BEST FOR: This option is best for checking accounts which typically have low or no rates of return. The default rate of return is 0%.

BEST FOR: This option is best for high yield savings accounts and CDs. The default rate of return is 2%.

BEST FOR: This option is best for brokerage accounts. The default rate of return is set to our Moderate Portfolio, which is 60% stock and 40% bonds with a rate of return of 8.08%. We encourage you to customize the rate of return to accurately reflect your asset allocation and expected return.

When you add an investment account in the planner, you have the ability to choose between the Ordinary Income or Capital Gains tax treatment. Here's a guide to help you understand which to select.

Boldin’s modeling and analysis does not depend upon how each individual holding performs. We do not yet capture cost basis, allocations, or transactions and you will need to make those entries yourself to ensure that your plan is accurate. You have the ability to model your asset allocation and expected return by using our portfolio models or entering a rate of return for each account.

See Asset Allocation and rates of return for more information.

Your cost basis is the total amount you paid for all the holdings in your account, or the original investment amount for tax purposes. This is usually the purchase price, adjusted for stock splits, dividends, and return of capital distributions.

Think of the turnover rate as a way to quantify realized gains generated from trading/rebalancing activity, including (not excluding) capital gain distributions within funds themselves. It is the percentage of your account that gets traded on an annual basis resulting in realized gain/loss events. In general, if you experience a 10% turnover, then you can safely assume that 10% of the dollar value of your portfolio is transacted in a year. Thought of another way, if your portfolio turnover is 10%, the (rough) average holding period for a security in the portfolio is 10 years.

Capital gains are not taxed until they are realized, and this isn't an issue in your retirement accounts (they have zero cost basis). Gains in after-tax accounts are taxed at preferential or lower capital gains rates and not ordinary income tax rates. The brackets are 0%, 15% and 20% depending on your taxable income. You may incur capital gains taxes in a taxable account when you 1) sell shares, and 2) when there is buying and selling within the actual fund itself. Even index funds will trade their portfolios in reaction to index additions and subtractions as well as weighting changes.

When you input a turnover rate, the tool will take the account balance and cost basis, realize the turnover rate as gains, and tax them at your long term capital gains rate. The appropriate turnover for your portfolio will depend on the activity within the account, and the types of investments you hold. It's tempting to set turnover at 0% if you hold index funds or ETFs and don't actively trade, but this almost always understates your real tax drag. Two realities are worth considering:

1. Rebalancing creates realized gains. If you rebalance your portfolio back to target allocations on any regular schedule — annually, quarterly, or when allocations drift past a threshold — you are selling appreciated positions. In a year where equities outperform bonds, rebalancing means trimming equities and buying bonds, which realizes gains on the equity side. Even a disciplined buy-and-hold investor who only rebalances once a year will typically generate turnover in the 2–5% range, and more aggressive rebalancers (or those adjusting allocations as they approach retirement) can easily see 5–10%.

2. Index open-ended mutual funds are not the same as index ETFs. While ETFs are remarkably tax-efficient because of their in-kind creation/redemption mechanism, index mutual funds can and do distribute capital gains. In 2024, just 5% of all ETFs distributed capital gains compared to 43% of mutual funds. Even mutual funds and ETFs tracking market-cap-weighted indexes hold securities with previously unrealized capital gains that may be realized through the normal course of portfolio operations, such as when an index rebalance requires appreciated securities to be sold, or sells equities to implement a glide-path strategy. If you hold index mutual funds in a taxable account — particularly older funds with large embedded gains, or funds that experience meaningful redemptions — you should expect some level of distributed gains regardless of your own trading activity. For more information, see the following references: SSGA/vanguard

The turnover amount is then added to the cost basis in the projections.

Example: With a $100,000 balance and $70,000 cost basis, a 10% turnover rate means $3,000 in gains (10% of the $30,000 unrealized gain).

The following are suggested ranges for turnover levels. Your own experience with your portfolio should be considered as there will always be exceptions. If you own ETNs, more narrowly focused funds, precious metals funds or other niche products, your turnover might be higher than indicated here. It will be important to look at the distribution history of that fund and plan accordingly.

A dividend is a payment made by a corporation to its shareholders. They are often paid on a regular basis, such as quarterly or annually. If you have an account which yields dividends, enter the percentage of the stock’s price paid annually as dividends. The yield should be included in your total return for the account.

For example:

By default, dividends will be reinvested which will increase the balance and the cost basis of the account in your plan projections. They will also be assumed to be qualified dividends meaning any associated capital gains tax will be included in your capital gains tax modeling each year as per IRS regulations.