Feature Enhancement: One Time Expenses
The Boldin team has provided this update to give you greater flexibility and precision in managing the major expenses in your future.
Financial plans often include significant, planned expenditures—such as home renovations, vehicle purchases, major vacations, educational costs, and special occasions. These expenses may be one-time or recur annually, and overlooking them can negatively impact the accuracy of your plan.
See this video to learn more about our latest enhancement:
Learn more about the added functionality
One-time expenses are non-recurring planned costs, such as home investments, vacations, or special events. These should be entered under the One-Time Expense section to ensure accurate financial forecasting.
Recurring expenses like yearly insurance payments can also be modeled as single amounts with matching start and stop dates in your Basic or Detailed Budgeter.
When you enter a One-Time Expense you have two options to fund the expense: Withdrawal Order or Specific Account.
If you select withdrawal order
We will fund the expense with income if possible, and then accounts based upon your withdrawal order if needed.
If you select a specific account.
The full amount will be withdrawn from this account only. If the account balance is insufficient you will receive a coach alert that the expense will not be fully funded.
Enter Amounts in Future Dollars
With either model, the expense amount is not subject to your plan's general inflation rate and you must enter the amount in future dollars (the expected value at the time of spending).
Additional functionality
We've also added a percentage option which is available for one time expenses from a specific account, which can be helpful to reduce balances to zero.
Deductible One-Time Expenses
If you mark a one-time expense as deductible (by selecting "Yes"):
The expense is treated as an above-the-line deduction by the software.
This deduction will not affect your annual itemized deductions.
The model does not assume a tax-free withdrawal of assets (e.g., appreciated shares).
Deductible one-time expenses from a tax-deferred account function as a QCD when entered in January. They are excluded from gross taxable income and satisfy the RMD for the year.
To handle HSA withdrawals for medical expenses, you can manually set up a transfer from the HSA account to an after-tax account with the lowest growth rate under 'My Plan > Money Flows.'When you enter a One Time Expense you have two options to fund the expense. Withdrawal Order or Specific account.