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Tax calculators for ER
Old 09-06-2014, 06:20 AM   #1
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Tax calculators for ER

I'm 55 and would like to retire within the next year and am trying to understand tax strategies.

Are there any tax calculators, whereby you can load in your age, how much you have in you IRA, 401K, Roth and taxable and it suggests the most beneficial way to withdrawal money for the most tax efficiency?

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Old 09-06-2014, 06:35 AM   #2
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I-ORP is probably the most popular.
Retirement Calculator - Parameter Form

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Old 09-06-2014, 07:48 AM   #3
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In "most" cases, ER find it best to tap taxable first, then tax-deferred, then tax-free and do annual Roth conversions to the top of the tax bracket you expect to be in once SS and pensions start (the top of the 15% tax bracket for me and many others). The Roth conversions lower your tax-deferred balance and lower RMDs (and therefore taxable income and taxes) once SS and pensions start.

YMMV and you should analyze you own situation.
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Old 09-06-2014, 07:49 AM   #4
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I second I-ORP as a popular (and useful) calculator. One additional factor to keep in mind is any ACA subsidy you might be interested in getting and the associated income cliffs. This may not apply in your situation, I did some additional calcs to account for that since that was a factor I wanted to include in the model.

I don't know of any readily available calculator that accounts for this.
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Old 09-06-2014, 07:52 AM   #5
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Although each case is different, there are a few here that are spending after-tax money first (so showing very little income versus pulling from tax advantaged accounts) and converting traditional IRA funds to Roth IRA (up to the 15% bracket). Some folks are thinking tax rates will increase, and convert more, beyond the 15% bracket. Others here are limiting income (by reducing Roth conversions) to take advantage of the PPACA subsidies.

+1 on i-orp for a starting point.
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Old 09-06-2014, 09:10 AM   #6
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Does i-orp take into account state level taxes?
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Old 09-06-2014, 09:48 AM   #7
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This thread has hit a nerve here; I've been scratching my head over tax consequences of my tax-deffered stuff vice the pensions and SS. Sooo, I just went and ran I-ORP on my coarse numbers and, in reviewing what it thinks, I now have a much better understanding of the dynamics. When the time comes, I may decide to do things differently, but I feel I would do so with a better understanding of the consequences.

+1 on I-ORP...
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Old 09-06-2014, 11:03 AM   #8
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Originally Posted by travelover View Post
Does i-orp take into account state level taxes?
There's a spot near the end of their form that asks for state tax rate and state standard deduction & exemptions. Retirement Calculator - Parameter Form

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Old 09-07-2014, 05:51 AM   #9
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Taxes will be a big issue for me. I wanted a calculator that estimated state and Federal taxes and took into account the AMT. After trying all the others I finally purchased ESPlanner which does this automatically. I use it to model Roth rollovers and minimize taxes.
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Thanks everyone
Old 09-07-2014, 11:52 AM   #10
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Thanks everyone

This tool was extremely helpful.
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Old 09-07-2014, 01:22 PM   #11
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I have never exactly tapped any account. I spend income thrown off my by taxable account, so I suppose in one sense this is tapping it. My strategy for the Roth and TIRA is to make some conversions in any year that I have not realized much ltcg. In years when I do not take ltcgs, I convert to Roth. Doing both at the same time seems not the best way to me.

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Old 09-07-2014, 01:36 PM   #12
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Never mind, I cleared the form, started over, and am good to go. Love this!

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