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Thread: QUICKEN

  1. #25

    Join Date
    Oct 2008
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    Stinking desert valley of bad air quality, AZ
    Posts
    2,705

    Default Re: QUICKEN

    So I just create 401K/403b accounts named TSPX and choose manual entry right?

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  3. #26

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,022

    Default Re: QUICKEN

    Quote Originally Posted by PessOptimist View Post
    So I just create 401K/403b accounts named TSPX and choose manual entry right?
    Yup, to the very conflicted guy... Just beware not to use an actual symbol... That happened to me and I got penny stock returns, yowser

    How about a Quicken tip. Have you ever wanted to see what kind of return you need (Average Annual Return - Not IRR/CAGR) to meet your retirement goals? Let us take a hypothetical GS11 sitting at $70K who wants to be collecting the same amount in retirement. Here are the assumptions:
    • Current Gross Salary: $70,000
    • Years of Service at retirement: 25 (He/She is quitting right now and living on the street for twenty years)
    • Current Retirement Savings: $150,000
    • Age: 45

    This chap wants to bring in $70,000 at age 65 from Social Security, Pension, and TSP. How can you use Quicken to figure out the annual return necessary to meet those goals?

    Well, start by selecting ‘Planning | Calculators | Retirement Calculator’
    It defaults to ‘Annual Retirement Income’. You can use that and play with the return. The key fields are:
    • Current Age: 45 (Default is 30. I’m always turning 30 so this is good, but not real accurate)
    • Retirement Age: 65 (Default)
    • Croaking Age: 85 (Maybe I should use Passing Age to be politically correct)
    • Current Savings: $150,000 (Work the numbers, much worse than expected if chap is not dumb like me)
    • Annual Yield: 8% (Default)
    • Annual Contribution: We will get this number
    • Inflation Rate: 3% (Defaults to 4%, but long term stats say 3%)
    • Other Retirement Income:
      • We will assume a pessimistic Social Security so: 75% of (1,300/month X 12) = $11,700
      • Again we will assume a pessimistic Pension so: 75% of 30% of Current Salary = $15,750
      • Total: $27,450. This goes into ‘Other Retirement Income’.

    The results are rather awesome for our individual. Click on the ‘Annual Contribution’ radio button on the top and place $70K in ‘Annual Retirement Income After Taxes’ field (and make taxes 0% - because I just want Gross and who knows how high taxes will be with President Howard Dean… And, make certain to increase with inflation). All this chap has to invest is $5,600/year – or $215 per pay period to reach that goal at 8%. If this chap invests %4 of his salary to retirement he/she will make it at 8% (5% over inflation). That is, this chap is required to provide $190 toward retirement. To boot, that $190 will feel like $140 in a take home cut.

    Playing with the annual return now gives you a means of changing risk and matching that to expected return and expected retirement income. For example, changing the ‘Annual Yield’ to 7% results in our chap being forced to contribute $10,000/year ($250 per pay period after match). That will feel like $190 per pay period in take home income.

    So, a chap making $2,700 per pay period has to 'pay himself first' $250 and earn a whopping 7% a year (average) to bring home the same bacon as he/she did during his/her working life. And, that $250 will feel like $190 in after tax income to this chap.

    As an aside, the 7% and 8% returns are BEFORE INFLATION – but the results incorporate the expected inflation. Now, one can use the Investing tab to set up an allocation. The resulting number in the ‘Allocation’ tab are AFTER INFLATION. Don’t ask me how I figured it out, it was a lot of research – trust me. Just add 3% to the expected return to match the Calculators expected return. Thus, a 7% expected return in the calculator requires an Allocation that returns 4% in the ‘Allocation’ Tab of the ‘Investment’ Tab. My rather conservative 25/0/32/17/26 allocation centers at an 8% average return. An example of an allocation returning 7% would be:

    G: 45%
    F: 0%
    C: 25%
    S: 10%
    I: 20%

    And, in a normal –non bond bubbly – market you do not even need 55% equities at age 45 to make the goal. The ‘F Fund’ doubles or triples ‘G Fund’ returns. I’m not using it because it is in a current market bubble. Dumb@ss market timing warning here - see my record in this years AutoTracker!!!
    Lookin' up at the 'G Fund'!!!

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  5. #27

    Default Re: QUICKEN

    Quote Originally Posted by PessOptimist View Post
    Thanks. Especially burro. This is an on line transaction. I was kinda hoping stoplight, boghie, frixxxx, rmi would comment.

    Thank you scout for the comment. Do you use it for your TSP account?

    The difference is about $16. I should stop being so cheap.

    PO
    Dang ! I'm REALLY late to this party Sorry, PO...just saw this when it floated to the top of the forum posts again...

    It's probably all a moot point, since you probably already purchased whatever version...but for the record :

    I'm using Deluxe, and it does everything I want it to...I'm still learning certain things about it, too, that I didn't know it could do !!! I'm NOT a sophisticated investor, so I really haven't dug much in to the bells and whistles...I might "upgrade" to Premier when I do my next upgrade !

    One mistake I made ? When I set up my TSP payroll deductions (years ago, in a previous version of Quicken...'99, I think !) I created my TSP tracking accounts using a "property and asset" label, rather than as an "investment" account. I created an "asset" account for each of the funds, and tracked my payroll allocations and IFTs by entering transactions. When I took out a loan for the house down payment, it was tracked merely as a reduction ("decrease") in my TSP account balances...paid back by deposit (an "increase"). Thus, I've never had any fancy reports or calcs to look at !!!

    When I rolled the Wife and my accounts into our IRAs, I was smart enough to set those up as "investment" accounts, so I CAN use features in Deluxe for tracking investments.

    Anyway...sorry, again, for the late comments...hope you have a Merry Christmas, and a fruitful New Year in 2014 !!!


    Stoplight...
    "Too old to rock and roll...too young to die"... - I. Anderson


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  7. #28

    Join Date
    Oct 2008
    Location
    Stinking desert valley of bad air quality, AZ
    Posts
    2,705

    Default Re: Whoops: Forget the easy way to get your average return risk...

    No worries Stoplight. Thanks everyone for the tips. I have only gotten as far as creating some accounts with balances. That was a couple weeks ago. I haven't looked at it since. Everything in it's own time. Merry Christmas.

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