DrawdownCalc

This is an independent fork of Wayne Scott's fplan. It is designed to explore optimal withdrawals from savings, Roth and IRA accounts. It uses a mixed-integer linear programming model to calculate solutions.

The ideas are similar to those of James Welch at www.i-orp.com. You should probably look at i-orp or wscott/fplan before you look at this project.

This software serves as the backend of the DrawdownCalc website.

Dev Setup

This is going to work best in a vitural python environment.

You should only need to do this first step once (unless you do something crazy like change the directory name): python3 -m venv .venv

Next you need to activate the environment: source .venv/bin/activate

Then install the program: python3 -m pip install -editable .

Server Usage

To start a server for use as a development backend to drawdowncalc_web: ddcalc-server

This will start a server on port 5001.

Command-line Usage and Options

• Copy examples/sample.toml to a new file
• Edit with your information. Take a close look at sample.toml and dcsingle.toml in the examples directory to see what the program supports.
• run ddcalc NEW.toml

--verbose

Shows the progress of the solver as it attempts to maximize your spending floor.

--timelimit N

Usually the program gives you an answer within a few seconds. In the event that it can't find the answer quickly it will return the best answer that it has found after 300 seconds (5 minutes). If you want to wait longer then you can specify how long, in seconds, that you are willing to wait with this option. I recommend that you use the --verbose option in conjunction with this option so you can see that progress is being made.

--csv

Outputs your answer in csv format instead of a table.

--spend N

Instead of solving to maximize your spending floor, this option will solve for at least the given amount of spending while minimizing lifetime taxes.

--roth N

Solves to maximize your spending floor while leaving at least N dollars, in inflation adjusted terms, in your Roth account at the end of your plan.

--bumpstart Y --bumptax T

Use these options to model what would happen if all of the federal income tax bracket levels increased by T after Y years. This program doesn't try to model what will happen when the TCJA expires. You can get a rough approximation by using these options to model all of the tax brackets adding 3 (like 10% -> 13%, 12% -> 15%, 22% -> 25%, etc) in 2 years. To do so you would use the options: --bumpstart 2 --bumptax 3

Why

This program adds some features that other progams lack, such as:

• State tax brackets
• Capital gains tax brackets
• Net investment income (NII) tax
• Year-end capital gains and qualified dividend distributions
  • The program assumes they are taxed in the year they are received and then spent in the following year

What's missing

There are a few things that could be added to make this more complete. The program does not currently take into account any of the following:

• Taxability of social security
  • If set to taxable it calculates 85% taxable
• HSA
• AMT
• IRMAA

State tax

Every state has their own rules. I did not try to implement them all. I put in enough to model my state and I believe many others. The following things are assumed about state taxes (and cannot be changed in your config file):

• Capital gains are taxed as income in your state

Known Issues

Check the issues tab for updates. This is what I'm currently aware of:

• Basis calcuations for capital-gains taxes are estimates