Then RPCs calculate your account balances for each year, going into negative numbers if there are inadequate initial savings or leaving a whopper estate if the withdrawal rate is too low. Income taxes are an important part of the ORP model. ORP provides more meaningful results through its treatment of personal income taxes. Those that require that you estimate your tax rate during retirement. ORP, which computes your taxes based on withdrawals, social security benefits, and earned income.
Taxes have a significant impact on tax-deferred withdrawals.
Ignoring taxes means that funds available for spending in retirement are substantially overstated. Leaving it to the user to guess her retirement tax rate may cause the results to either overstate or understate money available for spending. ORP not only computes taxes according to the IRS schedule, ORP adjusts the tax-deferred withdrawal schedule to minimize taxes paid. ORP's answer is optimal. RPCs are straight ahead calculators.