I am curious how the calc on retirement planner works: it has gains - withdrawals - cash flow/expenses = new balance. But my question is, I am assuming i would use the cash withdrawals to pay my expenses that are creating my negative cash flow. So is it not double counting to remove my w/d and then also remove the full negative cash flow? For me, the neg cash flow is my expenses and I plan to use the cash withdrawn from the portfolio to pay expenses. Seems like double counting to remove the withdrawal as well as the negative cash flow. Where does the model assume the cash withdrawn goes?
Hi @KathleenMc12 , I have not used the retirement planner yet. I hope I don’t give you incorrect information. I used the Tiller Money Feeds Add-on in Google Sheets to add the template to my foundations sheet. Is this the one you’re using?
I wasn’t sure how this was recording your actual income so I asked AI for an answer:
To handle your withdrawals correctly, you must make an entry in two different places.
First, enter the planned withdrawal amount in the “Withdrawals” column of the Retirement Planner sheet for the future year you are planning for.
Second, you must go to the Cash Flow Forecast sheet. For that same future year, you need to add the exact same amount to your forecasted income. You can create a new income line item there called “Retirement Withdrawal” for this purpose.
This works because it correctly tells the spreadsheet that the money you are withdrawing from your investments is being used to cover your expenses. It will balance out the negative cash flow forecasted for that year, and the final calculation in the Retirement Planner will be correct, solving the double-counting issue.
I have not tried what @TillerAlice suggests as I didn’t want to make too many adjustments to the template itself. I’m also not sure how you would go about making the suggested change as the withdrawal amount would change annually as it based on a withdrawal percentage of the annual balance. Maybe @TillerAlice can provide more insight into the suggested change.
What I have done in my worksheet is just set the Withdrawal Rate to 0%. When set to 0% the retirement planner will account for the negative cash flow by assuming it came from your investments.
If you enter a Withdrawal Rate that is greater than 0%, that withdrawal amount is over and above your negative cash flow, hence the appearance of a double-dip. You could set a low percentage, such as 0.1% if you want to have an extra withdrawal beyond covering negative cash flow and that would then assume that you will fully spend that money. In my case, I opted not to do that, and instead try to account for all known expenses in my categories worksheet and used the Cash Flow Forecast worksheet to record expected future Life Event expenses.
You can see a previous post about this at the link below:
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