Boldin automatically reinvests all investment income. Interest earned on accounts with ordinary income tax treatment is modeled through the rate of return you've entered, and dividends on accounts with capital gains tax treatment are modeled through the dividend yield. In both cases, the income is taxed appropriately and added back into the account balance — there isn't a setting to direct that income toward expenses instead.

In tax-deferred IRAs or 401(k)s, taxation is deferred until withdrawal. All distributions/withdrawals from these accounts are taxed as ordinary income, whether they are principal, capital appreciation, or dividends. The Boldin model does not consider these as a separate item from growth.

There are three ways to model investment income funding your spending, and they differ in an important way.

Option 1: Move the account to the top of your withdrawal order. The model will draw from that account first to cover expenses, acting as a proxy for spending the income. The limitation here is that the withdrawal order doesn't stop at your investment income — it will continue drawing on the account until it's fully depleted. If your intent is to spend only the income and preserve the principal, this approach will overstate how much leaves the account.

Option 2: Set up a recurring transfer. Rather than placing the account in your withdrawal order at all, add an annual money transfer from the account to your "prioritized account" — the one that sits first in your withdrawal order. Set the transfer amount to your estimated annual investment income (the account balance multiplied by its rate of return or dividend yield). This moves only the income into the account that funds your spending, leaving the principal intact. Because the amount is fixed rather than driven by your expenses, this gives you much tighter control over the model. You may want to revisit the transfer amount periodically as the account balance changes.

One tax distinction applies to both approaches. For accounts with ordinary income tax treatment, the tax modeling stays accurate — money leaving these accounts is taxed as ordinary income, the same way the interest itself is taxed. For accounts with capital gains tax treatment, the cash flow modeling works, but the tax modeling will be approximate: money drawn from these accounts is taxed on a pro-rata basis between your cost basis and gains, rather than under dividend tax treatment. Depending on your basis, the modeled tax may run somewhat higher or lower than what you'd actually owe on dividend income. In most plans the difference is modest, but it's good to know it's there if you're fine-tuning your tax projections.

Option 3: Navigate to My Plan > Income > Passive Income. Press Add Passive Income and enter the monthly income you anticipate from dividends. The Planner will tax this income stream at your ordinary income tax rate. For this case only, Do not enter a dividend yield in the account dialogue, do not include the dividend yield in your rate of return.

To model this, set the dividend yield on the affected investment accounts to 0% and create a Passive Income stream equal to the annual dividend amount you expect. This ensures that dividends are modeled as ordinary income and reflected in cash flow charts.