Section 1 -- Overview of your earned income in VeriPlan

Use the yellow-tabbed "2-YOUR EARNED INCOME" worksheet to establish an earned income baseline in VeriPlan for one or two earners. This worksheet collects information about income that you earn as an employee or as a working business owner.

Each of these two earners could have employment income (wages, salary, bonuses, etc.) and/or working business owner income. Working business owner income would be considered self-employment income by the U.S. Internal Revenue Service and could be earned through a variety of ordinary income tax pass-through entities, such as sole-proprietorships, partnerships, some LLCs/LLPs, S Corporations, etc.

To make your income entries, use either your income data from the most recent year or for an average of the last two or three years, whichever you believe is most representative of your current "steady state" annual income. If your sources of wage and salary income and/or your working business owner income has fluctuated significantly, use an average for several years rather than just the most recent year. Income categories are modeled after IRS Form 1040 categories. Form 1040 line references are given to ease your data collection.

VeriPlan will assume that each earner's wage and salary income and actively-managed / self-employed business income listed on this worksheet will continue, until retirement and then cease. Either earner can set his or her planned retirement age, using the orange-tabbed '3-Retirement Tool.' VeriPlan manages retirement age differences automatically. If there are two earners, the '3-Retirement Tool' also allows a selection of simultaneous retirement or for each earner to retire in different years, when he or she reaches planned retirement age.

The table in Section 5 of this worksheet allows you to make annual positive and negative adjustments to the projected pre-retirement income of either earner. You may want to make such adjustments to reflect planned events, such as, unpaid sabbaticals, large non-recurring bonuses, working part-time, returning to school, and other situations.

Furthermore, you can use this annual earned income adjustment facility to test the impact of unplanned events on you lifecycle financial plan. Such an unplanned event could be involuntary unemployment at any point for either earner. For example, you could test the lifecycle impact of one earner losing employment involuntarily several years prior to planned retirement age.

If you have other income sources that also would be taxed at ordinary income tax rates, but which are 1) not wage and salary income, 2) do not result from your active management of a business, and/or 3) will not cease upon you retirement, then DO NOT enter those income sources on this worksheet. Instead, VeriPlan offers several other worksheets for you to enter your other income sources:

A) Enter Pensions and Annuities on the yellow-tabbed '3-Your Pensions & Annuities' worksheet
B) Enter other income sources classified by the U.S. Internal Revenue Service as "Other Income" on the yellow-tabbed '4-Your Other Income' worksheet
C) Enter retirement income from the U.S. Social Security Administration on the orange-tabbed '2-Retirement Tool' worksheet

You also do not need to be concerned about income from or yields on the various assets that you will list on the various yellow-tabbed 'Your Assets' input worksheets. VeriPlan will automatically project net returns, reinvest/withdraw, and tax your asset returns, as appropriate, throughout your full lifecycle projections. Various other VeriPlan worksheets and tools explain how VeriPlan does this. No asset related income should be entered on this worksheet.



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Demonstrating a comprehensive projection for a professional couple with children, the VeriPlan tutorial can help you to understand what VeriPlan can do. Use this link to download a free copy of the VeriPlan tutorial file:

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