User Guide

Personal Information

Current Age

Your age today. The projection starts from this year.

Retirement Age

The age when you plan to stop working. Salary income ends at this age, and you begin drawing from retirement accounts. If you're already retired, set this to your current age.

Life Expectancy

The age to project through. A common approach is to use age 95 to ensure you don't outlive your money. The projection will show all years from your current age through this age.

Filing Status

Your tax filing status affects tax brackets, standard deduction, and Social Security taxation thresholds. Options: Single, Married Filing Jointly, Married Filing Separately, Head of Household. Selecting "Married Filing Jointly" enables couple mode with additional spouse inputs.

Couple Mode (Married Filing Jointly)

When filing jointly, you can add your spouse's information including their birth date, life expectancy, Social Security, pension, other income, and tax-deferred balance. Key couple-mode features:

• Separate RMD timing: Each spouse's tax-deferred balance has its own RMD schedule based on their birth year
• Combined income: Both spouses' income is included in household MAGI for IRMAA, ACA subsidies, and SS taxation
• Extended projection: Runs through the longer of both spouses' life expectancies
• Survivor handling: After a spouse passes their life expectancy, their income stops and filing status changes

State

Your state of residence for state income tax calculations. All 50 states plus DC are supported, including states with no income tax and those with special retirement income exemptions.

Account Balances

Cash Balance

Emergency fund and checking/savings accounts. This is drawn first when expenses exceed income, but earns no investment return (assumed to keep pace with inflation only).

Brokerage Balance

Taxable investment accounts. Growth is taxed as capital gains (more favorable rates than ordinary income). Withdrawals from this account trigger capital gains tax on the gains portion.

Tax-Deferred Balance (401k/Traditional IRA)

Pre-tax retirement accounts. Grows tax-free, but all withdrawals are taxed as ordinary income. Subject to Required Minimum Distributions (RMDs) starting at age 72, 73, or 75 depending on birth year (SECURE Act 2.0).

Roth Balance

After-tax retirement accounts. Grows tax-free and qualified withdrawals are completely tax-free. Not subject to RMDs during the owner's lifetime. Ideal for leaving to heirs.

Income Sources

Social Security

Your expected monthly Social Security benefit at your claiming age (62-70). Enter the amount shown on your Social Security statement. The calculator handles the taxation (0%, 50%, or 85% taxable based on combined income).

Pension

If you have a defined benefit pension, enter the annual amount and the age it begins. Pensions are typically taxed as ordinary income (you can specify if it's tax-free). Toggle "Adjusts for inflation" if your pension includes COLA.

Other Income

Rental income, part-time work, royalties, or other regular income. Specify start/end ages, whether it's taxable, and whether it adjusts for inflation.

Expenses

Flexible Expenses

Spending that can be reduced in tough times: travel, entertainment, dining out, hobbies. In Monte Carlo simulations with spending flexibility enabled, these can be automatically reduced during market downturns to improve portfolio survival.

Fixed Expenses

Essential spending that cannot be reduced: housing, food, utilities, insurance, healthcare. These are maintained regardless of market conditions.

Spending Flexibility (Monte Carlo)

When enabled, flexible spending can be reduced by a percentage you specify when portfolio balance drops below a trigger level. This models the Guyton-Klinger guardrails approach.

Life Events

Model one-time financial events that occur at specific ages, such as receiving an inheritance, selling a property, or making a major purchase.

Income

One-time income like an inheritance, asset sale, or bonus. For each event, you specify the amount, the age it occurs, the tax treatment (taxable as ordinary income or tax-free), and where to deposit the funds (Cash or Brokerage account).

Tax Treatment

Tax-free: Use for stepped-up basis inheritances, Roth distributions, or gifts. The amount is deposited without affecting your taxable income.
Taxable: Use for ordinary income like bonuses, deferred compensation payouts, or sales without favorable tax treatment. This income is added to your federal and state tax base for that year.

Expenses

Major one-time expenses like car purchases, home repairs, or medical costs. The expense is withdrawn from your accounts in the standard depletion order: Cash first, then Brokerage, then Tax-Deferred, then Roth.

Amounts

Enter amounts in today's dollars. Life events are not adjusted for inflation—the exact amount you enter will be applied at the specified age.

Roth Conversions

A Roth conversion moves money from a tax-deferred account to a Roth account. You pay taxes now, but the money grows tax-free forever. This can be valuable for reducing future RMDs and creating tax-free income in retirement.

Using the Roth Conversion Planner

Roth conversions are configured through the Roth Conversion Planner page, which automatically calculates an optimal conversion strategy based on your tax situation. The optimizer tests multiple timing strategies and selects the one with the lowest lifetime tax burden.

How It Works

Once you run the Roth Conversion Planner, your conversion schedule is automatically applied to both the Calculator projections and Chance of Success simulations. You can adjust individual years on the Roth Conversion Planner page if needed.

Conversion Window

The optimizer schedules conversions between retirement (when income drops) and the start of required minimum distributions. For couples, the window extends until both spouses have started RMDs—if your spouse is younger, you have more years to convert their tax-deferred balance before their RMDs begin. The optimizer considers tax brackets, IRMAA thresholds, and ACA subsidy cliffs when determining amounts.

Investment Assumptions

Stock Return

Expected annual return on stocks. Historical S&P 500 average is about 10% nominal (7% real after inflation). Used in the deterministic Calculator projection. Monte Carlo uses actual historical returns instead.

Bond Return

Expected annual return on bonds. Intermediate-term government bonds historically return about 5% nominal. Lower than stocks but with less volatility.

Bond Allocation

The percentage of your portfolio in bonds (vs. stocks). A common rule of thumb is "your age in bonds" but research suggests retirees may benefit from a "rising equity glidepath" starting more conservative.

Inflation Rate

Expected annual inflation. The Federal Reserve targets 2%. Historical average is about 3%. All future values are adjusted by this rate and can be shown in "today's dollars."

Bond Location

Choose where your bonds are held: tax-deferred accounts (default), Roth, or brokerage. Holding bonds in tax-deferred accounts is often recommended since bond interest is taxed as ordinary income. You can also let the Monte Carlo simulation automatically optimize this for your situation.

Pre-Retirement Contributions

If you're not yet retired, model your ongoing contributions to retirement accounts. These continue from your current age until retirement age. You can toggle whether contributions increase with inflation each year.

401k Contributions

Your annual contribution to employer-sponsored tax-deferred accounts. 2025 limit: $23,500 ($31,000 if age 50+).

Roth IRA Contributions

Annual contributions to Roth accounts. 2025 limit: $7,000 ($8,000 if age 50+). Subject to income limits.

Brokerage Contributions

Additional savings invested in taxable brokerage accounts after maxing out tax-advantaged accounts.

ACA Health Insurance

For early retirees (before Medicare at 65), health insurance costs can be significant. The Affordable Care Act provides subsidies based on income (MAGI). When ACA subsidies affect your conversion strategy, a callout appears on the Roth Conversion Planner page explaining the trade-off.

Premium Estimate

The optimizer estimates your health insurance premium based on your age. You can click "Edit" to enter your actual quote from healthcare.gov. The optimizer automatically calculates subsidies based on your projected income.

Show Aggressive Scenario

Click this to see what happens if you ignore ACA subsidies and maximize conversions instead. The comparison shows extra conversions, tax savings, lost subsidies, and the net impact—so you can make an informed choice.

Summary & Projections

The Calculator displays your results in two main areas:

Your Projection

A colored status banner shows whether your plan is on track: green (fully funded), yellow (falls short), or red (needs attention). On desktop, this panel stays visible on the right as you adjust inputs, showing projected balance at life expectancy, total withdrawals, and key milestones.

Year-by-Year Data

Expand any accordion section to see detailed projections including account balances, income sources, taxes, and Roth conversions for each year of retirement. All values are shown in today's dollars (inflation-adjusted).

Charts

Visual representations help you quickly understand your financial trajectory:

• Cash Flow Analysis: Shows withdrawals, Roth conversions, RMDs, taxes, and Social Security over time
• Account Breakdown: Stacked area showing each account type
• Roth Conversions: Bar chart of annual conversion amounts (when enabled)

Blue dots mark key milestones—hover to see details. Milestones include retirement, Roth conversion start/end, Social Security, pension, other income, Medicare (65), RMDs, and life expectancy.

Tax Breakdown

The tax detail section shows exactly how your taxes are calculated:

• Ordinary Income: Salary, RMDs, tax-deferred withdrawals, taxable Social Security
• Capital Gains: Gains from brokerage account withdrawals
• Federal Tax: Based on tax brackets for your filing status
• State Tax: Based on your state's tax rules
• IRMAA: Medicare surcharges if income exceeds thresholds
• NIIT: 3.8% surtax on investment income for high earners

How It Works

1. Historical Block Sampling: The simulation randomly selects 3-7 year blocks of actual historical returns (1926-2024) and stitches them together to create unique market scenarios.
2. No Replacement Within Trial: Once a historical year is used in a trial, it won't be reused. This prevents unrealistic scenarios like experiencing two Great Depressions in a single retirement.
3. 2,000 Trials: Each trial represents one possible future. Running 2,000 trials gives statistical confidence in results while keeping simulation time quick.
4. Success/Failure: A trial "succeeds" if your portfolio lasts through your life expectancy. It "fails" if you run out of money.

Historical Data

The simulation uses 99 years of historical data (1926-2024):

• Stock Returns: S&P 500 total returns (with dividends reinvested)
• Bond Returns: Intermediate-term government bonds
• Inflation: Historical CPI for that year
• Market Events: Major events like the Great Depression (1929-1932), 1970s Stagflation, Dot-Com Crash (2000-2002), Financial Crisis (2008), and COVID (2020) are labeled in trial details.

Understanding Your Results

Success Rate

The percentage of trials where your portfolio survived through life expectancy. A common target is 90-95%. Below 80% suggests significant risk of running out of money. This is the primary metric shown prominently at the top.

Outcome Statistics

The sticky panel shows three key outcomes: Median (the middle result), Top 25% (what happens in good scenarios), and Bottom 25% (what happens in poor scenarios). All values are shown in today's dollars.

Portfolio Chart

The chart shows the median outcome and the middle 50% range. The highlighted "sequence risk window" marks the first 7 years of retirement—when bad returns hurt the most.

Scenario Comparisons

The page automatically compares your plan against alternatives: What if you skip Roth conversions? What if you're willing to cut flexible spending in bad years? These comparisons help you understand the trade-offs in your strategy.

Bond Allocation Optimizer

Automatically runs when you simulate, testing different stock/bond mixes to find the optimal allocation for your situation. Uses an 80/20 weighting of success rate vs. median balance.

Trial Explorer

Click "Explore individual trials" to see all 2,000 simulation trials. You can filter by outcome, sort by balance, and click any trial to see year-by-year details including which historical periods were sampled.

Roth Conversion Optimizer

See how much you could save by converting to Roth at the right pace. The planner tests multiple strategies to find the best approach for your situation.

How It Works

Calculates a target tax-deferred balance so future RMDs stay low, then determines how much to convert to reach that target. Distributes conversions across available tax bracket room to minimize taxes paid.

Timing Strategies

Internally tests 8 different timing patterns (Even Spread, Front-Loaded, Back-Loaded, and others) and automatically selects the one with lowest lifetime taxes. You'll see the winning strategy displayed—click "Explain Strategy" to understand why it was chosen.

Roth Conversion Schedule

After the optimizer runs, you can manually adjust individual year amounts using the Roth Conversion Schedule table. Increase or decrease any year's conversion and see tax impacts update in real-time. The table shows federal bracket, federal and state tax cost, and healthcare impact for each year.

Guardrails & Insights

The Guardrails panel alerts you to IRMAA surcharges, ACA subsidy impacts, and other tax cliffs your conversion might trigger. The Insights panel provides actionable tips like "Consider converting more while in the 12% bracket" based on your specific situation.

ACA Subsidy Considerations

For early retirees (before age 65), ACA subsidies can save thousands per year. The Roth Conversion Planner accounts for ACA implications in two ways:

• Multi-Tier FPL Optimization: When you enable "Respect ACA Subsidy Cliff" in the Calculator's ACA section, the optimizer evaluates multiple income targets (200%, 250%, 300%, 400% of Federal Poverty Level) to find the optimal balance between Roth conversions and ACA subsidies.
• Health Insurance Costs: Your ACA premium settings are factored into the optimization. If you don't enter a premium, the optimizer estimates one based on your age using benchmark data.

A callout on the Roth Conversion Planner page shows when ACA constraints are active, your estimated subsidy, and lets you compare the ACA-optimized strategy against a more aggressive conversion approach.

Safety margin at 400% FPL: When targeting the 400% cliff, the optimizer keeps you 5% below it (~$3,500 for singles, ~$4,700 for couples). This protects against income surprises like Social Security COLA increases or unexpected fund distributions—going $1 over the cliff loses your entire subsidy. Lower targets (200%, 250%, 300%) don't need this margin because subsidies phase out gradually at those levels.

Bond Allocation Optimizer

Found on the Chance of Success page, this tool finds the optimal stock/bond mix for your specific situation by testing multiple allocations across thousands of historical scenarios.

How It Works

Tests multiple bond allocations (0%, 20%, 40%, etc.) and refines around the best results. Uses a balanced objective that weighs 80% success rate and 20% median balance.

Results Table

Shows success rate, median final balance, and 10th percentile (worst case) for each allocation. The recommended allocation is highlighted.

How It Works

Page-Aware Context

The assistant receives a summary of your financial situation relevant to the page you're on. On the Roth Conversion Planner, it sees your conversion schedule. On Chance of Success, it sees your Monte Carlo results. This helps it give specific, actionable answers.

Suggested Questions

Each page shows relevant starter questions. On the Calculator: "Am I saving enough?" On the Roth Conversion Planner: "Why these conversion amounts?" On Chance of Success: "What does my success rate mean?"

Usage Limits

To keep the service free, you can ask up to 10 questions per day. Common questions about retirement concepts (IRMAA, RMDs, Roth conversions) are answered from a cache and don't count toward your limit.

Not Financial Advice

The AI provides educational information, not personalized financial advice. For decisions about your specific situation, consult a qualified financial advisor or tax professional.

Privacy & Data Sharing

What IS Sent

• Age, retirement age, life expectancy
• Account balances (totals by type)
• Annual expenses
• Projection summary (final balance, success rate)
• Optimizer results (if run)
• Your question

What is NOT Sent

• Your name, email, or any identifying information
• Account numbers or institution names
• Social Security numbers
• Full year-by-year projections (only summaries)

Data Retention

Questions and answers are not logged or stored on our servers. Anthropic's data retention policies apply to data sent to their API—see their privacy policy for details.

Opting Out

The AI Assistant is completely optional. If you prefer not to share any data, simply don't use the chat feature. All other parts of retireclarity continue to work entirely in your browser with no external data transmission.

Federal Income Tax

Uses 2025 tax brackets (indexed for inflation in future years):

State Income Tax

All 50 states plus DC are supported. Key features include:

• No Income Tax: AK, FL, NV, NH (dividends only), SD, TN (dividends only), TX, WA, WY
• Flat Tax States: CO, IL, IN, KY, MA, MI, NC, PA, UT
• Progressive Tax States: Most other states with multiple brackets
• Retirement Income Exemptions: Many states exempt Social Security, military pensions, or provide senior income exclusions

Social Security Taxation

Social Security benefits may be partially taxable based on "combined income" (AGI + non-taxable interest + half of Social Security):

Note: These thresholds are not indexed for inflation and have remained unchanged since 1993.

Capital Gains

Long-term capital gains (assets held over 1 year) are taxed at preferential rates:

• 0%: If taxable income is in the 10% or 12% ordinary bracket
• 15%: If taxable income is in the 22%, 24%, 32%, or 35% bracket
• 20%: If taxable income is in the 37% bracket

For brokerage accounts, capital gains are calculated based on your cost basis (the original amount you invested). Enter your cost basis in the Retirement Savings section of the Calculator. The calculator tracks how your cost basis changes over time as you make withdrawals and reinvestments.

Required Minimum Distributions (RMDs)

Tax-deferred accounts (401k, Traditional IRA) require minimum withdrawals starting at the age shown above based on your birth year (per SECURE Act 2.0).

RMDs are calculated using the IRS Uniform Lifetime Table, dividing the account balance by a life expectancy factor. Failure to take RMDs results in a 25% penalty (50% before 2023).

IRMAA Medicare Surcharges

Income-Related Monthly Adjustment Amount (IRMAA) increases Medicare Part B and D premiums for high-income individuals. Uses MAGI from 2 years prior.

2025 thresholds. Monthly surcharges include Part B and Part D combined.

NIIT (Net Investment Income Tax)

The Net Investment Income Tax (NIIT) is a 3.8% surtax on investment income for high earners. It applies to the lesser of:

• Your net investment income (capital gains, dividends, interest)
• Your MAGI exceeding the threshold

For example, if you're single with $300,000 MAGI and $50,000 in capital gains:

• MAGI excess: $300,000 - $200,000 = $100,000
• Net investment income: $50,000
• NIIT applies to lesser amount: $50,000 × 3.8% = $1,900