[!WARNING & DISCLAIMER] There is no SUPPORT for these tools and no guarantee of accuracy, or appropriateness of use. No warranty of suitability for any purpose. There is also no charge. USE AT YOUR OWN RISK
You can DIRECTLY invoke these tools:
Retirement Optimizer A full tool, with optimizers! This is the original, and most featured tool.
A California resident built these with Google gemini, claude.ai and ChatGPT AI assistance. The author is a retired software engineer, spreadsheet twiddler, has a strong knowledge of Python, and Javascript. See Standalone Tools and Key Features below for a summary of what the tools can do - and be sure to look at What the Tool IGNOREs (and Known Bugs, below) so you understand the limitations of the Retirement Optimizer.
First, NOTE this I use the term “IRA” for any account that is “Pre-Tax”. And “Roth” for any tax free account. IRA in this context could be any number of actual account types: IRA, Traditional IRA, Solo IRA, SEP-IRA, Simple IRA, 401(k), 403(b), 457(b), Keogh plans, and probably more. Roth includes Roth IRA, IRA 401(k), HSA, TFRAs. HSAs are a bit of a different animal, actually.
Trivia for fun: IRA stands for “Individual Retirement AGREEMENT”, not account. Yeah, weird. And it’s not ROTH but Roth. It’s named after Senator William Roth who introduced it. Oh, and the “(k)” in 401(k) does NOT refer to Eugene Keogh, it’s a reference to the Internal Revenue Code.
You can inspect or download the files and run the tool(s) in about any browser (Brave and Chrome have been tested). Or you can directly run the tools from Cloudflare (tools.netcitizen.us). You need internet access for the fonts and charts to work properly because those are downloaded from public sources.
Here are less ambitious, standalone tools. Each should have a “How to Use” set if instructions, many have a way to generate a URL (called share) to capture your settings so you can either run again without reentering, or share with friends (or Redditors) for advice.
These tools are all being actively developed and improved. Each tool runs standalone in your browser - though most load additional local resources (e.g. they share the same taxengine.js). An internet connection is needed to load fonts and the tool for graphing charts. Basic, anonymous page-load analytics are collected (Google Analytics and Cloudflare Web Analytics) solely to understand how often the tools are used and from what general region - no personally identifiable information is collected, stored, or transmitted. General region information helps prioritize which state tax rules to add in future releases. You are welcome to see for yourself by inspecting the source code.
Retirement Projection - How might most of your retirement assets fare during your lifetime. Retirement Projection is visually richer tool than the Retirement Optimizer, but it’s less featured. Various Reddit and YouTube discussions do a lot of handwaving about IRA/401K balances. What this tool does is allow you to set your current age, current account balances, growth and inflation, filing status, and withdrawal rate. It then calculates the account balances and RMDs (once they kick in).
Retirement Projection includes Federal and state taxation - in fact, it shares the taxengine.js. As such it has a fairly rigorous tax calculator. Like the Optimizer, it models TWO IRA accounts, one Brokerage account, one cash account, and ONE Roth account. Why only one Roth? Because Roth accounts are “interchangeable” tax wise, so if you already have balances in multiple Roth’s just sum them. Ditto with Brokerage and cash accounts. In fact, perhaps the two most difficult problems (which it would be nice to have a solution for) are determining what a “correct” dividend and “growth” rate are.
Like the “Retirement Optimizer” you cannot specify different growth rates for Brokerage, IRA/401k or Roth accounts. There are several reasons why, not the least of which is that you can make an IRA better than a Roth by significantly increasing it’s dividend or growth rate - but then you’re not comparing the value of the account taxation consequences as much as the difference in growth rates.
In real life, yes you are very likely to put your Bonds, TIPS, and Money Market funds in your IRA when you move your faster growing assets to your Roth - to take advantage of the magic of compounding tax free. And if you have a choice, your high dividend, and high interest assets are better placed in a Roth where the tax moth won’t feed.
There is no provision for adding lumpy withdrawals, but there is a way to apply a “spending smile” curve to withdrawals.
FutureCost.html - Present Value of Growing Payments Answers the question: how much money must be set aside today - and left to grow - to fund a stream of payments that increase faster than inflation? The primary use case is Medicare IRMAA surcharges: because IRMAA penalties are paid from pre-tax IRA/401k withdrawals, the tool tracks federal and state marginal tax rates separately and grosses up every payment to reflect the actual account draw required. Sliders control the annual penalty, planning horizon, CPI inflation, extra growth above inflation (Medicare premiums have historically risen 2–4% above CPI), portfolio return rate, and income (MAGI). Four result metrics - funds to allocate now, year-1 pre-tax draw, final-year pre-tax draw, and total real cost in today’s dollars - plus a year-by-year chart of the payment as a percentage of income make the central point viscerally clear: those “small potatoes” grow in real purchasing-power terms every single year.
IRMAA and RMDs - What balances get me in trouble with IRMAA Given entered fixed income, calculate what size IRA balance will cause RMDs that hit IRMAA tiers at various ages. The tool uses current rates and does not attempt to adjust for inflation. For example a married couple with a $16,607,550 balance at age 73 together with $130,000 income (pensions/social security/etc) will hit the highest IRMAA Tier 5 due to $626,700 forced RMD. Yeah, that is clearly not most of us. But at age 80 a $2,882,540 IRA balance together with that same income will hit Tier 2 $5.2K annual charge because that balance at that age forces a $142,000 RMD. A balance of $1,286,740 for a single 80 year old lands in Tier 4 with a $5.7k annual charge. At 75 that same single person would be in Tier 4 with a 1.5M IRA balance. The Retirement Optimizer will suggest a target (combined) IRA balance that minimizes IRMAA jeopardy.
AfterTaxRealGrowth.html - After-Tax Real Growth Rate Did you know that your 2.5% interest bearing savings account LOSES money even if inflation is LESS than 2.5%? I suspected that, but this tool will show you the real answer - and surprise, it matters what your tax bracket is!
Visualize how inflation and taxation combine to erode nominal investment returns. Set an inflation rate and your portfolio’s nominal return, and the tool plots the real after-tax return across six federal tax brackets (0%, 12%, 22%, 24%, 32%, 37%), with the 24% bracket highlighted as the typical IRMAA Tier 1 landing zone. A dashed break-even line at 0% real return makes immediately visible that a 2.50% nominal return at 2.50% inflation and 25% tax is not a wash - it is a net loss of purchasing power (~0.61%/year). Each bracket card shows your real return at the current portfolio return alongside the minimum nominal return needed to merely preserve purchasing power at that bracket and inflation rate. Useful for stress-testing conservative accounts (CDs, money markets, bond funds) where the real return is easily negative without realizing it.
IncomeTaxPlanner.html - Federal + State Tax Sweep with IRMAA & Capital Gains Sweeps ordinary income from $0 to $1.1M in $10k steps and plots your true all-in effective tax rate - federal, state, and IRMAA combined - with a marginal rate curve that makes the Social Security torpedo, IRMAA tier crossings, and NIIT threshold immediately visible. Configure filing status, state (14 options currently), taxpayer ages, fixed Social Security income, capital gains proceeds and basis, a target year 2026–2035 with configurable CPI, and OBBBA provisions (senior deduction, elevated SALT cap). Two linked charts update instantly on any control change, and hovering either chart activates the corresponding tooltip on the other at the same income level.
Uses 2026 IRS Rev. Proc. 2025-32 federal brackets inflated forward by your chosen CPI rate; IRMAA premiums grow at that rate plus a configurable Medicare-specific increment. Designed to answer four questions: How sensitive is my tax burden to a $10k income change? Where are my sweet spots and danger zones (SS torpedo, IRMAA cliffs, NIIT)? What is my real all-in effective rate? What withholding should I target? The Share button encodes all settings into a compact URL that works from a local file or a web server - save it as a bookmark or paste it into a discussion to let someone else replicate your exact scenario.
HYSA Real Returns - Annual and Cumulative Real Value of a High-Yield Savings Account Two views in one tool. The Annual tab shows year-by-year after-tax interest and inflation erosion as stacked bars with a net real return line - making visible how often a “safe” savings account actually loses purchasing power. The Cumulative tab computes the real value of $10,000 compounding from a chosen start year, with three lines: Roth / 0%-tax, a custom tax-rate slider, and uninvested cash eroded by inflation alone. Rates are 80th-percentile competitive HYSA estimates (FDIC national rate data, Fed funds rate history, Bankrate benchmarks); inflation is BLS CPI-U.
Historical Real Returns - Inflation-Adjusted Cumulative Growth of $10,000 (1928–2025) Plots the real (inflation-adjusted) cumulative growth of $10,000 in US equity (S&P 500 proxy), US bonds (10-yr Treasury), and T-bills across 98 years of history, alongside a custom allocation mix (equity/bond/cash sliders) and an uninvested cash reference line showing the full purchasing-power loss from holding dollars with no return. A “Market Returns” overlay adds nominal (pre-inflation) companion lines in darker colors to make the inflation drag viscerally visible. Clicking any legend asset isolates that real + nominal pair. Log/linear scale toggle; shareable URLs encode start year, allocation, and scale.
This is the original tool. And while I like it, it’s definitely not for everyone. There is no “accumulation phase”. The focus is managing withdrawals from your accounts. But it has something I haven’t found in any tool: a withdrawal strategy optimizer - and a Monte Carlo stress-test tab to show you how your plan holds up across hundreds of simulated market scenarios.
My primary motivations for this tool are:
[!WARNING] While I’ve renewed development of this tool and conquered some daunting bugs, it’s still a work in progress.
ForcedIRA column, with the year’s bracket overage); a genuine shortfall now only appears when all accounts are exhausted. The ACA Cliff ceiling, by contrast, is now its own strict strategy - it never breaches the FPL cap (which would forfeit the subsidy) and instead flags the plan untenable.Because the author is in retirement and has an unhealthy IRA balance to manage - it became obvious that no tool he could find offered the flexibility and ease of use he desired. He and his wife are of different ages (so have different IRAs, RMD timings, Social Security amounts, etc.) Some really powerful tools did not offer California tax calculations (California is a high tax state), or did not provide for life expectancy, and more. Some of the questions the author sought to answer by modeling are these:
Therefore, the purpose of this tool is to model the remaining years of life with respect to spendable cash and taxation - and to determine how to optimize spendable cash. This tool may be useful to those who are in or very near retirement. It is not designed to analyze portfolios, in fact you must provide a best guess on the growth rate you expect for your particular portfolio(s). Signficantly more analysis is needed to do pre-retirement optimization, or optimization of asset mixes - this is not a tool for that. Some general principles apply, however: in general if you have a large IRA, it is usually best to put more bonds and conservative assets in the IRA, and put more aggressive assets in the Roth so that they can grow tax free.
Many focus on Roth Conversions and that is not wrong thinking, but such a view misses the big picture of WHY to do conversions. Also from the time one stops getting regular W2 income until the time one starts receiving pensions or social security is known as the “valley of opportunity”.
During this otherwise low income period, strategic withdrawals and movement is possible. Ultimately you are in a better place if you have degrees of freedom in your assets - more on this in a moment.
It also does not make sense to pay more tax than necessary. I do not see taxation as evil, but it does not feel “right” to pay up to 14,000/year in IRMAA fees for no net benefit
in Medicare - but that is one of the many possible pitfalls of having too much forced income.
Having a large tax deferred IRA balance (about 750K or larger at the start of drawing from your IRA) can have many consequences, the worst being taking forced income (RMDs) at higher tax rates and incurring those IRMAA penalties just described. You do NOT have to have a large IRA balance to fall prey to RMDs causing IRMAA. For example, if you have a healthy income stream between a pension, social security, and say a profit sharing plan, dividends, interest or residuals, even a modest amount of forced income can push you over an IRMAA cliff, cause you to incur NIIT (extra tax on capital gains), or push you into a higher tax bracket. That is, RMDs are NOT exclusively a “rich people problem.” In this tool, we show each: IRMAA, state and Federal taxes to show the big picture: net taxes/net spendable income, year by year spend and “Final Wealth”.
Why are these permanent?
More inputs and knobs and conditions make the tool less simple. If you’ve got those situations, you can do some modeling here, but maybe a better tool will be MaxiFi, EMoney, Empower, Projection Labs, Pralana, Boldin, or similar.
[!CAUTION] Remember: There is no SUPPORT for this tool. If you ask nicely, or offer a pull request to actually implement a feature, of course we can talk. It is a best effort/time available endeavor.
One of the lovely things about engineers is they like to build things. I’ve found many other free (or almost free) resources that both inspired me and made realize that there is more than one way to solve problems. Of course I’ve also paid for and used yet more tools which I will briefly address.
The sources I found around the interweb.
NestWise - lots and lots of features. No login required. Includes things like budgeting, extensive Monte Carlo analysis, and even one of my favorite features which allows you to compare different withdrawal strategies to find one that best suits you. What I’d like to see is a tool to vary starting spend to optimize that number (to be fair, it’s there but buried in the Scenario Compare as “Reverse Solver” - and there is “Probability Calculator” that allows you to sweep withdrawal rates, but takes a LONG time to run). And a bit more details in the strategy comparison - I’m less interested in the terminal balance than I am things like how much RMDs drive my taxation - there is a “Scenario Comparison”. I’ve examined the source code for this tool and collaborated with the developer. No back-doors, or exploitable flaws were found as of March, 2026. It incorporates a variety of withdrawal strategies (Guyton Klinger Guardrails, Constant Dollar, and many more).
I haven’t determined whether inflation is being used in the Monte Carlo or Historical (Cycles) modes, but it appears to be and it’s probably the clearest historical comparison tool I’ve seen anywhere. You can run your plan against the dot com bust, the Global Financial Crisis of 2008, the Great Depression, the lost Decade (1999-2009), and Stagflation.
It’s currently the best of breed. The user interface is more approachable than typical tools - but also more nerdy. One flaw is the frequent, long recalculation times - but that can be tweaked to only recalculate on demand. You can use it without logging in. It saves your progress in your browser. It has Debt Payoff, Budgeting (rather rare for a free tool) that allows you to import transactions. The tool is lingo heavy (meaning it uses financial terms).
Well, it’s gone now. But it’s the tool that made me realize that using Javascript to create a tool is much, much nicer than a spreadsheet.
Visual Federal Tax Tool - this tool shows how your federal taxes are calculated. As of 2026-01-17, it doesn’t handle taxability of Social Security income, and as best I can tell, doesn’t handle the OBBB (One Big Beautiful Bill) provisions for seniors.
AARP Tax Calculator - free to AARP members.
Retirement Figures seems pretty robust and is currently free. I have no access to the source to look for problems.
GoogleSheet by Charles Eglington found on Reddit. It’s got lots of options. I want some things that aren’t in it like a “Life Expectancy” for each person, properly calculate deductions, deduce filing status, etc. In addition, I’d like it to “self optimize” by varying the amounts of IRA/401K withdrawals (and the number of years for withdrawals). Ideally it would properly, or more properly calculate California Tax, and have a way to forecast based on inflation. But it’s still a helpful tool.
RothHelper is another tool that was posted in the same Reddit DIY thread. It has an accumulation phase and a simple analysis. Probably OK for modest IRA balances. I like the tabular output though it’s several pages worth of entry to get there. I recognize the graphics… same chart.js engine I’ve been using.
Boldin - formerly known as New Retirement. I had a year subscription. It was usable, but there was much I didn’t like about it. The main issue with the tool is they try to do “everything” from pre-retirement planning through retirement. My number one pet peeve is that everything you wish to do that requires a future date shows month-by-month choices. It matters for some things, like exactly what month you retire or start social security. But it’s tedious. One thing they have fixed is that it used to show “65y3m” meaning age 65, third month. Depending on your birthday, that could be any actual month. Now they show “65y3m Jan 2038” - for example. You can type either “65” or “2038” to get the list of 12 months and just pick one, but if that future income is say, an inheritance well, it’s just bizarre to be specifying the year, and month. Well, at least they don’t ask me what month I plan to die in. Maybe my spouse knows that plan.
You must specify an account withdrawal order (or use the default). The default picks taxable accounts first, followed by tax deferred and tax free. But if you’re going to do Roth conversions, or trying to deplete your overblown IRA - that order makes no sense. Ordering within taxable types makes sense… but I want the tool to be smart enough to know that the last 10k dollars I plan to spend can come from wherever is the most tax efficient at that time. Pull from my cash, or my Roth instead of launching me off an IRMAA cliff, please.
Boldin offers synchronization. The majority of redditors worry about providing linkages. My thought was: why wouldn’t you want to automatically get your account balances, and portfolio information… BUT Boldin only cares about balances. So the pain of “sometimes working/sometimes broken/sometimes need to be deleted and recreated” links is really a nuisance - not a value add. They have announced plans to actually monitor your portfolio, but unless they are going to do so in a way that enhances the guidance that they can provide for asset allocation or choosing growth rates… I doubt it will be worth it. Speaking of growth rates…
Another gotcha, is that every user, must select the “growth rate” for each account. This is a very tricky problem and picking wrong will give a much rosier or much more dismal picture. It may also severely skew the logic for Roth Conversions. If you have a brokerage account (or IRA) that contains 60% equity (and 20% of that International), 10% Bonds, and 30% cash/money market, the growth rate you pick needs to roughly match a reasonable reality that converges those 4 numbers. What many people end up doing is to split every account into separate components (Brok1-Equity, Brok1-Intl-eq, Brok1-TIPS, Brok1-Cash, Brok1-TaxFreeBonds) in order to assign reasonable different rates to each. Doing the split makes rate management easier, but it makes updating balances much more tedious - and it makes linkage to accounts useless.
Navigability of the tool has improved. Things are more where I expect them than when I first subscribed. As I noted, however, there could be many more easy cross links between sections - for example Taxes and IRMAA are separate sections. And if the AI could provide a link to get you straight to the section it’s telling you to visit, THAT would make it more usable. When I asked AI how to set a “glide path” it told me to change the “Growth Curve”. It told me where to find it. But it wasn’t there. I balked and the AI said: “Oh, that’s the INTERNAL name, it’s actually called “Model a Rate Change in the Future” (a switch). It’s not a curve, it’s a single change. So much for actually creating a glide path!
In my opinion, however the worst part of the tool is the Monte Carlo analysis. Monte Carlo is not a SPECIFIC type of analysis. Boldin has chosen NOT to model variable inflation. They offer Historical “simulation” (Market Risk Explorer) but it’s not on the Monte Carlo page, and the Monte Carlo output doesn’t inspire. Monte Carlo shows possible net worth outcomes (and the percentage of outcomes that end with >0 money). But that’s not very reassuring. And the Monte Carlo “chance of success” shown on the overview page is a dead end - it’s not clickable. They don’t provide information about what range of market volatility was used, what range of inflation was used. Their document (and the AI) both specify that they do NOT vary inflation at all - it comes from the “Rate Assumptions”
Social security explorer is inaccessible if one of the couple has already started collecting social security. That seems odd, because maybe I want to know if 67 or 69 or 70 is a better start age.
Oddly, the Roth Conversion Explorer has no AI component. And it feels very disjoint from the main components. For example, if you use the Roth Conversion Explorer but haven’t ALREADY created a new scenario, you must: quit and back out, duplicate a scenario and then redo the Roth Explorer questions. Or apply the changes to whatever the “current scenario” is. This would be a perfect opportunity to create a new scenario. Another head scratcher: you can specify that “surplus” (e.g. income in excess of spending needs) can be placed in a taxable account. But why can’t I put the excess that comes from an IRA into a Roth (e.g. a conversion). That is, I don’t expect to ever see years with a surplus AND a Roth conversion in the summaries, but I do. Seems it’s missing an easy win. And what about this: every withdrawal for spending is FIRST a Roth conversion. Taking that approach you gain tremendous benefits:
The tax consequences of an IRA withdrawal and a Roth conversion are identical.
The Scenario Manager is another prickly point. You can name scenarios, provide a “note” about what each one is, but you can’t e.g. see or compare the notes of multiple scenarios at once, nor can you readily tell how they are different. Did you want to try multiple Roth conversion strategies? You better have named them precisely and kept notes, because the Scenario Manager cannot tell you how the scenarios are different. AI can help, but it won’t, for example, tell you what choices you made in the Roth Explorer. Moreover, the explorer seems to always target drawing each spouse’s IRA to Zero. This does not make sense to me. There is value in keeping an IRA. Both due to the ability to do QCDs, leave some to charity, and - once the balance is sufficiently low - to withdraw funds at miniscule taxation. If you happen to be in a scenario and notice that the growth rate is wrong. You really only have one choice: delete all scenarios, make the change to the Baseline and recreate all the scenarios. Unless you happen to know the rates or inspect the rates used in every scenario - in that case you could update all the ones that had the wrong growth rate. But then you have to also take into account any money flow monkey business you may have done to model some of the things that Boldin doesn’t natively model.
One other shortcoming: Boldin likes to present things in future dollars. This is a mistake that gives a false impression. Right now one million dollars sounds like a nice nest egg (and it is). But 30 years from now at 3% annual inflation, that 1M is worth $412k. In much the same way if you notice your High Yield Savings account balance has climbed from 10k to 11k you would be remiss to not consider what inflation (and taxation) do to diminish the value of that account!
Final comment: at $144/year it’s a great deal compared to a ruinous retirement. You may spend a week putting a plan together. But you will have no use for the tool for the rest of the year. If it did real portfolio tracking, or budget tracking, or tax planning (e.g. how to pay your taxes in retirement) it WOULD make the tool more useful on a monthly basis. But ultimately, what Boldin provides is a complex calculator that responds to your tweaking. That is, it takes a complex problem, and makes you the decider. It will help you think about organizing, timing and accounts, but it won’t suggest to you how to do it BETTER. It won’t help you pick a “more ideal portfolio allocation”, tell you that your chosen growth rates are unrealistic. It doesn’t appear to optimize your annual withdrawals, or provide insights on the best time to do conversions (early in the year - by default it schedules them for December!)
I’ve not had this subscription for very long, so I’ll withhold my comments until I’ve kicked the tires more aggressively. I will offer for now, that it’s less “polished” than Boldin (I run into reference errors pretty often). So far the main quirk I noticed:
It wants to know ONLY the IRA balances at the end of last year. I understand this, but I do NOT. Why it wants prior year end of year balances is no doubt so it can compute RMDs for IRAs and 401K accounts. But if my accounts soared or took a beating, the current value is what I care about.
More later.
Projection Lab - Just now getting a look at this tool. First, don’t pluralize labs… that’s an empty webpage. It offers a free to try phase, current cost is $129 / year. It is definitely more “geeky” than say Boldin, but I already know it does two things that are awesome:
More later.
RetirementIQ Free for 7 days, $50/year. I’ve not dabbled much with this, partly because I prefer open source that I can inspect for possible flaws, back-doors, etc. Directly invoke it here: retirementiq.app
Retirement Scenarios free to kick the tires, but $79 to fully unlock. The UI is good, but the reliance on sliders and a few quirks make it less than ideal for use with a phone/small screen device. I found no gotchas after doing a security audit of the code (as of May 22, 2026). The author recently fixed a problem that made the tool unusable unless your retirement age is greater than your current age. There is, unfortunately, nothing in the tool that helps you calculate “ideal” Roth conversions - but all the directional guidance is good. Like many tools these days, but unlike all the others, this tool integrates AI. You can ask the AI questions about your plan and/or about the tool. If you want to use the tool on multiple devices, you need to “login” using the email address you use to make a purchase.
Cliff Edge App - found this in the DIYRetirement space and have been in contact with the author who asked me to review. It has good visuals. It is focused on seeing where the holes are that you can fall into. Give it some basic data, then slide the Roth Conversion slider to the right and it will show you what brackets you land in and how far away the next “cliff” is. There is a difference, however between a “cliff” (like IRMAA), and a bracket change (like the 0% long term capital gains income limit). If you cross a cliff you get hurt by a thousand or more dollars. If you cross a bracket you pay the next dollars at the higher bracket (extra pennies). It was free, but I see it’s asking $49/yr (or $79/yr by the time you read this). It includes RMD projections. You must create an account to see full projections. I haven’t analyzed it for full features - in part because I’m “averse” to creating an account unless I know what is going to happen with my data. The privacy policy is clear that all data stays in your browser (except the email to create the account). Sliding the Roth control to the right is the equivalent of getting more ordinary income as my Income Tax Planner will illustrate.
Late Payment Penalties One of the biggest bugaboos in retirement is managing your tax payments. Unlike working years where you were getting frequent payments with tax withholding already done, in retirement you can take taxable withdrawals anytime you like: beginning of the year, middle of the year, monthly, etc. However federal and state taxing authorities expect you to pay your taxes “timely” (e.g. quarterly or through appropriate withdrawals). It doesn’t matter to the IRS whether you withdraw 50K at the beginning, middle or end of the year, the IRS expects you to pay your taxes “quarterly” based on your total income at year end.
You CANNOT solve the timeliness problem by plunking down your tax debt when you file your taxes by the April 15 deadline!
The easiest solution to the “when were taxes paid” problem is to have taxes withheld from withdrawals or conversions. The IRS and most state goverments treat withholding as if you paid the amounts quarterly. BUT, most custodians will NOT allow you to withhold taxes from an Roth withdrawal. This means you have three ways to solve the “timely payment” problem: A. Estimate your taxes and pay them quarterly. (But if you miss a payment, expect late penalties!) B. Have the appropriate amount of taxes withheld from a taxable distribution to cover the years worth of taxes (or at least enought to reach “Safe Harbor”). C. File a form with the IRS (Form 2210, Schedule A) that explains why your income was “lumpy” and you didn’t meet the expected timely payment requirement.
Option B allows another workaround: Suppose you convert 10k from your IRA to your Roth. You can have taxes withheld from the conversion, and WITHIN 60 days, make your Roth whole by adding cash into the Roth. However you can only do that “rollover” maneuver once every 365 days - and it only makes sense if you are at least 59.5 years old.
Safe Harbor is another “gotcha” in the tax code. If you “timely” pay 90% of your current year taxes and 100% or 110% of your prior taxes (depending on income), you will not get an underpayment/late payment penalty.
Moldy Brackets While the Social Security payments are adjusted annually by the CPI (Consumer Price Index), the rate at which Social Security is taxed is based on thresholds have NEVER been adjusted for inflation since they were established (1983 for 50%, and 1993 for 85%). This is no doubt why congress has churned and churned on trying to make Social Security non taxable.
IRMAA Escalation My original model assumed that the IRMAA tax brackets and amounts are adjusted by CPI, but that’s not true. The brackets are adjusted per CPI, but the amounts are tied to Medicare. The CPI has averaged about 2.8% annually over the last 20 years, but Medicare has averaged 5.6% annual increase. IRMAA, as mentioned is a TAX CLIFF, not a graduated bracket. That means if you make $1 more than the maximum you move up an IRMAA tier. The result is not only the need to pay the tax, say an extra 4k per year, but you may have to withdraw more from an IRA to pay the tax. At a 20% nominal tax rate, that extra $1 costs at least $5K AND may result in pushing you up into higher marginal brackets. IRMAA penalties will cost significantly more REAL dollars in the future - if you have a chance to eat IRMAA now, or eat IRMAA later, neither is appetizing, but the future will be more painful.
Those Moldy Brackets have added to another problem: there is a “Tax Torpedo” - along with several other tax “pitfalls” - that hits middle income retirees particularly hard. The so-called Tax Torpedo turns a portion of your income in the federal 10%, 12% and 22% brackets into an effective tax rate of 18.5%, 22.2% and 40.7% respectively. To add more injury, eight states tax Social Security and that can make these rates even worse. Here are the net effects:
| State | Tax Structure | Rate at 10% Fed Level (~$10-20K) | Rate at 12% Fed Level (~$30-70K) | Rate at 22% Fed Level (~$75-150K) |
|---|---|---|---|---|
| Colorado | Flat | 4.4% | 4.4% | 4.4% |
| Connecticut | Progressive (7 brackets) | 2.0% - 4.5% | 5.0% - 5.5% | 5.5% - 6.0% |
| Minnesota | Progressive (4 brackets) | 5.35% | 6.80% | 7.85% - 9.85% |
| Montana | Two brackets | 4.7% | 4.7% - 5.65% | 5.65% |
| New Mexico | Progressive (5 brackets) | 1.7% - 3.2% | 4.7% - 4.9% | 4.9% - 5.9% |
| Rhode Island | Three brackets | 3.75% - 4.75% | 4.75% - 5.99% | 5.99% |
| Utah | Flat | 4.55% | 4.55% | 4.55% |
| Vermont | Progressive (4 brackets) | 3.35% - 6.60% | 6.60% - 7.60% | 7.60% - 8.75% |
At 12% Federal Bracket:
At 22% Federal Bracket:
33 of 50 states tax capital gains the same as regular income. Unfortunately many tools and many discussions neglect this aspect, which is another reason I wrote this tool. 9 states have no taxation or do not tax capital gains (as of 2025), and 9 states have preferential treatment of capital gains. [Source]
If you live in, or plan to move in a different state and you want to use this tool, you can! It now includes several states - and more can be added. If you’re impatient, you can get creative and ask AI to add your state to the TAXdata embedded in retirement_optimizer_taxdata.js file.
There are more than a dozen ways that not doing a conversion (to Roth or brokerage) can result in less spendable money and reduce spendable asset value. These scenarios mostly affect those with proportionately large IRA/401K balances. Even modest IRA/401K balances can significantly improve their asset balance and spendable cash through thoughtful withdrawals and conversions.
Here are some of the harms of having or accruing a large IRA/401K: