To calculate the Upside Investing floor, all "risky assets" that you've identified in your regular assets and retirement accounts are eliminated, representing the worst-case scenario of losing all your investments in stocks. This is the primary reason your Base Plan would be different from your Floor Plan.
Even if you enter that you have absolutely no risky assets in Upside Investing, there can still be slight differences in the results of the Base Plan vs the Upside Investing Floor, for the following reasons:
- In the Upside Investing Floor, "safe assets" earn the real interest rate, which is based on the initial Inflation Rate and Nominal Safe Rate of Return for Regular Assets you have entered in Settings & Assumptions. In the Base Plan, you can specify future changes to inflation or rate of return, but these do not affect the Upside Investing Floor.
- There are inherent differences in the treatment of asset income between Upside Investing and the standard reports. In Upside Investing, you have risky and safe assets, period. In the Base Plan, you can have other asset distinctions like municipal bonds or qualified dividends. So when these settings are present in the Base Profile, the difference between the Base Plan and a risk-free asset Upside Investing Floor could be greater.