Overview of your tax-advantaged plans in VeriPlan

U.S. tax laws concerning tax-advantaged retirement plans are extraordinarily convoluted. To the extent possible, VeriPlan has automated your lifecycle projections regarding the various employer plans and personal accounts that allow you to defer taxation or to avoid future taxation altogether. VeriPlan has fully automated the projection of your IRA contributions, deductions, asset growth, withdrawals, and taxation, regarding traditional tax-deferred IRA accounts and Roth 'never-taxed' IRA accounts.

On VeriPlan's yellow-tabbed "12-Your Tax-Advantaged Plans" worksheet, you will be able to enter information about the maximum limits on your contributions to the employer-sponsored defined contribution plans that are available for Earner #1 and Earner #2. Section 2 below provides useful information about employer plans, but does not require any entries. Section 3 is where you will make your personal entries related to your employer-sponsored plans. Once you make your employer-sponsored plan entries in Section 3, VeriPlan will automatically project contributions, deductions, asset growth, withdrawals, and taxation associated with these plans.

VeriPlan has fully automated the projection of your IRA contributions, deductions, asset growth, withdrawals, and taxation, regarding traditional tax-deferred IRA accounts and Roth 'never-taxed' IRA accounts. For this functionality to operate, you DO NOT have to make any entries in VeriPlan associated with the IRA tax rules. VeriPlan has documented its tax rules related to IRA contributions and deductions in Sections 4, 5, and 6. If the tax laws change in the future, VeriPlan provides gray user data entry boxes in Sections 4, 5, and 6 that you could change.

In addition to this worksheet, VeriPlan provides two user controls on the orange-tabbed '3-Tax-Advantaged Plan Tool' worksheet. These powerful controls allow you to vary your projected contributions to employer-sponsored plans and IRA accounts and to adjust the proportions of your contributions made to tax deferred versus Roth 'never taxed' investments. See the '3-Tax-Advantaged Plan Tool' for a better understanding of the functionality that VeriPlan provides to help you with tax-advantaged investment and retirement planning.

This worksheet is for your planned contributions to both employer and personal 'defined contribution' plans and accounts. If you have pensions, which are known as 'defined benefit' plans, your should enter information about them on the yellow-tabbed '3-Your Pensions & Annuities' worksheet.

This worksheet is NOT for information about your current asset holdings in traditional tax-deferred and Roth 'never-taxed' accounts. Enter your current holdings on the various yellow-tabbed 'Your Assets' worksheets. Your current holdings of assets in tax-advantaged and Roth 'never-taxed' accounts should be entered on the yellow-tabbed '6-Your Cash,' '7-Your Bonds,' '8-Your Stocks,' '9-Your Property,' or '10-Your Other Assets' worksheets.

For each of your tax-advantaged and Roth accounts, you should identify the asset class for the investment assets that you hold in your accounts and then enter the values and other characteristics of those as 'tax-advantaged' (enter 0), currently taxable (enter 1), or Roth 'never-taxed' (enter 2) asset accounts. VeriPlan will automatically combine your existing assets with your projected future contributions and deposits into asset accounts with similar taxability. VeriPlan will automatically defer taxes on each asset that is held in a 'tax-advantaged' account, until withdrawals from your traditional tax-advantaged accounts are either necessary to cover your future expenses or are legally mandated. VeriPlan will never tax projected returns on assets held in Roth 'never-taxed' accounts.