Firecalc and Rmd calculations

[engr]

Hello all,

Is there any way to model required minimum distributions on firecalc? I have a Traditional ira that I have been taking withdrawals to reduce the balance and also starting to do yearly conversions to a Roth IRA. I just turned 69 and only have until 72 when rmds start. I also have another Roth account and a taxable account. I want to convert as much as possible while staying in a acceptable tax bracket. I believe taxes will rise in the future. I will be taking social security at age 70. Between two pensions, two social security accounts, and savings I’m trying to keep my adjusted gross income below the. IRMAA thresholds and minimize my Rmd withdrawals. Also considering if a QLAC would be helpful as the premium would reduce my traditional ira balance (and also my Rmd). Comments are appreciated.

 

[Midpack]

Not really, I think you’d have to enter manual estimates for each year, supporters have that option (last on Spending tab).

I’m in a similar situation and had to resort to another paid subscription package (just one month) to model spending, returns, balances, RMDs, SSN income, filling target tax brackets, IRMAA, Roth conversions, capital gains, dividends, etc. to age 95. From that I now have it all reduced to a spreadsheet than allows me to make a final Roth conversion in Dec (after 1-3 conversions earlier in the year) without exceeding the 22% bracket or the 2X IRMAA penalty threshold every year. Last year Fed owed me $51 and I owed state $17 - so my spreadsheet is dialed in now.

https://www.early-retirement.org/forums/f36/firecalc-how-to-handle-rmd-taxes-100474.html

 

[Rianne]

In the link provided above Pb4uski's comment should help. pssst! He's an accountant.

 

[ERD50]

Hello all,

Is there any way to model required minimum distributions on firecalc? ....

Just to be clear, FIRECalc provides an output based on spending, portfolio balance/performance, and inflation. RMDs are *not* spending (they are a transfer from one account to another).

But the taxes on the RMD are, so if that's what you are after, then all you can do is make an estimate of those taxes and include them in your spending (which Midpack details in an earlier post).

-ERD50

 

[Lawrencewendall]

RMD is based on tax deferred amount on 31 December of the year prior. Project that amount for the future (I use 6% yearly increase guess) and apply the RMD table against the amount.

 

[pb4uski]

Just to be clear, FIRECalc provides an output based on spending, portfolio balance/performance, and inflation. RMDs are *not* spending (they are a transfer from one account to another).

But the taxes on the RMD are, so if that's what you are after, then all you can do is make an estimate of those taxes and include them in your spending (which Midpack details in an earlier post).

-ERD50

Spot on.