When you create an after-tax account with the capital gains tax treatment, you'll be asked to enter your dividend yield. 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.

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.

Method 1: If your plan is taking withdrawals from the dividend earning accounts, we do not recommend adding a separate income stream for dividend. Rather, include the dividend yield in the rate of return and consider the withdrawal to be the dividends.

Method 2: If your plan is not taking withdrawals from the dividend earning accounts, we recommend that you include the dividend yield in the rate of return and add a Transfer (in Money Flows) from the dividend earning account to a cash account with the Ordinary Income tax treatment.

Method 3: Do not enter a dividend yield in the account dialogue, do not include the dividend yield in your rate of return. 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.