In The Complete Retirement Planner, you have always been able to enter separate balances for Non-Retirement
Cash and Invested savings (with separate interest/return rates for each). For 2025, we split the Invested savings into two categories: Short-Term and Long-Term Invested savings. The Short-Term savings category works the same as the original Invested savings, with expected investment return %'s being entered for both before and after retirement time frames to help account for any investment changes after retirement (less risk?). The annual interest/returns for cash
and short-term invested savings are still taxed annually.
The new Long-Term Invested savings works a little differently. This category is for less liquid savings that are invested for the long-term and are expected to stay invested for as long as possible. If Non-Retirement savings are needed for expenses, Cash and Short-Term savings are used before the planner takes any distributions from Long-Term savings.
You also have an additional option for entering expected return %'s for Long-Term savings. You may enter return %'s
for both before and after retirement time frames (as you do for Cash and Short-Term Invested savings), or you may elect to use the annual return %'s that you assign to Retirement savings on the Income page. This is meant to give you more flexibility year by year, if needed/desired.
Most importantly, you will be able to enter a cost basis for your Long-Term Invested savings. For example, if you have $100k of savings, and your original cost (purchase price) of those investments was $70k (the other $30k coming from investment gains), you would enter 70% as your cost basis (70/100). If you do not know, and/or do not have records for, your original cost, the planner will default to using an assumed cost basis. The assumed cost basis will be calculated by taking 75% of the S&P 500 prior 10 year average return. Obviously, it is best if you know even a close estimation of your actual cost, but otherwise, the planner will help you out by using a reasonable approximation.
Here's the best part - expected returns on Long-Term Invested savings will not be taxed on an annual basis as other Non-Retirement savings are. Instead, when distributions are needed from these savings, the cost basis will be used, together with expected future returns, to calculate the long-term capital gains tax on those distributions. So there is no annual tax on returns/gains, and the tax that is calculated for distributions will be taxed at the capital gains tax rate, which is usually less than the tax rate for ordinary income (if married, 0% tax with income less than $96,700,
and 15% tax with income less than $600,050). That's a big advantage, especially in retirement when your income levels may be lower than prior to retirement.
When capital gains tax is calculated, the Non-Retirement Savings column on the Results page will be highlighted
(for either spouse, if married) to let you know, and the tax amount is automatically added to the Total Federal/State Taxes column.
There is also a new graph on the Results page to illustrate how much is being paid in Income tax, Capital Gains tax, Total Federal Tax, and State Income Tax so that you can see the relationships between the different taxes.
The additional flexibility, and tax accuracy, afforded by the new Long-Term Invested savings entries is a big benefit for your financial plan and only serves to make The Complete Retirement Planner even more "complete"!