So I played around with this little spreadsheet I made. I think it's correct. If your SS was 64K and taxable income was 18,466 total 81,466 would be tax free with 2023 standard deduction.
View attachment 46785
So I played around with this little spreadsheet I made. I think it's correct. If your SS was 64K and taxable income was 18,466 total 81,466 would be tax free with 2023 standard deduction.
View attachment 46785
Can someone post the link for the Fidelity Retirement Planner? I'm finding multiple different Fidelity Retirement related things and can't figure out which one is being discussed on this thread. I found a Fidelity Financial Independence Planner. Is that it?
This is a tax calculator that someone shared on this forum in the past. It's really good.
https://www.irscalculators.com/tax-calculator
+1. I wrote a 'withholding workbook' about 4 years ago, I update monthly to calculate Fed and state estimated taxes.My advice to you is to learn how to do your personal taxes, then start doing your taxes in January! Don’t start last year’s taxes, start your current year’s taxes so you know at what dollar amount your will cross over from the 22.2% marginal tax rate into the 40.7% or 49.95% marginal tax rate!
I’ve been using Fidelity Retirement Planner for years - never saw a tax estimate. How do you display taxes?
I spoke with a Fidelity Financial Consultant and he confirmed that on the Fidelity Retirement Analysis report, the expense dollar amount for the 3 modeling % was a NET dollar amount.
I spoke with a Fidelity Financial Consultant and he confirmed that on the Fidelity Retirement Analysis report, the expense dollar amount for the 3 modeling % was a NET dollar amount.
I read the notes about taxes in the appendix and reviewed the dollar amounts in the spending plan and I think COcheesehead is correct. The yearly expenses INCLUDE taxes. So if want to spend $78,000 per year, you need to add your estimated taxes to your spend amount. For married filing jointly, this would be about 7% federal taxes, so you would tell the program you're expenses are $83870 yearly.
You don’t have to add in taxes. Just create a budget in the spending module and the tool will generate the tax for you. That is why you are asked for filing info and state taxation in the tax module.
If you use FireCalc, you have to add taxes to your yearly spend.
Does it show what the tax is anywhere? Most of my money is in a Roth and it wasn't clear to me whether it was assuming I was paying taxes on the withdrawal.
Does it show what the tax is anywhere? Most of my money is in a Roth and it wasn't clear to me whether it was assuming I was paying taxes on the withdrawal.
I agree with you that getting a handle on your taxes is very important. But you don't need an estimator program. All the instructions and forms are online. Just calculate your taxes by hand, change whatever numbers you want and do them again to see what happens. That's what I do.You're curiosity is in the right place.
Having a reasonably accurate estimate of your future taxes is critical for retirement budgeting. Either fully understand how Fidelity is doing the tax estimate or use some other tax forecasting tool and understand the inputs and outputs. Or pay a CPA to do it for you.
I'm mystified when folks talk about how accurately they track current spending and how they research how spending might vary going forward. But, they then go on to have future taxes be just a shot in the dark guess. In our case fed + state taxes = about one third of our total spending so it is/was key to have a good estimator going forward.
I agree with you that getting a handle on your taxes is very important. But you don't need an estimator program. All the instructions and forms are online. Just calculate your taxes by hand, change whatever numbers you want and do them again to see what happens. That's what I do.
The Fidelity Retirement Planner is just a calculator that will project your expenses and balances over your lifetime. It does not calculate your taxes, or give you any guidance if you should be doing Roth IRA conversions or any other tax planning strategy.