Using Overrides


What are overrides?

The term override refers to an overridden value on the Planning page that changes what the software would have done by default based on the input parameters entered throughout the Scenario Setup flow. Most commonly this is used to make Contributions or Withdrawals for Capital Assets, but it can also be used to customize Income amounts and to change the Amount Paid to a Debt.

Overrides are evident by the yellow background of the cell and the small "x" in the cell. This highlighting distinguishes the manual entries from the entries generated automatically by Snap.  In the example below, a manual Contribution override of $2,400 is made to the RRSP for the first 4 years.  The TFSA has automatic contributions being made for the first 4 years, and then these contributions are continued using manual overrides.  All manual overrides are highlighted with a yellow background.

You can apply an override by entering custom amounts on the Planning page. In addition to applying overrides, you can also change the underlying logic and assumptions of the software so that values on the Planning page are updated without needing to use an override. For instance, for the order of contributions and withdrawals, you may wish to use the CFM order feature instead of or in addition to using overrides. 


Baseline projections with no overrides

In this example, the default Contributions are allocated as follows in the first year: $18,000 is contributed into an RRSP, $6,000 into a TFSA, and the rest into a Non-Registered asset. No overrides are present.

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Overriding default contribution amounts

If you want to override these default Contributions and for example contribute only $10,000 to the RRSP, click the first value in the Contribution column, enter $10,000, copy it down until the desired age (64 years old in our case), and click the blue checkmark.

Then, run the scenario.

You will see the new $10,000 Contribution to the RRSP.  The cells of the overridden values will be highlighted to indicate the override.  The Total Tax is higher because the RRSP contributions are lower. There is extra cash available due to the smaller RRSP contribution and this is contributed to the Non-Registered account since the TFSA contributions are already maximized.

In a similar way, you can make further modifications to the default contributions and withdrawals by editing the Contribution column of other assets. 

Note: If you want to remove the overrides and let the software default to its initial logic, you can do that.  Click here to learn how to remove the overrides.

You may wish to stop the automatic contributions to the Assets altogether, manually enter all asset contributions and assume any surplus cash has been spent.  You can do this by delaying the automatic cash-flow management until retirement.

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Overriding default withdrawal amounts

In this example, the Base Expenses are being funded solely by the Non-Registered account in retirement. The Tax Rates section on the Planning page can be used to see the Marginal and Effective tax rates each year. Until the RRIF minimum withdrawals commence, the client's Marginal and Effective tax rates are quite low. If you would like to smooth out the taxes paid, you can make withdrawals from the RRSP account using overrides. 

Click on the $0 amount in the RRSP Contribution column in the year where you wish to start making withdrawals. In this example, let's set a withdrawal of $25,000 per year, and index that at 2% each year.   Since it is a withdrawal, you must enter a negative number for the Contribution/Withdrawal column.  Enter -$25,000 in the text box, click the checkbox to copy it down until the desired age (71 years old in this example), and click the blue checkmark.

Once the manual withdrawal from the RRSP is completed, if more income is required in order to meet the client's desired Base Expenses, the default CFM logic is used.  Withdrawals are automatically taken from the Non-Registered account next.  The client pays more in taxes over the years aged 65 to 71 than they did with no RRSP withdrawals, but they pay reduced taxes in later years because the required RRIF minimum withdrawals are now lower.

The automatic RRIF withdrawals start in the year the client turns 72.  Snap will withdraw minimum RRIF withdrawals unless more income is needed based on the client's desired Base Expenses. You can use overrides to force minimum RRIF/LIF withdrawals or maximize LIF withdrawals.

In the above example, the client has a Non-Registered account that can be used to fund TFSA contributions each year. Snap Projections will not automatically withdraw more funds from the Non-Registered account to save to the TFSA, but you can also do this manually using overrides.  Please click here to view the steps to maximize TFSA contributions.

Note: If you want to remove the overrides and let the software default to its initial logic, you can do that.  Click here to learn how to remove the overrides.

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Using a $0 Override to force a contribution or withdrawal to/from the next available asset

If there are contributions being made to an account that you don't wish to have contributed to, you can enter a $0 contribution override to prevent this.  This will also work for withdrawals. For example, to prevent any contributions to the RRSP in the first 4 years or withdrawals from the Non-Registered account in retirement, enter a $0 amount under the Contribution column for the applicable years.  

In the first 4 years, more funds will be contributed to the Non-Registered account since the RRSP is unavailable for contributions.

Note the final year is highlighted in pink. This indicates a shortfall.  By specifying the withdrawals from the Non-Registered account as $0 and the withdrawals from the RRSP as $28,154 in that year, there is not enough money in the remaining account (the TFSA) to cover the desired spending.  Snap is blocked from withdrawing more from the accounts with overrides. To avoid the shortfall, you will need to clear the overrides on either the RRSP or Non-Registered account. 

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Overriding Income amounts

Once you've entered your desired Income sources on the Scenario Setup -> Income page, you can override values on the Planning page for individual years or periods of time.

For instance, if a client plans to go part-time for two years to go back to school, you can override the Employment Income to reflect this.

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Overriding the Amount Paid on a Debt

You can reflect accelerated Debt payments or new borrowing against a loan by entering overrides to the Amount Paid column of your Debt on the Planning Page.

Here we can model an accelerated mortgage payment starting in the second year of the projection by increasing the Amount Paid value on the Planning page by using an override.

Please click here to learn more about making alternate repayment plans in Snap.

In this example, we can model future borrowing against a line of credit to pay for a new car purchase by entering a negative value as an override to the Amount Paid column.

Please click here to learn more about using a Line of Credit in your projection to model future borrowing.

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