How to input data for mid-year retirement?
I will retire in November. My wife will retires some years later in July. My retirement coincides with my 60th birthday. My wife's will not be on or near a birthday.
How do we put in earnings and pensions for the partial years? Right now the report seems to be giving me the sum of my the middle of a calendar year. Should I start the pension a year later, put in our actual expected (partial year) earnings for the final work years, and then add in a partial pension benefit as special taxable income?
Would that mess anything up in the calculations?
Thanks..
RSS
The earnings is easy, right? You just calculate the amount of earnings you expect to get (in today's dollars) and put that in for your last year of work. For the pension, I guess you could enter that amount for the partial year as a special receipt and then start the pension at the beginning of the next year. That would not mess anything up. But I suspect you'll see very little difference in your consumption or living standard either way, but perhaps I'm wrong on that one.
Dan
Thanks for the response. Manually putting in the partial income & partial pension for the last working year seems to work ok. I got odd results, particularly regarding current year consumption, until I figured out that I should tell the program that I am retiring in the year *after* I actually retire, and that my pension starts then as well.
Now that I am more familiar with the program, the easiest solution seems to be to manually figure out where I will at year's end (say EOY 2009, when I will actually be retired), and tell the program to start calculations in 2010. That ends up fudging a little on my wife's numbers because of her future mid-year retirement, but not enough to make a difference. It's easier to figure out than the partial payments, and gives a cleaner report.
Either way, the outputs are extremely useful...
Yes, sometimes these dates and so forth become more clear when you see the results displayed in Excel tables.