I am new to Pralana Online but not to Gold. My data sets are the same so far. Most things seem to be lining up, except for the recommended Roth conversion amounts noted in a separate post. The biggest discrepancy I see that is worrisome in the withdrawal rates. The first 5 years, until age 72, Gold has a higher WR, by about 1%. This makes sense to me, since the Gold's larger recommended Roth conversions require larger tax bills. But after that, from age 72 to 82, Gold still has a much higher withdrawal rate -- by about 2-2.5% until age 82. Then, Pralana Online is higher, by 1% or more, for 3 years, and then from age 86 to end of plan at age 99, they are very close.
I should mention that there is a known bug noted on the Social Security income page for spousal income that may be at play here. I am widowed, collecting my husband's benefit as a survivor, and will collect my full benefit at 70. I don't know if that is part of the reason, and if that bug's impact continues for the life of the plan.
If that's not the problem, then I don't know how to account for this, and would love some help understanding it.
Hi, please see my reply to your other question. As for the Withdrawal Rate, obviously if the numerator and denominator are different due to other calculation differences, then the Withdrawal Rates will also be different.
I just reviewed this again and see that the formulas in Gold and Online have the same numerator (net cash flow) and denominator (total prior year savings).
However, the 'accounting' for net cash flow is different in Online than in Gold. In a test scenario that reconciles on total savings for every year, the withdrawal rates are different due to differences in what goes into the numerator (Net Cash Flow).
We are very likely to change the Withdrawal Rate metric in Pralana Online to use actual portfolio withdrawals, not net cash flow, for the Withdrawal Rate. Net cash flow is influenced (reduced) by Scheduled Withdrawals and RMDs, artificially lowering the current Withdrawal rate metric.
If you wish, you may email your Gold export file to me at charlie@pralanaconsulting.com and I will dig deeper into the differences by comparing the Gold and Online directly. Obviously, I can 'look under the hood' on both.
Thank you, I will look into that. You’re right, since I’m quite sure the expenses are the same, then it would have to be the asset level as denominator. So the two tools may be calculating my asset totals differently. The end of plan asset numbers aren’t too far apart though. When i have a chance I will compare the two more closely, and then report back. Withdrawal rate is an important calculation to me, although the true ultimate metric is success by end of plan. I know looking “under the hood “ is a good exercise for my own knowledge.
Can you say more about the SS spousal bug notice, and when an update can be expected? It seems I fit that description, unless I am reading it wrong, and I’m not clear on how that would impact my numbers.
First, my condolences on the loss of your husband. A couple of thoughts about your situation.
- The spousal benefit bug does not apply in your situation. Since your husband is deceased prior to the plan start, you are not eligible for spousal benefits. You may be eligible for survivor benefits, if greater than your own benefit.
- For widows/widowers, Pralana Online has a feature for 'Single' plans for you to specify an Annual Survivor benefit amount. This feature was requested by another subscriber who was widowed and collecting survivor benefits.
- This field only appears on Single person plans. You will see it if you switch your marital status to Single and go back to the Social Security page. Hover over the tooltip for that field label and it will explain more about this. I don't think the user manual has been updated yet to include this field.
Thank you, this is very helpful. Right now, since I am using my Gold dataset, I am listed as married, with husband passing this year (for sake of plan) and collecting his benefit. I will look into this and see what changes. I appreciate you at Pralana making that change. I think there are a lot of us.
Hi Charlie
Thanks for letting me know about the SS survivors' benefit. I fixed it. I would suggest that you add to the info box on the survivor benefit, to make sure that survivors don't check "already started benefit". I wasn't sure what to do, since I have started the survivor benefit but not my own. Trial and error solved that when I look at the Income report for both possibilities. FYI, there will be another subset of survivors who are either too young to currently start the survivor benefit, or who are currently old enough but working so that it doesn't make sense to start it yet.
We are very likely to change the Withdrawal Rate metric in Pralana Online to use actual portfolio withdrawals, not net cash flow, for the Withdrawal Rate. Net cash flow is influenced (reduced) by Scheduled Withdrawals and RMDs, artificially lowering the current Withdrawal rate metric.
I would very much prefer to have the Withdrawal Rate reflect what I am withdrawing, which I generally calculate by the formula Expenses - Income = Residual Living Expense. Obviously Pralana under the hood would look at its own figures. For now, may I suggest that you add a second column for Withdrawal Rate using RLE, next to the current one? There is definitely screen room for that, at least on a desktop. I don't know why someone would use the current one, but this would be the best of both worlds.
OK, I would definitely like to email you my Pralana Gold file. I corrected one thing, so made a new export file, in that I made sure to stop using effective $$ in Gold. That changed things. Now what I am seeing is withdrawal rates that look very similar, except for the years when I am taking RMDs and/or unscheduled withdrawals from my tax deferred account. Eventually that account runs out of money and at that point the withdrawal rates match once again. I'll also send you my cut and paste excel sheet that illustrates that very clearly.
How do I email that to you? I assume you can get under the hood for the Pralana Online data. Is that correct?
Edit to add I emailed them to mail@pralanaconsulting.com
Thanks so much. These are great products.
