How does Lifetime Planner calculate withdrawals by account?

JoelVP

Specifically, Lifetime Planner is taking withdrawals from my tax deferred accounts in the year I attain age 71, even though RMD's don't start until the year I turn 72. Why wasn't the Planner updated for the most recent RMD rules (i.e., age 72)? And what is the order of withdrawals between taxable, tax deferred, and tax free when cash is needed for expenses?

Scooterlam

Hard to say why the Quicken product team does not update RMD age in Lifetime Planner.  Equally hard to say is when they may address the issue, et al.  It's not without interest from the user base.  Have a look and vote here on this request.  

https://community.quicken.com/discussion/7865450/update-lifetime-planner-to-reflect-rmd-changes-to-iras-due-to-secure-act

After you turn 70, LTP prioritizes withdrawals from tax deferred accounts to fund your plan.   That is why you may see your taxable accounts grow after this time.  Have a look and vote on another idea centered around allowing the user to adjust order of withdrawal in LTP.

https://community.quicken.com/discussion/7900885/lifetime-planner-idea-allow-user-to-change-account-order-of-withdrawal-sequence-in-ltp/p1?new=1

Scooterlam

Hard to say why the Quicken product team does not update RMD age in Lifetime Planner.  Equally hard to say is when they may address the issue, et al.  It's not without interest from the user base.  Have a look and vote here on this request.  

https://community.quicken.com/discussion/7865450/update-lifetime-planner-to-reflect-rmd-changes-to-iras-due-to-secure-act

After you turn 70, LTP prioritizes withdrawals from tax deferred accounts to fund your plan.   That is why you may see your taxable accounts grow after this time.  Have a look and vote on another idea centered around allowing the user to adjust order of withdrawal in LTP.

https://community.quicken.com/discussion/7900885/lifetime-planner-idea-allow-user-to-change-account-order-of-withdrawal-sequence-in-ltp/p1?new=1

JoelVP

Excellent response. I'll go one better and suggest that the user should be allowed to specify the RMD start age. That way, if there is a future change to the RMD age, the user can immediately update the LTP himself without waiting for a software update

Rocket J Squirrel

JoelVP said:

Excellent response. I'll go one better and suggest that the user should be allowed to specify the RMD start age. That way, if there is a future change to the RMD age, the user can immediately update the LTP himself without waiting for a software update

This should be on a per-account basis to allow for RMDs from inherited IRAs.

JoelVP

Agree. But this inherited IRA need has always existed because inherited IRA's are subject to their own rmd schedule independent of traditional IRA accounts.

Scooterlam

Perhaps the Inherited IRA is a new IDEA post for lifetime planner - to be voted on, debated, elborated and added to the long, long wish list for LTP?  

RMD handling can be one of a number of requirements of the new Inheritied IRA "account type".    Just thinkin'.