2023-05-08

Investing - Fun Retirement Tables

Investing - Fun Retirement Tables

These three tables are important for retirement planning. They are subject to change and I might have entered them incorrectly, so when it comes to detailed planning or payment, check a more reliable source than me.

These are for 2023.

Also see  



Social Security Taxable Fraction

The taxable fraction of your Social Security income is based on I = Social_Security_income/2 + income from pensions, wages, interest, dividends, and capital gains. If married, filing jointly, add the I for both people.

If I is $25,000-$34,000 for single people or $32,000-$44,000 for married and filing jointly, 50% of your Social Security will be taxable.

Above these intervals, 85% of your Social Security will be taxable.

Social Security documents all say up to 50% or up to 85%, but as near as I can tell that means 50% or 85%. 

(2023-09-14 - I am told that the "up to" is resolved by filling out the tax forms. Apparently the algorithm is too complex to document any other way. This reminds me of the HTML spec - HTML is defined by whatever the web browsers do.)


Medicare Surcharge - income related monthly adjusted amount (IRMAA)

For Medicare part B and D -

If your earnings are over $97,000 ($194,000 if married) in any given year, two years later your Medicare premium will have a surcharge. This is recalculated annually.

By earnings they mean your adjusted gross income, modified by obscure things that I am not going to include here.

Table of Monthly Premium for Part B+D

single    married    premium





$0 - $97,000
$0 - $194,000
$160.90
$97,000 - $123,000
$194,000 - $246,000
$230.80 + $12.20
$123,000 - $153,000
$246,000 - $306,000
$329.70 + $31.50
$153,000 - $183,000
$306,000 - $366,000
$428.60 + $50.70
$183,000 - $500,000
$366,000 - $750,000
$527.50 + $70.00
$500,000 -
$750,000 -
$560.50 + $76.40

Watch out for this when converting assets from IRA to Roth IRA.


IRA Required Minimum Distribution

RMDs are required, now starting at age 73. For each age, there is a fraction of your IRA that you must withdraw, expressed as a number of years (Y) to empty it. The amount to withdraw is the total value of the IRA at the end of the prior year divided by Y. This applies to all pretax retirement accounts (IRA, 401K, 403B, etc.).

You must withdraw total_value/Y and include that as part of your taxable income. You cannot transfer it to a Roth.

Table of Required Minimum Distributions

Age  Y  %   Age   Y
 %   Age Y  %


 



 



 


 

90 12.2  8.2%
110 3.5 28.6%


 

91 11.5  8.7%
111 3.4 29.5%
72 27.4 3.7%
92 10.8  9.3%
112 3.3 30.4%
73 26.5 3.8%
93 10.1  10.0%
113 3.1 32.3%
74 25.5 4.0%
94 9.5  10.6%
114 3.0 33.4%
75 24.6 4.1%
95 8.9  11.3%
115 2.9 34.5%
76 23.7 4.3%
96 8.4  12.0%
116 2.8 35.8%
77 22.9 4.4%
97 7.8  12.9%
117 2.7 37.1%
78 22.0 4.6%
98 7.3  13.7%
118 2.5 40.0%
79 21.1 4.8%
99 6.8  14.8%
119 2.3 43.5%
80 20.2 5.0%
100 6.4  15.7%
120+2  50.0%
81 19.4 5.2%
101 6.0  16.7%


 
82 18.5 5.5%
102 5.6  17.9%


 
83 17.7 5.7%
103 5.2  19.3%


 
84 16.8 6.0%
104 4.9  20.5%


 
85 16.0 6.3%
105 4.6  21.8%


 
86 15.2 6.6%
106 4.3  23.3%


 
87 14.4 7.0%
107 4.1  24.4%


 
88 13.7 7.3%
108 3.9  25.7%


 
89 12.9 7.8%
109 3.7  27.1%


 

If you are more than 10 years older that your spouse and your spouse is the sole beneficiary on the IRA then you get a new table. The table has your age  horizontally and your spouse's age vertically and each entry is (as in the table above) your expected years of life (the inverse of the fractional withdrawal). Too much to document here, TIAA has the complete table - https://www.tiaa.org/public/pdf/rmd-joint-life-expect-table.pdf . (Thanks Gwyn P. Williams.)

If you do not take out the full RMD, you will be taxed 50% of the undistributed part.

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