| RETIREMENT SPENDING MODEL DEFINITIONS |
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Tax-Sheltered Funds
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| IRA’s, 401K’s, etc. |
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| Taxable Funds |
| All funds not tax-sheltered |
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| Total Funds |
| Tax-sheltered funds plus taxable funds |
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| Need After Tax |
| Amount of money you would want to live on over the next 12 months if you
retired today (after federal and state income taxes). |
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| P/T Funds Needed + w/d Taxable Funds |
| Pre-tax (P/T) money from Social Security, pension, buyout, other income
and tax-sheltered funds plus any money removed from your current non tax-sheltered
funds. |
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| Social Security P/T |
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Self explanatory. This increases each year
at the rate of inflation from your “current age” using “current dollars”.
The Social Security Administration can send you this information.
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| Pension & Buyout & Misc. Income P/T |
| Pre-tax (P/T) money from a defined benefit pension plan,
selling a company and from other income sources. Estimate the first
year amount in dollars “then”. |
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| Mandatory w/d Tax-Sheltered Funds P/T |
| Required pre-tax (P/T) minimum tax-sheltered withdrawals starting at age
70 ½. |
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| Elective w/d Tax-Sheltered Funds P/T |
| Pre-tax (P/T) withdrawals needed when your other
sources do not provide enough income to meet your desire. |
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| Total w/d Tax-Sheltered Funds P/T |
| Sum of pre-tax (P/T) Mandatory and Elective withdrawals. |
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| w/d (d/p)
Taxable Funds |
| Withdrawal source when Social Security, pension, buyout, other income
and any mandatory tax sheltered withdrawals are not enough. If other funds
provide more money than you desire, the excess will be deposited into here. |
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| Total Funds Adj. for Inflation |
| This is simply your “Total Funds” deflated by the rate of inflation out
to each of the 30 years. In other words, this column presents how your
“Total Funds” for each year would look, feel and spend in the year you retire. |
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