Recently, we discussed our free web-based calculator to help you better plan for your retirement. At that time, it offered answers to the many commonly posed questions for those nearing or currently in retirement.
- How long will my portfolio support my discretionary and non-discretionary expenses?
- How much will my heir or favorite charitable organization receive?
- What will my future tax liabilities look like?
Now, our calculator includes many new features to address a broader group of retirees, especially those with a spouse or domestic partner with other sources of retirement assets or retirement income.
New Features
The newest version of our retirement calculator offers a better interface for inputs, by arranging them in logical groups. It also includes many new features relevant to many retirement plans.
- A separate retirement horizon for a surviving spouse (or domestic partner) and their unique after-tax retirement income needs
- New inputs for the spouse’s tax-deferred accounts, like Traditional IRAs, Rollover IRAs, 401(k)s, 403(b)s and 457 plans
- New inputs for the spouse’s tax-exempt accounts, like Roth IRAs, Roth 401(k)s and Roth 403(b)s
- An option to select your state of residence, so that the taxable brokerage account can be properly taxed whether (or not) the surviving spouse resides in a community property state
- Added a starting age for social security and pensions for the retiree, and if applicable, their spouse, to delay these other sources of retirement income.
- Input to choose whether (or not) to value the heir’s assets based on using the new 10-year inherited IRA stretch rules due to the SECURE Act.
Optimizing Retirement Income Withdrawal Decisions with a Spouse’s Contribution
Like the previous version, the calculator provides results using the Common Rule and our Optimal Rule. To develop a plan for a hypothetical couple, we used the default values in the calculator, but switched the input labeled “Do you have a spouse or domestic partner?” to “yes”. In this case, you would received the following summary of your plan.
Scrolling down the page, you will see the a forecast of withdrawals to meet this hypothetical couple’s after-tax retirement income needs. In this case, we assumed a 20-year retirement horizon for the retiree. Then, the surviving spouse lives an additional five years after the retiree passes away. Consequently, in years 21-25 of retirement, the surviving spouse is no longer filing their taxes as “married filing jointly“. Instead, their tax brackets are significantly lower in these later years with a filing status of “single“.
The updated retirement calculator also tracks account balances, and now includes the spouse (or domestic partner) accounts as dashed lines.
We hope you find these new features helpful as you plan for your retirement! This new calculator continues to improve, and we welcome your suggestions.
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