Previously, you were only able to enable / configure Automatic Tax Calculations for your entire Trajectory, now those parameters can be set at a range level:
As you can see in the image above, Auto-Tax is now enabled from the "Tax" tab of an account's properties window. In addition, the fields "Income Tax Adjustment" and "Gains Tax Adjustment" are specific to that range. This means not only can you specify different adjustments for different periods of your life (for example if you move to a State with lower taxes after retirement) — you can even set taxes manually in some ranges and automatic in others.
OnTrajectory is now smarter about avoiding Early Withdrawal Penalties (EWPs). If you have contributions in a Roth account and you are under the EWP age, those funds will be used before gains from that account or funds in another retirment account that may cause EWPs to be triggered.
Secondly, if you are undergoing a Roth Conversion, and converted funds are at least 5-years old, they will also be used in order to avoid EWPs.
For items that have an End Age in the past, it's sometimes distracting to see them since they're no longer relavent to the future. Therefore, we've added a way to hide them from view without altering your calculations. Simply click the icon to hide an item (and its ranges). To display previously hidden items of a particular type, click the unhide button, as shown below:
OnTrajectory now supports the ability to further define your personal Drawdown Strategy with Negative Contributions. These could be either a one-time drawdown, by defining an age range with same start and end age — or it could be for a number of years.
Based on the amount, if will be removed from the account and taxes assessed accordingly. The funds will be deposited into your "Deposit Account" for that year.
We now provide two "modes" for viewing analysis results — Basic or Advanced. Both are available from the "Analyze and View" menu located in the top right portion of the screen. The menu is displayed below:
In Basic Analysis Mode selecting either "Monte Carol Analysis" or "Historical Analysis" automatically turns off auto-saving and prompts you to "Click for Refresh."
Upon refreshing the chart, you will see two new shaded sections, a lighter one for Median results and a darker one for 10th Percentile results:
Median shows the lower half of returns, meaning 50% of the returns are above the shaded area — another way to look at is you have a 50% chance of doing better than that result. The 10th Percentile region shows the "worst" 10% of returns, meaning you have a 90% chance of doing "at least" that well. Although 90% sounds quite high, it means you have a 10% of being at or below the darker region, which when performing long-term financial planning is about the minimum amount of safety you should plan on. We typically encourage folks to shoot for at least a 95% chance of success.
Read more about our analyses here: Monte Carlo and Historical Analysis
You can now have OnTrajectory estimate your future Income and Gains Tax rates. These estimates are based on a variety of factors including, earned income, taxable withdrawals, short-term gains, etc. For more information, see the guide Modeling Taxes in the section: Automatically Calculate Tax Rates
For Annually-Taxed accounts, you can now define a Dividend Yield. If entered, this rate is used to calculate the annually-taxable amount of an account on which taxes are paid each year (whether funds are withdrawn from the account or not).
Growth in the account "above" the Dividend Yield is treated as tax-deferred and taxed only when funds are withdrawn. For example, if Growth is defined 5% and Dividend Yield is 3%, then 2% growth is deferred.
Note: Dividend Yield is only available on accounts with the Tax Type "Tax-Annual". For more information, see the Guide Modeling Taxes in the section: Additional Tax Options.
Many of you have requested the option to use either historical data for Monte Carlo analysis or parameters set by themselves – now you have the choice.
As you see above, you can now set Expected rates for both Returns and Inflation, as well as set Volatilities for each. Our Monte Carlo Analysis Guide also includes sample return and volatility data from different periods to help you model different "known" metrics.
Also based on requests from the OnTrajectory Community, we've improved the "intelligence" of tax triggers. Previously, accounts designated as Tax-Deferred (gains-only) were taxed only after contributions were exhausted and gains were withdrawn. This was great for modeling a "Roth Ladder" or preventing Early Withdrawal Penalties — but not so great when drawing-down funds from a Brokerage Account.
NOW this tax-designation distinguishes between account types and taxes withdrawals more in-line with common practice.
Note: This change may effect your "Final Trajectory" calculation. This is due to potentially larger tax-burdens being calculated — however it is more accurate for most situations.
For those getting started with OnTrajectory, we've launched a new step-by-step flow to define your Incomes, Expenses, and Accounts — along with providing helpful tips to more accurately model your financial future. Just click "NEW SCENARIO" from the scenario drop-down to give it a try!
Our reorganized main Menu (shown below) now includes links to our new video series "Mastering OnTrajectory" — also available by clicking here.
Along with all of these updates, we're super excited to be partnering with Jillian Johnsrud from Montana Money Adventures for her course on becoming an OnTrajectory-Certified Coach!
Does helping people create more financial freedom sound like your dream side-job (or full-time job)? Jillian will show you how to build a profitable business with meaningful work helping others find more financial freedom. Details of this new offering will follow soon — along with exclusive pricing for OnTrajectory users.
OnTrajectory now provides a wealth of additional information at the completion of Monte Carlo / Historical Analysis. The Results tab on the Analysis Options pop-up displays the total amount for certain groups of results for every age/year of the simulation. Total amounts are shown for:
An example of Analysis Results is shown below:
The Avg % Growth row displays the Average Growth Rate for all the years for the group represented by a particular column, which is extremely helpful to determine a reasonable % Growth value when defining an Account item in OnTrajectory.
The "Calculate Success %" button now returns TWO percentage values — the first value, called 'Chance of Success', represents the number of simulated Trajectories that result in an end amount above 0. The second percentage is the number of Trajectories that result in an end amount at or above your Final Trajectory — it's displayed next to the Final Trajectory amount. Read more about these values here: Chance of Success
The righ sidebar, shown above, now also displays "Peak Assets", which is the maximimum end of year balance your Trajectory achieves.
Key Metrics based on the year you're displaying data for (located on the bottom-right of the screen):
We think most of these are self-explanatory. If not, please see our Output Data Guide for more info. The 4% Spending metric represents spending you're allowed under the "4% Rule".
The last enhancement allows you to add multiple Income, Expense, or Account items all at once — just click the Add + button, select 1 or more items, and "ADD". The items will be entered in the table — couldn't be easier :)
The Scenario dropdown now has 2 new options:
IMPORT SCENARIO — Select from a list of previously published scenarios. These are scenarios which have been made available by other users in the OT Community.
PUBLISH SCENARIO — Submit a scenario for publication. This feature supports bloggers, advisors, educators or even regular users who wish to share scenarios that demonstrate savings, spending, taxation or any number of financial strategies helpful to others in the OT Community.
In some situations, you may want to set the "cost basis" for the Starting Balance of an account. This is the amount of untaxed contributions in an account when it's first defined in OnTrajectory.
Typically, Cost Basis is only significant if you have a large account with sizable prior growth, such as a mutual fund account that's been growing for some time, and for which you have not paid taxes on the growth. This option is only available for accounts that have a Tax Type of "Tax-Deferred (gains only)". For more information on Tax Types, see the guide Modeling Accounts and Taxes.
Our new Advisor Portal let's you collaborate directly through OnTrajectory with your personal financial advisor, features include:
This feature requires your financial advisor to sign-up for an OnTrajectory account, find out more from our website.
Based on requests from several users in our community, we've created a space on Reddit.com where folks can ask questions regarding modeling techniques or approaches — either generally or specific to OnTrajectory.
We're not sure what the response will be, so we're calling this an "Experimental Forum" — if the experiment goes well, we'll keep it around, if not, we won't :)Click here to check out OnTrajectory OnReddit!
We've made it easier to model the tax advantages of pre-tax retirement contributions.
Now, when you designate contributions that typically occur "pre-tax" (such as those to a 401K or Traditional IRA), OnTrajectory automatically excludes those contributions from taxable Income — meaning you needn't adjust your tax-rate to account for those contributions.
We've also added Pre-Tax Retirement Contributions to the "Incomes" data table so you can easily see all contributions excluded from taxable income, as shown below:
Tracking Progress is how you judge the validity of assumptions underpinning your Trajectory — by comparing calculated amounts to the real-world value of your accounts.
You can now save your progress updates either as the total value of all your accounts or as individual account balances.
We’ve expanded our Employer Contributions functionality to give you more financial modeling flexibility. Now you can define contributions from employers for both 401k/403b/TSP and HSA accounts.
In addition, both your defined contributions and employer contributions can be designated either as a fixed amount or as percentage of Income (or any combination of the two), as illustrated below:
There is a new option under Item Propeties called Convert to Roth (on End Age). This option is applicable only to Traditional IRA and 401k account types. If checked, when the account's End Age is reached, taxes on contributions are deducted from the account, and it will be treated as a Roth IRA until the Trajectory End Age is reached.
We have greatly enhanced the ability to track the building of home equity. Read all about it here!
You've probably noticed these little guys showing up all over the place.
Each one launches you into a Guide right where you need to be. 'Context-sensitive' is what they call it, which really means you don't have to go to the Main Menu to find information — you can get it fast, when you need it.
Once you're in a Guide, you'll now see a handy Table of Contents at the top of each. These are all linked inside the Guide, again to help you both see what information is available, but also to get to it quickly — see sample below:
Finally, All Guides — Table of Contents is now located in the Main Menu. The list of topics continues to grow every month as new features are released.
We have updated our tax algorithms to automatically take into account Description as well as Tax Type when a rollover occurs. This change means that for accounts such as Roth IRAs, taxes will not be triggered when rolling over as long as it is not an early withdrawal. Previously, depending on the Tax Type a user chose, taxes may have been triggered.
We've also added a new Tax Type "Tax-Deferred (contributions only)", which will cause only contributions made to an account to be taxed when funds are withdrawn. These changes have been made both to make it easier and more flexible when configuring accounts, but also in preparation for Traditional IRA to Roth Conversion — functionality that is scheduled for later this year.
Lastly, we've made a slight change to how the End Year of an account is handled. Previously, when an account was in its last year, OnTrajectory added gains (based on the previous year's balance), but it did NOT make any Contributions or calculate RMDs for the account. The reasoning being that since funds were 'rolling over' into your Deposit Account anyway, those transactions were not required. However, with our focus of smarter tax handling, we've decided to make all End Year transactions consistent. The end result is that along with the other refinements mentioned above, your Trajectory End Amount may slightly increase — and we wanted you to know why!
While we perform rigorous testing on an extremely wide range of scenarios and data combinations, sometimes unusual situations can occur — please let us know using our feedback/questions feature if anything appears to be anomalous, and we will investigate immediately.
Change the order your Income, Expense & Account items appear — just click and drag the 'up/down' icon to move items to a new position (note: the top-most 'Deposit Account' cannot be moved).
You can now use mathematical operators to add (+), subtract (-), multiply (*), and divide (/) values in 'Amount' fields. This feature is similar to typing in a spreadsheet cell. For example, to quickly calculate an expense that is billed 4 times per year @ $87, simply type in the amount field: =4*87 and press 'Enter'.
That's it! No need to have a calculator open and nearby when entering values into OnTrajectory.
For some time, you've been able to earn Reward Points just by using OnTrajectory — now you can spend them! When you have at least 100 points, click the "My Referrals & Rewards" button and choose "Redeem Reward Points." That's it — we'll credit your account with a FREE month of our PowerPlan, which includes all the benefits below:
The fastest way to earn Reward Points is by referring friends to OnTrajectoy — 100 points for each referral that registers (limit 12).
We've made it easier for you to plan for the big 'R' by making it easier to designate a 'centralized' Retirement Age in your model. Rather than entering a discrete value, such as '67' — you can now enter 'R' to represent your retirement age (whatever you designate that age to be).
In the example below, notice the End Age for Base Income and the Start Age for Social Security are set to 'R'. Since the Retirement Age is set to '67', Base Income's End Age will be calculated to be '66' (the last year the item is received) and Social Security's Start Age will be calculated to be '67' (the year the item begins).
The 'Retirement Age' and 'Inflation Rate' fields are located just above your Income, Expense & Account data. Changing your Retirement Age here will universally change the value everywhere the 'R' is used — making 'what-if' analysis easier than ever before.
Save a Note to describe the Scenario you're working on in the Scenario Notes under the Feedback and Requests section of the page:
Users can now prevent OnTrajectory from automatically "drawing down" an account by checking "Prevent Automatic Drawdown" located in the Item Properties pop-up. Funds from that account will not be available to pay Expenses or to fund Contributions until the End Age of the account.
We've made it easier for you to define the Effective Tax Rate for any given year. Rather than enter a 'Tax Rate' for every Income or Account item, just enter it once for your Deposit Account (the one with the star next to it), as shown below:
The Tax Rate will be shared among all your Income and Account Items. Note: You will continue to designate whether an accounntt is 'tax-deferred' or 'taxed annually' at the Account level.
If you prefer to define Tax Rates for individual items, just click the Main Menu in the top right corner and choose Settings. On the 'Advanced' tab, deselect the option 'Centralized Tax Rates,' as shown below:
You can now Print, Save, and Copy data from an indvidual Output Data table. Click the appropriate button located on the top right of the table, as shown below:
We've also made Output Data tables easier to read, including the ability to toggle between "Today's" and "Tomorrow's" dollars:
For more information how to use OnTrajectory generally, click here:
Or open our GUIDE LIST any time through the Main Menu icon on the top right of the screen.