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What Is the default account?
What Is the default account?

This article explains what the Default Account is, why it may appear in your plan, and how to replace it.

Nancy Gates avatar
Written by Nancy Gates
Updated over a week ago

The Default Account, if it appears in your Plan, is an automatically-generated account to serve as a resting place for Excess Income. The Default Account cannot be interacted with nor controlled, so it is best to replace it with one of your actual accounts as soon as you can. It is an after-tax account with the ordinary income tax treatment and rates of return of 0% for optimistic and 0% for pessimistic to mimic a conservative standard checking bank account.

What Is Excess Income?

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.

How Do I Change the Default Account?

To change where Excess Income is sent to, you must change your election for the Excess Income section of My Plan > Money Flows. If your Excess Income section hasn't been started, you will have to press the "Start" button to continue:

If your Excess Income section has been completed but the To Account is "Cash," you will have to press the pencil icon ✎ to edit your selection:

The Default Account is actually called "Cash" here. Please select any other account besides the "Cash" account to replace the Default Account. This is one of the reasons it is very important to have descriptive names for your accounts.

If you do not have any other accounts selectable here, you need to make a taxable account — probably a checking or savings account — in My Plan > Accounts and Assets.

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