Entering information about taxes in the Lifetime Planner

Entering realistic tax information helps ensure your Lifetime Plan doesn’t overestimate how much you’ll have to spend later. Your tax rate affects how much income is available to save before retirement—and how much of your savings you’ll need to withdraw after.

You can use either actual tax return data or a demographic average based on your income and state. Choose the method that best reflects your situation and adjust as needed.

To get started:

1. Open the Planning tab and select Lifetime Planner.

2. Click Plan Assumptions if the assumptions list isn’t already visible.

3. In the assumptions list, select Taxes.

Choose your tax estimation method

You have two ways to estimate your tax rate in the Lifetime Planner:

📄 Use Tax Returns

This method uses data from your actual past tax filings.

To enter tax return data:

1. Choose Tax returns.

2. Enter your total income, federal taxes, and state taxes from one or more years.

   • Use gross income, not net.

   • If your spouse is included, enter combined totals.

3. If entering more than one year, total each field across the same range of years (for example, 2022–2024).

💡 Tip: This method is ideal if your income and deductions are consistent and you want a personalized estimate.

📊 Use Demographic Average

This option estimates your tax rate based on averages for your income bracket and state.

To use this option:

1. Select Demographic average.

2. Choose your state and enter your gross income (combined with your spouse’s, if applicable).

💡 Try this: If you're planning to move after retirement, temporarily change the state to preview how your tax rate might change.

Adjust your estimated tax rates

You can manually adjust the estimated rates if you know they’re likely to differ from your past or average values.

Before-retirement tax rate

This rate applies to:

• Salaries

• Taxable realized gains

• Other taxable income

🎯 Examples:

• You just bought a home and now deduct mortgage interest → Consider lowering your estimated rate.

• You want to be conservative or expect higher income later → Raise the rate.

🧓 After-retirement tax rate

This rate applies to:

• Social Security benefits

• Pensions

• Retirement withdrawals

• Taxable gains

🎯 Scenarios to consider:

• You expect your retirement income to drop → Lower the rate.

• You plan to maintain or increase your income → Keep the same or raise it.

• You’re retiring in a tax-friendly state → Consider adjusting downward.

💡 Tip: You can return to this screen and adjust your rates any time.

How Lifetime Planner uses your tax info

✅ The Lifetime Planner calculates your average tax rate, not your marginal rate.
✅ Tax calculations apply automatically to income and withdrawals.
✅ You’ll see how taxes affect your cash flow and savings needs.

Where to enter other types of taxes

• Social Security and Medicare taxes are included automatically.

• Enter property taxes in the Current or Future Homes & Assets section.

• Enter local income taxes in the Living Expenses section.

• Include sales taxes in the purchase price for Living Expenses or Special Expenses.

Example scenarios

✍️ Example A
You're a dual-income household with stable salaries. You enter combined totals from your last 3 years of returns to get a multi-year average.

✍️ Example B
You're early in your career and just bought a home. You know next year’s deductions will lower your tax bill, so you lower your projected before-retirement rate.

✍️ Example C
You’re retiring to a no-income-tax state. You adjust your after-retirement rate based on demographic averages for your future location.

Note: All amounts must be entered in U.S. dollars. If you’re using a multi-currency Quicken file, be sure to add USD with a current exchange rate.

Not Available in Canada

This tool is unavailable for users of our Canadian products.