• 1. Profile & Ages: Enter the birth year of each person and estimated life expectancy for both partners. To model a single taxpayer, set the Spouse Birth Year, Spouse Life expectancy and Spouse IRA to zero.
• 2. Assets: Enter balances. Brokerage Basis is used to calculate capital gains vs. principal. Brokerage withdrawals will be assumed to be part subject to capital gains. Total all after tax investment assets into Brokerage, and all cash-like holdings into Cash. Should one spouse predecease the other, all IRA assets are inherited by the remaining spouse. For Roth, sum the existing ROTH balances into one total.
• 3. Income (annual) Input annual Social Security and pensions. Set the start ages to see the impact of delaying benefits. Amounts you enter for Social Security Amt will be adjusted annually by the CPI/COLA (next options). Survivorship is the percentage of the pension that will continue to be paid after You pass away.
• 4. Assumptions: choose the Inflation rate, the CPI rate (which is the expected change in tax brackets rather than actual inflation), the Growth rate for the IRA/401K, Brokerage & ROTH. Cash Interest is the expected interest on cash and cash-like investments (e.g. Mutual Funds/Bonds). To make these numbers accurate, it's best to separate all investments into "Brokerage" and cash into Cash.
. Social Security Fail & SSecurity Net Payout.
• Strategy: Find this unlabeled item at the top left of the display. Set the After-Tax Send to the amount of after-tax income you need per year. And set the Spend Delta percentage. A Spend Delta of 0 means no change, while -1.5 would reduce spending by 1.5% each year. To have spending grow, use a number greater than 0, like 2%. Default is -1% per historical data.
  • In Withdraw Proportional +% it proportionately withdraws enough from all sources to reach the After-Tax Spend goal, then adds an extra IRA-only boost of 0–200% of that spend goal. At 0% it is the pure proportional baseline; higher percentages accelerate IRA drawdown, with the after-tax surplus flowing to Roth (if Max Conversion is on) or Cash.
  • Compare with Reduce IRA in N Years to amortize your IRAs in a fixed number of years (they will not be emptied, they will be drawn down to IRA Goal.
  • Fill Federal Tax Bracket withdraws enough to max out the chosen federal tax bracket. NOTE: If your spend goal is in a bracket higher than you select, it will try to meet the spend goal instead of locking to the bracket.
  • Lesser of IRMAA or TaxBracket is not yet implemented, but here it's like Fill Federal Tax Bracket, but reduces the amount withdrawn to stay under the the lesser of the (next) IRMAA tier, the next state or next federal bracket - which ever is lower. It applies an inflation adjusted "safety threshold" of 2,000. There are three gotcha's here: a. the After-Tax Spend goal is in play so it may blow right past the next tier if you have insufficient non-taxable income, b. the current year IRMAA tax is based on income from two years ago - so this setting attempts to avoid FUTURE tax - not tax in this year, c. the current year filing status is what is used to avoid hitting a higher tier. Here is why that matters: If you or your spouse pass away, the careful work avoiding a higher tier two years ago will still hurt in the current year. For example if the MAGI is one dollar below the first tier while married, two years from now when filing status is Single, that MAGI falls into the 4th IRMAA tier - the only upside here, is that there is now half as much of the IRMAA tax since it is per-person. One solution is to remarry. :-)
• After Changes... selecting the Annual Details, Chart or Optimizer will cause a recalculation and show the page. On the Annual Details table, rows are highlighted in yellow if status changes to single. A pink/red backgrounds means there are not enough funds to meet two years of SpendGoal. Optimizer finds the mathematical "sweet spot" for emptying IRAs to minimize lifetime total tax and maximize total spendable value. It checks different drawdown years - that is the same thing as the Reduce IRA in N Years but it loops through from 1 to 30 years.

What is Missing

This tool does not (currently) model annuities, multiple pensions, additional w2 (taxable) income. The tool intentionally keeps the number of options low. Currently the "optimize" option focuses on depleting the IRA balance(s) to the point where future RMDs will not force excess taxation (Federal, State and IRMAA). An additional optimization is planned that will iterate to maximize spendable - see the Planned tab. These features, however are NOT in scope.

1. There is no Monte Carlo or other fancy strength tests.
2. The RMD tables are the standard one, not the one that might apply if there is a 10 year or more difference in spouse ages
3. It only uses the MFJ and Single tax brackets. (No head of household, or Married filing separately)
4. Because ROTH assets are not taxable, it merges all ROTH funds into one account. In real life, conversions/withdraws and earnings would occur in separate accounts.
5. There is no Federal Alternative Minimum Tax (AMT) calculation. This normally does not apply to retirees unless they have huge bond interest, or are exercising ISO stock. In the case of California the 1% additional tax for high earners is built into the embedded tax table.