Retirement Calculator Question

[SkinsFan0521]

Hi,

I'm having trouble finding a calculator that will provide me with estimated account values and suggested withdrawal strategy after taking into account that we will have a substantial portion of our retirement assets in Roth accounts.

I basically want to be able to enter my current balances broken down by what's in Traditional 401k, what's in Roth 401k, what's in Roth IRA, what's in HSA, and what's in brokerage. Then, also input what I plan to contribute to each of those accounts annually for the next X number of years. There are some calculators out there that are similar, but none that I have found break down what the balance of each account will be which is a very important difference.

For example, say that I'd like to withdrawal from my Traditional 401k up to the top of the 10% tax bracket every year and then withdrawal $60k from Roth accounts. That's a much different withdrawal strategy than saying that I want to have $100k in overall spending and I would think significantly change the projections for my target number, no?

FIRECalc doesn't differentiate at all. You just enter how much your total spending will be. But, that total spending number includes any income taxes, health insurance, etc. However, it seems to me that the actual number that I need to withdrawal from my retirement accounts may need to be significantly less if I'm only in the 10% tax bracket and also can qualify for ACA subsidies (If they even exist... I'm just using them as an example) while withdrawing 80% of my spending $$ from Roth 401k & Roth IRA.

Am I missing a calculator that does this? Or am I wrong in thinking that this wouldn't impact my target $$ number too much? I'm 10-15 years from ER, but I'm trying to make sure I do all that I can to set us up for the comfortable ER that we want without actually working longer and saving more than we need to.

Thanks!

 

[COcheesehead]

Have you tried I-orp?

https://www.i-orp.com/help/assume.html

 

[SkinsFan0521]

Have you tried I-orp?

https://www.i-orp.com/help/assume.html

Hi,

I actually just looked at that the other day, but it doesn't use Roth 401k, just Roth IRA. I thought about just combining the contributions from our Roth 401k and Roth IRA ($18,500 + $5,500 each for my wife & I) and entering them in the Roth IRA field, but wasn't sure if that would give the desired result. Same with combining the current balances.

Will that work or will that break something?

Thanks!

 

[COcheesehead]

No one calculator has been perfect for me. I usually have to jury rig one thing or another, but I figure it gets me to good is good enough answer.

 

[Dtail]

Hi,

I'm having trouble finding a calculator that will provide me with estimated account values and suggested withdrawal strategy after taking into account that we will have a substantial portion of our retirement assets in Roth accounts.

I basically want to be able to enter my current balances broken down by what's in Traditional 401k, what's in Roth 401k, what's in Roth IRA, what's in HSA, and what's in brokerage. Then, also input what I plan to contribute to each of those accounts annually for the next X number of years. There are some calculators out there that are similar, but none that I have found break down what the balance of each account will be which is a very important difference.

For example, say that I'd like to withdrawal from my Traditional 401k up to the top of the 10% tax bracket every year and then withdrawal $60k from Roth accounts. That's a much different withdrawal strategy than saying that I want to have $100k in overall spending and I would think significantly change the projections for my target number, no?

FIRECalc doesn't differentiate at all. You just enter how much your total spending will be. But, that total spending number includes any income taxes, health insurance, etc. However, it seems to me that the actual number that I need to withdrawal from my retirement accounts may need to be significantly less if I'm only in the 10% tax bracket and also can qualify for ACA subsidies (If they even exist... I'm just using them as an example) while withdrawing 80% of my spending $$ from Roth 401k & Roth IRA.

Am I missing a calculator that does this? Or am I wrong in thinking that this wouldn't impact my target $$ number too much? I'm 10-15 years from ER, but I'm trying to make sure I do all that I can to set us up for the comfortable ER that we want without actually working longer and saving more than we need to.

Thanks!

I would venture to state that Firecalc indirectly does take into account Roth vs. Trad 401k.
It differentiates by the user having to input estimated taxes as part of their spending expenses; thus one would naturally calculate less taxes if the majority of the accounts are Roth.
Same concept with the Fidelity calculator. It asks the user to estimate their tax rate and calculations go from there.

 

[SkinsFan0521]

I would venture to state that Firecalc indirectly does take into account Roth vs. Trad 401k.
It differentiates by the user having to input estimated taxes as part of their spending expenses; thus one would naturally calculate less taxes if the majority of the accounts are Roth.
Same concept with the Fidelity calculator. It asks the user to estimate their tax rate and calculations go from there.

Hi,

Thanks for the reply, but I'm not sure that I'd agree.

Entering a tax rate that is then applied across all of your withdrawals isn't really accurate if 75% of that money won't be taxed. If you're saying that I could just enter the effective tax rate after calculating it based on the blend of Roth vs traditional, then that's possibly a bit closer. But, I think the total nest egg that you need and the withdrawal amount are vastly different depending on how much of your assets won't be taxed regardless of what tax bracket you're in.

Maybe it's because I'm looking at it slightly differently (maybe incorrectly) than many others. Or not explaining myself very well. I'm still trying to figure out what my number needs to be to retire and I feel like there must be a better way than what I've been doing that will incorporate the fact that we will have a large % of money in Roth accounts.

I'll try i-orp tonight or tomorrow and see if that gives me what I'm looking for if I just combine Roth IRA & Roth 401k numbers.

Thanks!

 

[Dtail]

Hi,

Thanks for the reply, but I'm not sure that I'd agree.

Entering a tax rate that is then applied across all of your withdrawals isn't really accurate if 75% of that money won't be taxed. If you're saying that I could just enter the effective tax rate after calculating it based on the blend of Roth vs traditional, then that's possibly a bit closer. But, I think the total nest egg that you need and the withdrawal amount are vastly different depending on how much of your assets won't be taxed regardless of what tax bracket you're in.

Maybe it's because I'm looking at it slightly differently (maybe incorrectly) than many others. Or not explaining myself very well. I'm still trying to figure out what my number needs to be to retire and I feel like there must be a better way than what I've been doing that will incorporate the fact that we will have a large % of money in Roth accounts.

I'll try i-orp tonight or tomorrow and see if that gives me what I'm looking for if I just combine Roth IRA & Roth 401k numbers.

Thanks!

The bolded above is indeed more my reference. Most of my balances are taxable, but I hear ya.

 

[cathy63]

Hi,

I actually just looked at that the other day, but it doesn't use Roth 401k, just Roth IRA. I thought about just combining the contributions from our Roth 401k and Roth IRA ($18,500 + $5,500 each for my wife & I) and entering them in the Roth IRA field, but wasn't sure if that would give the desired result. Same with combining the current balances.

Will that work or will that break something?

Thanks!

Yes, that's exactly what you should do. Take everything that's in the Roth portion of your 401K (i.e. your contributions and their earnings) and lump them together with your existing Roth IRAs. Take everything that's in the traditional part of your 401K (i.e. your employer match and those earnings plus anything you yourself put into the trad 401K) and lump that together with your tIRA accounts and put it in the Tax Deferred line.

You could also send in a suggestion to the i-orp developer that he update the text on the "Roth IRA Savings" line so that it says something like "Roth Savings (Roth IRA, Roth 401K)" to be more consistent with the "Tax-deferred Savings (IRA, 401K, etc.)" line.

 

[Perryinva]

Actually, if you click the Roth information highlight, it already says that, combine all Roths. I like i-orp, mainly because it gives sequences of withdrawal, but the only thing I can’t find is where to SET a limit for each category minimum amount or even an after tax income amount desired and have it predict the assets balances and categories at death, and also where to change the death age different than the default of 92. It always has me selling my house the year before I die to fund the last year, which I think is pretty funny.

 

[karen1972]

Nothing is perfect, I do use Flexible Retirement Planner as a cross check, the detailed view splits out taxable/tax deferred/tax free and it has a box for what age to start making 401k withdrawals and you can mark which order to take out and calculates out RMDs.

Edit: Its pretty good, doesn't do everything but you can use the Additional Inputs to do things like Roth Conversions ( I put in -$12K Tax Deferred Savings +12K Tax Free Savings, - $X Misc Expenses to cover the tax)... thus I think you could do something similar to take out "up to the top of the 10% tax bracket fro Tax Deferred

 

[dadu007]

Am I the only one who gets ERROR 404 when going to https://www.i-orp.com/help/assume.html and then clicking on HOME? (I see the data entry option popping up briefly and then disappears into the Error 404 screen.

 

[SkinsFan0521]

OP here...

Thanks everyone for the suggestions and help!

I have looked at i-ORP and it does seem to do a pretty good job, but some things aren't lining up, so I'm still trying to figure it out. When you use the "simple" form, it gives me one number and then if I go to use the "advanced" form and put in the exact same parameters, it gives me a VERY different number. I'm not sure what I'm missing, but it must be something big. haha

Also, I haven't ever heard of Flexible Retirement Planner before but I checked it out and I really like it. It seems to give enough options and then the detailed output that I'm looking for. As karen1972 said... nothing's perfect, but this one gets me pretty close to the information that I was looking for. When combined with i-ORP (once I figure it out) and FIRECalc, I think that will put me in a good spot to have a much better understanding of how the withdrawals are going to work in ER.

Thanks again!!

 

[Perryinva]

I get Error 404 when I hit Home button as well. I also het it while it is calculating. I also get different numbers between Advanced and Simple. I use Advanced for all the what ifs and to compare. I also already found all the answers to my questions above. RTFM.

 

[wmc1000]

The home page does give an error at https://www.i-orp.com/cookie/index.html- I just backspaced off the /cookies/index.html part and hit enter and got to the home page https://www.i-orp.com/GuarInc/index.html

 

[pb4uski]

.... For example, say that I'd like to withdrawal from my Traditional 401k up to the top of the 10% tax bracket every year and then withdrawal $60k from Roth accounts. That's a much different withdrawal strategy than saying that I want to have $100k in overall spending and I would think significantly change the projections for my target number, no? ....

Probably not.... the top of the 10% tax bracket would result in $0 to $1,905 in tax, depending on the mix of preferenced income and ordinary income included in taxable income. Even if your $100k of spending was totally non-discretionary, it would only increase your spending to $102k.

Most calculators assume that you include income taxes in your annual spending.

 

[GalaxyBoy]

Am I the only one who gets ERROR 404 when going to https://www.i-orp.com/help/assume.html and then clicking on HOME? (I see the data entry option popping up briefly and then disappears into the Error 404 screen.

Safari on the iPad gives the following error message; when it is dismissed it then goes to an error 404 page.

index: onError in https://www.i-orp.com/gamma/index.html(90): SecurityError: Blocked a frame with origin "https://www.i-orp.com" from accessing a frame with origin "http://www.early-retirement.org". The frame requesting access has a protocol of "https", the frame being accessed has a protocol of "http". Protocols must match.

 

[SkinsFan0521]

Probably not.... the top of the 10% tax bracket would result in $0 to $1,905 in tax, depending on the mix of preferenced income and ordinary income included in taxable income. Even if your $100k of spending was totally non-discretionary, it would only increase your spending to $102k.

Most calculators assume that you include income taxes in your annual spending.

Thanks for the reply.

You're right that my total spending would then be $102k, but most of the calculators don't have an option to specify that I only want to withdrawal taxable accounts up to the top of the 10% bracket. I believe (but I'm not looking at them this minute) that the Flexible Retirement Calculator and i-ORP add additional taxes on top of the amount that you say you want to spend. So, if I said I want $100k in after-tax spending, they assume that I'll be withdrawing taxable accounts up until $100k and therefore tell me that my actual withdrawal is going to need to be like $120k. And FIRECalc doesn't even care what $$ you have in different types of tax advantaged accounts.

In addition to that difference in taxes, I'd like something that would identify if I had enough Roth $$ to bridge that gap between the 10% bracket and $100k while using taxable only up to the top of the 10% bracket. FIRECalc for example, doesn't care and just takes your whole dollar value and spreads it out over the # of years. That's a very basic approach and doesn't take into account the complexities of having Roth accounts, tax deferred accounts, HSA accounts and taxable accounts. The overall portfolio value needs to be much higher with FIRECalc's methodology than if you take into account only a portion of your portfolio will be taxable when it is taken out, right? Unless I'm missing something, that's how I see it.

I have to spend some more time with it, but I believe that the Flexible Retirement Calculator does pretty much what I'm looking for.

 

[Perryinva]

There is another glitch I’ve come across in i-orp, in that it is granting spousal SS benefits that are not possible when I set my file age at 62. DW is 65 and started collecting at 62. At 65 currently she collects $14k/yr. When I start SS at 62, hers shows an immediate jump to $17k and increases from there. If I start SS at 70, it shows her correct SS all the time. As a result, i-orp shows a $4k increase in aftertax income by filing at 62 vs 70. My FRA PIA is currently $2952 for 66/8 in 2024. Impossible for her to ever get a spousal adder until I file at 70.

 

[dadu007]

The home page does give an error at https://www.i-orp.com/cookie/index.html- I just backspaced off the /cookies/index.html part and hit enter and got to the home page https://www.i-orp.com/GuarInc/index.html

That works. Thx!