Project Synopsis

The project goal is to optimize annual distributions by minimizing the amount of tax paid on those distributions. This will help maximize the number of years the assets last. The software will calculate expected savings based on clients’ projected retirement dates. The software needs to optimize pre-retirement, where clients are accumulating assets, and retirement, where clients are spending those assets. Pre-retirement inputs would include savings rates in various types of accounts (IRA/401k, Roth, after-tax, etc), expected rates of return, and predicted interest rates.

During retirement, clients derive their income from multiple sources. Social Security, IRA distributions, Roth distributions, HSA distributions, pensions, and other savings which all have different tax treatments. If there are substantial assets other goals will be to maximize the assets remaining after a 30-year horizon when the client could be expected to pass away.

Situations may arise where paying a little more tax today creates savings over the client’s lifetime. Detailed knowledge of individual income tax rules, tax table breakpoints, and tax treatment of various accounts will be required to produce a useful product.