ROR Cash Reserve Calculator — Planning Toolkit

Rate of Return Projection and Cash Reserve Calculator

Step 1	Enter the total size of the account (s). Also enter the desired income needed from the portolio (from the cash flow report in MGP). Both Yellow Boxes

Step 2	Enter the amount of Cash in Fixed income categories			This is the Grey section
	I like to ladder fixed annuities, CDs, etc while leave some in cash for immediate access

Step 3	Enter the amount into the equity side/this example uses my dividend portfolio.				It is the Blue box
	Step 2 and 3 will give you the percentages in each area and populate the light red boxes showing overall rate of return.
	The Green boxes will show the approximate income coming from each of the two sections.

Step 4	Play with the amounts in both areas to get the right blend generating the target return you need.
	Then make sure you can access the cash reserves with no penalties/surrender charges during down years (the number in Orange box is what you need to be able to access when you need it)



	Account Value	$1,400,000.00			Desired Income from Investments (MGP)		$80,000.00


	Fixed Income	21.4%			Equities	78.6%
								Approximate Rate of Return target
Name	Amount	interest rate	Annual Income		American Funds					% of account
								Equities	8.5%	78.6%	6.7%
					Proposed Dividend equity			Cash	4.0%	21.4%	0.9%
Dreyfus		2.6%	$0.00
AFAXX	$100,000.00	3.8%	$3,750.00		$1,100,000.00	1.5%	$16,060.00	Overall rate of return from this allocation			7.5%
3 yr	$100,000.00	4.2%	$4,150.00				Dividend Income	Should be similar to what you are illustrating in the Planning tool
5 yr	$100,000.00	4.5%	$4,450.00				Approximately
7 yr		4.0%	$0.00
10 yr		4.3%	$0.00

Totals	$300,000.00	4.4%	$12,350.00		Total Income from Interest/Dividends		$28,410.00
		Average

Forms of Cash
Savings					Difference to either shave off gains or draw from cash once per year/ then distribute monthly
Money Market					(Yellow box of desired income - the green box above of income generated annually.
CD's							$51,590.00
Fixed Annuities
Cash Value Life Insurance					Years of Reserves		5.82
Line of Credit on Home					This number is the amount needed each year in excess of interest/dividends - divided by the total amount of cash reserves
					Make sure you can get to this number with no penalties/surrender charges when needed.