08/07/2017: Revised After-tax Account Model
ORP's method of modeling the After-tax Account has been revised. The Afteer-tax Account
is divided into two asset types: stocks and bonds. Stocks grow
in value over the years and when they are sold the proceeds are
taxed at the capital gains rate. Bonds yield interest each year
which is taxed as personal income. Bonds do not grow in value
and are redeemed at face value. Stocks do not issue dividends.
05/01/2017: Social Security OASI Depletion in 2035
The Social Security and Medicare Boards of Trustees
estimates that Social Security's Old Age and
Survivors Insurance (OASI) Trust Fund has a projected reserve
depletion date of 2035. At that time, OASI income would be sufficient
to pay 77 percent of scheduled OASI benefits. Since this is fact,
until Congress changes the law, ORP reduces Social Security income
by 23% beginning in the year 2035.
03/19/2017: Tax Table Update
ORP is now running with the 2017 Federal tax table.
03/13/2017: New Infrastructure
Beginning the process of switching ORP from 1990 WATCOM compilers,
c and FORTRAN, to 2016 Netbeans and gnu.
03/06/2017: Enhance the 3-PEAT Simulator
Add the facility to download an Excel spreadsheet containing
a summary of the simulator's output.
02/26/2017: Add the 3-PEAT Simulator
he simulator simulates the actions of a retiree that runs
ORP annually with changed initial conditions (savings balance,
Social Security income, etc.) to determine the current year's
savings withdrawals and spending budget. Historical
data are used to assess plan performance
under historical financial conditions. In particular,
the plan is reviewed for premature savings depletion and
excessive disposable income volatility.
08/03/2016: Capping IRA to Roth IRA Conversions
ORP's IRA to Roth conversion option has been enhanced for users who
choke up on conversion's large IRA distributions early in retirement.
The enhancement allows you to cap taxable income within your choice of
tax brackets. Setting
this parameter to 15% or 25% will cap conversions and usually string
them out over more years.
The enhancement is targeted to planners who advocate this strategy
to let them assess the economic consequences of their choices.
It's all a matter of balancing the maximizing of retirement disposable
income with being comfortable with IRA distributions (not quantifiable).
6/13/2016: Affordable Care Act Income Test Tightened
Models which contain non-savings income (Social Security benefits,
pension income, post retirement earnings, etc.) after retirement
and before Medicare are infeasible when this income exceeds
ACA income limits. ORP now checks for this condition and
disables ACA income limits when they are exceeded by this
4/4/2016: Affordable Care Act Constraint Relaxed
ORP now allows for modeling ACA income restrictions
while specifying minimum bounds on the Roth IRA and
After-tax accounts. Formerly this was disallowed because
it was creating infeasible models in most cases. This
was accomplished by not applying the minimum bound requirement until
age 65, when the ACA income restrictions no longer apply.
3/23/2016: Income Tax Table
ORP's Income tax
brackets have been updated to reflect changes for 2016.
2/25/2016: ORP's Third Article
A third article featuring ORP has been published in The
Journal of Personal Finance:
Measuring the Financial Consequences of IRA to Roth IRA Conversions.
See page 47