social security taxes
Posted: Mon Nov 10, 2008 10:30 am
Are social security and medicare taxes deducted from income shown in the additional input section? I cannot find the difference in net income.
This is an area where the planner may not precisely capture reality.
The planner logic applies the generic "income tax rate" that you specify on the main inputs page to all taxable income. There's no differentiation between federal, state, or payroll taxes in this approach, it's just a one-size-fits-all tax rate.
If some of the income that you plan to receive during retirement is subject to a different amount of tax due to state taxes or the payroll tax, it would probably be best to account for this by subtracting out the additional tax amount from the gross amount you enter on the additional inputs page.
Jim