Maximum life expectancy/RMD age/Tax rates

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Posts: 1
Joined: Sun Nov 11, 2018 5:45 pm

Maximum life expectancy/RMD age/Tax rates

Post by Peterm » Sun Nov 11, 2018 6:05 pm

Just came across your tool - it looks great compared with other tools I have looked at!

Maximum life expectancy:
My family has had fairly long lived males. I am 60, so without any medical breakthroughs, over 100 years old seems like a reasonable age
planning target (so 120 years maximum age in the planner is good).

I strongly believe there will be many medical breakthroughs and would like to be able to
plan out to 150 years (Arbitrary, but perhaps 2x the life expectancy that I might have had at birth?)

I attempted to fake this by moving my age to 30, retirement age etc to 30/40 years old ranges, but the RMD seems to be set
at 70, defeating this work around.

Can you change the maximum life expectancy to 150 years old (lol or more)?

RMB ages:
I note too that there has been some talk about changing the laws for RMD ages or withdrawal rates.

Tax Rates:
I struggle to figure out what tax rates to use for both income and investments. I life in California, high tax state. Any extra advice or guidance
in the tool would be great! (Perhaps (based on retirement expenses)) separate high tax state estimate and low tax state estimate average rates
as a starting point for all of us?

Once I am comfortable with the setup/planning, I hope to be able to model more on buying an annuity and Roth conversions.

Thanks Again for wonderful tool!

Posts: 462
Joined: Thu Feb 28, 2008 6:48 pm

Re: Maximum life expectancy/RMD age/Tax rates

Post by jimr » Sun Nov 11, 2018 6:24 pm

I'd have to investigate whether there would be any ramifications to changing the max age. It should be just a simple change, but the problem is that I need to allocate memory for several of the simulation variables for the maximum plan length times the maximum number of simulation iterations. That's probably not a big deal these days, especially since the planner isn't required to run inside a browser anymore. As an aside, you probably saw this, but you can disable RMDs in settings (then you'd need to devise a way to model this manually however).

I really don't have any recommendations on tax rates. Average income and investment rates are so highly variable depending on individual circumstances that it's well beyond my pay grade. The planner does let you set different rates for different phases on your plan in additional inputs. It might be worth experimenting plugging different withdrawal scenarios into your favorite tax prep software to see what kind of average rates you get. That's the best way I can think of to come up with decent estimates.

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