The "Year at a Glance" feature in the Report output gives more details on how it calculates income taxes. It has some limitations and may not spend assets in the order you would . For example, MaxiFi considers all Regular Assets to be from one pot with a single cost basis.I have used Maxifi and its predecessor, ESPlanner, for over ten years. It is worth the cost just as reassurance that I am on course and have plenty of funds to see me through. Some years ago, I felt I needed more mentoring on how to use and interpret the reports. I paid some money to one of their consultants, which helped me understand things better.
One puzzling feature has to do with tax estimates. I'm now retired. Our family income is mainly from RMDs, dividends, Social Security, and my wife's pension. We don't pay over 25k in federal taxes and about 3k to SC state taxes. But Maxifi estimates taxes at $95k, rising to $120k. I'm not withdrawing and spending all that the program says I can. Still, even if I spent to the hilt of my discretionary spending allowance, it would increase LTCG taxes on my withdrawals but remain way below the taxation Maxifli predicts.
I believe there is a way to tweak the program to align the tax estimate with actual figures, but I forget what that is.
What I like about it is that instead of taking the ultra-conservative approach of withdrawing 4 percent each year, Maxifi gives you an annual spending budget. You can specify if you want to spend it all down or leave some to charity, relatives, whatever. You decide. We are living well, traveling, taking lots of SKI vacations (spending kids' inheritance), and giving large amounts to charity through a DAF, yet we spend far less than Maxifli tells us we can. Who knows, maybe our children will get something after all!
Statistics: Posted by colejr — Sat Jan 11, 2025 5:19 pm — Replies 66 — Views 10549