Two examples of VeriPlan's 7-TAXES $ graphic

7-TAXES $ graphic: Tax Payments (real $/yr)

Below are two examples of the blue-tabbed 7-TAXES $ graphic, which come from VeriPlan's "Sue and Sam Saver" tutorial.

You can download a free copy of this VeriPlan tutorial file using this link:

Download the Free VeriPlan Tutorial Now

This 7-TAXES $ graphic, which VeriPlan automatically generates for every financial plan, shows Sue and Sam's projected tax payments broken into eight categories:
1) Federal marginal rate ordinary income taxes on earned, interest, retirement and other income
2) State and Local marginal rate or flat rate ordinary income taxes on earned, interest, retirement and other income
3) Social Security taxes
4) Medicare taxes
5) Property and real estate taxes
6) Ordinary Federal, State, & Local taxes on mandatory and needed tax-deferred account withdrawals
7) Federal long-term capital gains taxes
8) State and Local ordinary income taxes on long-term capital gains

VeriPlan's tax model assesses marginal tax rates and limits against your taxable income, and it also taxes asset distributions, as required by current tax laws. VeriPlan's sophisticated tax modeling capabilities are fully integrated with all other VeriPlan projection modeling functionality.

For example, note that both of these tax payment projection graphics for Sue and Sam indicate significantly reduced taxes at age 50. In this particular scenario, Sue and Sam are modeling the impact of Sam being unemployed for six months at age 50. Therefore, these tax graphics automatically reduce income-related taxes at age 50.

The first sample tutorial graphic below shows Sue and Sam's tax payment projection using industry average investment costs. VeriPlan automatically extracted the investment cost information that Sue and Sam provided about their portfolio on VeriPlan's yellow-tabbed assets worksheets. Sue and Sam pay investment costs that are about average for full service retail brokerage customers.




This second tutorial graphic shows Sue and Sam's revised tax payment projection with lower investment costs that they consider to be more reasonable. These lower costs are based on the reasonable investment cost assumptions that they entered into Section 4 of VeriPlan's orange-tabbed "6-COST-EFFECTIVENESS TOOL" worksheet. (All other projection assumptions and data in VeriPlan remain the same in these two scenarios. Only the level of investment costs changes.)

By reducing their investment costs Sue and Sam's financial assets would last much longer and even grow in retirement. As a result, they pay ordinary income taxes on tax-advantaged account withdrawals throughout their retirement. When paying higher industry average investment costs in the first graphic, their assets in traditional tax-deferred accounts are exhausted by age 78. VeriPlan automatically stops assessing taxes, because there are no more taxable distributions available from these accounts.