Transition from Salary to Retirement Income/Taxes

Question

I have recently retired and I am trying to change my income from traditional salary paychecks to SSA Retirement Benefit plus my personal retirement savings (401k + other savings). How do I set that up to track SSA "income" versus savings and make sure I am anticipating any taxes due each year?

Frankx · Accepted Answer

Hi @TinB-1228,

Congrats on your retirement!

As far as recording the SSA income, you'll probably need to setup a new income category in the "Personal Income" group entitled "Social Security Income" or "SSI" (if you haven't already done that).  You should post all payments you receive from SSI to that category.

As far as planning for taxes goes, if you haven't already used it, you should open the "Planning" tab and then click on the "Tax Tools" button and select "Tax Planner". That will open a series of windows that allow you to plan for and estimate tax effects of transactions.  In addition, I suggest that you also look at some of the other options that the "Planning" tab offers to help you navigate through your new status.

Let us know if you have any followups.

Frankx

Rocket J Squirrel · Accepted Answer

Be aware that Quicken's Tax Planner has a long-standing deficiency in that it fails to calculate the taxable portion of your SS benefits.See this suggestion thread for more info (and ideas for workarounds) and vote for it.

markus1957 · Accepted Answer

Make sure all of your transactions are assigned categories/tax lines that feed correctly into the Tax Planner module.

Use an Income Reminder to split your SS income into taxable and non-taxable amounts. It's relatively easy to determine what percentage of the income will be taxable. Set the reminder to be automatically entered each month on the day your payment is deposited; for example, mine is the 3rd Wednesday of the month. Then match the downloaded SS transaction to the entered reminder.

Also use Scheduled Reminders to track your planned cash flow into and out of the main account you will be using for living expenses.

If investment income and IRA/401k withdrawals will be part of your income stream, set up reminders for those. They will also feed into the Tax Planner when set up properly.

I use the Home tab, Cash Flow module to track a custom date 3 years in the future to look at cash flow in my main spending account based on income and expense reminders set up to reflect my projected income and expenses.

Don't overlook the Lifetime Planner. It is helpful for looking out long-term.

TimB-1228 · Accepted Answer

Thank-you all for you help. I will use your suggestions to set-up the income categories and a reminder to track the monthly amounts. With the added knowledge, I will try to work around the limits of the tax planning calculations.