Hi Stewart and company,
Not to take anything away from Pralana -- which is wonderful -- I'd like to see a graph I first came across when I was debating between Pralana and RightCapital. It overlays tax brackets on top of taxable income through the years, and gives immediate visual feedback whether Roth conversion should be considered or dialed back a bit. I've included a screen capture to show an example. For my purposes it is not mandatory but it would be nice to have, and it definitely makes it easier to show my wife what I am up to.
Cheers to everybody,
Eric
Reminds me of a story about Sam Walton (Walmart founder). He took a young executive to a competitor's store and they both looked around and afterwards Sam asked the jr. executive for feedback. The youngster, thinking it was a good chance to impress the boss with his knowledge of retailing, replied along the lines of "It was terrible!" and proceeded to list all the things the competitor was doing wrong.
Sam, being the genius that he was, replied "Hm, I thought their cosmetic displays were quite nice, we're going to do it that way". The real lesson he was trying to teach was that in almost all cases, you can learn and improve at least some things by studying what others are doing.
@abq-goldgmail-com Thanks, Eric, I an see value in the visualization and so we'll consider that for a future enhancement.
Stuart
To add onto this ...
Can we see the Effective Marginal Tax Bracket as well?
This is a much more useful metric since it incorporates impacts of various Tax Impacts (e.g. State Taxes, SS Taxation, NIIT, Senior Tax Deduction, IRMAA etc.).
Thoughts?
Not sure when they were added, but the original request seems to have been addressed under Review-Graphical Projections-Tax Projections, which has graphs showing the path through ordinary income brackets, LTCG and IRMAA tiers. I had never looked at these before, but the wife asked a question about planning so I opened Pralana and knew she wasn't up for page after page of numbers, so I went looking for something visual and there were these beautiful graphs!
The graphs helped us both understand where some of the optimums that Pralana is finding are coming from - aside from ordinary tax brackets, if we do too few Roth Conversions, we pay exorbitant IRMAA costs late in life, if we do too many years of Roth Conversions, we miss the opportunity to have some years where qualified dividends would not be taxed.
Excellent work!
