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Old 09-24-2013, 08:54 AM   #41
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Still seems to be working for me also. However, I have noticed some strange behavior in the last week or two. For starter, a few days ago it wouldn't allow me to retire before age 50. It came up with an error if I tried. Now it will accept an age before 50.

Also, the Monte Carlo solution is very different from what the calculator returned in the past. There's a -22K spending difference between running it with and without MC. It definitely was a much tighter spread in the past.

Someone want to double check this?
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Old 09-24-2013, 09:38 AM   #42
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Well, glad to hear it's still up and running. Just wish I could access it. Living in Mexico now and I suppose it might have something to do with the IP address.
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ORP's Monte Carlo results.
Old 11-05-2013, 01:20 PM   #43
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ORP's Monte Carlo results.

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Still seems to be working for me also. However, I have noticed some strange behavior in the last week or two. For starter, a few days ago it wouldn't allow me to retire before age 50. It came up with an error if I tried. Now it will accept an age before 50.

Also, the Monte Carlo solution is very different from what the calculator returned in the past. There's a -22K spending difference between running it with and without MC. It definitely was a much tighter spread in the past.

Someone want to double check this?
Full disclosure: I am the web master for the Optimal Retirement Planner.

1) The 50 year retirement age issue has to do with a problem that developed with one user. His resources were insufficient to retire at age 40 and his model was going infeasible, which is bad. The first attempt at a resolution was to raise the retirement age lower bound to 50 but that cause push back. So the retirement age lower bound was set back to 40 and when such a model goes infeasible a suitible error message is sent back to the client.

2) There have been no recent changes to the ORP optimizer or Monte Carlo algorithm. It is well to remember that the term Monte Carlo implies that asset returns are being randomly generated, with ramdomly being the operative word. This means that the results of two runs will not compare well.

3) Monte Carlo results will normally, but not always, be less than a straight run. This "variance drag" on the mean return is a property of the random return generation as discussed in "The Retirement Calculator From Hell - Part II".
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Expats access to ORP
Old 11-05-2013, 01:24 PM   #44
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Well, glad to hear it's still up and running. Just wish I could access it. Living in Mexico now and I suppose it might have something to do with the IP address.
Full disclosure: I am the web master for the Optimal Retirement Planner

Expats exciled to Mexico can not access ORP. The problem is that ORP's service provider blocks access from users outside the US. That is in the process of being fixed so that users in popular retirement destinations will be able to access ORP while Africa, the Middle East, Eastern Europe, etc. will continue to be blocked.
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Old 11-05-2013, 01:35 PM   #45
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Well, glad to hear it's still up and running. Just wish I could access it. Living in Mexico now and I suppose it might have something to do with the IP address.
There are tools you could employee to get around that (until they fix it)
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Old 11-06-2013, 02:22 PM   #46
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Well, glad to hear it's still up and running. Just wish I could access it. Living in Mexico now and I suppose it might have something to do with the IP address.
You could try the free version of ProXPN.
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ORP vs Mexico
Old 11-07-2013, 10:53 AM   #47
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ORP vs Mexico

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Well, glad to hear it's still up and running. Just wish I could access it. Living in Mexico now and I suppose it might have something to do with the IP address.
ORP's service provider reports that the Mexico access problem is fixed and that the last geo based rejection was 9pm Tuesday evening, EST.
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Old 11-07-2013, 03:38 PM   #48
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ORP's service provider reports that the Mexico access problem is fixed and that the last geo based rejection was 9pm Tuesday evening, EST.
Yes, I am now able to access.

Followup is greatly appreciated, gracias!
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Old 05-13-2014, 11:20 AM   #49
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I've just been playing with the newly updated ORP. As with the older version, it still recommends an aggressive approach (aggressive in my opinion) to converting Reg IRA funds to Roth IRA's. ORP wants Reg to Roth conversions all done by age 70 and as far as income taxes on the converted amounts it's "Damn the torpedoes, full speed ahead!"

Considering that the base amounts for taxing SS are not inflation adjusted, no ability to control my pension payout, and the reality of RMD at 70, I am starting to think this makes sense.
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Old 05-13-2014, 10:42 PM   #50
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What is, I-ORP?
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Old 05-13-2014, 11:53 PM   #51
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What is, I-ORP?
http://www.i-orp.com/coverORP.html
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Old 05-14-2014, 11:07 AM   #52
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many thanks. Need to reprint in color and do MC sims.,
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Old 05-14-2014, 12:08 PM   #53
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I don't because it would have me doing Roth conversions right now but I have substantial LTCGs in my taxable account that I want to take advantage of the current 0% LTCG rate which fills up my 15% tax bracket. i-orp doesn't take this nuance into account.

Once those LTCGs are taken (rolled over into my basis) I had planned to start doing Roth conversions as i-orp would recommend, up to the top of the 15% bracket.

But beginning in 2014, I will be limiting my LTCG/Roth conversions to keep my O-MAGI under 400% FPL because from that point to the top of the 15% tax bracket the economic cost of lost Obamacare subsidies, taxes, lost property tax relief is about 36% of the additional income and I view that as too high a cost to pay.
+1 I also plan to use i-orp, but not until my LTCG are gone. I'm hoping this is built in at some point so we can see the whole picture up-front. Many that would actually use a tool like this likely have LTCG exposure.

My workaround when I've played with this tool has been to bump up the after-tax a little to account for what it thought I'd pay in taxes. Not perfect, but one more directional data point.
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Old 05-14-2014, 02:40 PM   #54
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+1 I also plan to use i-orp, but not until my LTCG are gone. I'm hoping this is built in at some point so we can see the whole picture up-front. Many that would actually use a tool like this likely have LTCG exposure.

My workaround when I've played with this tool has been to bump up the after-tax a little to account for what it thought I'd pay in taxes. Not perfect, but one more directional data point.
Subsequent to my prior post, I tore apart and rebuilt my retirement planning spreadsheet to do a better job of incorporating taxes (essentially building in an abridged federal and state tax calculation) and some other improvements. Using that analysis, I decided that it was preferable for me to prioritize Roth conversions over LTCG harvesting. Since we are still living off of our taxable funds at this point and all our positions have substantial LTCG , there will still be some LTCG as I sell taxable investments to replenish cash to support our living expenses, but other than that any leeway in the 15% tax bracket will go to Roth conversions.

I-ORP results align well with my plan to prioritize Roth conversions.
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Old 05-14-2014, 02:52 PM   #55
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Subsequent to my prior post, I tore apart and rebuilt my retirement planning spreadsheet to do a better job of incorporating taxes (essentially building in an abridged federal and state tax calculation) and some other improvements. Using that analysis, I decided that it was preferable for me to prioritize Roth conversions over LTCG harvesting. Since we are still living off of our taxable funds at this point and all our positions have substantial LTCG , there will still be some LTCG as I sell taxable investments to replenish cash to support our living expenses, but other than that any leeway in the 15% tax bracket will go to Roth conversions.

I-ORP results align well with my plan to prioritize Roth conversions.
Thanks for the info. My spreadsheet isn't nearly that sophisticated yet. Now I'm interested again and better get to work. We'll see how mine works out and if i-orp agrees. Having lots of LTCG is definitely a great problem to have. Congrats on that!
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Old 05-14-2014, 05:18 PM   #56
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I have guessed my income and taxes to 75. I find when Ms G starts taking SS at 70 and RMDs at 70.5 that we may just barely crack the 25% tax rate. Trouble is guessing what her tIRA balance may be at 70, could be over 7 figures easily. I am maxing LTCG now, and will hope on converting to Roths when possible.
I am done for the year, took a bunch of LTCG converted to Roth, kinda easy to guess Total Stock and Total World qualified dividend payouts through the end of the year. I could still recharacterize Roths if needed, but I do think converting some tIRA and paying a little taxes, and having 10 years tax free growth could be a winner.
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Old 05-15-2014, 01:36 AM   #57
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Trying to figure out how to optimally convert from my tIRA to ROTH is something I've been thinking about. So, based on this post, I've been trying to see if i-orp would be helpful. Perhaps I'm doing something wrong. But, at least from my attempts, it's advice is both wrong and harmful.

We have a substantial amount of our portfolio in tIRA's and 401K's at our prior megaCorp employer. We have a much larger amount of our portfolio in taxable. Our taxable portfolio yields multiple $10,000 in qualified dividends. We pay no federal taxes on these dividends.

Our strategy is to convert as much of our tIRA (and then 401K) as we can to ROTH up to the top of the 15% bracket.

I entered our approximate portfolio into i-orp. It's input did allow a % return on our taxable portfolio but then didn't seem to consider it in its tax strategy.

Its advice was to convert up to the top of the 15% bracket from tIRA/401K to ROTH (ignoring any other income from our taxable portfolio). It also carefully showed us the tax we would pay on that amount (also, ignoring any other income from our taxable portfolio).

I know for our situation that if we convert IRA's beyond the top of the 15% bracket we'll be taxed at a 30% marginal rate (not at 25% as some assume).

I've seen several positive comments on this tool. Is there some value to this program that I'm missing? Is it broken?
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Old 05-15-2014, 06:05 AM   #58
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adrift, I agree, from what I have seen i-orp does seem to ignore income on the taxable portfolio in calculating its conversion amounts but it also ignores exemptions and deductions too.

Also see SS at 70 and RMDs - double tax 'whammy'? especially post #20
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Old 05-15-2014, 08:01 AM   #59
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adrift, I agree, from what I have seen i-orp does seem to ignore income on the taxable portfolio in calculating its conversion amounts but it also ignores exemptions and deductions too.
If this is the case, it really isn't much use to me. I am also in a situation where income above the 15% bracket gets taxed at 30% instead of the next bracket rate.

The tax calculations are not that complicated - they just take a bit of programming work (I did it in Excel). It would be easy enough to incorporate the basics, including the dividend push-up -- even if they wanted to exclude more subtle changes like phase-out of exemptions and AMT.
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Old 05-15-2014, 10:27 AM   #60
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... i-orp does seem to ignore income on the taxable portfolio in calculating its conversion amounts but it also ignores exemptions and deductions too.

Also see SS at 70 and RMDs - double tax 'whammy'? especially post #20
ORP models income subject to personal income taxes in a rather crude way, i.e. by reducing annual account appreciation by the tax rate. This issue is to be addressed in a future release by including income from the taxable account in with the rest of the income tax computations.

ORP does include personal exemptions and the standard deduction in its income tax model.
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