Is FireCalc annual spending pre or post tax

[casole]

BASIC question sorry I could not find the answer, I think it is assuming a pre-tax amount as a I saw a note saying tax rates were not factored in, thanks for confirming! So I should take my expenses and gross up for what i think taxes will be? If you see someone has answered you can move on

 

[braumeister]

Yes, taxes are considered spending in FIRECalc.

 

[latexman]

Taxes are an expense in FireCalc.

 

[Midpack]

As you probably now realize, it would be a fools errand to predict what Federal and state taxes would be over the next 30+/- years. So that's left to the user to decide, and adjust spending accordingly. Not recommending it but I think i-ORP attempts to project taxes FWIW...

 

[Dtail]

As you probably now realize, it would be a fools errand to predict what Federal and state taxes would be over the next 30+/- years. So that's left to the user to decide, and adjust spending accordingly. Not recommending it but I think i-ORP attempts to project taxes FWIW...

Fidelity does factor in taxes, but the Federal amount appears to be overstated.

 

[Exchme]

Since you have to make a single guess at taxes, realize that all the higher and lower return cases won't be quite as extreme as shown.

That is, if you use your best estimate of your taxes, then if we were to re-live a sequence where the market tanks, you would actually have lower taxes than you assumed, so your savings would last a bit better than the program shows. Also, those historical cases that show you would be swimming in gold won't be quite that great after the government takes their cut.

 

[casole]

Thanks all, makes sense.

 

[youbet]

Since you have to make a single guess at taxes, realize that all the higher and lower return cases won't be quite as extreme as shown.

That is, if you use your best estimate of your taxes, then if we were to re-live a sequence where the market tanks, you would actually have lower taxes than you assumed, so your savings would last a bit better than the program shows. Also, those historical cases that show you would be swimming in gold won't be quite that great after the government takes their cut.

Hmmmmm……. Not always. Remember you pay income taxes on income, not on the value of your portfolio. There will likely be some opportunities for lowering taxes, such as tax loss harvesting, but there is still the very real possibility your portfolio could decline substantially while your income taxes remain close to flat. Happened to me in the “Great Recession.” I’m sure everyone’s situation is unique.