Accurate systematic withdrawals calculator

[RF954]

Hello, new guy here.

I am looking for an online calculator that accurately provides how long a tax deferred retirement account will last given regular withdrawals. The problem I have run into is that the calculators I have found online do not correctly calculate the federal tax withholding, and they provide a figure that is well below the standard 20% that the IRS requires. As an example, for $2000 monthly withdrawals and a tax bracket of 22% the CalcXML "How Long Will My Money Last" calculator provided a figure of $271 for fed withholding. Unless I am missing something this is just over half of the amount that should be withheld.

I did find one calculator that provides accurate feedback on the withholding, but it does not provide the balance after the systematic withdrawals.

Any help will be greatly appreciated!

 

[RunningBum]

Do you have an option to roll it into an IRA, which should not require mandatory withholding?

Even if not, focus on the actual tax that will be due rather than the withholding. If you have to have too much withheld, you'll get it back in a tax refund, or not have to pay taxes on other income such as SS and any distributions from a taxable account.

 

[Spock]

Taxes depend on what your other income is...
plus you can sometimes direct the institution to withhold a specific rate.
Vanguard states: "Unless you instruct us not to withhold taxes, the IRS requires us to withhold at least 10% of your withdrawals from traditional IRAs, SEP-IRAs, and SIMPLE IRAs for federal income taxes." Fidelity states same.


Withholding is irrelevant regarding how long your balance will last. Its what you end up with on the 1040 that matters. Just include taxes in your spending budget.


Use any calculator with a PMT function or better yet create a spreadsheet doing the same.

 

[pb4uski]

For one thing, the standard rate is 10%, not 20%.

IRS regulations require Fidelity to withhold federal income tax at the rate of 10% from your total withdrawal unless your withdrawal is from a Roth IRA, or unless you elect otherwise. You can change your tax withholding percentage by entering any whole number between 10 and 99 or by electing not to have federal tax withheld (provided that you have supplied Fidelity with a U.S. address).

Beyond that, I'm not sure what the OP is seeking to achieve.

 

[RunningBum]

For one thing, the standard rate is 10%, not 20%.



Beyond that, I'm not sure what the OP is seeking to achieve.

If this is a 401K:

https://www.irs.gov/retirement-plan...-plan-participants-general-distribution-rules

Any taxable distribution paid to you is subject to mandatory withholding of 20%

Otherwise I agree, withholding is not really relevant, net taxes owed is.