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Thanks for the report. Note the income thresholds for this tax are not indexed for inflation. That means you may be subject to this tax at relative modest income levels in later years of a simulation. The tax is included as part of your federal income tax in other taxes.
Also, the IRS states that investment income includes, but is not limited to: interest, dividends, capital gains, and several other categories. Thus, even if you don’t own stocks/bonds, simply having some accumulated cash earning interest during later years of a simulation could subject you to this tax.
There is more detailed information available from the IRS here: https://www.irs.gov/newsroom/net-investment-income-tax-faqs.
We know there is a general need for even more detailed information in the Log report to understand situations like this. Thanks again for the feedback.
1) Yes, that is correct. Our pre-loaded “Living Expenses” event is just a renamed Withdrawal event. You can create as many events of as many different types as you need. And they can Start and End in the simulation years of your choosing. You can also rename or delete existing events by long-pressing on the event in the list and selecting off the popup menu.
2) Thanks for describing your requirements. That is helpful to understand. Right now CIRY Pro is a high-fidelity tool that performs detailed tax calcs, shows your marginal tax rate, and gives you flexibility via events for manually experimenting and fine-tuning your withdrawal strategy. You can change the withdrawal order by long-pressing an Account name and choosing Move Up/Down. You can use Transfer events to move money between accounts (Roth conversion), and the app will handle any tax consequences. We also hope to add individually saved/loaded scenarios soon.
In the long run we would like to offer more automated intelligence for optimizing withdrawals, but that will depend on attracting an active user base to support our development efforts. Thanks again.
David, thanks for expanding on your capital gains needs. The CIRY modeling engine does support the concept of a ‘Tax Basis’ on Taxable Accounts, but we haven’t exposed it in the user interface yet. That would let you set the proportion of an initial balance that’s already been taxed. The rest would be treated as unrealized gains going forward. I believe that would offer the functionality you need.
I’ve elevated the priority for getting this into the user interface, but can’t promise a timeline until we assess other tasks. Thanks again.
Good news, you can export results right now! Tap the Envelope icon at the top of the Reports screen.
I will add a font size adjustment to our wish list. I’m not sure what’s involved with that, so it could have to wait until our next major release.
Can you expand on what you need in the way of capital gains accounting? We do track unrealized gains internally, and there is more detail in the Log report, but we haven’t exposed any capability for users to fine-tune that. I’d be interested in your requirements, and any suggestions for the user interface.
Glad it makes sense now. The calculator is a powerful tool and can model some complicated scenarios, but we’ve worked hard to ensure the numbers are right.
As for Inflate Before/Inflate After, you have to look at each individual situation. For starters, Inflate Before is only relevant if the event starts sometime in the future. Maybe you are scheduling a car purchase 3 years from now. You would probably check Inflate Before, because the price of the car would rise with inflation before you purchased it. Inflate After has to do with inflation once the event has begun. Living Expenses are ongoing from the start of the simulation, and we would expect them to increase with the inflate rate, so I would check Inflate After. For a 401k contribution it depends on whether you intend to increase your contributions over the years, or keep them at the initial level.
We’re really glad you’re happy with calculator! Reviews on the Google Play Store are very valuable to us right now, if you have a minute to leave one. Either way, we appreciate the feedback Conrad!
Just to clarify: you want to enter all starting balances in the Accounts section. You use the Events section to set up any annual or repeating cash flows that take place in subsequent years.
We have just been alerted to a bug where Today’s Dollars is not staying selected for multiple calculations. It’s possible that the problem you are seeing with the Cash Flow report inconsistency is due to that same bug. We will investigate and try to fix as soon as possible. Sorry for the inconvenience.
Your Cash account is where any income for a given year will accumulate, unless you direct it elsewhere. The Log report (last report in the Reports section) shows every single transaction for every year, so if you have an unknown amount like that 53,535 accumulating, you can scroll to the year in question in the Log report, then look in the EVENTS section in that year to see exactly where that sum is coming from. Most likely one of your defined events is producing that income.
Hi Conrad. The “Business” event is just an Earned Income event that we pre-loaded for convenience. An Earned Income event mirrors a paycheck stub and is useful if you need to fine-tune your work income stream, capturing all your deductions or for self-employment, for example. Otherwise, you can just rely on the simplified “Work Income” field in People/You or Spouse.
The “Tax Deferred Saving” event is just a Transfer event that we also pre-loaded for convenience. A typical use for that might be extra retirement saving, in addition to what is withheld from a paycheck. If the To Account in a Transfer event is set to “Your Tax Deferred,” for example, it’s an equivalent mechanism to the withholding you see in the Earned Income/Business event. The money is going to the same account and will get the same tax treatment.
Also, note you can create as many events as you want by tapping NEW. And you can rename them by long-pressing on an event in the list and picking Rename.
Ok Blair, that worked, I can see your screen now.
What I’m seeing looks like the sale of a home, not an early payoff. That the Home Property column goes to zero in 2023 means you no longer own the asset. Typically this would happen if you set an End Year on the PropertyEvent, instead of or in addition to an Early Payoff Year. The End Year is used as the year when the property is sold. Try setting End Year to unending if that’s the problem.
If that doesn’t get you going, the next step would be to send us a screen shot of your input data for that Home event. Also please confirm that early payoff is your intention, because your starting message above says “I am not paying off $215,376 in the last year.” Thanks.
Blair, if I understand your question correctly, can you address this scenario by adding another transfer event to do more tax deferred saving after the house is paid off? Tap NEW on the Events screen and select Transfer to create one of those events. Set it to move money from your Cash account to Tax Deferred, for example. The app offers quite a bit of flexibility, since you can add unlimited events and Start/End them on any dates. Hope this helps.
Hi Blair, unfortunately I’m not able to see your screenshot, which makes this hard to diagnose. (Maybe David can help us debug that.)
Meanwhile, I just did a simple test of a PropertyEvent with early payoff and it seemed to work as expected. The Home Loan went down gradually, then went to zero in the year of the payoff.
I’m wondering if you have an explicit End Year set on that PropertyEvent? That means the house is being sold in that year, vs. being held indefinitely. (We need to document that better, and I’ve made a note of it.) Try setting End Year to unending if that’s the problem.
My simple test:
Start Year: 2008, this is the year the house is purchased
End Year: unending
Purchase Price: 250000
Financed: 80%
APR: 4%
Mortgage: 30, need this for amortization even if being payed off early
Early Payoff Year: 2023Hi Blair, sorry for the slow response, we’re on holiday hours. The Log report documents every transaction in the simulation, so if you scroll down in it to the EVENTS section of the year in question after your retire date, you should be able to spot where that $600K is coming from.
If you still can’t identify it, we will try to take a look. You can email your report data to support@ekorau.com by tapping the Envelope icon at the top of the Reports page. (Just understand that we will try to identify and fix any errors on our part, but we can’t offer financial planning or modeling advice.)
The ability to import/export scenario files is high on our task list for the coming month. Thanks!
The [low] options on Asset Classes are our attempt to offer the option to model your finances using lower investment returns going forward. Many experts say you should not be using historical returns for stocks in the future, but nobody knows for sure.
Asset Classes and their returns can be defined and edited by users, and we really recommend that users take responsibility for their own decisions there, else it puts us developers in the role of giving financial advice.
On my blog page for the calculators, I offer a number of resources for estimating Asset Class returns: https://www.caniretireyet.com/calculator/
…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.
The Pro 1.03 release, up on the Google Play Store now, is a significant step towards 1.1 and adds these enhancements:
- context-sensitive help: (?) takes you to topics for the current screen
- new FIND bar: calculate and see result anywhere in the app, long-press jumps directly to Reports
- asset class editing: asset classes are now user-editable in place, you can change investment returns without having to create new ones
- Cash Flow report: new Social Security and RMD columns, modest improvements to readability/scrolling
