With the passage of Secure Act 2.0, almost every retirement plan will now be required to offer both pre-tax and Roth elective deferral and matching options for participants. If that sentence alone confused yet, best to start with our tax tutorial.
But which option provides the best retirement outcome? How do you define “best?” Existing tools make broad assumptions about tax rates and ignore the impacts of Social Security or Required Minimum Distributions (RMDs) from pre-tax accounts that can significantly alter your tax situation in retirement.
We built a tool that provides detailed financial projections throughout your working years and retirement, calculating your tax bill, marginal and effective tax rates, Social Security benefits, and RMDs, so that you can have a year-by-year projection of your financial situation. It accounts for the retirement budget you want and accounts for the additional taxes of withdrawing those funds from pre-tax accounts.
Included features:
- Single or Married filing status
- Optional Inclusion of Social Security benefits
- Configurable contribution and matching rates and tax styles
- Inclusion of both the Tax Cuts and Jobs Act (TCJA) tax tables as well as the Pre-TCJA tables that will go back into effect after 2025