Annual Retirement Spending Input

[rondom]

Where I put my annual retirement spending amount, should that include both social security and additional amount desired? For example, spouse and I have 30,000 SS and would like about $60,000 additional, total = $90,000? How is before or after tax amount handled. For instance our distribution is about $30,000 year befor tax. Do I use before or after which is about $24,000?

[jimr]

rondom,

Sorry for the delay in responding. I just returned from vacation.

The retirement spending amount should be the actual amount of money that you plan to spend each year, not including income taxes due. You can enter this amount on the main input screen next to "Annual retirement spending." Alternatively, you could use the "additional inputs" window to enter spending if you need the amount to change on a year-to-year basis.

For your SS, enter the gross amount ($30,000) in the annual retirement income section and use the default income tax rate of 20%. You can verify that the planner is doing the right thing by looking at the "after tax income" column on the "detailed output" tab. That column should show an after tax income of $24,000 in each year of retirement.

Finally, it's possible to specify other retirement income sources (with different tax treatment) by using the "additional inputs" window. Here you can specify an income amount as well as the percent of that income that's subject to income tax.

Jim