+1. I have higher federal tax rates in my future plans too, I'd rather minimize bad "surprises" in my plan, "good" surprises are welcome. Though we can't know how or when they will increase, there are many ways to increase tax revenue.Maybe I should have said that I expect taxes will go up not down in the future. The point for me is that my tax planning can assume marginal rates are at a minimum, so no depending on some magical tax fairy going forward.
Nope, the point is I don't think they will raise the marginal tax rates (with exception of evil rich) and they will make stealth changes. in other words I wouldn't make any decisions today based on the fact that marginal rates will go up. They very well could decide in the future that people with Roth IRAs are rich and it's not fair they aren't paying their fair share and add it to the AMT calculations.
Well, you may be right. When I heard that the Bush tax cuts are permanent, that is when I thought that you are likely joking. I don't think any positive tax change has ever been permanent before, but we can hope. (Well, I mean positive for those who pay more taxes than they receive payments from our dearly beloved uncle.)
Yes but then what would people talk about here all day? I've already posted plenty of cat pictures
Yes but then what would people talk about here all day? I've already posted plenty of cat pictures
It is fun to see how convoluted you can get with this SWR stuff. I compare it to "measuring with a micrometer, marking with chalk and cutting it with an ax" Just way too many variables that are constantly changing. It's a moving target. I tend to use the KISS method. Run FIRECALC once a year and you are good to go.
I can think of several reasons why people discuss and analyze this over several threads and time periods. Some reasons:
Me too, I think. When I was a lot younger, just before I got on board with the personal computer revolution, I would spend much time calculating how my savings would grow at various different savings rates and with different fixed interest rates. I used a pocket calculator and ran the calculation for each year for 30 and 40 year periods, tabulating the results as I went. Many pieces of paper were used, and I would often calculate and re-calculate the same scenarios, partially out of mild obsessiveness, and partially for the enjoyment of performing simple calculations.
Aren't we weird?Fun with numbers, I guess.
Many of my former co-workers with whom I have stayed in touch with on Facebook are probably dismayed to find that in retirement, I have turned into a guy who posts cat pictures
Hmmmm.....do we know each other, or is this going over my head?
Take Briggs Meyer test, you will probably come out as INTJ, see:I enjoy going through my numbers for the past 4 years or so since retirement, and computing my withdrawal rate for each year using various methods. Why? I don't know. Fun with numbers, I guess.
I'm not afraid of spreadsheets, so I'd be a good candidate for this. Yet, when I tried it I didn't see any clear "thousands of dollars in taxes" (other than moving some trad IRA to a Roth IRA, and it doesn't take a spreadsheet to figure that one out). I saw some close calls that depended on assumptions about future inflation, tax rates, and returns. No clear winners.
This is where I threw in the towel on fine-tuning any optimization. The results appeared to be highly sensitive to assumptions on these three things (and probably more), so sharpening the pencil still further seemed a waste of time. I'm just goingto do the common-sense things that don't cost much in order to reduce the chances to paying more in taxes later.
Good post. Given the availability of time after ER to indulge in these fun "what if" pursuits I think there is a great tendency to measure and try to model things things with the precision of a micrometer when life events are in fact delivered with all the delicacy of an ax.
