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Personal Data

A snapshot of the Personal Data screen

It's always best to start easy and the Personal Data page does that. Work through the page and fill in the information you know. There are a couple of numbers on this page that you probably don't know. If you find yourself stumped, look up the topic in this manual. It gives estimates for the things you may not know. More important, though, it gives some tips on how to research available information so you can develop a more accurate answer.

Retiree Information

Name Name of the Retiree
Birthdate

The program uses the Retiree's birth date to calculate his/her age which is needed to calculate age specific items such as social security benefits

Retirement Date

The date when you expect to start receiving Social Security Benefits.

Social Security Amount

The amount of your expected Social Security Benefit. For the most accurate possible estimate go to the Social Security Website at 'http://www.ssa.gov'

Spouse Information

Name Name of the Spouse
Birthdate The program uses the Spouse's birth date to calculate his/her age which is needed to calculate age specific items such as social security benefits
Retirement Date The date when your Spouse expects to start receiving Social Security Benefits.
Social Security Amount The amount of your Spouse's expected Social Security Benefit. For the most accurate possible estimate go to the Social Security Website at 'http://www.ssa.gov'

Miscellaneous Personal Data

Retiree is married Social Security Benefits are dependent on whether you are married or single. In addition, the Estimated Income values (see below) are assigned 100% to a single retiree but are divided 50/50 between a married couple.
Years to calculate projection How many years to include in the projections graphs? For retirees this relates to how long they expect to live. For other goal planning (saving for college, etc.) this is the number of years until the goal is achieved. The Planning for your Retirement section contains a more complete discussion of the issues involved.
Inflation Rate Inflation and Interest (investment return) have a very strong influence on the calculations results. Estimating the Inflation Rate too low has the effect of making future expenses artificially low. The result is that even modest investment returns outperform inflation and generate excessively optimistic results. Estimate Inflation Rate too high and inflation consumes your investments, leaving you broke.

Don't let the current low inflation make you too optimistic, if you pick anything below 4.0% you should have a good reason.

Use 4.5% if you don't know what to put down. There is a more complete discussion of inflation in the Planning for your Retirement section.

Investment Return Investment Return and Inflation each have a strong influence on the calculations (Estimate Investment Return too high or too low and your results will be unrealistic). Historicaly, this value is around 9.5% or 10.5% but the current economic climate suggests something slightly lower. I would recommend a value of around 8.0%. If a significant portion of your funds are in bonds, treasury notes, CDs or other more stable investments you may want to use an even lower number. A discussion of investment returns can be found in Planning for your Retirement
Before Retirement Tax Rate This is your incremental tax rate, not your tax bracket. The incremental tax rate is the percentage of each dollar of all your income that goes to taxes. Your tax bracket is the percentage of each extra dollar that is taxed and assumes any extra income does not generate new deductions. Your incremental tax rate does not include non-income related taxes like property tax or sales tax but does include Social Security tax and Medicare tax. It is usually less than your tax bracket due to non-taxable income and deductions.

You can calculate this value from your W-2 information and Federal and State tax returns:
  • From you and your spouse's W-2s, add all the line 3 - 'Social Security Income' values together. This is your total income for the year. The W-2 line - 'Wages, Tips and Salary' already has the Social Security Taxes and some pre-tax medical plan, pension plan and other numbers taken out - don't accidently use this value, your income will be too low and the Before Retirement Tax Rate will be too high.
  • Add together all the income related taxes that you and your spouse paid. These include Social Security and Medicare Taxes, Federal and State Income taxes and any city or county income taxes you may have paid. If you received a refund you must subtract that from the total taxes paid and if you had to pay more at tax time - be sure to add that in.
  • Take the total taxes paid and divide it by your total income.
  • Multiply the result by 100 to get the percentage.
  • If you don't have your W-2 and tax return handy you can estimate it from the table below:

    Income Estimated Incremental Tax Rate
    $20,000 9.5%    
    $30,000 13.5%    
    $40,000 16%    
    $50,000 18%    
    $60,000 21%    
    $70,000 23%    
    $80,000 25%    
    $90,000 27%    
    $100,000 28%    
    $110,000 29.5%    
    $120,000 31%    
    $130,000 32%    
    $140,000 33.5%    
    $150,000 34.5%    
    $160,000 35.5%    
    $170,000 36%    

    This table is based on a 3 person family taking standard deductions. State tax is estimated at 30% of the federal tax paid. The family is not taking any additional tax credits or deductions.

    After Retirement Tax Rate Estimating an after retirement tax rate is more difficult since it requires all the information that the pre-retirement tax rate used along with additional information about your Social Security income. Social Security benefits are taxed at a rate that varies between 0% and 85%. The exact rate depends on your earned income and several types of common investment income.

    If you are retired you should calculate the value from your tax returns.

    To estimate this value:
  • If your after retirement living expenses are below $4,200/mo subtract 3% from your pre-retirement incremental tax rate.
  • If your after retirement living expenses are between $4,200/mo and $5,500/mo subtract 1%.
  • If your after retirement living expenses are above $5,500 your Social Security will be heavily taxed and you should use your pre-retirement tax rate for after retirement estimates.
  • Estimated Values

    You can enter estimates for the current value of your assets, income and expenses. This allows you to make quick (but less accurate) estimates of your financial status. Enable each estimate by clicking on the appropriate check box. When there is a check in the estimate box the values from the associated Asset, Income or Expense Worksheet is ignored and the estimated value is used in it's place. Each value is independent of the others. You can check them in any combination and only the checked estimate(s) will be used.

    Estimated Total Assets and Investments The total value of your current assets and investments. This is everything you own - your home, cars, stocks and bonds, retirement plan balances, etc., all lumped into one total value.
    Estimated Income Total income for both you and your spouse, before taxes. For married people, the program assumes that this is evenly divided between you and your spouse. The program also assumes the each person's share of the income disappears when that person starts receiving Social Security.
    Estimated Expenses

    Monthly expenses can be difficult to estimate. The Expense Worksheet is an excellent tool that can help identify your expenses.

    One way to make a quick estimate is to take your annual after tax income, divide by 12. From that number subtract your monthly savings. The result should be an approximation of your monthly expenses.

    When you subtract your savings make sure you only subtract money that you save for the long term, if you save up for several months so you can pay the car insurance or taxes that is good money management but it is not long term savings.

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