Cash Flow

The easiest way to understand the cash flow in Snap Projections is to think about it as the cash left after paying taxes and deductions, expenses, investment contributions, debt payments, insurance premiums, and charitable donations that have been entered into your projections. 

This leftover cash can be either used to fund lifestyle (After-Tax Spending) or if the After-Tax Spending is set to $0, this surplus cash will be deposited into the Cash account (or into the assets).

Here's an example:

If the Employment Income is $100,000, after paying the tax of $18,621, and CPP/EI contributions of $4,453, contributing $16,200 to the RRSP and $0 to the non-registered account, we are left with $60,726.  This surplus is contributed to the Cash account because in this case, both assets have a specific contribution override (indicated by the yellow highlighting). Otherwise, the surplus of $60,726 would have been contributed to the Assets according to default logic.

If we allocate $54,000 to fund lifestyle expenses in the After-Tax Spending column, the Cash account would be left with ($60,726 - $54,000 = $6,276).

If we remove the $0 contribution override on the non-registered account, the surplus cash will be contributed there instead of to the Cash Balance

A more formal definition of cash flow is as follows:

AFTER-TAX CASH (ATC) =
all Income from the Income page marked as taxable
- total tax
- debt payments
- expenses (non-taxable negative income columns)
- contributions to non-registered assets
- contributions to TFSA
- contributions to registered assets (RRSP, LIRA, DCPP)
- insurance premiums
+ other cash (non-taxable positive income columns)
+ withdrawals from non-registered assets
+ withdrawals from TFSA
+ withdrawals from registered assets (RRSP, LIRA, DCPP)

Note: OAS Clawback has not been included in this definition as it already lowers the OAS amount received.

Alternatively, if you want to factor in the Taxable Income column (already calculated for you), you can use the following definition:

AFTER-TAX CASH (ATC) =
Taxable Income
- total tax
- debt payments
- expenses (non-taxable negative income columns)
- contributions to non-registered assets
- contributions to TFSA
- insurance premiums
- interest on non-registered assets
- dividend on non-registered assets
- capital gains on non-registered assets
- non-eligible and eligible dividend gross up
+ other cash (non-taxable positive income columns)
+ withdrawals from non-registered assets
+ withdrawals from TFSA

Note: In this 2nd definition, we need to separately account for interest, dividends, and the taxable portion of capital gains that are included in the Taxable Income column.

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