults for both the tax rate and exemption, and click Next.

Did You Know?

Holding on to your property for at least two years and renovating pays off. You can exempt up to approximately $250,000.00 if you keep your primary residence for at least two years before selling it. In addition, home improvements can drastically improve your selling price and are tax deductible when you sell your house. Consult with an accountant or tax professional for more information.


Select whether you intend to use the money you make from the sale to purchase another home and then click Done.

To exclude an asset or property from the plan, select the asset or property and then select Exclude from Plan.

To add a loan, expenses (for example, upkeep for a rental property), or income (for example, rent you receive from a rental property) for an asset or property, select the asset and click Loans, Expenses, or Income.

To add a new asset, click New and complete the Quicken Account Set Up dialog box.

See Also

See "Add New Property or Debt Accounts" on page 99 for more information on adding new assets.


When you are finished making changes to your assets and properties, click Done.

To add property as future purchase, from the Future Homes & Assets section of the Planning Assumptions window, click Edit and then click New. Follow the prompts to add the new property.

Did You Know?

Use the Future Homes & Assets section to set up homes or assets you are thinking of purchasing. To see how a new home or asset would affect your plan, in the Future Homes & Assets section, click Edit and set up a new home or asset. After you see the results, you can remove it or save it to use in your plan.


Review and Change Current and Future Loan and Debt Information

Scroll down to the Current Loans section of the Planning Assumptions window and review your loan information. To make changes, click Edit.

To review loan details, select the loan. The loan detail appears at the bottom of the Loan Accounts window.

To exclude a loan from the plan, select the loan and then select Exclude from Plan.

To adjust payoff information, select the loan and click Payoff.

Select whether there will be a balloon payment for early payoff and click OK.

See Also

See "Getting Out of Debt" on page 203 for information on using the Debt Reduction section of the Planning Assumptions window.


To add a new loan, click New and complete the Loan Setup dialog box.

Click Done when you are finished reviewing and making changes to your loan accounts.

To add potential future loans that are not related to any property or asset, from the Future Loans section of the Planning Assumptions window, click Edit and then click New. Follow the prompts to add the new loan.

See Also

See "Managing Your Loan Accounts" on page 107 for information on adding new loans.


Review and Change Living Expenses Information

Scroll down to the Living Expenses section of the Planning Assumptions window and review your yearly living expense information. To make changes, click Edit.

To use an estimate that Quicken has predetermined (this is based on your current bills and expenses), select Rough Estimate and change the yearly living expenses amount.

To use the total derived from amounts you enter for all expense categories, select Category Detail and then click Details.

To have Quicken create an estimate for each category, based on your spending habits thus far, click Estimate.

Quicken provides a date range for the past year. If needed, you can enter a new date range, and then click OK.

To view only living expense categories, select the Only Show Living Expense Categories option.

To change the living expense amounts, click in the Monthly Amount column for each category and type the amount that you use each month. Then click OK.

To indicate that you want to save a percentage of your excess income, type the percentage of the excess amount. Otherwise, leave it at zero.

Click Done.

For Your Information

The amounts that appear in the Category Detail dialog box are based on information you've entered in Quicken thus far. The categories are the same as those that appear in the budget planner. However, if you set up a budget, the budgeted amounts you set up for each category are not the same as those amounts that appear in this dialog box. For more information on budgets, see "Setting Up a Budget" on page 196.


Review and Change Adjusted Living Expenses

Scroll down to the Adjustments to Living Expenses section of the Planning Assumptions window and review any adjustments you are planning on making to your yearly living expenses. To make changes, click Edit.

To add a life event, such as retirement or college, click New.

Select whether or not the event is for a specific person, complete the adjustment information, and click OK.

To update an adjustment, select it and click Edit.

To remove an adjustment, select it and click Delete.

To exclude an event from your plan, select the event and select the Exclude from Plan option.

When you have completed the adjustments, click Done.

See Also

See "Planning for College" later in this chapter for information on using the College Expenses section of the Planning Assumptions window.


For Your Information

Living expenses usually change when you retire. To help you determine what percentage your living expenses will increase or decrease, see "Planning for Retirement" later in this chapter. You can enter an arbitrary amount for now, if you like. After you determine the expected increase or decrease in living expenses, you can go back to the Planner Assumptions window to change the percentage.


Review and Change Special Expenses

Scroll down to the Special Expenses section of the Planning Assumptions window and review any additional expenses you are planning. To make changes, click Edit.

To add a new expense, click New.

Select whether or not the expense is for a specific person, type a description for it, and then click Next.

Type the approximate date for the expense, the duration, and the expense amount, and then click Next.

To select the account you plan to use to fund the expense (if any), click Choose Accounts.

If you do not have a specific account to fund the expense, select General Expenses (shown in this example); otherwise select Specific Accounts to select the account. The option you select determines what you see in the next step.

If you have money to apply toward the expense, enter that amount and type the date you plan to have the money. (If you selected Specific Accounts in step 6, you would select the account you want to use in this step.)

Click OK. Quicken fills in the top portion of the Add Special Expense dialog box with the account information.

In the Amount from Loans box, enter the loan amount you need for the expense, if a loan will be used. The amount you need to save monthly to pay for the expense appears in the Monthly Savings Target box.

To change how you would like to fund the expense, repeat steps 59; otherwise, click Done.

To update an expense, select it and click Edit.

To remove an expense, select it and click Delete.

When you are finished with special expenses, click Done.

If you are finished with all your assumptions, close the Planning Assumptions window.

For Your Information

Remember, you can exclude this event from your planner assumptions by selecting the event shown in step 11 and selecting Exclude from Plan. For example, if you entered an expense to see how it affects your finances, but don't plan on acting on the expense right away, you can exclude the expense until you are ready to act on it.


Review and Change Planner Assumptions and What If Scenarios

If you don't already have the Planning tab open, choose Planning, Go to Planning Center, and then click the Planning tab.

Review the Plan Results section to see how the information you entered in the Planning Assumptions window affects your financial outlook.

Scroll down to the Plan Assumptions section to review details for each of the planner assumption categories. To make any adjustments to any of the categories, you can click a category link.

TIMESAVER You can also click the Change Assumptions button to open the Planner Assumptions window to make changes to all of the assumptions

Make your changes and click Done when you are finished.

To explore different scenarios or situations to see how they change the outcome of your plans, click Explore What If's.

From the Choose a Goal Type drop-down menu, select a goal, such as Retirement, and then click a what-if scenario, such as changing your retirement age.

Make changes (in this example, the retirement age) and click Done. Quicken adjusts the outcome and shows you the impact, using a line chart in the What If window.

Repeat steps 67 to play with other what-if scenarios.

To save a scenario, click Save What If as Plan.

To revert to the original information, click Reset What If.

To close the window without saving anything, click Close Without Saving.

When you are finished, close the window.

Using Calculators

The Calculators section of the Planning tab in the Financial Overview center provides a series of calculators that can help you crunch numbers for retirement, college, refinancing, savings goals, and loans. Each calculator is customized to determine the potential for the particular situation. For example, if you want to see whether it would be advantageous to refinance your home, you can use the Refinance Calculator to find out. Using the Refinance Calculator as an example, let's step through how the calculators work:

1.

In the Calculators section of the Planning tab, click Refinance Calculator.

2.

Type the current payment and escrow amounts for your existing mortgage.

3.

Enter the principal amount, the number of years, and the interest rate for the new mortgage.

4.

Type any closing costs and points you will be charged.

5.

Click Calculate.

6.

If needed, you can change any of the information in steps 24 and click Calculate again to see how different figures affect the outcome.

7.

If you are finished, click Done. You can use the other calculators in a way similar to what is shown here.


Did You Know?

You can print from the calculators. You can print the calculations to save for reference later by clicking the Print button.





Quicken 2007 On Demand
Quicken 2007 On Demand
ISBN: 0789736381
EAN: 2147483647
Year: N/A
Pages: 138
Authors: Gina Carrillo

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