Retirement Plans - Tax-Deferred

Back to: Retirement Plans in Moneytree Plan

Tax-deferred retirement accounts can be split broadly between employer sponsored accounts and IRAs. With these contributions are made pre-tax. As a result of reducing taxes now, withdrawals are wholly taxable as ordinary income.

Withdrawals prior to age 59.5 are subject to 10% penalty taxes. You can have Moneytree Plan exempt penalty taxes by unchecking the box to calculate penalty taxes in Assumptions > Other.

RMDs for tax-deferred retirement accounts begin the year the owner turns 72.

Employer Sponsored

These make up most options for Retirement Plans. They include IRA, 401k, TSA/403b, SEP, etc. The "Other" option also falls into this category.

Contributions are split between personal and company contributions. These contributions can be entered either as a monthly dollar amount, or as a percentage of salary. The percent of salary only applies to the salary and wages, not self employment income.

For individuals deferring RMDs from working passed 72, they can be delayed by using the corresponding input field in Assumptions > Other.

IRA

IRAs allow for personal contributions. Company contributions, and contributions as a percent of salary cannot be entered.

RMDs for IRAs always begin the year the individual turns 72 and cannot be delayed. The field to defer RMDs in Assumptions > Other will not impact IRAs.