Budget Statement

Question: When I have $0 in expenses for Spouse 1 and 2 in the pre-retirement budget, the report takes the Net Income amount and puts it in the Total Expense amount. Answer: In cases where you  and your spouse are not yet retired, if there is no budget,...

By: RetireWare / Equisoft On 2:40 PM

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CPP Sharing

Question: What does "years of common CPP coverage while married" mean? Answer: CPP can be shared between spouses when the pension is paid. The sharing formula is based on the years of common coverage. For example, suppose you are the same age. If you contribute from age 25...

By: RetireWare / Equisoft On 2:39 PM

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Properties

Question: 1. For the principal residence, I have entered the same amount for each of us for market value and mortgage.  Please confirm this is correct. 2. We both own rental real estate properties.  I entered this value, the purchase value, and the mortgages against them in my...

By: RetireWare / Equisoft On 2:39 PM

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Templates

Question: Are there templates to assist in gathering data? I can't see to locate any templates for this. Answer: The worksheets are inside the help files. Open the Help window, expand the 'Other' menu and click 'Worksheets'. ...

By: RetireWare / Equisoft On 2:39 PM

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Disposition of Property

Question: In the detailed cash flow table, there is one year of high income tax in the year I sell my investment property. Why is that? Answer: It is because the capital gains tax applies in the year of disposition. ...

By: RetireWare / Equisoft On 2:38 PM

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Plan for Both Spouses

Question: I tried creating two files (for my wife and myself) and requested combined calculations in both files.  However when I try and get a report it appears I am doing something wrong.  After a calculation I see the projections are using my numbers but the reports I...

By: RetireWare / Equisoft On 2:38 PM

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Use of TFSA

Question: Why is the TSFA not used as income?  It accumulates a large balance but there aren't any withdrawals ever from the account. Answer: Your TFSA is never required, as the goal is met from RRSPs and LIFs, which require minimum withdrawals during retirement, and non-registered assets, which...

By: RetireWare / Equisoft On 2:37 PM

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Mortgage Debt

Question: We entered a $260k mortgage for our rental property. When is this debt paid? Answer: The balance of the mortgage is paid in the year of disposition of the rental property. ...

By: RetireWare / Equisoft On 2:37 PM

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Retirement Income Objective

Question: I plan to retire in 2018. Why is the retirement income objective set at about $110,000, when I entered only $50,000 for each spouse?  Is this for inflation? Answer: Yes, numbers show in nominal dollars, the $110,000 represents $100,000 in today's dollars. ...

By: RetireWare / Equisoft On 2:37 PM

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Results

Question: I'm struggling to interpret the results.  On one hand it looks like we our plan is in good shape.  But why is our probability of success so low? Answer: It is possible to have a situation in the simulation where bad investment returns cause shortfalls before you...

By: RetireWare / Equisoft On 2:36 PM

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Monte Carlo Settings

Question: In the Monte Carlo settings, I checked the box to "Use Rates of Return as specified in the Economic Outlook". Why are the rates that shown in the Monte Carlo settings different from the economic forecast and the fields disabled? Answer: When you select to use the...

By: RetireWare / Equisoft On 2:35 PM

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When to Sell

Question: If I have a rental property, how can I use RetireWare to determine the right time to sell. Answer: Your circumstances , life events and the real estate market will be the deciding factors on when to sell.  For modeling purposes, use an approximate year. Selling a...

By: RetireWare / Equisoft On 2:35 PM

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Quantifying Risk

Lightning and lotteries According to the National Oceanic and Atmospheric Administration, the odds of becoming a lightning victim in the United States in any one year is 1 in 700,000. Your odds of winning the jackpot at Lotto 6/49 is 1 in 13,983,816. So you are 20 times...

By: RetireWare / Equisoft On 12:06 PM

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Retire Happy!

The pursuit of happiness Researchers at Liverpool Victoria, a UK insurance company, recently assessed the cost of a "happy retirement" at nearly $400,000. Their estimate is for maintaining a fairly ordinary standard of living consisting of essential living costs plus the cost of the "pursuit of happiness". The...

By: RetireWare / Equisoft On 5:39 PM

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The Long-Term Care Risk

Too far to consider It may be far away in the future and something we'd prefer not to think about, but increasing life expectancy comes with an unfortunate side effect: not only will we live longer, but we also will live longer in poor health. The long-term care...

By: RetireWare / Equisoft On 7:25 PM

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Monthly pension

Question: I'm trying to enter a pension into one of my files; however, I'm not clear on how to do so. If someone has a $2,000/month pension, what do I put into lifetime pension payable at age 65? Answer: If it is a pension that will not grow...

By: RetireWare / Equisoft On 11:10 AM

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TFSA savings after retirement date

Question: The software appears not to allow for savings to be allocated to TFSA after retirement date. Is there a way to grow my TFSA account after retirement? Answer: There are two places to enter TFSA amounts: In 'Registered Investments' for retirement purposes In Pre-retirement Budget, on the...

By: RetireWare / Equisoft On 11:09 AM

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The Interest Rate Risk

Risk of risk-free investing The interest rate risk is the risk of low earnings or reduced market value of a portfolio due to low future interest rates. Lower interest rates affect retirement income in many ways: Lower income on guaranteed income certificates and bonds. At maturity, capital reinvested earns...

By: RetireWare / Equisoft On 3:08 PM

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Investment Income Calculation

Question: It seems the program may be treating withdrawals from a TFSA as "income" for purposes of the OAS "clawback" test. Answer: No, TFSA investment income is never included in taxable income. The OAS clawback is based on all income plus realized investment income. Investment income for the...

By: RetireWare / Equisoft On 9:50 PM

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CPP and Retired

Question: When I run the simulation with the expected contribution years for the Canada Pension Plan, the results show a blank column for the CPP in the cash flow forecast. Answer: If you are retired and want to use a CPP based on contribution years, you must supply...

By: RetireWare / Equisoft On 9:50 PM

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Odds of success

Question: When I run a Monte Carlo simulation, I get 92% success odds, but the assets at retirement show a shortfall. When I look at the charts, it looks like there is/may be a slight shortfall near 85-90… Why does this happen? Answer: Each capital market simulation looks...

By: RetireWare / Equisoft On 9:50 PM

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Calculation of Dividends

Question: In 'Economic Outlook', what’s the difference between the Annual Expected Return and Dividend Yield in the “Economic Basis for Projections"?  For example if I input 3% for Equities – Canada and an expected Dividend Yield of 3% does that mean a total expected annual return of 6%?...

By: RetireWare / Equisoft On 9:49 PM

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Retirement Budget

Question:  I now signed-up for your new web based application and my first impression is quite positive.  A couple of points though: 1) The software seems to ignore the post retirement budget data I’ve entered for my wife and I.  The budget statement is empty. 2) Can the...

By: RetireWare / Equisoft On 9:48 PM

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Losing a Loved One

Not an appealing title In order to add a little subtlety, I did not name this post "Death of a Spouse", but this is one of our post-retirement risks to plan for and manage: the risk of one spouse dying unexpectedly a few years into retirement. We will...

By: RetireWare / Equisoft On 10:28 AM

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The Stock Market Risk

Risky stocks Stock market risk is the risk of the decrease in the market value of an investment. In contrast to the sequence of returns risk, the risk that a market downturn reduces the capital base near the time of retirement, stock market risk is a period of...

By: RetireWare / Equisoft On 9:54 PM

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Sale of Principal Residence

Question: I have completed entering data for my wife & myself. The data includes selling the principal residence and using a portion of the capital for future income. However the program results ignore that instruction. Principal residence value continues unchanged and cash flow goes negative. Answer: Ensure that...

By: RetireWare / Equisoft On 6:35 PM

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Detailed Cash Flow

Question: Is there a way to see the cash flow for the asset and income in a table format? Answer: There are links in the last part of each of the Accumulations, Income Forecast and Savings tabs in the View results page. The links open a pop up...

By: RetireWare / Equisoft On 6:33 PM

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Pension Income Splitting

Question: Does the software take into account defined benefit plans and post retirement income splitting? Answer: Yes, you can enter in the 'Pensions' page a current or past defined benefit pension plan. There is an option for splitting pension income, and if selected the program will apply the...

By: RetireWare / Equisoft On 6:32 PM

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Economic Forecast

Question: Can the rates of returns be adjusted by the user or are they fixed? Answer: If you have the professional or DIY version, you can modify the rates and have your own forecast. Otherwise, the RetireWare defaults will apply. ...

By: RetireWare / Equisoft On 6:31 PM

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Compliance

Question: Does this software comply with IIROC Guidelines? Answer: A review of IIROC's Guidance Note 11-0349 "Guidelines for the review, supervision and retention of advertisements, sales literature and correspondence" indicates that it is not in breach of the policy. However, you may want to ask your compliance department....

By: RetireWare / Equisoft On 6:29 PM

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Post-retirement Budget

Question: I am retired and the software seems to ignore the post retirement budget data I’ve entered for my wife and I. The budget statement is empty. Answer: There are two budgets: pre-retirement and post-retirement. The budget that applies in your case is the post-retirement budget. Since you're...

By: RetireWare / Equisoft On 6:27 PM

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Incomplete or no 'View' Page

Question: I have entered all information into an advanced retirement plan and the only result that shows up under “View” is one chart. There is no Monte Carlo, risk analysis, accumulations, income forecast, etc. Answer: For a few users who use Internet Explorer 9 (and sometimes the recent...

By: RetireWare / Equisoft On 6:26 PM

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The Inflation Risk

What is the inflation risk?  "Inflation is a rise in the general level of prices of goods and services in an economy over a period of time." — Wikipedia The inflation risk is the possibility that the value of your retirement income loses part of its purchasing power....

By: RetireWare / Equisoft On 3:22 PM

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