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Income Received within Summary of Retirement Planner Simulation Results
Posted: Tue Sep 18, 2018 11:07 am
by herbsims
Guys and Gals,
My next question. Is the Income Received showing PRE or POST tax? In other words, is this the actual cash I can spend, or do I have to take out taxes from that income and then what ever is left over is what I have available to spend?
Thanks in advance,
Herb
Re: Income Received within Summary of Retirement Planner Simulation Results
Posted: Tue Sep 18, 2018 9:06 pm
by jimr
I'm not sure I understand exactly what you mean by income received but I'll take a shot at an answer...
The "Annual Retirement Income" amount on the main window is assumed to be fully taxable at the income tax rate. You can see how this works by running the simulation and clicking the detailed view tab which shows year-by-year results. Click on the show more detail radio button for even more info. You can also enter income using the "Additional Inputs" window and that interface lets you set the amount (percent) of each income source that's subject to taxation at the income tax rate (eg 50% of social security income gets taxed at 15%).
The "Annual Retirement Spending" amount is intended to be the net amount available to spend after paying income taxes. This of course assumes that you adjust the tax rates (both income and investment) to be a good representation of your average expected tax rates for these, taking into account both federal and state income taxes.
Jim