Detailed View observations and questions

[harkdh]

Hi, I just installed this program and learning about all its features. Without going into its advanced features yet (Additional Inputs), I ran just a simple scenario, entered all the information on the Summary View screen including planned expenses and SS and ran the analysis. A couple observations make me wonder if I have entered all the info correctly. Looking at the Detailed View I have these questions (I know some have been asked before but the confidence in my data entry is not yet 100%);

-I am thinking Planned Expenses and Annual Retirement Income (SS) would adjust for inflation each year but they stay exactly the same throughout the plan, why is that?
-The Median Withdraw also stays exactly the same for the first 5 years of the plan then starts adjusting at age 67 (before age 72 RMD) for what I assume is inflation, why is that?
-Is the amount in the Median Withdraw column after tax dollars? Meaning the withdraw was actually greater than that? I ask because if I add that amount to After Tax Income, it exactly equals planned expenses, but I need additional funds to pay income taxes.
-My Taxable Portfolio goes to zero at age 67 but suddenly reappears at age 75, why is that?

Thanks so much for your time.

[jimr]

Hello,

I tried to answer your questions are below...

In general, it can be helpful to select the "show more detail" radio button at the top right of the detailed view window to add in some extra columns to the table. Also, if you right-click on any column header, you'll get a menu that lets you "show all columns" which adds even more information. Finally, if you right-click on any cell in that table, you can export the table to excel for easier manipulation.

-I am thinking Planned Expenses and Annual Retirement Income (SS) would adjust for inflation each year but they stay exactly the same throughout the plan, why is that?

All of the amounts in the detailed view table are shown in today's value dollars. So an amount that stays the same from year to year is exactly keeping up with inflation. An amount that increases from year to year is increasing at a rate greater than inflation, and an amount that decreases from year to year is either decreasing, staying the same, or increasing at a rate less than the inflation rate.

-The Median Withdraw also stays exactly the same for the first 5 years of the plan then starts adjusting at age 67 (before age 72 RMD) for what I assume is inflation, why is that?

There could be a couple of reasons for this. First, if you have selected the flexible withdrawal option, the percent of desired spending that gets funded may be increased or reduced to something other than 100%. This withdrawal adjustment can begin as early as the second year of retirement. You can disable this feature by setting the spending policy to stable. More info on this here:
https://www.flexibleretirementplanner.c ... -policies/

The more likely explanation from what you've described is that withdrawals are coming from your taxable portfolio prior to age 67 so there are no taxes due on those withdrawals. Then starting at age 67, withdrawals are coming from the tax deferred portfolio, which get taxed at the income tax rate so the total withdrawal amount needed is higher. The taxable portfolio is carried at a 100% cost basis, so withdrawals from that portfolio don't incur any taxes. Gains on the taxable portfolio are taxed at the investment tax rate before being reinvested into the portfolio.

There may be some other explanation, but I'd need more details about the plan settings to know what it might be.

-Is the amount in the Median Withdraw column after tax dollars? Meaning the withdraw was actually greater than that? I ask because if I add that amount to After Tax Income, it exactly equals planned expenses, but I need additional funds to pay income taxes.

The median withdrawal column includes the withdrawal amount that's needed to fund expenses plus any taxes due on the withdrawal, plus the taxes due on the extra withdrawal to pay the taxes, and so on. (This depends on which portfolio the withdrawal comes from - taxable, deferred, tax free).

-My Taxable Portfolio goes to zero at age 67 but suddenly reappears at age 75, why is that?

If the RMD amount in any year is greater than the amount needed to cover expenses and taxes, the excess is moved into the taxable portfolio.

[harkdh]

Thanks for the quick and detailed response Jim, its amazing to see how different scenarios play out.