Hi all- trying to do some (simple-ish) math but not clear what to google.
I’m trying to determine how much I need to save now if I want 7k a month starting in say 25 years for a length of 30 years - say growing at 5% from now through the end of the 30 years.
Any help is appreciated! Thanks!
I’m trying to decide between ProjectionLab and getting access to RightCapital through one of the finance YouTuber courses. ProjectionLab at least has a free trial, which makes it easy to test first, but the RightCapital option is basically a straight $399 upfront.
If anyone here has used either one, or both, I’d really appreciate hearing whether the YouTuber RightCapital access felt worth it, whether it seemed limited in any way, and which one you ended up preferring. Apologies if you’re seeing this in more than one subreddit. I’m posting in a few places just to get a wider range of feedback.
For this converter: https://advisors.vanguard.com/tax-center/tools/roth-betr-calculator/
Those 59.5 in age should also take note of rules.
I think page 11 is useful to read to start.
I am 61 with a substantial amount in my 401(k) and almost nothing in Roth. I am looking to do come Roth Conversions over the next few years to (a) Avoid higher rate RMDs later in life and (b) avoid IIRMA surcharges when being forced to do RMDs.
Does anyone have a recommendation for online tools to model this, where I know my estimated income, AGI, MAGI, ROI on the 401(k), etc?
I'm a user of Projection Lab and the just released version has some interesting planning additions with tax and Roth conversion strategies, something I've wished for for quite a while.
I wanted to share my plan I've been spending way too much time planning to get any feedback on. Retiring this year at 55 so a considerable stretch of gap years along with an extended bottom of the brackets to take good advantage of. A core principal of the plan will be to gain subsidies by looking modest in paper with MAGI under the threshold cliff and living a higher lifestyle (traveling) with 'MAGI-invisible' income.
My rough plan:
#1, fortunate to have both a pension and 457b to serve as a guaranteed income floor (though both count against MAGI.
#2, sell off all income/dividend paying ETFs counting towards MAGI e.g., SCHD, SGOV, etc.
#3, Move most of my HYSA paying 3.2% against MAGI over to FTEXX (zero-fee tax-exempt MUNI fund paying very low dividends) leaving some still in my HYSA. Between the two of those they will fund go-go spend 'MAGI-invisible'. It'll also serve as a critical hedge against SRR especially with retiring so early. <-- Does anyone think the wrong way to park cash-equivalent?
#4, I draw SS at 67, wife at 65 (to not blow MAGI).
(Edit: above had a minor date edit)
. #5, some ver Roth conversions against a large pre-tax IRA between 65-67 along with QCDs and DAF to minimize RMDs and IRMMA.
After having been a lifelong investor in regular Treasuries, I am exploring TIPS (because I believe that interest rates will rise, given the inflationary policies of the administration and Congress). It seems to me that the main motivation for TIPS is to protect one from rising inflation. What is the difference between that and simply purchasing short-term Treasuries, or even easier, a money market fund? Those rates go up in accord with the Prime (and presumably inflation, assuming we have a responsible Fed). Why tie up my money in 5- to 10-year TIPs instead of a money market fund, since both adjust to inflation on a short-term basis?
I find it confusing and taking too big a proportional chunk from my investments to make it work even as 1/3 or so of income sources (SS, savings, ladder).
Right now, it seems I would be best served with a ~23 year ladder starting withdrawals when I hit 70 (based on how long I have which is based on sex and longest living relative in my entire ancestral line [my mom] plus a few years cushion [matches what I have read you should do]).
It seems I can only buy some TIPS from open market each year, Treasury TIPS are not doable this way direct. It seems in a Roth or rollover IRA is the only place TIPS can live. Otherwise, the tax is sucked out each year.
The total I would need is a retirement savings back breaker. Even with it at 1/3 of my lowest possible income needs.
The other option is to buy iShares iBonds ETFs which have a 0.10% annual ongoing fee. One ticker for each maturity year. I am not sure this is cheaper or better, just simpler. Maybe?
I would welcome any advice. I have the intelligence of a 9 year old about bonds so, keep it simple and non hyperbolic or OT. Be gentle. Thanks.
- Reinvest vs. Cash Strategy
Set all funds to pay both Dividends and Capital Gains in Cash. Do not reinvest.
The MAGI Factor: You owe taxes on fund distributions whether they are reinvested or taken as cash. If you reinvest, you lock up the cash but still take the MAGI (Modified Adjusted Gross Income) hit. To get cash to live on later, you would be forced to sell shares, triggering additional capital gains that artificially spike your MAGI and threaten your ACA and IRMAA thresholds.
Mutual Fund Specifics: Mutual funds (especially active ones) often distribute significant end-of-year capital gains. Taking these as cash provides your living expenses without requiring you to sell off principal.
- Routing and (my state tax) Advantage
Direct all dividends and capital gain distributions into MM account to use as your central pool for living expenses.
If your distributions generate more cash than you need to live on, do not leave the excess in MM or reinvest it in equity funds. Instead, manually buy USFR (which I also have).
Why USFR over MM: My state taxes capital gains and ordinary dividends at combined state and local income tax rate, with no discount for long-term gains. However, interest from direct U.S. government obligations is entirely exempt from state and local taxes.
My MM is only partially state-tax exempt because it holds agency debt and repurchase agreements alongside Treasuries. USFR holds direct floating-rate Treasuries and is historically ~99.9% exempt from my state taxes. This makes it a far superior vehicle for parking excess cash, shielding your yield from state taxes while keeping your principal stable and accessible without triggering capital gains.
I think one weak point in retirement planning tools is how they model spending in bad markets.
Real households usually do not react in an all-or-nothing way. They cut some discretionary spending, delay some purchases, and keep paying the essentials.
So what should a good planning tool do here?
For anyone who has used tools like Boldin, ProjectionLab, Pralana, spreadsheets, etc.:
I’m less interested in abstract “probability of success” discussion and more interested in whether the software reflects how people actually adjust spending in retirement.
Originally planning to retire at 58yo - I am 55. But now looking to accelerate that schedule by 1 or 2 years now.
Anyhow, I will have a small (32K) vested pension balance. I can choose among several payment options, including a single lump sum, a rollover to an IRA or another qualified plan (including my company 401(k) Savings Plan), or an annuity.
If it matters, we have roughly 1.75MM in tax deferred accounts. Very little in Roth. And another 90K in cash.
Sure, we get it. Play the long game, if applicable for you.
He did leave out Medicare two year look back though. 62 and 63, you want to keep income low. If applicable to you.
Trying to model my retirement plan in PL. I am in a partnership where I max my personal, catch up and employer contributions through my salary. I'm having trouble getting PL to allow me to add the "employer" component from my salary instead of as a traditional outside cashflow from an employer. I've searched their site and while the solo 401k is mentioned, I haven't found instructions for setting it up in the program. Any advice appreciated.
Can anyone point me to a guardrail system for planning for early retirement where the withdrawal is not constant over time (meaning adjusted but based on a given initial withdrawal). Life is just rarely so neat as the examples seem to imply.
One example would be early retirement: If one retires at (say) 55 and starts social security at 70 portfolio withdrawals will be different (higher) for the first 15 years and then be reduced when social security kicks in.
Another example might be if you plan to move and you know you will have higher expenses that single year or two.
I can imagine so many scenarios where it is expected at the start that spending will not be tied to the first year withdrawal.
But all the guard rail systems I've seen start with a certain initial withdrawal and raise or lower it when guardrails are triggered based on portfolio value over time. But that's too simplistic for real planning purposes when withdrawals are not constant.
Thanks in advance for any help with this.
I will add:
The 4% rule is hardly better at handling real, ie complex retirement needs.
I've also seen risk based guardrails that use Monte Carlo chance of success to change withdrawals, but I'm suspicious in general of black box Monte Carlo simulations where the methods and assumptions are either not clear or perhaps use relatively few iterations (looking at you Boldin).
I’m starting retirement this year and have been going pretty deep into the planning side.
One thing that stood out is how interdependent a lot of the decisions are:
Most of the tools I tried, including ones like Boldin and ProjectionLab, felt very scenario-based — you tweak one variable at a time and compare outcomes. The problem I kept running into is that the “best” choice for one decision often depends on what you assume for the others.
So I started building something for myself to explore this more systematically.
The way I’ve approached it so far:
For a typical couple, this ends up evaluating a pretty large number of combinations rather than relying on a few hand-picked scenarios.
Before I go too far down this path, I’d really appreciate input from people here:
Would especially value critical feedback.
EDIT: Really appreciate all the thoughtful responses — especially the references to tools like Pralana and Boldin, and the discussion around rules of thumb vs. optimization.
One thing I’m still trying to understand better is whether systematically exploring combinations of decisions actually leads to meaningfully different outcomes, or just adds complexity on top of what people are already doing.
I wrote up how I’ve been thinking about this in more detail here: https://pinebrook.ai/prisma/approach.html
Would especially appreciate any pushback on whether this feels genuinely different, or just a more exhaustive version of existing approaches.
Hello, wondering if there is consensus on which accounts to withdraw from first second etc. My case is outside the U.S. so the typical instruments (roth, 401k SS) don't necessarily apply to me.
For context, we are in Australia.
my retirement account (similar to a 401k) is accessible at 60 and must be used at 67yrs with a minimum withdraw rate per year. These are completely tax free at 60.
my partners' is the same, but they are 8 years junior, so can be accessed with this delay.
Then there are regular outside stocks which would pay capital gains tax (at 50% discount). and these are not necessarily large (e.g., ~5 years of expenses)
Then there is a US based retirement account that is fixed and can be accessed at 59 and a half, however will have a 30% tax on any withdrawal due to AU-US tax treaty. (also currently about 5 years of expenses).
Finally, some cash reserves like most.
So question is, should the US based account be withdrawn first, knowing that it will shrink fastest, or later in life allowing for a greater growth so the 30% tax doesn't chew away as hard as it would in the early years?