I played around with some numbers, and it seems a lot of my concerns about RMDs are completely unfounded.
I’ve had a very basic Social Security and ACA calculator in my spreadsheet for a couple years now, but I think I was doing the math all wrong with inflation (nominal investment returns, and today’s tax, ACA, etc limits), so I’ll end up with plenty of time to convert my pretax accounts to Roth. I was concerned that I’d need to balance ACA reported income to optimize health care costs and converting enough pretax to not pay a ton when I take Social Security.
So I put everything together using today’s dollars and simulated what a withdrawal strategy would look like, and I’ll probably be more concerned with rationing my pretax space to not have to deal with Medicaid, rather than not being able to convert enough. It’s amazing what a few percent in the wrong places can do!
Anyway, what simulations do you do? Are there any simulations you’d like to do, but don’t know where to start?
Most of my simulations occur in my head. As in simulating what it will be like to be job-free someday, haha.
When I bought my house, though, I did figure out how to do all the amortization tables myself so that I could compare all the different rates and points and stuff, along with figuring out early payment payoff periods. l felt way more in control having the same level of information available to me that the mortgage broker did.
It’s really nice when comparing quotes for buying down a rate, or looking at the impact of additional payments. It’s also incredibly easy to throw together. For anyone interested:
- payment =
PMT(mortage rate/12, mortgage term * 12, -initial principle) - interest =
(mortgage rate/12) * remaining principle - principle payment =
payment - interest - new principle =
prev principle - principle payment
Throw that into a spreadsheet and drag down. Add a SUM() to figure out total interest paid or whatever. I have a VLOOKUP() to calculate interest for the current year for tax planning purposes, for example.
Maybe I’ll start an unofficial weekly post about various calculations I have in my spreadsheet. I have something like 30 tabs, so surely something there is interesting to others.
Today’s my wedding anniversary (sort of, thanks to COVID causing us to have multiple anniversary dates).
It’s amazing how much marrying the right person can accelerate your timelines. My spouse was in the “work til I die” camp when we first met. However, they were always very frugal. Now we both dream of FIRE and have a pretty significant net worth.
