The future value checkbox in association with the Start Age/Date field determines when funding is available for a goal as well as when cost of living indexing is applied in a Target-Map. Though the illustrations below are of annual cash flows, the same can be said for assets.
When entering data consider the following factors:
Is the dollar amount entered in today's dollars or future dollars?
When should COLA indexing start: from current age/date or future age/date?
When should the dollar amount be made available for funding a goal: now or at a future age/date?
These decisions will impact a Target-Map goal funding illustration in various ways and depending on when funding is considered available, will determine if the financial tile is greyed (future age) or not.
Usage
👉 Combination 1: Future Value checkbox is checked and a future Start Age/Date is entered.
Impact: The dollar value is made availabe for funding at the future Start Age/Date and the Target-Map starts applying COLA indexing on the dollar value at the future Start Age/Date.
👉 Combination 2: Future Value checkbox is not checked and a future Start Age/Date is entered.
Impact: The dollar value is made availabe for funding at the future Start Age/Date but the Target-Map applies COLA indexing on the dollar value from the current age.
👉 Combination 3: Future Value checkbox is checked or unchecked, and today's age is entered on the Start Age/Date field or is left blank (inheriting current member age).
Impact: The dollar value is available and accrues today for funding and Target-Map applies COLA indexing on the dollar value from the current age.
Again, note that in this scenario, the Target-Map will apply COLA from today's age and apply the growing funds to a goal whether the Future Value checkbox is checked or not.
Target-Map View
Highlighting the impact of the three conditions above (our Member, Mr. West, is 44 years old):
🟠FV Checkbox is ON; COLA percentage applied from future age; funding availability from future age.
🟢FV Checkbox is ON; COLA percentage applied from current age; funding availability from current age.
🟣FV Checkbox is OFF; COLA percentage from current age; funding availability from future age.
(Click to vew larger image.)
Of course, Asset-Map does not make the final decisions on when Future Value is used or how or when COLA is applied. We only illustrate the impact on the math. The Financial Professional can utilize these tools to provide client conversations around strategies and planning and is responsible for proper application.
8/2024