User Guide

Personal Information

Current Age

Your age today. The projection starts from this year.

Retirement Age

When you retire — an age, or (once your date of birth is entered) the exact month. Retiring mid-year splits that year: you keep working — and drawing a paycheck — through the month before, then the retirement profile (spending, withdrawals, ACA→Medicare) takes over for the rest, each prorated to its share of the year (retire in March → 2/12 working, 10/12 retired). A whole-year or age-only retirement is treated as fully retired from January. A salary anchored to retirement automatically stops the month you retire — its end shows "last working months." Stream end ages are inclusive: "55 through 59" still pays in the year you turn 59. If you're already retired, set this to your current age. Plan rows label each year with the age you turn that year (the IRS convention); the "Age:" shown under Date of Birth is your age today.

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 and their owned expenses stop, and filing status changes. Household expenses continue at 100% for the survivor — there is no blanket survivor discount. To model costs that end with one person (a car lease, their travel), give that expense stream an Owner

Staggered Retirement Dates

Each person has their own retirement date in the Household section. Onboarding seeds the spouse's to retire alongside you — a starting value, not a link, so moving yours afterwards leaves theirs where it is, and you can set theirs to any date you like. (Plans made before that seeding leave it blank and simply retire them with you.) Modeling (expenses, withdrawals, taxes, healthcare) begins at the household's first retirement. While one spouse still works:

• Paycheck covering expenses: If the working spouse's paycheck covers part of your spending, add it as an income stream in Income & Expenses (e.g., tax-free "Paycheck" from first retirement until their retirement) — it shows up in every chart. Plans that used the old coverage % were converted to exactly such a stream automatically
• Employer health coverage: The Household card shows one row per person who still has working years — “[name]'s employer plan covers: Nobody / Just them / Both of you” — so each of you sets your own. A covered person under 65 pays no marketplace premium, but only while the plan's owner is still working: it ends the month they retire, not at 65. Medicare still starts at 65 regardless. The quiet line beneath the rows reads the result back (“employer → ACA 2032–2036 → Medicare from Jun 2036”) so you can see the handover the projection actually uses — including the split year, since Medicare starts on your 65th birth MONTH and you buy marketplace coverage for the months before it
• Salaries: Wages live as Salary income streams (Income & Expenses → Treat as: Salary, one per person). They fill tax brackets, Social Security taxation, and ACA/IRMAA MAGI in every working year — pre-retirement years included — so Roth conversion headroom and subsidies stay honest. The pay is spendable in those years too: it covers its own tax, funds the savings attached to it, pays for whatever spending you've modeled, and the rest is saved (see Working Years below)
• Works both ways: either of you can carry a salary stream past the other's retirement, and the employer-coverage fields follow whoever still works — a working spouse's plan or a working primary's plan can cover one or both of you

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.

Milestones

Milestones are the named moments your plan is built around, and they have their own section — directly under Household, above everything that refers to them. They appear as vertical lines on your projection charts, and any income or expense can be anchored to one, so moving the milestone moves everything that follows it.

The ones you can move

Each person's retirement, plus any milestone you add yourself, listed in the order they happen. Every row states the year, whose age it is, and how many things are anchored to it. Click one to edit it in the side panel — nothing else on the page moves. Editing a retirement here changes the same field Household holds; there is one retirement, shown in two places. A custom milestone's timing is a month or a year, typed exactly like any other timing field, and the panel lists what is anchored to it under Anchored here.

Derived

Below those, four compact lines cover everything your plan implies rather than chooses: Medicare per person, Social Security claiming per person, RMDs, and Plan horizon — each of your life expectancies (the “Live to” age in Household), with whichever one is later marked as the year your plan actually ends. Only the parts something decides are clickable, shown with a dashed underline that goes solid on hover: a Social Security claiming date and each Plan-horizon year open the field that sets it. Medicare and RMDs carry no underline at all, because nothing but your birth date and the law decides when they start.

Anchoring

Anchoring is done from the item, not from here: open an income or expense stream and pick a milestone in its timing field (see Income & Expenses). The count on each milestone row is what is currently pointing at it, so it is the quickest way to see what a change of date would actually move.

Accounts

Add each account by name — 401(k), 403(b), Traditional IRA, Roth IRA/401(k), brokerage, crypto, checking, savings, CD, money market. Behind the scenes each account rolls up into one of four tax buckets that drive the projection:

Cash (checking, savings, CD, money market)

Drawn first when expenses exceed income. Defaults to the Cash return in Investment Assumptions.

Taxable (brokerage, crypto)

Growth is taxed as capital gains. Enter each account's cost basis (what you paid); withdrawals above basis trigger capital gains tax.

Tax-Deferred (401k/403b/Traditional IRA)

Pre-tax accounts: withdrawals are ordinary income and Required Minimum Distributions apply from age 73 or 75 (SECURE Act 2.0). In couple mode, set the Owner on each retirement account — spouse-owned accounts start RMDs on the spouse's schedule.

Roth (Roth IRA/401k)

Tax-free growth and withdrawals; no RMDs during the owner's lifetime.

Ownership

Retirement accounts are individually owned (You or Spouse); taxable and cash accounts can also be Joint. Ownership beyond the RMD split is recorded for future modeling and doesn't change today's projections.

Return override

Each account can override its bucket's expected return (a 4.5% high-yield savings account, a speculative crypto sleeve). The projection grows the bucket at the balance-weighted blend. Overrides apply to the fixed projection only — Monte Carlo uses historical market sequences for everything.

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 & Other Income

Pensions, rental income, part-time work, and other regular income are modeled as income streams in the Income & Expenses section: add an income stream and set "Treat as" to Pension or Recurring income in the editor panel (recurring amounts can be entered per month or per year). Streams offset your spending needs each year, count toward Social Security taxation and Medicare surcharges, and — for pensions — get state pension tax treatment where applicable. Choose "For life" as the end for lifetime income; in couple mode, set the Owner so the income stops at the right person's death. Expenses can carry an Owner too (a spouse's car lease ends at their death; Household expenses continue for the survivor). For spouse-owned items, ages are entered as the spouse's own age — "from 60" means when they are 60.

Income & Expenses

All money in and out lives here: your living expenses, recurring flows like part-time work, rental income, a mortgage, or a travel phase, and one-off events like an inheritance, a home sale, or a major purchase. A stream can run for a single year or between two ages (or milestones, including "Plan end" — the last year of the projection).

Templates

The Add button opens a template gallery: part-time work, consulting until Medicare, a mortgage with a movable "paid off" milestone, travel years, vehicle replacement (net of trade-in, every 7 years), a §121 home downsize, long-term care for each person's final years, family gifts, big home repairs, a boat/RV bundle, and a spending phases bundle — the "retirement smile" (Blanchett): extra go-go spending early that tapers with age, sized from your own spending level and flexible in bad markets. Every template is an ordinary stream you can tune after creation, or start blank.

Living Expenses

Everyday spending is just expense streams — add as much detail as you like (housing, groceries, insurance, subscriptions, property tax) or keep a couple of broad items. A typical living-expense stream is Household-owned, inflation-adjusted, and runs from First retirement until Plan end; amounts can be entered per month or per year. Costs that start or stop at an age (a mortgage until payoff, travel years) are the same thing with different timing.

Categories

Give expenses a category (Housing, Utilities, Food, Transport, Healthcare, Insurance, Travel & Leisure, Other) to keep the Income & Spending chart readable: categorized expenses group into one flow per category, and clicking a category on the chart drills into its individual streams. A category is suggested automatically from the name as you type. Display only — projections are unaffected.

Owners & Survivors

In couple mode, an expense can belong to one person or the Household. An owned expense stops at that person's death; Household expenses continue at 100% for the survivor — there is no blanket survivor discount. Model the spending that would end with each spouse (their car, their hobbies) as owned streams to see realistic survivor scenarios.

Flexible vs Fixed

Mark an expense as Flexible if you could cut it back in tough times (travel, dining out, hobbies). Everything else is treated as fixed — maintained regardless of market conditions. There is no separate flexibility switch: if anything is marked Flexible, simulations can flex it; if nothing is, spending stays fixed.

Spending Flexibility (Guyton-Klinger)

In Monte Carlo simulations (and severe deterministic drawdowns), expense streams marked Flexible can be reduced by up to a maximum percentage when a trigger fires (portfolio below its peak threshold, a bad market year, or both). The trigger, the thresholds, and the maximum cut are tuned in Settings, and those settings drive the projections directly. A prosperity rule can also increase flexible spending when the portfolio is thriving. The portfolio trigger watches total household wealth, including a spouse's retirement accounts.

Repeat Every N Years

Recurring expenses can fire every Nth year instead of annually — a car replacement every 7 years, a new roof every 20, a big trip every other year. Set "Every" next to the Repeats checkbox; each occurrence is inflated to its own year if inflation-adjusted.

Income

Income streams like part-time work, rental income, an inheritance, or an asset sale. For each stream, you specify the amount, when it occurs (an age, a milestone, or a specific date — see Timing below — for a single occurrence, or a start and end for recurring streams), the tax treatment (ordinary, tax-free, capital gains, or home sale), 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.
Ordinary: 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.
Cap gains: Use for selling an appreciated asset (stock, investment property, a business). Enter the sale proceeds as the amount and what you originally paid as the basis; the gain (proceeds minus basis) is taxed at long-term capital gains rates in the sale year.
Home sale (§121): Like Cap gains, but for selling your primary residence. Up to $250,000 of gain (single) or $500,000 (married filing jointly) is excluded from tax under IRC §121; only gain above the exclusion is taxed at capital gains rates. The exclusion amounts are fixed by law (not inflation-indexed), and a surviving spouse who sells after switching to single filing gets the $250,000 exclusion. Qualifying requires having owned and lived in the home for 2 of the last 5 years — the calculator assumes you qualify.

Expenses

Expense streams like a mortgage until payoff or a multi-year travel phase, and one-off costs like a car purchase, home repair, or medical bill. The expense is withdrawn from your accounts in the standard depletion order: Cash first, then Brokerage, then Tax-Deferred, then Roth.

Amounts & Inflation

Enter amounts in today's dollars. By default the exact amount you enter is applied in the year(s) it occurs. Recurring streams have a +Inflation toggle: when on, the amount grows with your inflation assumption each year to maintain purchasing power; when off, it stays fixed in nominal dollars (right for a fixed mortgage payment, but a fixed amount buys less each year).

Milestones

Milestones live in their own section, directly under Household — see the Milestones chapter above. What belongs here is what an income or expense DOES with one: any stream can start or end at a milestone and then follows it automatically. That is the timing field described next.

Timing: Milestones, Dates & Include/Exclude

Every timing field — income and expense start/end, a milestone, a real asset sale — uses the same combobox. Click it and an empty search shows your available milestones first (your or your spouse's retirement, the household's first retirement, Medicare at 65, Social Security claiming, RMD start, either life expectancy, plus your own custom milestones), then a couple of quick relative picks ("2 years after <milestone>") — "More…" expands the full relative range. Pick a milestone and the field tracks it automatically: change your retirement age and everything anchored to "You retire" follows, with no re-entry. Recurring streams can anchor their start and end to different milestones (e.g., health premiums "from first retirement until Medicare"). Delete a milestone something is anchored to and the field keeps its last resolved age with a warning pointing it out.

Typing a digit instead switches the list to specific months — type a year ("2032"), a month name ("nov"), or both ("nov 2032") — each row echoes the age you'd be at that point ("Nov 2032 · 59y4m") so you can sanity-check it against a birthday. The projection runs in whole calendar years but honors the month you pick: the date lands in its own calendar year, and a flow that starts or ends mid-year is prorated for that year — a salary ending in June counts for half the year, a pension starting in September for a third (4 of 12 months).

On an END timing field anchored to a milestone, an Include / Exclude toggle appears: Include ends the stream in the milestone's own year (through it); Exclude ends the year before — the convention retirement-linked ends use by default, since the retirement year itself is fully retired (see Retirement Age above). Picking a fresh milestone defaults to Include so the resolved line under the field always matches what you typed; flip it any time.

Real Assets

Value Outside the Portfolio

Your home or rental property is tracked by value and appreciation rate (blank = tracks inflation). The value appears on the Accounts chart as a "Real assets" band — the stack top is your net worth — but the projection can't spend it: it stays outside the withdrawal order until you sell.

Linked Cash Flows

Mortgage, property tax, insurance, and rent income live underneath the asset as ordinary streams (quick-add buttons pre-fill them). They behave exactly like other Income & Expenses streams — they're just organized under the property they belong to.

Rental Operating Costs (Schedule E)

Costs linked to a rental — property tax, insurance, maintenance, HOA — deduct against its rent income for taxes (the cash still leaves). A mortgage deducts only its interest: set the "Tax-deductible portion" on the mortgage stream (an estimate like 60% is fine; the quick-add pre-fills it). Deductions are capped at each year's rent — net rental income never goes below zero. Costs on your own home never deduct (there's no Schedule E for a primary residence).

Rental Depreciation

For rentals, enter the year you started renting and an estimated land value: the building (cost basis minus land) depreciates straight-line over 27.5 years, a non-cash deduction that shrinks the taxes on your rent — the cash itself still flows. The deduction is capped at each year's rent income (no passive-loss carryforward) and, when you sell, the accumulated depreciation is recaptured as ordinary income (≈ the §1250 rules; exact for tax brackets up to 24%) with the remaining appreciation taxed as capital gains.

Selling

Check "Sell this asset" and pick an age, milestone, or specific date. Selling costs (default 6%) come off the top — reducing both the proceeds and the taxable gain. The remaining appreciated value becomes sale proceeds deposited to Brokerage, taxed as a home sale (§121 exclusion — $250k single / $500k married —) or as capital gains against your cost basis. For a married couple, a sale after the first spouse dies uses the stepped-up basis — the property's value at that death, fully in community-property states (AZ, CA, ID, LA, NV, NM, TX, WA, WI) and by half elsewhere. Linked recurring streams automatically end at the sale — insurance and rent on a sold house can't happen. Cars and boats aren't tracked as values; model their costs as expense streams instead.

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 Optimizer

Roth conversions are configured through the Roth Conversion Optimizer page, which automatically calculates a recommended conversion strategy based on your tax situation. The optimizer tests multiple timing strategies and selects the one that leaves you the most money after every tax is paid.

How It Works

Once you run the Roth Conversion Optimizer, your conversion schedule is automatically applied to both the Calculator projections and Chance of Success simulations. The year-by-year table is read-only by design — every year in it was priced by the optimizer, and a hand-edited year would not be. The pace is still yours: the planner's slider moves between schedules it actually measured. If a particular year really is different — a property sale, a one-off gain, a year of consulting income — model that reality in your plan's income and expense streams, and the optimizer prices it into the schedule.

Conversion Window

The optimizer considers every year from today until required minimum distributions begin, and picks the ones where your income leaves room. Retiring is the most common reason income drops, but it is not the only one — a year between jobs, a sabbatical, or a move to part-time work is the same opportunity, and the optimizer will use it. Years when you are earning a full salary usually have no room to spare, so it leaves them alone. 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. The 10-year Treasury — the bond series Monte Carlo draws from — has returned about 5% nominal since 1926. 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. The percentage applies uniformly to every growth account — tax-deferred, Roth and brokerage alike. Cash accounts never hold bonds.

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."

Pre-Retirement Contributions

If you're not yet retired, add retirement savings to the salary that funds them. Open a Salary stream and enter the employee tax-deferred, Roth, and taxable contributions from that paycheck, plus any employer match and optional destination account. The Pre-Retirement Contributions section summarizes the combined amounts for each person.

Tax-Deferred Contributions

Employee contributions to a traditional 401(k), 403(b), or similar plan. The calculator warns when one person's total exceeds the age-aware 2025 employee deferral limit, while allowing cases such as a separate 457 plan or after-tax contributions.

Roth Contributions

Employee Roth savings from the paycheck. This is a planning input that may represent Roth 401(k), Roth 403(b), or Roth IRA money; verify the limits and income rules that apply to your actual account.

Brokerage Contributions

Additional savings invested in a taxable brokerage account. In a modeled working year, all employee contributions are limited by what the paycheck can fund after taxes, FICA, and working-years spending; employer match is not.

Working Years

If you're still working, the plan models your pre-retirement years as cash flow. Every year you have wages, your paycheck pays its taxes, funds its savings, covers your spending, and the rest is saved.

What your paycheck does

In every year you have wages, the paycheck pays its own income tax and FICA, funds the 401k, Roth and brokerage savings attached to it, covers whatever spending you've modeled for that year, and whatever is left is saved to your taxable brokerage. If you haven't told the plan what you spend while working, there is nothing to subtract — the plan saves your whole net paycheck, and the app warns you on Income & Expenses. Add a spending-while-working expense (the "Spending while working" gallery card, or set any expense to run from Today until a retirement in its timing fields) and the plan spends what you actually spend.

What a working year computes

In a working year your salary is spendable cash and the plan works out: salary − FICA − income tax − working-years spending − your contributions. Whatever is left is a surplus, invested in your taxable brokerage (so a good saver's balance grows before retirement). If spending and contributions outrun the paycheck it's a shortfall, drawn from your savings through the normal order (cash → brokerage → tax-deferred → Roth) — and a pre-59½ tax-deferred draw pays the 10% early-withdrawal penalty just like it would in early retirement. A shortfall is a signal to fix the plan (spend less, save less, or earn more), not a precision feature.

FICA in your working-years tax

Salary years include employee FICA — 6.2% Social Security up to the wage base, 1.45% Medicare on all wages, and the 0.9% additional Medicare surtax on high earners — in the taxes shown for those years. FICA is charged on your gross pay, before any 401k deferral (pre-tax deferrals don't dodge FICA). It's a payroll tax, kept out of your taxable income and MAGI, and it never touches pension, withdrawals, or Social Security. Like your income tax on wages, FICA is paid out of the paycheck: it shows in the "taxes" line and reduces what's left to save that year.

If contributions outrun the paycheck

Your contributions are funded from your salary, so they can't exceed what the paycheck can afford (pay, minus FICA and tax, minus any working-years spending you've entered). If they do, the plan caps them to the affordable amount — tax-deferred first, then Roth, then taxable — and shows a warning telling you to lower contributions or raise your salary. Your employer match is never capped, because it never passes through your paycheck.

Not modeled here

Self-employment tax (SECA) and the employer half of FICA are out of scope — a 1099 income modeled as a salary stream is charged the employee FICA rate only, so its payroll tax is understated. Working years do not change your entered Social Security estimate (the plan takes SS as your input, it never re-derives it from an earnings record). And Roth conversions are retirement-gated — the optimizer won't convert during high-salary working years, where a conversion would stack on wages at your top rate.

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), so a Roth conversion that lifts your MAGI can cost you subsidy dollars. The Roth Conversion Optimizer shows that trade-off year by year: the conversion schedule carries ACA subsidy and ACA net columns for each year on a marketplace plan, and any year whose conversion was held down by the 400% FPL line says so in its Why column.

Premium Estimate

Left alone, the projections estimate your annual pre-65 premium from your age using benchmark data. To use your own quote from healthcare.gov instead, open Settings → Healthcare and set "ACA Premium (pre-65)"; clearing it returns to the age-based estimate. Subsidies are always calculated from your projected income, whichever premium is in use.

Subsidies are priced, not fenced off

There is no separate mode to switch on for ignoring subsidies. The optimizer's opening estimate holds bracket room 5% below the 400% FPL cliff in years where you'd otherwise collect a material subsidy, and from there the search prices a lost subsidy as the real dollars it costs — crossing the cliff only when crossing it leaves you with more money after every tax is paid.

Modeling an annuity

A fixed lifetime annuity (SPIA) maps cleanly onto an income stream:

1. Add an income stream under Income & Expenses with the annual payout.
2. Set the owner. A single-life annuity belongs to the annuitant — the stream automatically stops at their death. For a joint-life annuity, set the owner to household and it pays until the last survivor.
3. Leave the end age empty for lifetime payments, or set one for a period-certain annuity.
4. Inflation toggle: off for a fixed payout (most SPIAs), on if you bought a COLA rider.
5. Tax treatment: ordinary for a qualified annuity (bought with IRA/401k money) — every payment is taxable income.

The premium — do this carefully. Don't enter the purchase as an expense: the planner would fund it through the withdrawal order and tax the withdrawal, which is wrong for a qualified purchase. Instead, reduce the source account's balance directly by the premium at the purchase date.

Non-qualified annuity? Part of each payment is untaxed return of your own money. Approximate the exclusion ratio with two streams: one ordinary for the earnings portion, one tax-free for the return-of-basis portion, ending the tax-free stream at your life expectancy.

One honest limitation: the plan runs to the life expectancy you set, so an annuity's insurance value in the beyond-that years won't show up in your Chance of Success. That protection is real — the model just can't price it yet.

Long-term care (self-insuring)

retireclarity deliberately models long-term care as what it actually is financially: a large late-life expense, funded by your assets. There's a built-in template for it — to stress-test a care scenario:

1. Add an expense and pick the "Long-term care (last years)" template — it's pre-anchored to life expectancy and moves with it. Size it to real care costs in your area; $70K–$150K/yr is a common range.
2. If the plan would fund care by selling the house, set the home's planned sale to the same age — the proceeds land in your accounts and fund the expense.
3. Run Chance of Success with and without the scenario to see what the risk actually does to your plan.

If you carry LTC insurance instead, model the premiums as an expense stream and reduce the care expense by your policy's daily-benefit coverage.

Inherited IRA (the 10-year rule)

Most non-spouse beneficiaries must empty an inherited IRA within 10 years, paying ordinary income tax on distributions. There's a template for it: add an income stream and pick "Inherited IRA (10-year rule)" — enter the balance and it creates a 10-year ordinary-income stream at balance ÷ 10. Adjust the yearly amounts afterward if you plan an uneven drain schedule.

Approximation: growth inside the inherited account during the window isn't modeled — for a large inheritance, size the stream a little above balance ÷ 10 to compensate, or front-load it if you plan to drain early in low-income years (often the tax-smart move).

Expected inheritance

Use the "Expected inheritance" template (add an income stream) — a one-time, tax-free event at the age you'd conservatively expect it. If it includes a tax-deferred account, model that part as an inherited IRA (above). Unsure it'll happen? Run the plan without it — if the plan only works with the inheritance, you want to know that.

Part-time work in retirement

Consulting, a bridge job, phased retirement: add a salary-type income stream from your retirement age to whenever you plan to fully stop. The projection funds early-retirement years from it before touching your portfolio — often the difference-maker for retiring before Social Security. The ACA subsidy math sees this income too, which is exactly what you want: part-time income raises MAGI and can cost subsidies, and the model will show that honestly.

Reverse mortgage

A HECM's monthly draw is loan proceeds, not income — model it as a tax-free income stream from the start age. The balance you owe grows against the house: approximate by reducing the home's value (or its planned-sale proceeds) by the projected loan balance at sale or life expectancy.

Approximation: the compounding loan interest and fee structure aren't modeled — use your lender's amortization projection for the payoff figure, and treat the result as optimistic by roughly the fees.

Downsizing your home

This one's built in: give the home a planned sale at your downsizing age (Real Assets → planned sale, with §121 home-sale tax treatment), and add the replacement as a one-time expense — or as a new real asset if you want it back on the balance sheet. The sale proceeds, tax exclusion, and freed-up equity all flow through the projection automatically.

Health savings accounts

retireclarity doesn't model HSAs as their own account type yet. The closest honest proxy: fold your HSA balance into Roth (add it to your Roth balance, or itemize an account named "HSA" with the Roth type). Growth is tax-free and qualified medical withdrawals are tax-free — and in retirement, medical expenses are plentiful enough that most HSA dollars exit qualified.

What the proxy misses: the contribution deduction during working years, the 20% penalty on pre-65 non-medical withdrawals (Roth basis rules are friendlier), and post-65 non-medical withdrawals being taxed like an IRA. If your HSA is a large share of your savings, treat the projection as slightly optimistic.

Summary & Projections

The Calculator displays your results in two main areas:

Your Projection

The projection card shows your ending balance or the age through which the plan is funded, and its color describes the real trajectory relative to your starting portfolio: Growing, Stable, Declining, or Depletes. For people more than five years from retirement, it instead leads with the earliest retirement age the deterministic projection can support. 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: Stacks every dollar that came in — salary, Social Security, pensions, other income, and the whole portfolio withdrawal — against the spending line, so the bar top is the year's total money in. The space above the line is what that money also had to cover, taxes and health premiums, plus anything left over; the tooltip lists those without claiming which source paid for which. A hatched slice at the top of the withdrawal is the part a required distribution forced out beyond what the year used — spending, taxes and premiums together — shown only when it came back as reinvestment. Roth conversions appear separately as non-spendable transfers
• Account Balances: Stacked area showing each account type and real assets over time
• Income & Spending: A selectable-year money-flow diagram from income and withdrawals through taxes, spending categories, and savings

Event markers and milestone lines identify retirement, Social Security, pension, other income, Medicare, RMDs, life expectancy, and your custom milestones. Hover or select them for details.

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

When Something Happens

When something you planned actually closes — a home sale, a windfall, a big expense — confirm it from the Make this plan yours checklist on the Calculator, or update your balances and give the event its real month. Once a planned one-time event's month arrives, the checklist asks whether it happened.

Confirming with Done settles the whole thing at once: the event gets its real closing month, its taxes count in the year it actually happened, and the accounts you point its money at are updated — without counting the money twice. Already typed the new balances yourself? Leave the account rows at $0; your balances carry the money side either way. For a sale of something you hold in an account, the money moves between your accounts, so your net worth doesn't jump — only the tax story changes.

Not yet puts the question away until next month — it returns until you confirm the event or move it to a future month. Confirmed by mistake, or picked the wrong month? Open the event and give it its real month: a re-dated event is treated as re-planned, and the checklist will ask again when that month arrives. The balances the confirmation wrote stay written, so if the money never actually landed, correct the account balance too.

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. Sampling With Replacement: Blocks are drawn with replacement (a proper bootstrap), so a bad era can appear more than once in a long retirement — only an immediate back-to-back repeat of the identical block is rerolled.
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" only if you can pay for every year of the plan — never running out of money at any age. It "fails" the first time a year's spending can't be covered, even if later income would have rebuilt a balance.

Historical Data

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

• Stock Returns: S&P 500 total returns (with dividends reinvested)
• Bond Returns: 10-year Treasury total returns
• Cash Returns: 3-month Treasury bill returns — cash rides its own historical short-rate path rather than a flat assumed rate, so a high-inflation era comes with the high short rates that actually accompanied it
• 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 in which every year of the plan was funded, through the last survivor's life expectancy. It is about paying the bills, not about the balance surviving: a $0 portfolio is not a failure if Social Security and your other income cover that year's spending. A trial fails the first year spending can't be covered, however it ends. 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 best allocation for your assumptions. 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.

The Roth Optimizer

See how much more your plan keeps by converting to Roth at the right pace. The planner tests multiple conversion intensities and refines the schedule that leaves the most after all taxes are paid — including what your heirs keep.

How It Works

Maximizes the money you keep at the end of your plan — leftover traditional balances counted at a flat 25% heir rate, brokerage gains at long-term capital-gains rates, and Roth dollars tax-free. That same 25% is applied to the recommendation and to the no-conversion baseline alike, so it shapes the comparison, not the verdict. The planner seeds itself by filling the cheapest tax-bracket room first (a target tax-deferred balance keeps future RMDs low), then buys conversion space in price order. Safety lives in hard limits, not scoring penalties: every recommended year has to be affordable, has to leave two years of spending reachable without a forced traditional withdrawal in every year your plan could already do that without converting, and can never make your money run out earlier than it would with no conversions at all.

Intensity Sweep & Refinement

Starts with a bracket-fill schedule, tests conversion budgets from no conversions through progressively deeper target-balance reductions, and keeps whichever leaves you the most money. A refinement pass then buys the cheapest remaining tax space first and shifts dollars between years. A final convergence pass re-offers every add, removal and year-to-year shift at $100K, $50K, $25K, $10K, $5K and $1K, cycling that ladder until a complete pass at every size changes nothing — or until a generous compute budget runs out. In the common case it reaches that fixed point: a certified local optimum, not a claim of global perfection. The three hard constraints (affordability, two years of reachable spending where your plan already had them, never worsening how long your money lasts) bound the search rather than scoring it down. The opening estimate holds back from an IRMAA step and from the ACA cliff, but neither is fenced off in the refinement or in the objective — they're priced, so a cliff is crossed only when crossing it leaves you with more.

How Much to Convert

The run doesn't stop at one answer — it measures your plan's whole conversion-efficiency curve, and the How much to convert slider is how you pick a point on it. Every stop is a schedule that was actually evaluated through the same engine and the same hard limits, so there is nothing between two stops: you can only choose a plan that was priced. The panel headline is the pair the choice turns on — the money you keep, and the tax you pay now — and both figures, the stat tiles and both charts re-derive as you drag.

Three words on the track are the named stops, and each one is a button that jumps there. Nothing is converting nothing, the baseline everything else is measured against. Max is the right end: the schedule that leaves the most money after every tax is paid. Best value is the detent between them — the last stop where each new $1 of conversion tax still earns at least $0.50 of after-tax estate. Neither one is the “right” answer; they are two strategies, and which you want is yours to pick. Past the detent, the track is labelled Diminishing returns: every stop up to Max still adds net money, just at a shrinking rate. A live readout prints that rate at whatever stop you're on, a share line states what the stop keeps as a share of the gain and of the full tax bill, and How this is calculated opens the $0.50 rule and what it rests on.

The slider applies itself. There is no Apply button and no preview state: releasing the slider is choosing that schedule, and the rest of the app projects it from that moment. A fresh run opens on Best value where your curve has a knee, and on Max where it doesn't; come back later and the slider is wherever you left it. One thing it does not do is clear the "Results may be outdated" banner — moving the slider picks among schedules an earlier run already measured, so only running the optimizer again re-measures them.

The Two Charts

Two views of the schedule the slider is on. What you keep shows the balances your plan ends up with, bucket by bucket, against no conversions. Why this works puts your tax bill beside the no-conversion baseline year by year, with the Medicare (IRMAA) tier each year lands in charted under the axis.

Roth Conversion Schedule

Below the panel, always open, the year-by-year table is the audit of the schedule you picked, in dollars: for each year, the conversion amount, a short Why naming what stopped it there, the tax that conversion costs now, the tax those dollars would draw in your RMD years if left alone, and the difference between the two as Saves. On a year you buy a marketplace plan, two more columns carry that year's subsidy and what is left to pay after it. Hovering a figure opens its detail — the tax split behind the amount, the full Why this amount sentence — and on a phone, tapping a year opens all of it in a sheet. A year the optimizer left out reads Not recommended with its reason in the same Why column.

The table is read-only, deliberately. Hand-edited years and pinned amounts were removed: a year you overrode was priced by nobody, and the schedule stopped matching the curve the panel was measuring. If a particular year really is different — a property sale, a large one-off gain, a year of consulting income — model that reality in your plan's income and expense streams. The optimizer prices it and the schedule reflects it.

ACA Subsidy Considerations

For early retirees (before age 65), ACA subsidies can save thousands per year. The Roth Conversion Optimizer automatically includes ACA implications:

• Subsidies priced, not fenced: The opening estimate holds bracket room 5% below the 400% FPL cliff in years where you'd otherwise collect a material subsidy. From there the search prices lost subsidies as the real dollars they are, and crosses the cliff only when crossing it leaves you with more money after every tax.
• 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.

The schedule shows estimated healthcare effects year by year, and marks every year whose conversion was held down by the 400% line.

Why the 5% margin at 400% FPL: The opening estimate works from projected income, and projections move — a Social Security COLA increase or an unexpected fund distribution can shift the real number, and going $1 over the cliff loses the entire subsidy. So the seed leaves 5% of headroom. It's a fixed modeling margin, not a setting: the refinement pass works from the full projection, prices the subsidy at its real value, and can spend that headroom when the trade is worth it.

Bond Allocation Optimizer

Found on the Chance of Success page, this tool finds the best stock/bond mix for your assumptions 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.

Spend more without going broke

Conversions barely change how much you can spend. They change what is left at the end. So set the spending first, against a floor you pick, and let the conversions follow.

1. On the Roth Conversion Optimizer, run the optimizer — the button reads "Find My Strategy" the first time and "Optimize" after that. Then drag the "How much to convert" slider left, toward "Nothing". A low setting keeps the cheap early conversions and little else.
2. Under Income & Expenses, add a recurring expense for the extra spending — from your retirement milestone to Plan end, inflation-adjusted. Do not mark it "Flexible": a flexible stream is one the simulation may cut in bad years, which would flatter the answer you are about to read.
3. Run Chance of Success. Nudge the expense amount, press "Re-run", and repeat until the success rate sits on the floor you have decided you will not go below. The floor is your call — the Chance of Success chapter above describes the usual targets.
4. Return to the planner and press "Optimize". The run re-prices every schedule against the plan that now carries your extra spending — and it reopens the slider at "Best value" or "Max", not where you left it.
5. Drag the slider back left, then re-run Chance of Success to confirm your floor. Releasing the slider applies that schedule, so this is the step that puts the floor back — skip it and you are reading a different plan from the one you tuned.

If you would rather keep the schedule the fresh run opened on, that is a legitimate choice — but re-check the floor before you accept it, and trim the expense if it dipped. At a spend tuned this tightly, the larger schedule usually scores a little lower: the tax it prepays comes out of the same portfolio the extra spending is drawing on.

Why this order. Run it the other way — maximize conversions, then see what spending survives — and the conversion schedule looks like the thing that decided your standard of living. It is not. Spending is set against a risk floor you choose; conversions then work on the estate, which is a different question with a different answer.

Leave the most to heirs

Maximize, then check the two costs. The maximum is one drag; the costs are what decide whether you keep it.

1. Run the planner and drag the "How much to convert" slider right, to "Max" — the schedule that leaves the most after every tax is paid.
2. Open the "Roth Conversion Schedule" below the panel and read the "ACA subsidy" column. On a year the household is on a marketplace plan, the cell is that year's subsidy — the whole year's figure, not the part the conversion caused — and "ACA net" beside it is what is left to pay after it. A year with no marketplace plan reads as a dash. So read it as a level, not an effect: note the column at "Max", move the slider, and note it again. The difference between the two readings is what the conversions did.
3. The lifetime versions live on the Calculator, under "Lifetime Totals": "Medicare (IRMAA)", and "ACA Subsidies" when the plan collects any — the row is absent when it collects none. Read them the same way, at two slider positions. It is a two-page round trip, so it is worth writing the four numbers down rather than trusting the comparison to memory.
4. For the year-by-year surcharge, switch the chart to "Taxes": IRMAA is one segment of the tax stack, so you can see which years carry a surcharge and how large. Before either of you turns 65 there is no surcharge to read — the household starts paying it from the older spouse's Medicare enrolment, not from both. In the years before that, select the year and take the "Healthcare" figure off the year card beside the chart: premiums net of subsidy, in the money the household actually pays.

None of this says "Max" is wrong. It says "Max" has a bill, and the bill is legible before you accept it. If the surcharges land in years you care about for another reason, "Best value" is the smaller schedule the optimizer prices as the best trade per dollar of tax — how much smaller than "Max" depends entirely on your plan.

Can I afford a big one-off?

A roof, a boat, a wedding. Price it in the currency that matters: what it does to the odds.

1. Run Chance of Success and write down the number.
2. Under Income & Expenses, add the purchase as an expense. Set its timing to the year it lands and leave it as a single occurrence, not a stream.
3. Press "Re-run" and compare against the number you wrote down.
4. Keep the row or delete it. That is the whole decision.

Read the drop against the margin. Under the headline success rate the page prints a ± figure in percentage points — the simulation's own margin. A drop smaller than that is not a signal; treat it as no change.

When it lands matters as much as how big it is. The same purchase costs more success early in retirement than late: the money it removes had the most years left to compound, and the first years are when a bad market does the most damage. If the drop is uncomfortable, try the same amount a few years later before giving up on it.

Test Social Security timing

Breakeven is the number everyone stops at, and it is the least informative one available.

1. On the Calculator, open Social Security and press "Find Best Strategy". It tests every claiming age still open to you; results come back under "When to claim Social Security", each row a claiming age or, for couples, a pair of them.
2. Read Δ Lifetime tax and Δ Balance first. These are deterministic — their differences are real, however small.
3. Couples: hover the info icon beside the "Monthly" figure on each row. The tooltip names the survivor benefit — what the surviving spouse keeps after the first death, at those claiming ages. This is where late claiming earns its keep, and it is exactly what a breakeven age cannot see.
4. Read Δ Success last, and read a dash there carefully. On a comparison row it means the difference did not clear the simulation's margin of error — on that axis the two strategies are the same plan, and the deterministic columns decide. On the row you are comparing against, every delta column shows a dash for the different reason that there is nothing to compare it to.

About breakeven. A breakeven age does appear — on the claiming card before you run the comparison, and only for a single household. It answers one question, honestly: how long you must live for delaying to catch up. It is silent on the two that usually decide the call — what the survivor is left with, and what the claiming age does to the plan's tax bill across the whole horizon.

Bridge to Medicare (the ACA years)

Retire before 65 and you buy your own coverage until Medicare starts. What you pay depends on your income (MAGI), so a Roth conversion in those years raises the premium as well as the tax — and at the 400% FPL line the subsidy stops altogether rather than tapering. In the bridge years a conversion can cost more in lost subsidy than it saves in tax.

Where the cost shows

Two surfaces, both per-year. In the "Roth Conversion Schedule", the "ACA subsidy" and "ACA net" columns show, for each year the household is on a marketplace plan, that year's subsidy and what is left to pay after it — the year's whole figures, not the slice the conversion caused, and a dash on a year with no marketplace plan. To see what a conversion did, read the columns at two slider positions and take the difference. A year the optimizer held back states its reason in the "Why" column — the "Why this amount" card naming the subsidy cutoff. On the Calculator, select a pre-65 year and read the year card's "Healthcare" figure: premiums net of subsidy, for that year. Where your plan itemizes its healthcare spending, switching the chart to Income & Spending breaks that figure down further; a plan that does not itemize shows it as one Healthcare flow.

Seeing a conversion's effect

Note the year card's "Healthcare" figure for each pre-65 year, move the "How much to convert" slider, and read them again. The slider applies itself — releasing it is choosing that schedule — so the projection and the card re-derive without an extra step. What moves is the subsidy; what you are trading it against is the panel's "Tax now" figure. The difference between the two readings is the conversion's effect: neither reading states it on its own.

The boundary year

Retirement dates are month-granular and the premium picture follows them. Employer coverage ends the month you retire, and the year is billed for the months you were actually on a marketplace plan — so one month of shift changes what that year costs. Move the date by a month, then step the year card through the retirement year and the one after it with the arrows beside the year. A couple who retire in different calendar years have two boundary years to check; retire in the same year and there is one boundary year carrying both transitions.

Turning 65 ends this and starts its successor: the same income question, asked by Medicare instead, as IRMAA. Conversions you held back during the bridge years often belong in the window between retiring and required distributions — which is the window the planner already searches.

Federal Income Tax

Uses 2026 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:

• Gains fill the separate 0%, 15%, and 20% long-term capital-gains bands.
• Taxable ordinary income fills the bottom of the income stack first, so one gain can span more than one capital-gains rate.
• Any unused standard deduction can shelter part of the gain before the rate bands are applied.

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).

Retiring Before 59½

Tax-deferred withdrawals taken before the year you attain 59½ incur the federal 10% additional tax (26 U.S.C. §72(t)) on top of ordinary income tax. Projections apply it per person, to each person's own accounts — a younger spouse's IRA draws are penalized on the spouse's age even when you are past 59½. The penalty is a tax, not income: it never inflates your MAGI for ACA subsidies or IRMAA, but planned withdrawals are sized larger to cover it, so pre-59½ plans deplete tax-deferred money faster. Three legal escape hatches are modeled:

Rule of 55

If you separate from your employer in or after the year you turn 55, withdrawals from that employer's 401(k)/403(b) are penalty-free. Mark each 401(k)/403(b) account as "Current employer's plan" (the default) to claim it; IRA money is never protected, so avoid rolling a protected 401(k) into an IRA before 59½ if you plan to spend it early. Separation timing is your retirement age — retiring at 54 forfeits the exception entirely.

72(t) / SEPP (Substantially Equal Periodic Payments)

An opt-in schedule of annual IRA withdrawals that is penalty-free at any age — but locks you in for at least 5 years and until 59½, whichever is later. Enable it per person via the "72(t) early withdrawals (SEPP)" card in Accounts, and pick the IRS method there: fixed amortization computes the payment once (Single Life Table) from the balance in the first payment year and holds it fixed, while the RMD method divides each year's balance by that year's factor and so moves every year — the card shows both figures for your balance before you choose. Payments are still ordinary income and can't be Roth-converted away.

Roth ordering and the 5-year conversion clock

Roth withdrawals follow the IRS ordering: contributions first (always tax- and penalty-free — set "Contributions to date" on your Roth accounts), then conversions oldest-first, then earnings. Each conversion has its own 5-year clock: spending it before conversion year + 5 and before 59½ pays the 10% recapture penalty. Waiting out the clock is the classic "Roth conversion ladder" — convert now, spend penalty-free in year 6. Earnings drawn before 59½ are ordinary income plus the penalty; after 59½ everything is tax-free.

See the Modeling Notes section for the simplifications behind these rules.

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.

2026 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

Federal Tax Rules

Inflation indexing

Tax brackets and the standard deduction are indexed forward using your inflation setting. The IRS actually indexes by chained CPI, which typically runs a fraction of a percent below ordinary CPI — so if your inflation setting reflects ordinary CPI, real-world brackets will likely grow slightly slower than modeled, and actual long-run taxes may run marginally higher than projected.

Thresholds that genuinely never move

Social Security taxation thresholds ($25K/$32K, unchanged since 1993) and NIIT thresholds ($200K/$250K, fixed since 2013) are not indexed in the model because they are not indexed in law. That's not an approximation — it's why more of your Social Security becomes taxable as incomes inflate.

Senior deductions

The permanent age-65+ additional standard deduction is modeled ($2,050 for Single/HoH, $1,650 per 65+ spouse filing jointly, per living taxpayer). The temporary OBBBA "senior bonus" deduction ($6,000/person, tax years 2025–2028 only, with income phase-outs) is deliberately not modeled: it expires before most projection years. Real taxes in 2025–2028 may be slightly lower than shown — a conservative bias.

Survivor filing status

The year a spouse dies still files jointly; the survivor files Single from the following year. The two-year Qualifying Surviving Spouse status (which requires a dependent child) is not modeled — it rarely applies to retirees, and skipping it is conservative.

NIIT investment income

The 3.8% NIIT is computed on capital gains only. Net rental income also counts as investment income in real life but is not included here, so landlords with MAGI above the thresholds may owe slightly more than shown.

ACA Health Insurance

2026 law — enhanced subsidies expired

The enhanced pandemic-era subsidies expired at the end of 2025. Projections use the 2026 rules: a hard subsidy cliff at 400% of the Federal Poverty Level (earning $1 more loses the entire subsidy) and a steeper expected-contribution curve (roughly 2.1%–9.96% of income, per the IRS 2026 table).

Income below 100% FPL

Under 2026 law, income below 100% FPL is ineligible for marketplace subsidies. The model shows those years as estimated Medicaid at $0 premium — accurate in Medicaid-expansion states, but the "coverage gap" in non-expansion states is not modeled.

Married Filing Separately

MFS filers are ineligible for premium subsidies by statute and are modeled at full marketplace price (the narrow abuse/abandonment exceptions are not modeled).

Employer coverage — what isn't modeled

Each person's employer plan covers them (or both of you) until the month that person retires; from there the household buys marketplace coverage until Medicare at 65. Three deliberate approximations sit behind that: COBRA is not modeled separately — an 18-month bridge is priced as ACA, which is usually close and sometimes cheaper than real COBRA; retiree medical (an employer plan that continues past retirement) has no dedicated input — model it by entering your own premium as the healthcare quote override; and the premiums you pay while working are not modeled at all — payroll deductions are treated as part of the paycheck, so a covered working year shows $0 healthcare cost rather than your share of the employer plan.

Benchmark premiums

If you don't enter your own quote, premiums come from a benchmark table priced at the primary person's age band and doubled for couples. The table floors at age 50 and tops out at 64 — younger early retirees and couples with a large age gap should enter their actual healthcare.gov quote.

Medicare IRMAA

Per beneficiary, real CMS amounts

Surcharges use the published CMS 2026 amounts (Part B + Part D combined) and are charged once per Medicare beneficiary — a 65+ couple pays twice — and trigger when either spouse is 65+. Thresholds index with your inflation setting; surcharge dollars grow with medical inflation.

Two-year lookback

IRMAA is based on your MAGI from two years earlier, as in real life. The first two projection years have no lookback history yet, so they approximate using current-year income instead.

No life-event appeals

SSA-44 appeals (work stoppage, marriage, death of a spouse) are not modeled. In reality, retiring is a qualifying event that often waives IRMAA in the first Medicare years, so early-retirement IRMAA may be overstated — conservative.

State Taxes

Tax year 2026 data

All 50 states plus DC use tax-year 2026 rates, brackets, and deductions, each value carrying a source note in the data. A few figures the states have not yet published for 2026 deliberately remain at their 2025 values, marked in the data. States legislate rate changes constantly; data is refreshed periodically.

Retirement income exemptions

State pension and retirement-income exclusions apply to IRA/401(k) withdrawals, RMDs, and Roth conversions according to each state's actual law — full exemptions in states like Illinois, Pennsylvania, and Mississippi; capped exclusions in states like Georgia, New York, New Jersey, and Colorado — per person, with per-person age gates.

Not modeled: income cliffs and phase-outs

New Jersey's pension exclusion actually disappears entirely above ~$150K of income; the model grants the exclusion regardless of income (and, conservatively, never grants it to conversions). Minnesota and Vermont phase their Social Security exemptions out gradually above their thresholds; the model uses a hard cutoff at the threshold instead.

Not modeled: capital-gains preferences

A few states tax long-term gains at a discount (SC, AR, WI, MT, ND, HI). The model taxes gains as ordinary state income everywhere, slightly overstating state tax in those states.

Not modeled: high-income surtaxes

California's 1% mental-health surtax over $1M, Massachusetts' 4% surtax over $1M, and Washington's capital-gains excise tax are not modeled. Very high-income years in those states are understated.

Not modeled: government-pension carve-outs

Some states fully exempt government or public-service pensions (e.g., New York) beyond their general pension rules. The model can't distinguish a government pension from a private one, so those retirees may see overstated state tax.

Projection Engine

RMD table

RMDs use the IRS Uniform Lifetime Table. The Joint Life Expectancy Table (Table II), which lowers RMDs when your sole-beneficiary spouse is more than 10 years younger, is not modeled — those couples' RMDs are overstated, which is conservative.

Survivor rollover

When a spouse dies, their tax-deferred balance rolls into the survivor's account (the spousal "treat-as-own" rollover — the overwhelmingly common election), and future RMDs follow the survivor's own age and schedule.

Death timing

Each person lives through the end of their life-expectancy year. That final year still files jointly; the survivor files Single starting the next year.

How withdrawal taxes settle

Withdrawal sizing, Social Security taxation, and taxes are solved together in a convergence loop. Any last-resort top-up withdrawals needed to cover the final tax bill are themselves re-taxed once in a single bounded pass; the second-order tax on that top-up (roughly the marginal rate squared — usually a few dollars) is an accepted, documented residual rather than an endless tax-on-tax spiral.

Mid-year convention

Withdrawals, Roth conversions, and reinvestments are assumed to happen mid-year and earn half a year of growth; money that stays put earns the full year.

Early-withdrawal (pre-59½) rules

The 10% penalty, Rule of 55, 72(t)/SEPP, and Roth conversion seasoning are modeled with these accepted simplifications: the whole calendar year in which 59½ is attained is treated as penalty-free; Roth money is one household bucket whose qualified-age test uses the older living spouse; conversions made before today aren't seeded into the 5-year ladder (only in-projection conversions get clocks); state-level early-withdrawal penalties (e.g., California's 2.5%) and penalty exceptions beyond Rule of 55/SEPP (medical, disability, first home, public-safety age 50) are not modeled — where these matter, projections lean conservative.

FICA (payroll tax)

Employee FICA on salary uses the current Social Security wage base grown forward by cumulative inflation as a wage-indexing proxy (the real base is re-indexed to average wages each year — close but not identical). The 0.9% additional Medicare surtax thresholds ($200K single / $250K married-joint / $125K married-separate) are not inflation-adjusted, matching the statute, which is fixed in nominal dollars. The employer half and self-employment (SECA) are not modeled.

Working-years cash flow

Every pre-retirement year with wages is modeled as salary in, taxes/FICA/spending/contributions out, surplus to brokerage or shortfall from savings. With no working-years spending entered there is nothing to subtract, so the whole net paycheck lands in the surplus — and the app warns you on Income & Expenses. Working-years spending does not flex in bad markets (spending flexibility is a retirement behavior). A pre-retirement shortfall funded from savings pays its early-withdrawal penalty, and the last- resort top-up that covers the tax on that draw isn't itself grossed up — so a small residual (bounded under ~3% of the tax-deferred draw) is left uncovered. That's an accepted approximation on what is already a plan-failure signal, not a precision path.

Planned sales

Concentration risk is not priced, losses are not realized, and every planned sale is taxed at long-term rates — see What This Does Not Model.

Monte Carlo

Historical bootstrap

Each trial stitches together random 3–7 year blocks of actual 1926–2024 history. Stock returns, bond returns, and inflation are always drawn from the same historical year, preserving their real-world correlations. Blocks are sampled with replacement (a proper bootstrap), so a bad era can recur within a long retirement.

Precision

Each run is 2,000 trials. At a 90% success rate, the sampling margin is about ±1.3 percentage points — treat 89% and 91% as the same answer.

Success definition

A trial succeeds only if every year is funded, through the last survivor's life expectancy — for couples, the projection runs to whoever lives longer, not just yours. One year you couldn't pay for fails the trial, however it ends. A $0 portfolio isn't itself a failure: if Social Security and other income cover your spending, that year is funded.

Spending cuts

Flexible expenses are reduced according to your Spending Flexibility (Guyton-Klinger) settings; the portfolio trigger watches total household wealth, including a spouse's retirement accounts.

Pre-retirement sequence risk

For any plan still earning wages, the accumulation years are part of each trial — so a bad market in the years right before you retire hits the savings you were counting on. This pre-retirement sequence-of-returns risk shows up in the success rate for accumulators: a crash at 63 matters, not just one at 73.