Financial/Tax Planning Tools?

[Cat in OH]

I'm wondering if anyone knows of any online personal financial planning tools or spreadsheets that I might be able to use. I'm an accountant and tax preparer (very small practice). I don't do any financial planning professionally, but my husband and I have reached a point where we need to figure out the best retirement income scenario, especially tax-wise. I can do some of the calculations using ATX and spreadsheets, but I'd rather not re-invent the wheel if there's something already available.

Briefly, we're trying to figure out several things, especially considering likely changes to tax rates over the next few years:

1) How much of our traditional IRA's should we convert to our Roths?

2) Are we better off in the end if we draw out of our regular (non-tax-deferred) investment accounts before drawing from the IRA's?

Thanks for any suggestions!

Cathy

[JohnH]

A very good place to start is the Vanguard web site. They offer a wealth of information for free, and you'd do well to absorb everything John Bogle has ever written on investing and retirement planning.

Personally, I think there's a pretty good case to be made for waiting as long as possible before withdrawing qualified money in order to get the maximum benefit of tax free accumulation. After all, that's why you initially put it there.

The main exceptions to that general rule would be:

1) your retirement income leaves you in the lower part of the 15 per cent Fed bracket - it might be worthwhile to use Roth conversions and/or regular withdrawals to lock in the tax liability at the 15per cent rate, even if the money is simply moved laterally into the same type of investment. I think it's safe to assume that tax rates are going up in the future. Of course, the interplay with state income taxes can also have a huge impact on this analysis.

2) your income producing assets are likely to push you into a higher tax bracket when you begin RMD 's. Certainly a nice problem to have, and it might alter your current withdrawal plans if that's a potential problem.

There are hundreds of other possibilities, but I can guarantee that if you develop an instinct for looking at investing in the way John Bogle views it, you 'll find that there isn't much out there to trump his reliable advice. You'll also insulate yourself from 90 percent of the half-baked schemes that many so-called "investment advisors" try to push on their clients.

As an aside, one of the best pieces of advice I ever ran across was a suggestion to put yourself on a "retirement budget" well before you actually retire. So about 3 years before my wife retired from her state employment, we calculated her net benefit and used a savings withdrawal to reduce her take home pay down to that figure. We became accustomed to that smaller check so there was no shock to the budget when she actually retired. Of course the saving accumulation ended when she retired, but we had some extra nest egg socked away. We had been very conservative in our estimates, so she actually got a small raise in her monthly benefit when she retired. I still work full time and will probably continue to do accounting and tax work until I lose my balance, but we will probably do some sort of similar transition if or when I ever give it up.