Overview: Financial Calculator Update 12/31/2019
The quarterly update for 12/31/2019 is a large update, affecting every calculator. The majority of the changes affect the functionality of the calculations, updating them to 2020 rules and regulations. The most significant calculation changes in this update were to the retirement, savings, and tax calculators. Additional changes have also been made changes for continued ADA support. All standard calculators meet accessibility specification WCAG 2.1 Level AA and Section 508.
"Setting Every Community Up for Retirement Security Act", better known as the SECURE Act was signed into U.S. law on December 20th, 2019 (technically it was an amendment to a much larger funding bill). The SECURE Act has a significant impact on retirement distributions. All affected calculators have been updated, both in definitions and functionality, to incorporate the new law as it now is understood. It is expected that the IRS will release further procedures to implement the SECURE Act. We expect at least one more update in 2020 to accomodate IRS published revenue procedures.
As of this update, Internet Explorer 8 (IE8) is no longer supported. Although official support of IE8 ended on 12/31/2018 we continued to package specific IE8 required files and code in our download package. Starting with this update conditional code and files specific to IE8 are no longer provided. Microsoft ended all support for IE8 on 1/12/2016. Internet Explorer 9 support will continue through 12/31/2020.
All maintenance releases are cumulative, so if you apply this update, you will have all previous calculator updates as well. For your reference you can view the previous update notes here: 9/30/2019 Update.
For more detailed information please see our frequently asked questions: FAQ: V3 Frequently Asked Questions
Update Instructions
For more detailed information please see our deployment documentation: V3 Deployment Information
- Download the latest update package for your calculators from your download site, found on your update e-mail notice.
- Execute the KJEUpdate.exe file from your download. This is a self-extracting zip file. (Or unzip the KJEUpdate.zip file if you are using a non-windows platform.) If you see a warning message, you can safely continue. When prompted for a directory, you may use the default or enter your own. It is recommended that you extract the update to a new directory and then move the required files to your production or staging environment. One directory will be created with no subdirectories.
- Replace all files provided in update package. The update package includes all JS files and CSS files that are required to update the content of your calculators. IMPORTANT! The update package does not contain any HTML files or the KJESiteSpecific.js or KJESiteSpecific.css files. These files are not required for an upgrade, and replacing them may result in overwriting custom changes for your website installation. If you use the full installation package and have changed the file KJESiteSpecific.js or KJESiteSpecific.css files do not replace them.
When you test the new version of the calculators, make sure that the browser you are using uses the new files instead of any it may have in its cache. You may need to clear the browser's cache manually to ensure the new versions are loaded.
Please note, if you have a Servlet or other custom deployment, installation instructions for your package will found on your download page or provided separately.
Update Changes 12/31/2019
The V3 (HTML5/JavaScript) calculators do not require any edits or modifications to HTML pages, all changes are encapsulated within the JS files provided.
- ADA requirements for WCAG 2.1 level AA and Section 508
All calculators follow the ADA guidelines to meet accessibility specification WCAG 2.1 Level AA and Section 508. We continue to refine our ADA support with this update. Over the past year all calculators have been tested and updated to include ADA support, this includes:
- Improved keyboard access and continued review and improvement of screen reader compatibility.
- Deep scans of all calculators with:
SortSite:
https://www.powermapper.com/products/sortsite/checks/browser-compatibility/WebAim:
https://wave.webaim.org/We will continue to monitor and update our software to maintain compliance and ensure any future compliance issues are resolved quickly. If you have a specific calculator on your site where you have a question please feel free to contact us.
- Improved Graphic Interface
Improvements to the graphical user interface continue with this update. This includes refined keyboard only use of the calculator help icons.
- The SECURE Act of 2019 was signed into law on December 20th, 2019. All affected calculators were updated to comply with the Act.
- SECURE Act of 2019 new age for starting Required Minimum Distributions (RMD):
The Act changed the age that RMDs must begin and for most account owners. For account owners born after 6/30/1949 RMDs are required now to start at age 72. Account owners born on 6/30/1949 or earlier continue to use 70 1/2 as their start age. This also means that if RMDs have already started for an account, you must continue the distributions even if you are not 72.
Generally, for account owners and their spouses, the SECURE Act did not change how the RMD is calculated; it only changed the age that they start.
- SECURE Act of 2019 most Beneficiaries can't stretch distributions beyond 10 years
Allowing the beneficiary of a retirement account to stretch out distributions over their life time has been significantly impacted by the SECURE Act of 2019. Previously, all beneficiaries had this option. With the new law only designated eligible beneficiaries are allowed this type of minimum distribution. If you are not a designated eligible beneficiary, you have until 12/31 of the year that contains the 10th anniversary of the original account owner's death to withdraw all funds from the account. There are no minimum withdrawals during this 10 year period, but all funds must be withdrawn before the deadline to avoid significant penalties. Designated eligible beneficiaries are a surviving spouse, a child of the account owner (but generally only until they are 18, at that point the 10 year rule begins) or a chronically ill individual. For more information please see Modification of Required Distribution Rules for Designated Beneficiaries.
SECURE Act of 2019 Updated Calculators
Put these calculators on your website!RMD & Stretch IRA Calculator Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible. Required Minimum Distribution (RMD) Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account. This financial calculator will also look at potential future year's distribution requirements. Required Minimum Distribution (RMD) - Current Year Use this calculator to determine your Required Minimum Distributions (RMD) as an account owner of a retirement account for the current year. Required Minimum Distribution (RMD) - Future Projection Use this calculator to create a projection of your future Required Minimum Distributions (RMD) as an owner of a qualified retirement account. Required Minimum Distribution (RMD) - with Stretch Projection Use this calculator to create a stretch projection for Required Minimum Distributions (RMD) of a qualified retirement account. Beneficiary Required Minimum Distributions (RMD) Use this calculator to determine your Required Minimum Distributions (RMD) as a beneficiary of a retirement account. Beneficiary Required Minimum Distributions (RMD) - Spouse Inherited IRA Use this calculator to create a future projection and Required Minimum Distributions (RMD) as a spouse beneficiary electing not to treat the inherited retirement account as his/her own. 457 Plan Roth Conversion with Distributions Calculator Use this calculator to help determine if converting your 457 plan account to a 457 Roth plan account is a good move for you. Roth 401(k) Conversion Calculator This calculator will show the advantage, if any, of converting your pre-tax 401(k) to a Roth 401(k). Roth IRA Conversion with Distributions Calculator Use this calculator to help determine how you can stretch out your retirement plan distributions for as long as possible. IMPORTANT! The calculators have been updated for the SECURE Act of 2019. However, while the new law is effective as of January 1st, 2020 the IRS has not released procedures for its implementation. Future IRS published procedures may have an impact on enforcement and interpretation of the Act.
- SECURE Act of 2019 new age for starting Required Minimum Distributions (RMD):
- The definition for Rate of Return has been updated to include 2019.
New definition:
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2019, had an annual compounded rate of return of 13.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2019, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
New definition Spanish Definition:
Es la tasa compuesta anual de rendimiento que usted prevé lograr con sus ahorros o inversiones. La tasa de rendimiento real depende en gran parte de los tipos de inversiones que usted escoja. En los 10 años que terminaron el 31 de diciembre de 2019, el Índice Standard & Poor's 500® (S&P 500®) tuvo una tasa compuesta anual de rendimiento de 13.2%, incluyendo la reinversión de los dividendos. Del 1o de enero de 1970 al 31 de diciembre de 2018, el promedio de la tasa compuesta anual de rendimiento de S&P 500®, incluyendo la reinversión de los dividendos, fue aproximadamente 10.7% (fuente: www.standardandpoors.com). Desde 1970, el mayor rendimiento en un período de 12 meses fue 61% (junio de 1982 a junio de 1983). El menor rendimiento en un período de 12 meses fue -43% (marzo de 2008 a marzo de 2009). Las cuentas de ahorro en una institución financiera pueden pagar tan poco como el 0.25%, o incluso menos, pero tienen un riesgo mucho menor de pérdida del capital.Es importante recordar que éstos son casos hipotéticos y que las tasas futuras de rendimiento no se pueden predecir con certeza, y que las inversiones que pagan mayores tasas de rendimiento generalmente están sujetas a mayor riesgo y volatilidad. La tasa real de rendimiento en las inversiones puede variar mucho a lo largo del tiempo, especialmente en inversiones a largo plazo. Esto incluye la potencial pérdida del capital de su inversión. No es posible invertir directamente en un índice, y la tasa compuesta de rendimiento que se menciona arriba no refleja cargos de ventas y otros gastos y honorarios que pueden cobrar los fondos de inversión y/o empresas de inversión.
This affects the following 66 calculators:
For Canadian Calculators the definition for Rate of Return has been updated to:Rate of return
The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
- The definition for Inflation and Expected Inflation Rate has been updated to include CPI data from 2019. The CPI for 2019 was estimated by the Minneapolis Federal Reserve as 1.8% (the annualized rate), this small difference from the existing long term average was not enough change the long term average of 2.9%. The new definition now reads:
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2019 the CPI has a long-term average of 2.9% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2019, the last full year available, the CPI was 1.8% annually as reported by the Minneapolis Federal Reserve.
For Spanish the definition now reads as:
Es la tasa de inflación que usted prevé como promedio a largo plazo. Una medida común de inflación en Estados Unidos es el Índice de precios al consumidor (CPI por sus siglas en inglés). De 1925 a 2019 el CPI tiene un promedio a largo plazo del 2.9% anual. En los últimos 40 años el CPI más alto fue 13.5% en 1980. En el 2019, el último año completo disponible, el CPI fue 1.8% anual, según informa el Banco de la Reserva Federal - Minneapolis.
This affects the following 25 calculators:
- Health Savings Accounts (HSA)
Have been finalized for 2020. The limits and amounts were increased slightly from 2019 for all HSA calculations. All calculators were updated to indicate the new 2020 amounts. Income tax brackets and rates were updated to 2020. This includes the following:
The table below shows the limits for HSA's in 2020.
Health Savings Accounts (HSA) Contribution and Limits 2020 2019 Change HSA Contribution Limit Single: $3,550
Family: $7,100Single: $3,500
Family: $7,000Single: $50+
Family: $100+HSA catch-up contributions* $1,000 $1,000 No change, not indexed to inflation HDHP minimum deductible Single: $1,400
Family: $2,800Single: $1,350
Family: $2,700Single: $50+
Family: $100+HDHP maximum out-of-pocket** Single: $6,900
Family: $13,800Single: $6,750
Family: $13,500Single: $150+
Family: $300+*Catch-up contributions can be made anytime during the year in which the participant turns 55.
**This includes deductible amount, co-payments and other non-premium payments.Please note, you are no longer eligible to make HSA contributions starting in the first month that you are eligible for and enrolled in Medicare Part A or B.
For complete details on HSAs you may wish to visit the U.S. Treasury at US Treasury Health Savings Accounts
This affects the following calculators:
HTML File Changed Name HSABusiness.html Health Savings Accounts (HSA) Employer Benefit HSAContribution.html Health Savings Account (HSA) Contribution Calculator HSASavings.html Health Savings Account (HSA) Savings Calculator HSAvsTraditional.html Health Savings Account (HSA) vs. Traditional Health Plan HSAGoal.html Health Savings Account (HSA) Goal Calculator - Self-Employment Tax Calculator (TaxSelfEmployment.html): Has been updated 2020 tax rules. This calculator is for 2020 tax calculations for taxes filed in April 2021. Minor changes have occurred to the definitions and the calculations, but there have been no additional input and output fields. (Note: the 2019 version of this calculator for 2019 taxes which are filed in April 2020 is available at this link 2019 Self-Employment Tax Calculator.)
- 1040EZ Tax Form (TaxEZ1040.html), Marginal and Effective Tax Rates (TaxMargin.html): Have been finalized for the 2019. Minor changes have occurred to the definitions and the calculations. (Note: the 2020 version of this calculator will be released 3/31/2020 which is for 2020 taxes which are filed in April 2021.)
- 1040 Tax Estimator (Tax1040.html): Has been updated for changes in 2019. This is the final version of the 1040 tax form for 2019. Changes were made to match the new law: 2017 Tax Cuts and Jobs Act. This version includes an entry for Qualified Business Income Deduction.(Note: the 2020 version of this calculator will be released 3/31/2020 which is for 2020 taxes which are filed in April 2021.)
Qualified business income deduction (Form 8995)
The Qualified business income deduction (QBID) reduces your taxable income by 20% of your qualified business income, subject to certain limitations. Calculating your QBID is not included in this calculator but you can estimate the amount with the following Total the QBI for all of your pass-through entities. This will be reported on your Schedule K-1 or Schedule C for a sole proprietorship.
Income Thresholds QBID 2019 Single and Heads of Household Married Filing Jointly AGI at or below $160,700
20% of business income from qualified trades or businesses including Specified Service Trade or Business (SSTB)es$321,400
20% of business income from qualified trade or business including specified services or businesses.AGI in range has prorated deduction $160,700-$210,700
Phase-out of QBID deduction for Specified Service Trade or Business (SSTB). Phase-in of employee wage requirements for all other businesses.$321,400-$421,400
Phase-out of QBID deduction for Specified Service Trade or Business (SSTB). Phase-in of employee wage requirements for all other businesses.AGI above $210,700
No QBID deduction for Specified Service Trade or Business (SSTB). QBID limited to 50% of employee wages paid or 25% of employee wages paid plus 2.5% of invested capital.$421,400
No QBID deduction for Specified Service Trade or Business (SSTB). QBID limited to 50% of employee wages paid or 25% of employee wages paid plus 2.5% of invested capital.Which entities are considered Specified Service Trade or Business (SSTB) is not clearly defined. The following are specifically identified as NOT a SSTB: real estate brokers, property managers, architecture, engineering and bankers. For all other businesses you are considered a SSTB if you are in the trade or business of performing services as an employee - or - if the business is a Specified Service Trade or Business (SSTB) as defined by Section 1202(e)(3)(A).
Section 1202(e)(3)(A) includes any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees.
- Charitable Giving Tax Savings Calculator (CharitableTaxSavings.html): Has been updated for changes in 2019. New calculator includes the impact of itemized deductions and AMT. (Note: the 2020 version of this calculator will be released 3/31/2020 which is for 2020 taxes which are filed in April 2021.).
- Long Term Care Calculator, Long-Term Care Required Savings (LongtermCare.html, LongTermCareSavings.html): The estimated costs have been updated to reflect the cost of 2019 nursing home and home health care costs.
Definition for long term care costs has been updated to:
- This is your current estimated cost of long term care. This is your current estimated cost of long term care. According to the Genworth Financial 2019 Cost of Care Survey, the estimated median annual cost for a nursing home stay was $90,156 per year for a semi-private room. This is about $247 per day. The cost for a private room was $102,204 or $280 per day. Assisted living at home can cost more than $52,620 per year or $144 per day for a home healthcare aid. All of these long-term care costs can be considerably higher in larger metropolitan areas.
The default daily value was increased to $280.
- Individual 401(k) Contribution Comparison (Individual401kContribution.html): Has been updated for 2020. Contribution limits have increased to $57,000 per year. The catch-up amount increases from $6,000 to $6,500. Definitions and information have been updated to reflect the calculator is current for 2020.
- Individual 401(k) Savings Calculator (RetireSolo401k.html): Has been updated for 2020, 401(k) contributions increased $500 to $19,500 and total defined benefit contribution limit has increased to $57,000. The catch-up amount also increases from $6,000 to $6,500 for solo 401(k) plans. Definitions and information have been updated to reflect the calculator is current for 2020.
- Retirement Contribution Effects on Your Paycheck Calculator (RetirePayrollSavings.html, Spanish: SPRetirementPayrollSavings.html, RetirementPayrollSavings2.html): The contribution limits for retirement plans on this calculator have been updated to $19,500 for 2020. The Payroll withholding information has also been updated to 2020 rules and rates.
- Payroll and withholding calculators
The Payroll withholding information has been updated to 2020 rules and rates. Starting in 2020, empoyees have a new W-4 form. Completion of this form is optional. Integration of the new W-4 will be included in the 3/31/2020 update.
This affects the following calculators:
HTML File Changed Name Payroll.html Payroll Deductions Calculator PayrollHourly.html Payroll Hourly Paycheck Calculator Payroll125.html Payroll Flexible Spending Account (FSA) Calculator PayrollGross.html Payroll Net to Gross Calculator 457Payroll.html Payroll Deduction Calculator with 457 Contributions IncomeOneorTwo.html Should my spouse work? RetirePayrollSavings.html Retirement Contribution Effects on Your Paycheck Calculator RetirePayrollSavings401k.html 401(k) Contribution Effects on Your Paycheck Calculator RetirePayrollSavings457.html 457 Contribution Effects on Your Paycheck Calculator Compare401k2.html Roth vs. Traditional 401(k) and Your Paycheck Calculator SPPayroll.html Cheque deducciones y retenciones SPRetirePayrollSavings.html Efectos de sus Aportaciones a su Jubilación sobre su Cheque de Paga - 401(k)/403(b) limits are $19,500 under 50, $26,000 for 50 and over
- Social Security tax (2020 earned income maximum of $137,700 with employee rate 6.2%).
- FICA maximum $8537.40 for 2019
- Allowances amouny is $4300 in 2020
- Additional Medicare Tax withholdings of 0.9% for earned income above $200,000. No change for 2020
- Flexible Spending Account for Medical maximum is increased to $2750 for 2020 (up $50)
Definition updates as follows:
Year-to-date earnings
Your current year gross earnings that were subject to FICA taxes (Social Security tax and Medicare tax). This total should not include the current payroll period or any income from other sources or employers. We use this amount to determine if you are required to have Social Security tax or additional Medicare tax withheld for the current payroll period. Typically, this is your gross earnings minus employer paid health insurance and any Flexible Spending Account (FSA) contributions. In 2020, year-to-date earnings is not required or used for incomes under $137,700 per year, or if your current year-to-date earnings plus your current payroll does not exceed $137,700.
Social Security tax
For 2020, Social Security tax is calculated as your gross earnings times 6.2%. For 2020, incomes over $137,700 that have already had the maximum Social Security tax of $8537.40 withheld will not have additional withholding. Please note that if you have other wages or employers this calculator does not make any assumptions as to the total Social Security tax withheld for the current year other than the actual inputs for this calculator. This tax is also referred to as the Federal Insurance Contributions Act Old Age Survivors and Disability Insurance (FICA OASDI).
Medicare tax
Medicare tax is calculated as your gross earnings times 1.45%. Unlike the Social Security tax, there is no annual limit to the Medicare tax. Starting in 2013, an additional Medicare tax of 0.9% is withheld on all gross earnings paid in excess of $200,000 in a calendar year. If you enter an amount for the year-to-date gross earnings, this additional Medicare tax will be calculated based on the current period's gross earnings that exceed the annual $200,000 threshold. If no year-to-date amount is entered, any additional Medicare tax withholding will be calculated only for any gross earnings in excess of $200,000 for the current payroll period. If year-to-date wages prior to the current payroll period have exceeded $200,000, the year-to-date wages must be entered to calculate an accurate additional Medicare tax.
Federal tax withholding calculations
Federal income tax withholding is calculated by:
- Multiplying taxable gross wages by the number of pay periods per year to compute your annual wage.
- Subtracting the value of Withholding Allowances claimed (for 2020, this is $4,300 multiplied by Withholding Allowances claimed on the employee's W-4: Employee's Withholding Allowance Certificate).
- Determining your annual tax by using the tables below (single and married rates, respectively).
- Dividing the amount of tax by the number of pay periods per year to arrive at the amount of Federal tax withholding to be deducted per pay period.
Single Withholding Rates 2020* Annual taxable income between these amounts Annual withholding Withhold additional % of income over this amount *Source: https://www.irs.gov Publication 15 Income Tax Withholding Tables for 2020 $0 - $3,800 $0.00 $3,800 - $13,675 $0.00 plus 10% of income over $3,800 $13,675 - $43,925 $987.50 plus 12% of income over $13,675 $43,925 - $89,325 $4,617.50 plus 22% of income over $43,925 $89,325 - $167,100 $14,605.50 plus 24% of income over $89,325 $167,100 - $211,150 $33,271.50 plus 32% of income over $167,100 $211,150 - $522,200 $47,367.50 plus 35% of income over $211,150 $522,200 - (no limit) $156,235.00 plus 37% of income over $522,200 Married Withholding Rates 2020* Annual taxable income between these amounts Annual withholding Withhold additional % of income over this amount *Source: https://www.irs.gov Publication 15 Income Tax Withholding Tables for 2020 $0 - $11,900 $0.00 $11,900 - $31,650 $0.00 plus 10% of income over $11,900 $31,650 - $92,150 $1,975.00 plus 12% of income over $31,650 $92,150 - $182,950 $9,235.00 plus 22% of income over $92,150 $182,950 - $338,500 $29,211.00 plus 24% of income over $182,950 $338,500 - $426,600 $66,543.00 plus 32% of income over $338,500 $426,600 - $633,950 $94,735.00 plus 35% of income over $426,600 $633,950 - (no limit) $167,307.50 plus 37% of income over $633,950 - College Savings (CollegeSavings.html, SPCollegeSavings.html (Spanish): The definition for tuition, room and board, and education cost inflation have been updated to include the average costs for the 2019-20 school year. The defaults have also been changed to reflect the new average cost for the 2019-20 school year and the average cost increases for tuition and room and board. The new information is show below:
College cost
The average published costs of college for the 2019-20 school year (including tuition, room and board, books, supplies, transportation and other personal expenses) as reported by the College Board:College cost inflationU.S. Undergraduate College Costs for 2019-20 School Year
College Type Tuition & Fees Room & Board Total Change from 2018-19 Public 4-Year (in-state tuition) $10,440 $11,510 $21,950 2.7% Public 4-Year (out-state tuition) $26,820 $11,510 $38,330 2.4% Private 4-Year $36,880 $12,990 $49,870 2.8%
This is the percentage that you expect educational costs to increase per year. Data provided by The College Board's "Trends in College Pricing 2019" reported tuition, room and board increases at approximately 4.8% annually over the past 10 years. 2019 saw a smaller increase of approximately 2.8%. - 401(k) Calculator (Retire401k.html), 401(k) Savings With Profit Sharing (Retire401kProfitShare.html): The definitions and the calculation module have been updated to reflect the 2020 maximum contribution limits of $19,500 annually ($500 change from 2019) for those under 50 and $26,000 annually for those 50 and older ($1000 change from 2019). The limitation used in the definition of highly compensated employee increased to $130,000 for 2020.
- 457 Savings Calculator (Retire457.html): The definitions and the calculation module have been updated to reflect 2020 maximum contribution limits of $19,500 annually for those under 50 and $26,000 annually for those 50 and older.
- 403(b) SavingsCalculator (Retire403b.html): The definitions and the calculation module have been updated to reflect 2020 maximum contribution limits of $19,500 annually for those under 50 and $26,000 annually for those 50 and older.
- Roth (after-tax) Account or Pre-Tax Account? (RothvsPreTaxAccount.html): The definitions and the calculation module have been updated to reflect 2020 maximum contribution limits of $19,500 annually for those under 50 and $26,000 annually for those 50 and older.
- 72(t) Calculator (Retire72T.html), 72(t) Distributions Impact (Retire72TAlt.html): The Federal Mid-Term rate has been updated for January 2020. This change affects the calculators default values and the definition of Reasonable Interest Rate For January 2020. For January 2020, 120% of the Federal Mid-Term rate is 2.03%.
- Roth IRA Calculator (RothIRA.html), Traditional IRA Calculator (RegularIRA.html), Roth IRA vs. Traditional IRA Calculator (RothvsRegular.html): These calculators have been updated to 2020 phase out ranges. The maximum annual contribution of $6,000 per individual under 50 and $7,000 per individual over 50 remains unchanged from 2020. These changes include updates to the calculation module as well as the definitions and the report.
The tables and text below has been updated:
2020 Traditional IRA Deduction Phase-Out Ranges Tax Filing Status Income Phase-Out Range Married filing jointly $104,000 - $124,000 Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)* $65,000 - $75,000 Married filing separately* $0 - $10,000 Married filing jointly (spouse has employer plan, IRA owner does not)** $196,000 - $206,000 Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. The table below summarizes the income 'phase-out' ranges for Roth IRAs.
Roth IRA 2020 Contribution Phaseout Tax Filing Status Income Phase-Out Range Married filing jointly or head of household $196,000 to $206,000 Single $124,000 - $139,000 Married filing separately $0 - $10,000 Total non-deductible contributions
The total of your traditional IRA contributions that were made without a tax deduction. Traditional IRA contributions are often tax-deductible. However, if you have an employer-sponsored retirement plan at work, such as a 401(k), your tax deduction is limited based on your income. This calculator automatically determines if your tax deduction is limited by your income.
2021 Traditional IRA Deduction Phase-Out Ranges Tax Filing Status Income Phase-Out Range Married filing jointly $105,000 - $125,000 Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)* $66,000 - $76,000 Married filing separately* $0 - $10,000 Married filing jointly (spouse has employer plan, IRA owner does not)** $198,000 - $208,000 - Roth 401(k) vs. Traditional 401(k) Calculator (RothvsTraditional401k.html), Roth vs. Traditional 401(k) and your Paycheck (Compare401k2.html): Contribution limit notes updated for 2019. The definitions and the calculation module have been updated to reflect the 2020 maximum contribution limits of $19,500 annually for those under 50 and $26,000 annually for those 50 and older.
- Retirement Planner Calculator (RetirementPlan.html), Retirement Pension Planner Calculator (RetirementPlan3.html), Retirement Planner with Retirement Earnings Calculator (RetirementPlan4.html): Calculations and definitions for Social Security updated. (See Social Security calculator update for details).
- 2020 Federal Tax Rate table has been added to the following calculators (replacing the 2019 Federal Tax Table)
Filing Status and Federal Income Tax Rates 2020* Tax Rate Married Filing Jointly or Qualified Widow(er) Single Head of Household Married Filing Separately *Caution: Do not use these tax rate schedules to figure 2019 taxes. Use only to figure 2020 estimates. Source: Rev. Proc. 2019-44 10% $0 - $19,750 $0 - $9,875 $0 - $14,100 $0 - $9,875 12% $19,750 - $80,250 $9,875 - $40,125 $14,100 - $53,700 $9,875 - $40,125 22% $80,250 - $171,050 $40,125 - $85,525 $53,700 - $85,500 $40,125 - $85,525 24% $171,050 - $326,600 $85,525 - $163,300 $85,500 - $163,300 $85,525 - $163,300 32% $326,600 - $414,700 $163,300 - $207,350 $163,300 - $207,350 $163,300 - $207,350 35% $414,700 - $622,050 $207,350 - $518,400 $207,350 - $518,400 $207,350 - $311,025 37% Over $622,050 Over $518,400 Over $518,400 Over $311,025 NOTE: The actual tax calculators will be updated at the end of the tax season, in the 3/31/2020 update.
- Social Security Calculations
Calculations and definitions updated for 2020. The calculations use the 2020 FICA income limit of $137,700 with an annual maximum Social Security benefit of $36,132 ($3,011 per month) for a single person and 1.5 times this amount for a married couple. Please see https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf for more information.
These changes affect the following calculators:
Name HTML File Changed Social Security Benefit Calculator SocialSecurity.html How important is Social Security? NoSocial.html Retirement Planner Calculator RetirementPlan.html Retirement Pension Planner Calculator RetirementPlan3.html Retirement Nestegg Calculator RetirementNestegg.html Retirement Income Calculator RetirementNumber.html Retirement Planner with Retirement Earnings Calculator RetirementPlan4.html The definitions of Social Security in each of these calculators has been updated to the following: Social Security is based on a sliding scale depending on your income, how long you work and at what age you retire. Social Security benefits automatically increase each year based on increases in the Consumer Price Index. Including a spouse increases your Social Security benefits by 1.5 times your individual estimated benefit. Please note that this calculator assumes that only one of the spouses work. Benefits could be different if your spouse worked and earned a benefit higher than one half of your benefit. If you are a married couple, and both spouses work, you may need to run the calculation twice – once for each spouse and their respective income. This calculator provides only an estimate of your benefits.
The calculations use the 2020 FICA income limit of $137,700 with an annual maximum Social Security benefit of $36,132 ($3,011 per month) for a single person and 1.5 times this amount for a married couple. To receive the maximum benefit would require earning the maximum FICA salary for nearly your entire career. You would also need to begin receiving benefits at your full retirement age of 66 or 67 (depending on your birthdate). This calculator rounds your age of full Social Security benefits to the next highest full year. If your birthdate is between 1955 and 1959 your actual full retirement age for Social Security is 66 plus two months for each year after 1954. Your actual benefit may be lower or higher depending on your work history and the complete compensation rules used by Social Security.
For Spanish versions:
El Seguro Social está basado en una escala móvil en base a sus ingresos, a cuánto tiempo trabaja y a qué edad se jubila. Los beneficios del Seguro Social aumentan automáticamente todos los años en base a los aumentos del Índice de Precios al Consumidor. El incluir a un cónyuge aumenta sus beneficios del Seguro Social en 1.5 veces el cálculo de su beneficio individual. Note que esta calculadora asume que sólo uno de los cónyuges trabaja. Los beneficios podrían ser diferentes si su cónyuge ha trabajado y ganado un beneficio que es más de la mitad de su beneficio. En el caso de un matrimonio en el que ambos cónyuges trabajan, podría tener que hacer el cálculo dos veces - una por cada cónyuge con su respectivo ingreso. Esta calculadora sólo provee un cálculo aproximado de sus beneficios.
En las calculaciones se utiliza el límite de ingreso 2020 FICA (Ley de la Contribución Federal al Seguro Social) de $137,700 con un beneficio anual máximo del Seguro Social de $36,132 ($3,011 por mes) para una persona soltera, y esa cantidad multiplicada por 1.5 para un matrimonio. Para recibir el beneficio máximo, usted tendría que haber ganado el salario máximo FICA por casi toda su carrera. También tendría que comenzar a recibir beneficios a su plena edad de jubilación de 66 ó 67 años (dependiendo de su fecha de nacimiento). Esta calculadora redondea su plena edad de jubilación para recibir beneficios del Seguro Social al siguiente año completo. Si su fecha de nacimiento es entre 1955 y 1959, el Seguro Social considera que su plena edad de jubilación es 66 más dos meses por cada año después de 1954. Su beneficio real podría ser menor o mayor, dependiendo de su historial de trabajo y las reglas completas de compensación que usa el Seguro Social.
- Estate Tax Planning Calculator (EstatePlan.html, SPEstatePlan.html): The exemption amount has been increased to $11,580,000. This is $180,000 more 2019's $11,400,000. There was no change in the estate tax rate. The annual gift exclusion remained at $15,000.
- Inflation Calculators: Have been updated to include CPI information for 2019. The CPI for 2019 was 1.8.
These changes affect the following calculators:
Category Name HTML File Changed Investment Inflationary Millionaires InflationMillionaire.html Inflation and Consumer Prices Calculator InflationPrice.html Inflation - Historic Impact on Investments InflationHistory.html - Tax Free Savings Account (TFSA) Comparison (Canadian and French Canadian) (CATFSACompare.html,FRTFSACompare.html ): The definitions and description have been updated for 2020 with improved links to canada.ca. The maximum contribution is set at $6,000 per year (no change from 2019). The new definition reads:
Tax Free Savings Account (TFSA)
This is a flexible savings account that allows Canadians 18 and older to save for any purpose and withdrawals are tax free. The contribution limit for 2020 is $6,000, not including any catchup contributions for previous withdrawals or years where you didn't contribute the maximum. In recognition of the fact that people are likely to have multiple savings objectives at various stages of their lives - e.g. vacation, wedding, car, home or cottage - the full amount of withdrawals may be re-contributed to a TFSA starting the following year, to ensure that there is no loss in a person's total savings. For complete details of how a TFSA works please visit https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html.
- Retirement Planner Calculator (Canadian and French Canadian) (CARetirementPlan.html,FRRetirementPlan.html): The definitions and description have been updated for 2020 where available. The default OAS and CPP/QPP amount have been updated the latests quarterly amounts available at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html and https://www.canada.ca/en/services/benefits/publicpensions/cpp/payment-amounts.html respectively. OAS $613.53 Maximum Monthly Payment (regardless of marital status Oct. to Dec. 2019), CPP/QPP $683.65 Average monthly new benefit amount for July 2019.
- Education Savings Calculator (Canadian and French Canadian) (CACollegeSavings.html,FRCollegeSavings.html ): The RESP Grant information has been updated to the latest available matching grant information (2019).
Registered Education Savings Plan (RESP) 2019 Income Range Annual Grant Calculated As $0 - $47,630* $0.40 for each $1 for the first $500.
$0.20 for each $1 for the next $1,500.
Maximum annual grant is $600.$47,630* - $95,259* $0.30 for each $1 for the first $500.
$0.20 for each $1 until you reach the maximum grant.
Maximum annual grant is $550.over $95,259* $0.20 for each $1 for the first $2,500.
Maximum annual grant is $500.In addition, definitions for Education Cost Inflation and Rate of return have been adjusted to be more Canadian specific.
Rate of return
This is the annually compounded rate of return you expect from your investments. This will also be the rate used if you end up with a negative balance and need to borrow money to meet your goal. The actual rate of return is largely dependent on the type of investments you select. For example, the annual return of the S&P/TSX Composite Index for the 10 year period from December 31, 2009 through December 31, 2019 was 3.9% (source spindices.com). Over the same period the total annual return (including dividends) was 6.9% (source spindices.com). Savings accounts at a bank or credit union may pay as little as 2% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Education cost inflation
This is the percentage that you expect educational costs to increase per year. The annual education inflation is approximately 3.3% (source: Statistics Canada 2018 - 2019 Academic year).