You are {{data.person.age}} years old,
you are planning to retire in {{data.person.retirement.age-data.person.age}}
years in {{data.person.retirement.year}} at the age of
{{data.person.retirement.age}} (beginning of the year).
You can start penalty free withdrawing from your traditional 401k/IRA accounts at
{{data.noPenaltyWithdraw.age}}(59.5), your medicare will kick in when you are
{{data.medicare.age}}, and your social security retirement benefit starts at
{{data.person.ss.age}}.
When you are
{{data.rmd.age}}, you'll be required to withdraw (RMD) from your traditional tax
deferred accounts (IRA, 401k).
Your life expectancy age is
{{data.person.deceased.age}}.
Your total number of years in retirement is
{{data.person.deceased.age-data.person.retirement.age}}.
Current Savings (you and spouse)
Salary based income and savings (you and spouse)
Social Security Benefits (you and spouse)
check https://secure.ssa.gov/ for estimated SS Benefits
Current calculation assumes a single combined social
security benefit.
Rate of return
Summary : Net worth
({{toDollar(data.person.roth+data.person.investment+data.person.pretaxBalance)}}.)
Your current household earned income is {{toDollar(data.person.salary)}}, you
expect annual
merit
increase of {{toPercent(data.meritIncrease)}}.
Your current tax deferred retirement accounts
have{{toDollar(data.person.pretaxBalance)}}, you are contributing
{{toPercent(data.contrib.employeePercent)}} of your
salary to 401k, and your employer contributes
{{toPercent(data.contrib.employerPercent)}} of
your contribution up to {{toPercent(data.contrib.employerMatchUpTo)}}, total
contribution is {{toPercent(data.contrib.totalPercent)}} of your
salary each year. Your current year 401k contribution calculates to be
{{toDollar(data.person.salary*data.contrib.totalPercent/100)}}.
Your current Roth retirement accounts
have{{toDollar(data.person.roth)}}, you are contributing
{{toPercent(data.contrib.roth401kPercent)}} of your
salary to Roth 401k, and your employer contributes
{{toPercent(data.contrib.employerPercent)}} of
your contribution up to {{toPercent(data.contrib.employerMatchUpTo)}}, total
contribution is {{toPercent(data.contrib.rothTotalPercent)}} of your
salary each year. Your current year Roth 401k contribution calculates to be
{{toDollar(data.person.salary*data.contrib.rothTotalPercent/100)}}.
Your estimated yearly spending before retirement is
{{toDollar(data.spending.beforeRetirement)}},
monthly spending is {{toDollar(data.spending.beforeRetirement/12)}},
this should include:
Housing
Your expensive kid(s) - tuition, activities, etc
Your estimated yearly spending after retirement is
{{toDollar(data.spending.afterRetirement)}}, monthly spending is
{{toDollar(data.spending.afterRetirement/12)}}:
Lower housing expenses, and hopefully no more mortgage
Higher medical expenses
More traveling
Your estimated starting Medicare year {{data.medicare.year}} cost based on
When you retire in {{data.person.retirement.age-data.person.age}} years at
{{data.person.retirement.age}},
you are not yet qualified for Medicare, your estimated your monthly health insurance
out
of pocket before Medicare kicks in is
{{toDollar(data.spending.insurance/12)}}.
Your spending will be adjusted for {{toPercent(data.inflation)}} inflation
every
year.
Required Minimum Distribution {{data.rmd.year}} (age {{data.rmd.age}})
When you reach the age of {{data.rmd.age}}, you'll be required to take "Required
Minimum Distribution" from your tax deferred traditional 401k/IRA accounts, and
distribution is taxed at the ordinary income rate.
The 'ordinary income' also means that you'll have taxable income, which affects the
tax you pay,
your Medicare payment, and Social Security retirement benefit taxes. However,
there are some tax benefits of keeping some money in the tax-deferred accounts,
you want the amount to be low enough that you won't be forced to take out a lot each
year.
The RMD money you are forced to take out cannot be directly converted to Roth IRA. The
IRS requires that you take the RMD for the year before you can perform a Roth
conversion.
The strategy is to convert your traditional 401k/IRA to Roth IRA as early as possible
(typically after you retire),
you'll pay taxes for the years of conversion; once converted, your roth balance,
including
gains, won't be taxed again, and there's no required minimum distribution, nor will your
withdraws from Roth count as taxable income.
Your Roth conversion starts at {{data.distribution.age}}, and
fills up the {{toPercent(data.distribution.bracket)}}tax bracket;
at
{{data.yearlyData.find(x => x.pretaxBalance == 0).age-1}}, your tax deferred
accounts will have $0.00
at {{data.rmd.age}}, your tax
deferred accounts will have {{toDollar(data.rmd.pretaxBalance)}}.
you'll be required to withdraw {{toDollar(data.rmd.pretaxBalance)}} / 27.4 =
{{toDollar(data.rmd.rmd)}} on first year and increases percentage wise every
year
after. Your tax bill on that first year distribution is around
{{toDollar(calculateOrdinaryIncomeTaxForYear(this.data.rmd.rmd,
this.data.rmd.year))}}.
Taxes
Federal Ordinary Income Tax (see table below) - with historical 1.7% increase in
bracket
ceilings each year
Federal Capital Gain Tax (0%/15%/20%/23.8% for long term)
FICA (SS & Medicare), 6.2%, and extra 0.9% for portion of salary income over
$250,000;
no FICA on capital gains or roth conversion.
Medicare Surtax 3.8% on Capital Gain for MAGI over $250,000.
State Taxes allows different taxes for before and after retirement.
Long-term capital gains can't push you into a higher tax bracket
Social Security benefits tax:
Depending on your 'provisional income', 0%-85% of SSN income is taxed.
'Provisional income' includes gross income (wages, interest, dividend, pension, rent
income), tax-free interest (municipal bond) and 1/2 of SS Benefits.
For single filer (tax): if provisional income is less than 25000, 0%; between
25000 and 34000, then 50%, above 34000 = 85%.
Married Filing Jointly: less than 32,000 = 0%, between 32000 and 44000 = 50%, >
44000, then 85%.
Note: provisional income is not inflation adjusted.
The resulting percentage of SS Benefits is subject to ordinary income tax rate.
Note: The calculation assumes there's no state tax for SS benefits.
Note: Roth IRA distributions are not included in the provisional income calculation.
Age
Year
Salary
401k Contrib
Roth 401k Contrib
RMD
Spending
Roth Conversion
Tax
Deferred Balance
Roth Balance
Investment
Medicare
Social Security
Taxes
{{yearly.age}}
{{yearly.year}}
{{toDollar(yearly.salary)}}
{{toDollar(yearly.k401)}}
{{toDollar(yearly.roth401k)}}
{{toDollar(yearly.rmd)}}
-{{toDollar(yearly.spending)}}
{{toDollar(yearly.dist)}}
{{toDollar(yearly.pretaxBalance)}}
{{toDollar(yearly.roth)}}
{{toDollar(yearly.investment)}}
-{{toDollar(yearly.medicare)}}
{{toDollar(yearly.ss)}}
-{{toDollar(yearly.tax)}}
Projected Tax Rates
Calculated with historical 1.7% increase in bracket ceilings each year, and accounted
for 2025 trump tax (Tax Cuts and Jobs Act) brackets.
Year
Rate
{{y.year}}
{{toPercent(b.percent)}}
{{toDollar(b.income)}}
Summary
Current year {{new Date().getFullYear()}} (age
{{data.person.age}})
Your current net worth is
({{toDollar(data.person.roth+data.person.investment+data.person.pretaxBalance)}}.)
Retirement year {{data.person.retirement.year}} (age
{{data.person.retirement.age}})
When you retire, your net worth will be
{{toDollar(data.person.retirement.roth+data.person.retirement.pretaxBalance+data.person.retirement.investment)}}:
you'll have {{toDollar(data.person.retirement.investment)}} in your post-tax
investment accounts,
{{toDollar(data.person.retirement.roth)}} in your Roth IRA/401k accounts, and
{{toDollar(data.person.retirement.pretaxBalance)}} in your tax deferred
traditional retirement accounts.
Your current retirement plan cannot get you to {{data.person.retirement.age}},
your post-tax balance will be
{{toDollar(data.person.retirement.investment)}},
try adjusting your retirement plan!
After retirement, all your spending, including taxes that you
need to pay
will come from your post-tax investment account until you reach the age of
{{data.noPenaltyWithdraw.age}},
which means that you'll need to pay capital gain taxes for the amount drawn.
Note: the calculation assumes 50% withdraws from post-tax investment
accounts are capital gains
Note: For ease of calculation, age 60 is used, instead of 59.5
Penalty free withdraw year {{data.noPenaltyWithdraw.year}}
(age {{data.noPenaltyWithdraw.age}})
After you've reached the age of {{data.noPenaltyWithdraw.age}} (59.5),
your net worth will be
{{toDollar(data.noPenaltyWithdraw.roth+data.noPenaltyWithdraw.pretaxBalance+data.noPenaltyWithdraw.investment)}}:
you'll have {{toDollar(data.noPenaltyWithdraw.investment)}}
in your post-tax investment account,
{{toDollar(data.noPenaltyWithdraw.roth)}} in your Roth IRA/401k accounts, and
{{toDollar(data.noPenaltyWithdraw.pretaxBalance)}} in your tax deferred
traditional retirement accounts.
You can start
withdrawing funds from pretax accounts without penalty,
however, you'll pay ordinary income tax for the withdraws.
At this time, instead of selling investments from post-tax accounts to cover taxes and
spending, the funds
should come from your pretax accounts. The step-up rule allows you to pass down your
brokerage investment balance to your heir without incurring capital gain tax.
Your current retirement plan cannot get you through
{{data.noPenaltyWithdraw.age}}
where you can withdraw from pretax accounts without penalty.
Your post-tax savings is {{toDollar(data.noPenaltyWithdraw.investment)}},
You have {{toDollar(data.noPenaltyWithdraw.pretaxBalance)}} in pretax accounts,
consider adjusting your plan, or look into "55 rule" or "72t" for early withdraw.
Social Security benefit starting year {{data.person.ss.year}}
(age {{data.person.ss.age}})
You indicated that you want to start receiving the social security benefit at the age of
{{data.person.ss.age}}, and the monthly benefit will be
{{toDollar(data.person.ss.perMonth)}}.
Required Minimum Distribution year {{data.rmd.year}} (age
{{data.rmd.age}})
Your pretax retirement accounts will have {{toDollar(data.rmd.pretaxBalance)}}
Good Job
You'll be required to take out
{{toDollar(data.rmd.rmd)}} from your pretax accounts this year, your
estimated
tax bill
will be
{{toDollar(data.rmd.tax)}} for withdraw amount of
{{toDollar(data.rmd.dist)}}.
End of life year {{data.person.deceased.year}} (age
{{data.person.deceased.age}})
When you die, your net worth will be
{{toDollar(data.person.deceased.roth+data.person.deceased.pretaxBalance+data.person.deceased.investment)}}:
you'll have {{toDollar(data.person.deceased.investment)}} in your post-tax
investment accounts,
{{toDollar(data.person.deceased.roth)}} in your Roth IRA/401k accounts, and
{{toDollar(data.person.deceased.pretaxBalance)}} in your tax deferred
traditional retirement accounts.
Tip: How much money you will end up with is what matters, not how
much taxes you will pay.
TODOs
add calculation for Singler filer, and other types
before retirement, if started conversion, and salary doesn't cover tax, need to take tax out of investment