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Old 07-10-2021, 10:12 AM   #81
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Quote:
Originally Posted by aja8888 View Post
I'll be 78 in a couple of months and I agree setting goals and planning is a good exercise, but in the end, "Nobody Knows Nuthin"....LOL!

I've had more unplanned surprises along the way....but glad I had a "contingency plan"!
Would you share your unexpected expenses and income with the folks following in your footsteps? I'm 12 years behind you. Thanks
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Old 07-10-2021, 12:14 PM   #82
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Really

I am almost 70. What is Excel? I somehow managed very nicely without all the computer programs. Imagine that
I do know what Excel is.
Imagine how people planned and survived financially 50 years ago.
It is amazing how complex you can make something that is really straightforward.
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Old 07-10-2021, 06:47 PM   #83
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Wonderful first post!

Lots of reading and was not mentally ready for how long it is. You made some solid points and also agree with the 2md post about some variables that may/may not be able to fully plan for.

You sound like you're taking this very seriously, as we all should, and believe you'll do very well!

PS Invest in very popular index funds AND, if you have a long runway to retirement, possibly Tesla! Whenever the heck they release FSD... possibly 1-10+ years.
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Old 07-12-2021, 11:39 AM   #84
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So I'm a bit late to this thread. I haven't read all the posts so forgive me if this has been mentioned.

What the OP wants is all covered by the "Optimal Retirement Planner"
https://www.i-orp.com/Plans/extended.html . There is little need to do your own spreadsheet to model when to take SS or how to optimize Roth conversions.

Take a loop at ORP. It seeks optimal spending over your retirement given present (and known future) taxation. When I looked at ORP results in detail it was very informative.

The take-aways for my situation were that Roth conversions and SS start dates were secondary to when I quit working and nest-egg growth rates. The suggested pre-tax Roth Conversion taxes were eye-popping large numbers. And these large Roth conversion taxes were for a for an arguably modest spending benefit given modest future nest-egg growth rates.

Take a look at the ORP calculator and draw your own conclusions.
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Old 09-12-2021, 09:35 PM   #85
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It has been 2 months since I made this first post which looks to me to be rather arrogant in retrospect. I haven't changed my opinion about having a spread sheet. Just that I came here thinking I had it mostly figured out after developing it over several years and lurking for a few weeks. Since then I must have modified and enhanced it multiple times by what I have learned here in the last few months

- Roth conversions only make sense (to me now) if I am going to save taxes. If I can use after tax funds for a couple of years to be in the 12% tax bracket then that is when it would make sense. Otherwise, I will be in the 22% bracket even with RMDs at 72. I know there are differing opinions
- Nothing now should be decided for more than a year or two. I should continue to look at my ROI to see if RMDs will increase into another bracket or if it looks like Congress wont extend the tax law, it may make sense to do more conversions before they go up
- You should look at present and future tax consequences to anything you do such as Roth conversions, hitting the Medicare limit that raises your payments, and IRA balance bs RMDs
- I didnt understand about Social Security Spousal Benefits and the different rules associated with it
- I did know about firecalc before I came here, but not about https://opensocialsecurity.com/ its a nice tool as well to provide data on most effective SS date. I also learned more about expanding the options in Firecalc to get more information such as how much can I spend vs looking at my plan
- As stated earlier, the tools should be used to inform decisions for the next year or two. Such as, it is good to plan SS at 70, but I can make the decision to take it earlier anytime before then and should do a check every year
- I needed to lay out a plan for my wife if I should pass first with single tax rates, SS death benefit and estimated spending against various ROIs to make sure she will be all right

There is a lot more I learned and want to thank the forum members for making this a very welcome place. There is a broad spectrum of members with different perspectives and the discussion back and forth has been very beneficial.

There is no right answer, it depends on everyone's unique situation, perspective and what is right for you and me. For example, I followed the thread on taking a low interest home loan. If I took a 15 year loan for $400K and invested it, at the end of 15 years I could be $240K ahead at a 3% ROI. That seems like a smart thing understanding there are always risks with investments. However, I personally have had the goal my entire Adult life to have my house paid off and that would be one of the three pillars I needed to retire (House PO, Pension start and Target investment reached). I know its emotional, but I am not going to do that. It feels great to me my house is paid off. I look around and now its all ours. Money doesn't buy a happy retirement, it just makes it easier. Since I have more then enough money to last 50 years if I lived that long, why chase something if it doesn't sit well with me. Again, I know its more emotional than analytical

My original plan said I wouldn't have had any issues, and with what I have learned here I am in better shape then I thought.

The only major change to my plan is to extend my date two months. The person I hired and have been grooming to replace me will be out in December for surgery and I want to not only cover but make sure we have a week to transition in January before I head out. I have a lot invested here in this organization I built, the team I assembled and the product we are developing. A couple months to help ensure something I helped start continues on a successful path is worth it to me, even with the political BS from Megacorp Leadership.
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Old 09-13-2021, 08:09 AM   #86
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Romer,
I enjoyed reading your initial analysis and reading about adjustments based on other thoughts.

Another tool (yes you always need another one!) is Flexible Retirement Planner. It is an applcation that I use from time to time. I just updated my spending inputs due to a recent modification (wedding), and the result is still 100% assurance we'll be ok. Actually, the spouse will be ok for a very long time.

Good luck with your upcoming date.
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Old 09-13-2021, 09:24 AM   #87
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Nice.

Seems to me that you had a pretty good handle coming in, and were able to make a few worthwhile refinements and new considerations. (Which is basically what you just said!) Good all the way around.
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Old 09-13-2021, 09:42 AM   #88
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Quote:
Originally Posted by target2019 View Post
Romer,
I enjoyed reading your initial analysis and reading about adjustments based on other thoughts.

Another tool (yes you always need another one!) is Flexible Retirement Planner. It is an applcation that I use from time to time. I just updated my spending inputs due to a recent modification (wedding), and the result is still 100% assurance we'll be ok. Actually, the spouse will be ok for a very long time.

Good luck with your upcoming date.
Is there anything you get from Flexible Retirement Planner that you don't get from Firecalc?
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Old 09-13-2021, 10:58 AM   #89
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Quote:
Originally Posted by qwerty3656 View Post
Is there anything you get from Flexible Retirement Planner that you don't get from Firecalc?
Flexible Retirement Planner is Monte Carlo, so a completely different model. Always nice to see a different model. But be aware that all Monte Carlo sims suffer from the dreaded tail. The worst case is worse than historical (firecalc) and the best case is better than historical. Generally, 95% in a Monte Carlo sim is about equal to 99.9% in firecalc. Generally. So I always recommend folks donít chase the Monte Carlo tail all the way to 100%. They will have to work longer than required.
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Old 09-13-2021, 11:34 AM   #90
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Quote:
Originally Posted by Romer View Post
Probably the one that took me the longest time to get right was to calculate the tax in an equation that worked every year
You can change these based on the potential; for them to increase in 2026 based on current law

=IF(K7-D7<0,(0),(K7-D7))*0.22+(C7*0.1)+((IF(V7>D7,D7,K7)-C7)*0.12)+((K7-20000)*0.0465)

K7= My calculation column for Taxable income
C7= 22% Bracket escalated every year by 1%
D7= 12% Bracket escalated every year by 1%
E7=24% Bracket escalated every year by 1%
F7 = 22% Bracket escalated every year by 1% (I know its out of order)
The last part is for Colorado as they take off the first 20K and then have a flat rate of 4.65%

The c7 times .1 is to cover the base 10% tax before the 12% bracket starts

The =IF(K7-D7<0,(0),(K7-D7)) is pretty useful. Essentially IF K7-D7 is negative then it will use 0, otherwise it uses the equation. The negative values were messing me up
@Romer, I might have missed it, but it appears as though you are not using macros for your calculations. I highly recommend this.

For example, in my model, I have the following macro:
Code:
Public Function FederalOrdinaryTaxes(amount As Double)
    Dim standardDeduction As Double
    Dim salt As Double
    Dim taxableAmount As Double
    
    If amount = 0 Then
        FederalOrdinaryTaxes = 0
        Exit Function
    End If
    
    standardDeduction = 25100
    salt = 0 ' State and Local Taxes deduction.  TODO: look into
    taxableAmount = amount - standardDeduction - salt
    
    If taxableAmount < 0 Then
        FederalOrdinaryTaxes = 0
        Exit Function
    End If
    
    FederalOrdinaryTaxes = Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 4, True) + (taxableAmount - Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 1, True)) * Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 3, True)
    
End Function
To use, I have cells like this:
=@FederalOrdinaryTaxes(D3+E3+J3+K3)

I pass in everything that is taxable for that year.

I have a fed tax table that the macro looks amounts up in, in another sheet.

My macro may or may not be perfect, but if it is wrong, I can change it in one easy place.
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Old 09-13-2021, 12:20 PM   #91
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Quote:
Originally Posted by target2019 View Post
Romer,
I enjoyed reading your initial analysis and reading about adjustments based on other thoughts.

Another tool (yes you always need another one!) is Flexible Retirement Planner. It is an applcation that I use from time to time. I just updated my spending inputs due to a recent modification (wedding), and the result is still 100% assurance we'll be ok. Actually, the spouse will be ok for a very long time.

Good luck with your upcoming date.
Quote:
Originally Posted by qwerty3656 View Post
Is there anything you get from Flexible Retirement Planner that you don't get from Firecalc?
TBH I've never made a comparison to find out. I haven't used Firecalc in quite a while, so I'm not up to date on any newer bells and whistles.
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Old 09-13-2021, 01:13 PM   #92
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Quote:
Originally Posted by camfused View Post
@Romer, I might have missed it, but it appears as though you are not using macros for your calculations. I highly recommend this.

For example, in my model, I have the following macro:
Code:
Public Function FederalOrdinaryTaxes(amount As Double)
    Dim standardDeduction As Double
    Dim salt As Double
    Dim taxableAmount As Double
    
    If amount = 0 Then
        FederalOrdinaryTaxes = 0
        Exit Function
    End If
    
    standardDeduction = 25100
    salt = 0 ' State and Local Taxes deduction.  TODO: look into
    taxableAmount = amount - standardDeduction - salt
    
    If taxableAmount < 0 Then
        FederalOrdinaryTaxes = 0
        Exit Function
    End If
    
    FederalOrdinaryTaxes = Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 4, True) + (taxableAmount - Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 1, True)) * Application.WorksheetFunction.VLookup(taxableAmount, Worksheets("Taxes").Range("$A$2:$D$8"), 3, True)
    
End Function
To use, I have cells like this:
=@FederalOrdinaryTaxes(D3+E3+J3+K3)

I pass in everything that is taxable for that year.

I have a fed tax table that the macro looks amounts up in, in another sheet.

My macro may or may not be perfect, but if it is wrong, I can change it in one easy place.
I have never used macros in excel. Right now I have people who do that for me at work but it does give me something else to learn for my personal future use

Thanks for the suggestion
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Old 09-13-2021, 01:30 PM   #93
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It's not really a macro, but a function. And it can be called by a macro or simply by your formula in a cell.
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Old 09-13-2021, 05:49 PM   #94
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^^^ technically yes, but in my shop we called everything a macro, since you get to them by clicking View Macros. Force of habit I guess.

I was pretty good at creating macros and functions when I was working. Several of them were thousands of lines long and did some pretty nifty data transformation.
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Old 09-14-2021, 04:08 AM   #95
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^ Yeah, in Windows you can get to the VB editor with Alt + F11 and look at the modules which contain macros and functions. I'm not a programmer, but developed an Excel app in the 90's. It's been a useful tool over the years. Once in a while I'll add a short macro to my toolbar.
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Old 09-14-2021, 05:37 AM   #96
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I've used my own financial spreadsheets for decades - since the Lotus 1-2-3 era. Had a macro driven Excel sheet, now an Apple numbers spreadsheet.

The Excel one I had 10-20 years ago was great - it massaged all of my financial data to give me the answer as to when I could retire. Later I found that there were non number factors involved in retirement planning. So while I thought that my spreadsheet was the only tool governing my planning, it really was just a part of the process.

Now 7.5 years into retirement, my Apple numbers spreadsheet is less robust (no macros) but gives me what I need to keep current retirement finances and projections in order.
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