Truth Tip, Distribution

When working with the Distribution Calculator, once you've pushed either the “Interest Only” or “PayDown” button, it turns blue (meaning it is on) and puts the correct withdrawal amount in the withdrawal field.  Then, if you make a change to the Earnings Rate, Illustration Period, or Present Value, it will automatically re-calculate the Withdrawal amount. If you press the button again (no color) it will turn off the automatic function and subsequent changes to other fields will have no impact upon the Withdrawal amount. This can be helpful if you want to calculate a Withdrawal amount based upon a certain Earnings Rate, Illustration Period, and/or Present Value  but then see the effects of varying those items and keeping the same Withdrawal amounts. 

For example:If You want to do a Paydown on the account for the first 20 years and then do something else for the next 20 years.  You would calculate the Paydown (by pressing the PayDown button) using “20” in the Illustration Period.  Then, press the PayDown button again (turning it off) and then change the Illustration Period to 40.  You will see the account being consumed in the first 20 years. You could then show additional income from year 21 to 40 from other sources (such as Life Insurance withdrawals) by inputting that information after pressing the “PLI Inputs” button.