Retirement Income Tax Analysis Template

Retirement plans are usually offered by almost all companies to accommodate their employees during their retired life. Different companies offer some types of tax advantage over retirement plans or retirement income. Some retirement plans are known as tax-deferred accounts so that the retirement income of the employee can be considered exempted from tax for a specific period under some terms and conditions. It will be good to analyze your retirement income in advance to get the following benefits:

  • Either you have sufficient income to meet your goals.
  • Plan necessary adjustments to meet your goals.
  • Projected estimation of your retirement income.
  • Social security projection estimate.
  • Retirement distribution and cash-flow analysis.
  • Retirement income tax analysis will help you to anticipate your future liability regarding income tax.

Retirement income tax analysis is a good tool to get the prospect approximately after the ten of more years of retirement. It will prove really beneficial to plan your goals after evaluating your future financial position.

Here is preview of this free Retirement Income Tax Analysis Template created using MS Excel,

Retirement Income Tax Analysis Template

Federal Income Taxes

If you have tax deferred pension plans then while taking out money, you have to include the amount that you have received as taxable income while filing federal income taxes. Federal tax return mentions taxable benefits on the 12a and 12b lines in case of 1040A form. If you are using 1040 form then you have to read 16a and 16b lines.

If you have Roth pension plan like 401 (k) plan or Roth 403 (b) plan then you can enjoy tax free withdrawals. In this case, the pension income will be reports on the line 12a of form 1040A or 16a of form 1040 only so do not consider 12b of form 1040A or 16b of form 1040.

State Income Taxes

Some states charges income taxes on pension income so if you are living in such state then you have to pay income tax on retirement income. Tax rates may vary from state to state and are usually based on your total taxable income for the state.

Some states consider different types of pensions while applying tax on them. For instance, some states like Alabama, Illinois, Mississippi, New York and Pennsylvania etc. do not tax any government, federal state or local government level pensions. On the other hand, California, Connecticut, Rhode Island and Vermont do not have any plan to exempt pension income from tax.

Tax Penalties

There are some rules for the withdrawal of pensions like if you will withdraw your pension payments before determined duration then you have to pay tax on the amount of withdrawal as penalty. Tax penalty is a just the once fee amounting to 10 percent of the unqualified distribution. This penalty is considered really important and urgent that you have to pay on the early withdrawal. In order to calculate the amount of tax penalty and its documentation, it is necessary to fill a 5329 form and at attach it to your form 1040 tax return.

Note: Form numbers and lines of tax details can be varied according to your own state.

Here is download link for the above mentioned Retirement Income Tax Analysis Template,



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