I would find it beneficial to see what is the total (cumulative) tax value over a given plan’s lifetime as a way to compare it against other tax planning scenarios. If this could be shown graphically then in one picture you could see the end values (total cumulative tax) per scenario as well as how the cumulative tax per scenario progresses during the plan(s) lifetime. Propose adding this graph under Review > Graphical Projections > Key Plan Metrics by Scenario. Add a third radio button of “Taxes” to “Savings” “Expenses” selection. Graph data as “Cumulative Taxes” where each year is the total of all previous years and current year. Add note that Taxes are the combination of all types: Federal, State, Local, Social Security and Medicare Wage Tax.
Note that minimizing lifetime taxes paid is not the same as maximizing your wealth and can be a very misleading metric. You expect your taxes to grow with your portfolio (bigger RMDs, bigger dividends, etc.), so a strategy that minimizes total taxes paid may be because it paid taxes at too high a rate early on and so made you less rich.
Spending Strategies "Consumption Smoothing" and "Actuarial" try to find a spending level that runs down your assets at the end of the plan. For those, the right metric is the spending level. For other spending strategies, the metric to use is the final wealth on an effective basis (where you enter a tax rate to approximate taxes your heirs will have to pay).
@eyedrop21 - On 9-Feb-25 I submitted the Feedback (#1994) below -
Add new Tax Graph for comparison between Scenarios.
Specifically add "Taxes" to "Savings & Expenses" Radio button selections under current "Compare Plan Key Results Metrics by Scenario".
Ideally a Taxes breakdown to (Federal, State & Local, SS Wage, Medicare) for consistency with Tax Projections graph.
Early in the new beta "Feature Voting" facility this was on the list...
Bob
@ricke Good points here. Sometimes we focus on one goal such as paying the least taxes, or getting the biggest ACA premium tax credit, much to our own detriment. I love how Pralana shows this! I had a client that came to me after reading an article or watching a video and insisted I show them how to pay no taxes, zero, in retirement. They were 67 though, just ready to retire, and had only saved (a lot!) in their 401k. And single. They were quite angry with me when I laid it out, because paying no taxes in retirement was going to be a very expensive endeavor indeed. At least, legally, as I told them 🙂
