How Quicken calculates retirement funds

Question

Within Quicken Deluxe there is a module for retirement planning and I have been playing with it. Some of my funds are in IRA accounts whack will need to be withdrawn by a certain minimum amount per year when I reach 70.5. Obviously this annual IRA withdrawal has tax consequences increasing my tax bracket as of that time.

In Quicken's retirement module there is a question about the tax bracket at retirement. However my tax bracket will be less in retirement before the IRA withdrawals and greater after. I assume that Quicken has no mechanism to take into account this change in tax bracket. Am I correct?

Also, in its calculations does Quicken assume I am first depleting IRA funds before using non IRA funds or the other way around?

Willliam

Carl · Accepted Answer

I use and recommend a spreadsheet for that purpose. The flexibility and transparency of a spreadsheet is very helpful. I postulate income and expense (as a budget) for future years. I can try various values of inflation and increment or decrement my income. Basically, this shows me how long my money will last in retirement under various scenarios.

PS: Does Willliam really have three ls? Carl

WIlliam · Answer

Thanks.Using a spreadsheet that way would be beyond my capabilities. I'd be afraid I forgot to take into account something.  Are there such pre-coded blank spreadsheet forms available for download?William

Carl · Answer

"WIlliam"  wroteNot that I know of. But, learning to use a spreadsheet is not difficult.I used spreadsheets to manage my finances before I adopted Quicken. The main advantage of Q, as I see it, is the historical reports.  Q is generally inflexible and opaque. Spreadsheets are very easy to change, insert or delete something, and you can see what is happening.Try a spreadsheet for financial projections -- you'll like it!Carl

How Quicken calculates retirement funds

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