The Net Flow Analysis will answer the question of how well available incomes can cover spending goal needs and taxes, while also showing the source used to cover any shortfall. It can be considered as Net Inflows vs Gross Outflows (excluding Transfers).
The point is to be able to see how well incomes + RMDs cover spending goals and taxes, year over year. And, when there is a shortage, how much is required, and what source will cover the shortage? Conversely, if there is excess income, we’ll see how much excess income is being generated in a given year.
What does each column of this report mean?
Year - Every year of the plan from today to the end of the plan
Age - Client and co-client age throughout the plan
Net Income - All incomes, net of taxes. This must exclude all Guaranteed Income and RMDs
Net RMDs - RMDs, net of taxes
Total Net Income + Net RMDs - The sum of Net Income + Net RMDs.
Net Current Income Transfers - All transfers from Current Income, net of any taxes
Net Goals (ex Transfers) - Net Spending goals (i.e., not grossed up for taxes). Transfers must not be included
Total Taxes (Incl Transfers) - Total income taxes + capital gains taxes for the year, including taxes on any transfers. The idea is to show the total cost to the client, and how well their income can cover all costs.
Net Flow (Surplus/Shortage) - The difference between the (Total Net Income + Net RMDs) and Net Goals. This shows how well income streams + RMDs are covering spending goal needs and all taxes.
Net Insurance Payouts - All net payouts from GIAs, FIAs, RILAs, GI IULs, and IULs (Only Goal Distributions)
Net Portfolio Dist (ex RMDs) - All net distributions from the portfolio (non-FIA/RILA, non-IUL accounts), excluding RMDs.
Excess Income Contributions - Any excess income contribution