Retirement Tax Planning
Taxes can be one of the largest controllable expenses in retirement. RetirePlanAI calculates federal, state, and payroll taxes every year of your plan — using real IRS brackets, not a single guessed rate — so you can see what you actually get to spend.
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Most calculators apply a flat tax rate at the end. We treat tax as a real expense: it has to be paid, and if your income doesn't cover it, the money comes out of your portfolio — which is itself taxable.
- Federal tax from the actual IRS brackets for your filing status
- The standard deduction, including the age-65 addition and the current senior bonus deduction
- Social Security taxed the way the IRS does it — 0%, 50%, or 85% based on your provisional income
- Withdrawals from a 401(k) or IRA counted as ordinary income, not treated as free money
- Pre-tax 401(k), 403(b), and 457 contributions reduce your taxable income, capped at the annual deferral limit — and states that tax deferrals anyway, like Pennsylvania, are handled correctly
- Brackets indexed forward using your own inflation assumption, so a flat real income doesn't silently drift into a higher bracket
Compare States Before You Relocate
State income tax estimates for all 50 states and DC, including major retirement-income exclusions in supported states. For retirees, what matters usually isn't the rate — it's what a state chooses not to tax.
- Nine states with no income tax at all, handled correctly
- Only eight states still tax Social Security — we model which, and their income thresholds
- States that exempt retirement-account withdrawals outright, like Illinois, Mississippi, and Pennsylvania
- Retire and move mid-year? The year is split between both states in proportion to the time you spent in each
Account for Payroll Taxes While You're Still Working
If you're still earning, Social Security and Medicare taxes come out before anything else. Plans that skip them overstate what you can save between now and retirement.
- Social Security tax up to the annual wage base, applied to each spouse separately
- Medicare with no cap, plus the Additional Medicare surtax on higher earners
- RSU vesting counted as wages at its full pre-tax value, then taxed at your real bracket instead of a flat withholding rate
- Payroll tax stops automatically when your wages do
- A 401(k) deferral lowers your income tax but not your payroll tax — a distinction many calculators miss
Understand RMD and Roth Conversion Tradeoffs
Required minimum distributions are forced income whether you need the money or not. Converting to a Roth earlier can shrink them — but you pay for it now. Seeing both sides in one projection is the only way to judge it.
- RMDs calculated from the IRS Uniform Lifetime Table on your prior year-end balance
- Start age set from your own birth year — 72, 73, or 75 — and separately for your spouse
- Money you don't spend from an RMD stays invested in a taxable account rather than vanishing
- Roth conversion strategies that fill your bracket to a target of 12%, 22%, or 24%
- Conversions trimmed to avoid crossing an IRMAA cliff, if you want them to be
Frequently Asked Questions
Does this use real tax brackets?
Yes. Federal brackets and standard deductions come from the IRS revenue procedures for the tax year, for all four filing statuses — not an assumed effective rate.
Which states are supported?
All 50 states and Washington DC, with each state's own rates, brackets, and standard deduction, plus how it treats Social Security. Major retirement-income exclusions are modeled in supported states.
What happens if I move states in retirement?
Set where you live now and where you plan to retire. Before the move you're taxed by the first state, after it by the second, and in the year you actually move the tax is split between them in proportion to the time spent in each.
Are Social Security benefits taxed?
Federally, between 0% and 85% of your benefit is taxable depending on your provisional income — we run that test every year. At the state level only eight states tax benefits at all, and most of those exempt them below an income threshold.
Is this a substitute for a tax preparer?
No. These are planning-level estimates for decisions like when to retire, whether to convert to a Roth, and where to live. They are not a tax return, and they don't cover every deduction, credit, or local tax.
See Your Retirement After Taxes
Build your plan and watch federal, state, and payroll taxes flow through every year of your projection.
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