Why isn't Lifetime Planner showing tax on tax-deferred withdrawals?

JBird79

I have both ROTH and Traditional IRAs in Quicken. Lifetime Planner doesn't start to show taxes on my IRA withdrawals until 2029, even though it shows withdrawals from tax-deferred accounts starting in 2024. Is it using up my ROTH funds first?! This doesn't seem smart.

Chris_QPW

This is one reason I don't really like the Lifetime Planner for "planning" other that a ballpark plan.  It doesn't allow you to control which accounts (or account types) that it draws down at any given time.

To directly answer your question other than for RMD (and it has the wrong year for that) Quicken will in fact pull money from the Roth accounts before the tax deferred accounts.  It will also take money from your taxable accounts before your tax deferred accounts.

It is also hard even see this happening since in the details for the year they don't have a section for "tax exempt/Roth".  A withdraw from a Roth or a Traditional IRA will both be in the "You Tax-deferred" amount.  The only way you know that it is taken from Roth is that it would show up with an amount in the "Tax on Withdrawals" amount.

JBird79

Thanks Chris!

I thought it would take ROTH last, or at least proportional instead of socking me with taxes later in life. Maybe it is doing it as a worst-case scenario, which I can understand. Now that I know that, I can take it into account.

Scooterlam

@JBird79
Here is an idea post you might be interested in regarding order of withdrawal - the current behavior I saw and a suggestion for improvement.  Have a look.  https://community.quicken.com/discussion/7900885/lifetime-planner-idea-allow-user-to-change-account-order-of-withdrawal-sequence-in-ltp