Flexible Retirement Planner Support Forum

Does FRP model taxes on withdrawals to pay taxes?

e.g. If 100% of my assets were in tax-deferred accounts, and I entered no retirement income and Annual Retirement Spending of $100,000 and a tax rate of 20%, would FRP model withdrawing $100,000 or would it model withdrawing $120,000?

It actually needs to withdraw more than $120k in order to cover the taxes on the $20k extra withdrawal needed to cover the taxes due on the $100k - and so on, and so on...

You can see this in the detailed view table if you select the "show more details" radio button, then right-click on any column header and select "show all columns."

This adds a bunch more columns including one that shows the actual amount withdrawn each year grossed up to cover taxes.

the investment and income tax rate inputs should be based on effective tax rate and not marginal tax rate, correct?

Yes. That's correct. Also, in addition to federal taxes, the rates should cover any state or local income taxes you expect to have to pay.