You will have “excess income” anytime your monthly income from ALL sources – including Required Minimum Distributions (RMDs) – is higher than what you have specified for your total monthly expenses. Some years, you may earn more than you have designated in your budget, so you will need to tell the tool what to do with the excess income.

If you are someone who carefully monitors their cash flow and are good at saving extra money, then you might tell the system to save 100% of your excess income. All excess money will be allocated to the savings account that you select.

On the other hand, if you are someone who might be more apt to spend whatever money you have earned each month, you might want to specify that the system saves 0% of the projected excess income. Or, choose that a percentage will be saved and a remaining portion to be consumed.

Note: The tool will automatically default to choose "Other Savings" for your excess income, a default account. If you set up custom savings accounts in My Plan > Savings and Assets, you will be able to designate any of your brokerage accounts.

Here is a video explanation of excess income:

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