How Does Negative Cash Flow Affect Funds?

Negative Cash Flow

If a client's expenses exceed income causing negative cash flow, the negative cash flow is covered by assets in the following order as distributions from accounts:

  • Cash accounts such as checking and savings
  • Taxable accounts such as brokerage accounts
  • Tax deferred accounts such as IRA's and 401(k)'s
  • Tax free accounts such as Roth IRA's


  • Accounts earmarked to goals that start before retirement
  • Accounts earmarked to retirement
  • Accounts earmarked to goals that start after retirement
  • Un-earmarked accounts
  • Emergency fund accounts

*Please note the tool will consider a plan to have negative cash flows if distributions must be taken to meet expenses.