Lifetime Planner RMD tables in Quicken 2017 [Mods - Do Not Archive]

Bedford

kayver said:

Quicken Premier 2018 R6.12 and seeing the same problem with incorrect RMDs. I did a little digging into tax history and learned that things changed in 2002.
In 2001 the table for IRA owners was
70 26.2
71 25.3
72 24.4 etc.
The Single Life Expectancy table for beneficiaries was
70 16.0
71 15.3
72 14.6 etc.
In 2002 Single Life Table was updated
70 17.0
71 16.3
72 15.5 etc.
According to my calculations, Quicken appears to be using the Single Life Table to calculate RMDs.
70 17.0
71 16.3
72 15.5 etc.
But it's supposed to be used only for inherited retirement accounts.

The Uniform Lifetime Table is supposed to be used by IRA owners regardless of the age of the beneficiary or even no beneficiary.
70 27.4
71 26.5 
72 25.6 etc.

This is a little disconcerting. I've been a longtime fan of the Lifetime Planner.

Is there some way to get this information to Quicken Support or Development and get a response back?  Many people have identified the problem, but I haven't seen any indication that Quicken has responded or is even aware of the problem.  This seems to be a big enough problem that we somehow need to get a response from Quicken.  Any suggestions from the superusers?

Bob_L

They do read these, but I will point this thread out to the moderators to see if that helps.

Bedford

Thanks. It just seems to be such critical mistake, if the planner has been erroneously calculating people’s retirement savings projections for several years, and they have known about it. This could have financially affected a lot of people. Hopefully someone in QA will take notice.

markus1957

Bedford said:

Thanks. It just seems to be such critical mistake, if the planner has been erroneously calculating people’s retirement savings projections for several years, and they have known about it. This could have financially affected a lot of people. Hopefully someone in QA will take notice.

I'm going to offer an opposing view on this. The IRS requirement has evolved over time as have the life tables as we live longer. Quicken's Help file indicates the Lifetime Planner calculates withdrawals based on a term certain method which essentially creates a withdrawal rate that will deplete your tax-deferred accounts in conjunction with your death. Current IRS rules would not deplete those savings to the same extent.

For those with plenty of resources that last beyond life expectancy, a more aggressive withdrawal rate will not have much of a detrimental effect other than increased taxes; excess funds transfer to taxable accounts in the planner.

For those whose resources are more limited, the higher withdrawal rate may be more appropriate and serve to provide a higher standard of living than might otherwise be projected using IRS rules. Those who can least afford it (or want to live a little larger) would be leaving money on the table if the planner is changed to conform to current IRS withdrawal rates.

Since it's really a choice of which life expectancy table to use, maybe the planner should offer it as an option. Further, as Congress keeps looking for ways to raise revenue, they may modify the tables to more closely align savings depletion with life expectancy.

Bob_L

Bedford said:

Thanks. It just seems to be such critical mistake, if the planner has been erroneously calculating people’s retirement savings projections for several years, and they have known about it. This could have financially affected a lot of people. Hopefully someone in QA will take notice.

But you really don’t have a choice as to which table to use, i.e. your circumstances drive it. For example a significantly younger spouse or an inherited non spousal IRA require different choices. That is why I think choice of method makes the most sense, as I stated earlier. If that adds too much complexity, however, I would recommend going with the method that is the most used, which isn’t what is in there now.

Ben12

This discussion has been going on for a year. It has been useful to see the thought that has gone into the issue with users. It also addressed the issue of Roth IRA and RMDs. It seems the problem is understood and I don't understand why Quicken does not solve the issue using the information posted here.

RalphA

mshiggins said:

Can you provide an example we can use for testing?

I can provide an example test file. How do I send it? Or you can just make one. Start new quicken file, add one normal brokerage acct with one stock and shares enough for about $1,000,000. add one ira acct with a stock with value of about the same. Now go to lifetime planner, say age 82 born in 1936, pick a date. Fill in required fields. Once you can see the planner graph, click on 1st column and look at tax free withdrawals. The amount withdrawn will be way more than if the irs factor for age 82 of 17.1 were used.

Scooterlam

mshiggins said:

Can you provide an example we can use for testing?

Hi RalphA,

There has been a number of reports regarding RMD factors being wrong.  I confirmed this for myself as well.  

Several months back, I compiled a list of bugs and ideas for Lifetime Planner.  Sadly some of these issues are quite old.  Nonetheless, this RMD issue is documented in that thread.  See link below.
Please have a look at the thread and links therein and either "vote" or "me-too" the idea or issue respectively.  The point of this list is to advocate for a LTP update and improvement plan/execution from the Quicken product team.
Scott2018 QW HBR R9.34

https://getsatisfaction.com/quickencommunity/topics/lifetime-planner-bug-and-idea-list-make-yourself...

Bedford