Pre/Post Tax Effects

[rm_organ]

Mark,

I'm going to start to look at the new release.

But one thing that I figured would eventually show up, but never has is the following: have you ever considered adding the ability to mark an investment or a portfolio/subportfolio as Pre-Tax or Post Tax? From there, I would then like the ability to drop in an effective tax rate. Why? This would allow me to better understand the "buying power" of the portfolio. I do some of this today by exporting to excel and then manipulating, but it would be nice to have the data stored in Fund Manager. If reports could be toggled to show either pre or post tax effects, that would be a great help. (When I look at my total portfolio, all dollars are not equal, of course.) I've searched the forum and it doesn't seem like there are any other requests for this, which is a surprise to me.

As long as I'm in request mode, have you considered adding retirement planning to the software in order to allow a simulation of how the portfolio might be used to fund retirement activities? Again, in this scenario, the pre/post tax switch would be a big help.

Even if it was just a simple "Here's how much I spend today (or need at the date of retirement)". Then, adding some simple forecasting would be pretty easy. It also would be easy to add on to over time. I've tried some things from the internet, but other software fails to compare to Fund Manager's level of sophistication.

[Mark]

Hi rm_organ,

Thanks for the feedback/ideas. The tax effects issue has been discussed, but as you can see FM doesn't incorporate tax rates and their effect on your performance. You could choose to record the taxes you pay, and then they would be included. I realize you're asking for a more automated method than this though. Another method you can use now to help with this is to utilize the Custom investment properties. You could define one as your "Tax Rate", and then set this property on all your investments. For tax-free investments, you'd just set it to 0. You can then write your own user-defined equations using these tax rates, so you could calculate different things like your buying power. We have this described for a similar situation here:

http://www.fundmanagersoftware.com/expense_ratio.php

which talks about tracking expense ratios and total expenses. You can apply the same idea to tax rates and taxes.