How about ALL GONE 🤪

I used EXPENDITURES as suggested.

I'm glad you like the changes.

Thanks again!

DigitalTorqueWrench wrote:

I like the new CASH-FLOW Summary.  This is helpful.  Thank you.

There is, however, one thing that I think could be improved in the CASH-FLOW Summary and in some of the other charts & tables. It has to do with the way the MoneyReady App treats CPP contributions.  I am attempting to provide honest feedback; I am not suggesting that anybody or everybody has to agree with me!

 

From the documentation:

‘TAXES’ includes CPP/QPP and EI deductions

I am guilty of reading the documentation too fast which caused me to initially miss that statement.  I wish I had paid more attention to this detail because I spent several hours trying to figure out why the MoneyReady App was showing slightly bloated tax values in situations that involved employment income.

 

I think that grouping TAXES, CPP, and EI together and calling them "TAXES" is too much of an oversimplification.

Treating EI contributions as taxes is a bit of a stretch, but there is probably not too much harm in it.

However, I personally do not view CPP contributions as being a tax.  Unfortunately (for me), I know that not everybody out there on the Internet shares my view.

I would have preferred it if the Sankey diagrams provided four flows immediately to the right of the vertical centerline into:

  ⇒ TAXES

  ⇒ TO ACCOUNTS (this could potentially be renamed to simply DEPOSITS for consistency with the CASH-FLOW summary).

  ⇒ SPENDING

  ⇒ PENSION CONTRIBUTIONS.

The PENSION CONTRIBUTIONS flow should then be split into two outflows on the far right side of the diagram:

    ⇒ CPP CONTRIBUTIONS

    ⇒ OTHER PENSION CONTRIBUTIONS (or something to that effect)

The TAXES bar chart should not include CPP contributions.  CPP could be moved to a new bar chart labelled PENSION CONTRIBUTIONS.

Or, if the TAXES bar chart must continue to include CPP contributions, could the chart be relabeled and could CPP pensions be rendered in a different colour?

So now, back to the new CASH-FLOW report. It has two columns named TAXES and SPENDING.  I do not think it is right that the CPP pension contributions get included in the first column but other pension contributions get included in the second column.

I would have preferred to see three columns:

   • TAXES

   • SPENDING

   • PENSION CONT.

I recognize that not everybody has a wide monitor so some people might not like the table becoming wider than it already is.  Also, I don't have loans or mortgages so I cannot comment on how or where such things are supposed to appear.

The existence of separate columns labeled SPENDING and TOTAL SPENDING is confusing.  Based on their names, one would expect the two columns to hold identical values. Therefore the TOTAL SPENDING column could be dropped entirely or renamed to something more meaningful such as TOTAL OUTFLOWS.  For me, the word spending infers the use of money to buy goods or services.  Spending is what I do with my spending money.  I don't use that word when referring to the payment of income tax and/or pension contributions.

Thanks for the feedback DigitalTorqueWrench.  Yes, I don't want to add additional columns to summary reports because horizontal screen real estate is precious.  We may be able to clarify the terminology in labels for columns and charts, however. We can also give you additional breakdowns of the TAXES in the year reports which are meant to be detailed. Thanks again.

The TIME MACHINE Year reports now have subtotals by expense type (when specified), income type, and account type. You can now get all the years together in a single report. This extensive report, in both today's and future dollars, is now included as new worksheets in the Excel download.

You can view only a selection of the years. That is the same cash-flow report that is included in the REPORT for printing or pdf download.

A new summary cash-flow report is now also available. For every year, it shows the Cash In totals of EXTERNAL INCOME and ACCOUNT WITHDRAWALs by account type. The Cash Out columns show the total spending, total taxes, and ACCOUNT DEPOSITS by account type. The Net-savings are also shown. The cells are coloured with a heat map to help you see exceptionally low and high amounts.

Although these reports are available for older runs including saved runs, those may not show all the subtotals. Also if you've entered a lot of EXPENSE entries, you may want to add an expense type for them if you haven't already. This way you'll see their subtotals in the reports, and it will also make the Sankey diagram in the year report a lot cleaner.

You can get to any of these larger reports from the Views section below any TIME MACHINE Timetable, or from the Year report (click on any year in the Timetable).

Let me know if you have any issues, questions, or suggestions.

Elisabeth

Here's what the summary cash-flow report looks like:

"Joint (but not really)" accounts are now implemented. The way it works is where you add or edit a non-registered, joint account, on the screen where you set "Percentage of account my_name contributed to", you can now also set who can contribute or withdraw from the account (only you, only your spouse, or both of you).

So for your account, to make sure all taxable income is attributed to you in the TIME MACHINE, you can set your contributions to 100% and restrict deposits and withdrawals to you only. You would set your contributions to 0% for your spouse's account and restrict deposits and withdrawals to your spouse only for them to be solely responsible for the taxes on their account. Both accounts will still be considered joint with the right of survivorship so there would be no deemed disposition or probate on the death of the first spouse.

The TIME MACHINE will from today on calculate the death benefit if it also calculates the CPP/QPP pension (i.e. in cases where you are not already taking the pension). A section was added to the eBook. it reads:

There is a $2500 death benefit payable to the spouse (if there is one) or to the estate upon the death of a pensioner. To qualify for the death benefit, the deceased must have made contributions to the CPP or QPP for at least one-third of the calendar years in their contributory period for the base CPP/QPP, but no less than 3 calendar years, or 10 calendar years. This taxable amount has not been increased in years, and it does not appear that it will be indexed anytime soon. If you are not already collecting CPP or QPP, the TIME MACHINE will also calculate the death benefit. If you are already collecting the pension, and thus did not enter a CPP/QPP pensionable earnings table as described in the section above, no death benefit will be calculated as the TIME MACHINE cannot determine eligibility in that case.

Thank you for that. You make an excellent case for the "Joint (but not really)" accounts! I'll see what I can do.

I'm glad that's resolved for you. And it gave me an opportunity to teach more about Joint accounts and attribution rules, so I hope others will benefit. Thanks

I fixed the issue where "Percentage of account my_name contributed to" when set to zero wouldn't stick and revert back to 50%. Thanks for alerting me to it.

To keep with CRA attribution rules, any taxes due on a Joint account are attributed to each spouse according to their percentage of contributions. Since it's Joint, the TIME MACHINE allows either spouse to contribute to it. It then updates the percentage contributed anytime a deposit to the account is made.

So for the scenario you are describing, where the Joint accounts are not really Joint, you'd have to set it up in a way to make sure the TM does not need you to contribute to "her" account, and for her to not need to contribute to "your" account. That way the proportion contributed by each spouse would not change if you each only contribute to your own accounts. I realise that is not easy to do given the way Joint accounts are treated in your Priorities table. The Optimizer may also do its own thing to optimize. So I would have to set up something special for you, like a separate account type: "Joint (but not really)" 😉. I'll think about it.

In the meantime, I suggest you just set them up as not Joint and know your probate fees won't be quite as high as shown. You can set up a non-taxable income for the last day of the year the first spouse dies to make up for the probate if needed.

You are right. I am aware of it of course, but surprisingly haven't included it yet. I think that is because I find that puny amount to be offensively low. It has not been changed for years, and it doesn't appear it will be indexed any time soon.

Now you ask, I will add it. Will post here again when it is done.

The account rebalancing procedure used by our rebalancing tool and the TIME MACHINE now considers risk-adjusted expected returns rather than simply expected returns.

For that to work optimally, you need to have entered risk values for all your investments. To make that easy, we expanded the 'Change the expected rates of return for all investments by their asset classes'  feature again. We've added a checkbox that when checked will also automatically set the risk value for each investment. If we can calculate the 3-year volatility for the investment from the FUNData market data for that investment, the risk measure on our scale of 1 to 20 will be used. If not, an approximate risk measure based on the investment's asset classes will be set.

The risk measure will also be set automatically when you enter new investments either manually or when first imported from Wealthica.

Hi and Welcome. I'm glad you are enjoying trying out all of the tools. You must have run the Choose Your Legacy tool to create a Legacy cash flow. That tool tells you how much to increase or decrease your spending and in what time frames so that you can leave the legacy amount you choose. It will save those suggestions as entries in your EXPENSEs table if you ask it to, with names like Legacy_1 and Legacy_2. The entries will show positive amounts when you need to increase spending but negative when you need to decrease spending. Negative expenses act as income when you subsequently run a TIME MACHINE or the Withdrawal Optimizer and will show up as such in the cash-flow reports. You would probably want to reduce the amount for other positive expenses and delete the negative ones, but we can't know what expenses you can reduce, so we can't do it for you.

I like to start the year by reflecting on the one past, and 2023 was absolutely fantastic for the MoneyReady App by every metric we have: traffic, registrations, subscriptions, and renewals. It's all from word of mouth, we didn't do any advertising.

I want to thank all of you who have supported the app not only with your paid subscriptions that keep the lights on, but also your referrals, and your feedback. I always find your feedback very useful so thank you for taking the time to reach out through the Forum or the Contact page.
I am continually improving the app and adding features and I want to particularly thank the people who have asked for features directly, or simply through their questions, feedback, and interesting discussions, that inspired me to write new or to improve features. 

Here is the list of new features and enhancements we announced last year with the Money Ready Forum usernames of the people I particularly want to thank.

January 2023:

• 100 Monte-Carlo simulations. (understandingTermite8)
• If you have started or applied for U.S. Social Security benefits. (forcefulFerret1)
• Foreign currencies for REVENUES, INCOMES, EXPENSES, and AUTOMATIC SAVINGS/WITHDRAWALS. (enlightenedSyrup4, forcefulFerret1)
• A model for the USD/CAD exchange rate was added to the Market simulations. (forcefulFerret1)

March 2023:

•  The MoneyReady Forum. (SheltieLover)
•  Accurate GIS calculations when reduced OAS eligibility. (enchantedTermite7)

April 2023:

• Implementation of changes to the QPP starting in 2024. 
• Ability to take CPP in Québec and QPP outside of Québec. (niceBumblebeeburritos8)
• EXPENSE Types, Subtypes, and Subtotals. (forcefulFerret1)

May 2023:

• CPP/QPP and OAS start age including months.
• Added a multiplier option to inflation for indexing. (immenseMuesli9)

June 2023:

•  OpenAI searching of all MoneyReady documentation. (WanderingMonkey)
•  Repeating EXPENSEs date picker. (brilliantChile0, forcefulFerret1)

October 2023:

• We’ve added support for Family RESPs and now allow multiple Individual RESPs for the same beneficiary. (communicativeTuna7)
• New Cash-flow Sankey diagrams in the year reports. (gregariousDotterel1)

November 2023:

• Notification emails from the MoneyReady Forum. (SheltieLover)
• ChatTVM: use AI for solving Time Value of Money problems.

December 2023:

• Rates for Short-term and Long-term financial planning. (sincereFish9)

If you use and like any of these features, I wanted to give all the credit to the users named.

Behind the scenes were many more enhancements. We have also greatly improved the site's speed, stability, and accuracy by adding server capacity, extensive testing capabilities, and more automated error checks and warnings. But still, along with all this new code in an extensive app as this one, it is inevitable for a bug to sometimes creep into production, and you can blame me entirely for those. 

So I also want to give a special thanks to all of you who have graciously reported anomalies you saw or asked for clarification. This greatly helped me find the bug if there was one or to clarify the app and its documentation to eliminate confusion. Many of you are already in the list above since the power users that use the app extensively and push it to its limits, are also the most likely to both see anomalies and to make suggestions. Additional thanks to sympatheticRaisins4, impartialLollies5, astronomicalToucan8,  stupendousSausage4, marvelousJerky8, incredibleBustard8, likableToucan0, decisiveGuppyhare3, courteousEggs8, fearlessRaisins5, enchantedTortoise1, focusedGranola0, lushEnzymeeukaryotefalcon1, adventurousBittern9, proficientLlama0, dependableTermite1, bustlingEnzymeeukaryotefalcon6, mountainousCheetah8. I thank you all for your patience and understanding.

Together, we are making the MoneyReady App the smartest financial planning app for you and all Canadians.

Onward to 2024! I wish everyone a happy and prosperous year.

Elisabeth Tillier, Ph.D.
President of MoneyReady

Sorry, but you'll have to do your own research on that. If any users have any information that would be helpful feel free to post it here.

For those who may be wondering what you are talking about, that is the paper I used to derive the MoneyReadyApp's Withdrawal Optimizer.

It's hard to answer your question as the MoneyReady App is also by far the most transparent financial planning software in terms of describing its algorithms and methodology publicly and in fair detail.

sincereFish, you have inspired me with this discussion! See the Announcement:

https://www.moneyreadyapp.ca/forum/topic/270-rates-for-short-term-and-long-term-financial-planning

Thank you!

Today I'm happy to announce changes in the RATES/YIELDS/CURRENCIES section. 
These mostly apply to advanced users who enter and follow their individual investments.

1. Setting default expected rates of return by asset classes.
    If you've used this feature before you'll notice we have expanded the asset classes considered. 
    The rates entered will now be used to automatically set expected rates of return when investments are first entered, or first imported from Wealthica.
    The defaults have been set to the FP Canada long-term recommendations but you can change those defaults and save them.
    You can use them to change the default rates for all your investments at once at any time. You can now also opt-out any investment you never want changed by this feature.
    
2. Setting Long-Term future expected rates of return. 
    This allows you to set the TIME MACHINE to switch to long-term rates of return by asset class starting a given number of years in the future for all your investments.
    This is an important new feature that permits simultaneous short-term and long-term financial planning.
    It allows you to plan for shorter-term goals like buying a house, in conjunction with longer-term goals like retirement (or a later stage in retirement). 
    
    Many of my users are investors who follow their investments closely, including short-term investments with much higher or lower rates of return than the FP Canada™ projected long-term rates.
    They want the rates to reflect their own expected returns for the short term, and see those reflected in the short-term projections. 
    However, by allowing long-term projected rates to start from a later date, we can also obtain a reasonable long-term financial plan.  

3. The Withdrawal Optimizer now allows changes in future rates. 
    The motivation to implement varying rates in the Withdrawal Optimizer came about because of the new feature to automatically switch to long-term rates in the TIME MACHINE. 
    You can now optimize any TIME MACHINE run that uses that feature, anywhere you have set future rates manually in the Rates table, 
    and it even runs with market-crash scenarios and market simulations (although the usefulness of this on such simulations is doubtful).

Please see the expanded RATES/YIELDS/CURRENCIES section (7.1) of the eBook for details. Let me know if you have questions.

Happy holidays everyone!

The Withdrawal Optimizer algorithm finds the optimal withdrawal strategy in retirement that maximizes your legacy. The way it works cannot handle limits put on it as you suggest. Using the TFSA as an emergency fund is a fine strategy. I would not recommend deleting your TFSA account for the Optimizer, as that makes your scenario completely wrong. The Optimizer gives you an optimum strategy, but you don't have to follow it in real life, it's just an indication that you could do better. It actually tells you how much better, so is it significant? If it makes a large difference, then it's worthwhile to look in more detail at what it's doing to learn from it, and you can probably improve your set withdrawal strategy for regular TIME MACHINE runs. If it's not significant, then don't worry about it, do what you were going to do as you told the TIME MACHINE.

Hi,

Yes, I did write that, and always meant for any of the 'Other income' types not to be earned income. Not sure if it wasn't set right from the start or if it changed along the way, that should be fixed now.  Enter it as Other Income, selecting Income for its tax treatment. It will be treated as taxable but not earned and will not add to your RRSP room. Thanks.

Hi,

A regular TIME MACHINE run follows your orders as you set them up with your PRIORITIES and AUTOMATIC SAVINGS/WITHDRAWALS.

However, the WITHDRAWAL OPTIMIZER runs ignores those orders. It does what it needs to maximize your legacy. There is no way to restrict it to give you a sub-optimal solution.

Thanks