Job loss — zero income in years 1-2, then re-employed
Job loss — zero income in years 1-2, then re-employed ends $684,168 behind employed throughout, 2% raises, after tax.
- Lifetime tax, in today's dollars: $77,461 less.
- All of it under the assumptions listed below, which the reader can change.
What the tax change is made of
- Federal income tax: −$48,587
- Tax on dividends, interest and portfolio gains: −$28,874
These add back to the total change; they are the same taxes the projection sums into the headline, discounted the same way.
Not financial or tax advice.
Lifetime tax (present value)$564,935
Terminal after-tax wealth$3,775,327
Years in IRMAA5
What this assumes
Every figure below depends on these. Change one and the answer changes.
- Horizon
- 25 yearsHow many years the projection runs.
- Nominal return
- 5%Assumed annual growth before inflation.
- Inflation
- 2.5%Grows spending, and indexes brackets between published years.
- Discount rate
- 3%Used to present-value lifetime tax — the headline metric.
- Future tax law
- Current law continuesLeft on current law, the projection assumes today’s brackets last the whole horizon — itself a forecast, not a neutral choice.
Other assumptions (4)
- Dividend yield
- 1.2%
- Interest yield
- 0.8%
- Business cash return
- 2%
- Income growth
- 2%
Year by year
| Year | Age | Ordinary income | Federal tax | IRMAA | Net worth |
|---|---|---|---|---|---|
| 0 | 45 | $150,000 | $24,734 | $0 | $687,231 |
| 1 | 46 | $0 | $0 | $0 | $646,135 |
| 2 | 47 | $0 | $0 | $0 | $601,156 |
| 3 | 48 | $159,181 | $26,071 | $0 | $691,291 |
| 4 | 49 | $162,365 | $26,532 | $0 | $786,560 |
| 5 | 50 | $165,612 | $27,000 | $0 | $887,215 |
| 6 | 51 | $168,924 | $27,477 | $0 | $993,518 |
| 7 | 52 | $172,303 | $27,961 | $0 | $1,105,744 |
| 8 | 53 | $175,749 | $28,453 | $0 | $1,224,182 |
| 9 | 54 | $179,264 | $28,954 | $0 | $1,349,134 |
| 10 | 55 | $182,849 | $29,462 | $0 | $1,480,914 |
| 11 | 56 | $186,506 | $29,980 | $0 | $1,619,855 |
| 12 | 57 | $190,236 | $30,505 | $0 | $1,766,302 |
| 13 | 58 | $194,041 | $31,040 | $0 | $1,920,618 |
| 14 | 59 | $197,922 | $31,583 | $0 | $2,083,182 |
| 15 | 60 | $201,880 | $32,135 | $0 | $2,254,281 |
| 16 | 61 | $205,918 | $32,696 | $0 | $2,434,200 |
| 17 | 62 | $210,036 | $33,266 | $0 | $2,623,356 |
| 18 | 63 | $214,237 | $33,846 | $0 | $2,822,184 |
| 19 | 64 | $218,522 | $34,435 | $0 | $3,031,141 |
| 20 | 65 | $222,892 | $35,033 | $4,727 | $3,245,763 |
| 21 | 66 | $227,350 | $35,642 | $4,845 | $3,471,154 |
| 22 | 67 | $231,897 | $36,260 | $4,966 | $3,707,961 |
| 23 | 68 | $236,535 | $36,888 | $5,091 | $3,956,720 |
| 24 | 69 | $241,266 | $37,527 | $5,218 | $4,217,992 |