2 Replies Latest reply on Aug 19, 2010 6:33 PM by Azimmeister

    Planning Software

    charger1
      I have just retired and I would like to acquire software to use in planning and managing my retirement. I would like to be able to do "what ifs". Does anyone have a suggestion?
        • Re: Planning Software
          JerryD
          charger1 said...

               
                    I have just retired and I would like to acquire software to use in planning and managing my retirement. I would like to be able to do "what ifs". Does anyone have a suggestion?      
                          

          Look into a spreadsheet. I am not being flippant. A TIAA-CREF adviser set up one for me addressing a strategy that includes Social Security and taxes (I think that he did this) and even as detailed as when I might buy a new car (it turns out that a new car can become a major blip in retirement assumptions especially if you inflate the cost out) . I then augmented it with various investments and performance assumptions and state/Federal taxes and projected to age 95 for me and my wife (I wish!). I even threw in when my wife gets SS benefits.

          I then did some what-ifs on converting our IRA's to Roth's and looked at the tax implications for our situation. This was extremely helpful since it showed me how I could maximize those conversions up until required minimum distributions start at 70 1/2 - remember that RMD's are given to you at a rate just like regular income and Roth's are never taxed again (income tax NOT estate tax) for you AND your beneficiaries (called a stretch IRA). I picked a specific before distribution tax rate during the conversion stage that I never want to exceed by doing the conversions and then looked at after distributions started and what the taxes would be. My resulting strategy provides several years at a lower tax bracket after RMD's start and a considerable total tax savings due to the "permanent" Roth tax shelter.

          If you are ambitious or a control freak like me, you can update the spreadsheet annually for actual taxes and investment gains/losses to get a pretty accurate on-going picture of where you are at in retirement.

          One gotcha to doing IRA to Roth conversions if you don't overpay taxes throughout the tax year is that you have to file an estimated tax return by January 15 and pay enough taxes to avoid any penalties. The flip side is that the April 15 return is pretty much a breeze since I already did my taxes on Turbo Tax in the previous December. Also, TIAA-CREF sets a deadline in late December by which you need to do the conversion. However, their fax capability makes this pretty trivial if you have the right form identified and ready to go.
          • Re: Planning Software
            Azimmeister
            Try Voyant (http://www.planwithvoyant.com/content/consumer/default/index.html).  It has excellent planning tools and "what-if" capabilities.  It is also free!