i think i was just unlucky encountering these two questions. when i did the 2011 first, i didn’t include living expenses but figured that the guidence wanted us to count that in. then i learned followed that when dealing with 2010 today. then surprisingly in 2010 the guidence didn’t want that part… so in summary, i would fail this same question in both years.
You should include them only if he can’t pay for them with his salary or any other income he gets from another source. Thats how i see it and how the answers to the essay guidelines ive made until now suppose.
You should include them only if he can’t pay for them with his salary or any other income he gets from another source. Thats how i see it and how the answers to the essay guidelines ive made until now suppose.
if your income is sufficient to cover living expenses, then you dont include the living expenses anymore since its not a liquidity need anymore (already being covered by income).
I can’t see how they could possibly ding you for expressing - in addition to certain one off outlays stipulated in the problem - the words to the effect that "annual expense outlay will be drawn from portfolio return (not from principal) or partially from return/principal encroachment.
But then again they like to keep things nebulous…who know what the answer ball pops up that year
But how the liquidity need is to be funded (return vs portfolio) is important