Quick question on the Retirement Planner. Should I be using columns U thru Y to input my annual contributions to my retirement accounts or are the captured somewhere else already?
Hi @ameet.sampat ,
If you are using the Retirement Planner sheet without the Cash Flow Forecast sheet, any adjustments (other than the core growth rate) should be added in columns U thru Y.
If you are using the Cash Flow Forecast, those yearly cash flows will be included in the Retirement Planner in column N. If you consider your annual contributions to your retirement accounts as income or expense, those values would be part of your cash flow. I would likely consider those annual contributions as Transfers, since they don’t change your Net Worth. If they are considered transfers, they won’t show up in the Cash Flow.
If those annual contributions are added as Life Events on the Cash Flow sheet, they will also transfer over to the Retirement Planner.
Otherwise, you should manually add them as mentioned above.
I realize this might be a little confusing, but we tried to design this sheet to handle as many different scenarios as possible.
Jon
Makes sense. Thanks!
Retirement Planning needs to take into account how income impacts Obamacare Tax Credits and Savings Deductibles on insurance costs, RMD (Required Minimum Distribution of pretax accounts like 401K) when added to SS can bump you into higher tax levels so you may want to do conversions before SS or RMDs are required, starting at 62 Medicare Penalty if MAGI income greater than a certain amount (IRMAA) which has a 2 year look back, tax rate changes based on income. It would be nice to see how SS income changes based on when you take it. You can get those inflation-adjusted numbers from the SSA Calculator for 62, 67, and 70. Then it would be nice to see your retirement graphed based on when you take SS and when you start taking RDM. Taking RDM doesn’t reduce your retirement amount as it can be invested in a taxable account, but you have to pay taxes on the conversion regardless. When you have to take RDM depends on when you were born. In 2026 tax rates may revert back to higher rates, which will impact expenses.
Thanks @ken.rury this is definitely something to keep in mind although would likely increase the complexity of the spreadsheet dramatically. Wondering @jono if you just want to update the documentation that it doesn’t factor this type of conversion in?
Hi @ken.rury ,
You are correct that a complete Retirement Planning sheet would need to take those topics into account. And even more than those issues for each person. Another issue is no one knows the future tax rates, so even if the sheet accounted for these things, it would only be based on current tax rules and formulas, which change every year.
There are some ways to manually build these topics into the sheets using the Adjustments and Cash Flow statement. But I realize that makes the sheets much more complex.
There is a caveat already at the top of the sheet documentary that says:
Retirement planning is a very complex & personal task with individuals each bringing a unique set of goals, inputs, and expectations. We have tried to build a solution that leverages your existing Tiller information and provides best-effort future retirement guidance. We’ve made the sheet flexible so you can add your own basic adjustments and options. At the same time, we realize this sheet might not provide all the features some may want. We welcome your feedback in the comments below.
Source: Docs: Retirement Planner Template
To me, that covers some of what Ken is suggesting. @heather do you think it needs something more?
Jon