2017 December 22 at 3:11 pm #439darrowkParticipant
We received this question from a user:
“I have been reading your blog and recently tried out your app. It is very intuitive and easy to use, and as a fellow engineer, I appreciated the detailed help instructions and video tutorial that accompanied them.
I am curious how your app takes into account the penalties that are incurred on early withdrawals from Roth IRA or Roth 401ks.
Let’s say your app says that I can retire at 50, but most of my savings is in either a Roth IRA or Roth 401k, how does the 10% early withdrawal get taken into account? Also, my company’s pension doesn’t kick in until I’m 55 1/2, how do I tell the app to take that into account?
Thanks, and keep up the good work!”
2017 December 22 at 3:13 pm #441darrowkParticipant
…thanks for writing. Glad the app was easy to use. If you have time to leave a short review on the Store, we really appreciate those at this stage.
I assume you’re using the Free version, which was designed to be a quick start and provide easy, rough answers. I’d say the accuracy of that app is within about 10%, in general.
The Free app does have a “Pension Start Age” which you can set on the Me screen.
For greater accuracy in many advanced situations, I’d recommend our Pro calculator. It handles penalties on Traditional accounts, and performs detailed federal tax calculations.
Penalties on Roth accounts are somewhat less likely, since withdrawals of all your original contributions would not be penalized or taxed, even before age 59 1/2. However withdrawals of earnings might be, and Pro does not handle that, yet.
Pro is a paid app, but very inexpensive given our development costs and the sums it can model for you:
Hope that helps.
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