I'm new to Online but not to Gold. So far I am working with my imported data, so everything should be pretty much the same. For the suggested Roth conversions, I am using IRMAA limit of $129K and Tax Bracket limits of 22%/25%, going from now out to 2030 when I turn 73 midyear. In Online, I am getting something like $70K all the years until the final year, where I get about $38K. In Gold, I am getting something $90K, until the final year, where they match at $38K.
This may be related to the "known bug" re SS money. I am widowed, so at present Pralana sees me collecting my late husband's benefit until age 70, when I collect my own. The amounts match in Online vs Gold. I'm confused mostly because even after age 70 it doesn't start to match up, but does at age 72. The Tabular Projections sources of income match up in Online vs Gold, and both are in today's $.
Any thoughts on this?
Good morning and thank you for subscribing. While often Pralana Online and PRC Gold get the same results, in some cases they do not, and this is expected. There are a number of intentional differences, many are listed on the More > PRC Excel vs Online page.
In the case of Roth Conversions:
- Online does a full tax recalculation, including Schedule A itemized deductions and Alternative Minimum taxes, iteratively to find the R/C amount that takes you to the top of your designated brackets.
- PRC Gold assumes the standard deduction and does not otherwise do a full tax recalc or iterate. There are just some practical limitations to what can be done in Excel.
- In most, but not all cases, the two algorithms produce the same results.
- In Pralana Online on the R/C Results > Details by Year table, you can click on an amount in the "Total Pre-Tax Conversion Amount" column to see a very detailed audit of how that conversion amount was calculated. And of course, you can look at the various tax forms.
As a part of our testing, I routinely run a script to do a year-by-year comparison of 1000's of tabular projection metrics for 100+ test scenarios in both Gold and Online to see if they reconcile. Most do reconcile within a few $. We have others that do not get the same result, due to the known calculation differences.
I hope this explains why there may be differences in the results produced by the two tools.
Regards,
Charlie Stone, Pralana
Thank you. I will take a look. Roth conversion recommendations don’t worry me too much. On a common sense level, as long as I don’t go past my IRMAA target, I know I’m fine, and that is likely optimal. But I do want to understand it a bit more.
