Surplus Strategies

This page covers the following location(s) in NaviPlan:

Enter Financial Data - Strategies - Surplus

Planning Objectives :: Related Information

Planning Objectives

ClosedWhat does NaviPlan consider to be a surplus?
  • NaviPlan defines a surplus as a situation in which total cash inflows exceed total cash outflows as of December 31 of a given year.
ClosedWhat is the purpose of a surplus strategy?
  • You can use surplus savings strategies to allocate cash surpluses.
  • There are two types of surplus strategies in NaviPlan:
    • Surplus savings: allows you to allocate surplus funds to various non-registered assets over a period of time, regardless of ownership.
    • Surplus expenses: allows you to model hidden expenses (e.g. unexpected car repairs, dining out, etc).
ClosedHow does NaviPlan handle multiple strategies?
  • When entering multiple strategies of the same type (e.g. two surplus savings strategies): NaviPlan allocates the surplus using the percentages entered in the % of Surplus fields.
    • For example: Your client has a $100,000 surplus and 100% of that surplus is to be divided evenly to Account A and Account B.
      Strategy TypeAllocated to...Amount
      Surplus SavingsAccount A50%
      Surplus SavingsAccount B50%
      Each account will therefore receive $50,000, using all of the surplus.
  • When entering multiple strategies of different types (e.g. a single surplus savings strategy and a single surplus expense strategy): NaviPlan will allocate the surplus to the savings strategy first (assuming the order has not been changed in Surplus Cash Usage) using the percentage entered in the % of Surplus fields. Then, NaviPlan will allocate the remainder to the surplus expense strategy using the % of Surplus value applied to that strategy type.
    • For example: Your client has a $80,000 surplus and has entered two surplus strategies: both for 50% and allocated to Account A and a 50% surplus expense strategy.
      Strategy TypeAllocated to...Amount
      Surplus SavingsAccount A50%
      Surplus Expensen/a50%
      NaviPlan first saves 50% (or $40,000) to Account A, then uses 50% of the remaining surplus (or $20,000) as an assumed lifestyle expense, leaving an ending surplus of $20,000.
ClosedCan surplus expense strategies cause a deficit?
  • Surplus expense strategies can never cause a deficit since they occur only in years that have a surplus.
    • If the clients' entire surplus is to be used by the surplus expense strategy, enter 100% for the final surplus expense strategy.

Related Information




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