What happens to a lump sum inflow if it is not spent or reinvested? How can they be reallocated?

Surplus Lump Sum Inflows

When lump cash inflows occur, the funds will be deposited into the owner's default cash account if they are not spent or deposited elsewhere – e.g. into a savings account, an investment or a pension.

Lump sum cash inflows include:

- Lump sum pay-outs from pensions,

- Proceeds from liquidated properties/assets (items entered on the Property/Assets screen),

- Future windfalls (entered on the Windfalls screen),

- Surplus debt credits (from a new loan),

- Lump sum pay-outs from protection policies,

- Estate distributions at mortality,

- Lump sum pay-outs from pensions to survivors. 

If these funds are proceeds from the liquidation of a jointly owned asset (e.g. a couple sells their home), the funds will be split between the owners and deposited into their respective default cash accounts, unless they are spent or deposited elsewhere.

Sweeps - Set surplus cash to be swept from default cash accounts into savings, investments, or money purchases

Suppose you want to assume all surplus income is invested rather than kept in a cash account or that your client tops up Investments with any leftover surplus. Aside from planned savings, you can also set a sweeps rule for default cash accounts.

The software has a facility for setting the annual sweep of surplus cash from the earner's/owner's default cash account (e.g. Simon's Cash) into to one or more target accounts. Sweeps can be set for these default cash accounts on the Savings screen's Annually Sweep Balance to Other accounts panel.

To set up a sweeps rule for a default cash account:

1. Go to the Cash Sweep Account under Savings and Investments in the Dashboard screen 

2. Select Sweep Options


3. Select an account to annually sweep surplus to for the whole of the plan (where there is surplus)

4. Click Done 

Sweeps are not percentage based.  The entire balance of the default cash account will be swept into the specified target account at the end of the planning year.  The only exceptions would be pensions, since they have contribution limits. If a savings account or investment were placed at the top of the list of sweeps accounts, that account would invariably receive one hundred per cent of the swept funds since neither have rules imposing contribution limits.