How It Works
A look at how we estimate your retirement projections.
Important: This tool is for informational and educational purposes only. The projections shown are estimates based on the assumptions you provide and may not reflect actual future results. This is not financial, tax, or legal advice. Please consult a qualified professional before making financial decisions.
Our Approach
Financial planning can feel like a black box. We aim to make it transparent. Tax and Social Security calculations use published IRS and SSA formulas, so you can see how the numbers are derived and understand how changes to your inputs affect your projections.
What We Calculate
Social Security Benefits
- Primary Insurance Amount (PIA) using SSA bend points ($1,286 / $7,749 for 2026)
- Early claiming reductions (up to 30% if you claim at 62)
- Delayed retirement credits (8% per year up to age 70)
- Spousal benefits (up to 50% of higher earner's PIA)
- Cost-of-living adjustments (COLA) applied annually
- Full Retirement Age based on your birth year
Social Security Claiming Optimizer (Pro)
Compare how different claiming ages (62, 67, or 70) affect your estimated lifetime benefits.
- Side-by-side projections for each claiming age
- Breakeven analysis showing when delayed claiming may pay off
- Spousal coordination for couples
- Lifetime benefit estimates based on your inputs
Federal Taxes
- 2026 marginal tax brackets for single and married filing jointly
- Standard deduction with age 65+ bonus ($2,150 single / $1,700 per spouse married)
- FICA taxes on wages (6.2% Social Security + 1.45% Medicare)
- Self-employment tax (SECA) at 15.3%
- Additional Medicare Tax (0.9%) on earnings above threshold
- Taxable Social Security based on provisional income thresholds
Capital Gains
- Tiered long-term rates: 0%, 15%, and 20% based on taxable income
- Bracket stacking—ordinary income fills lower brackets first
- Net Investment Income Tax (NIIT) of 3.8% when applicable
- Cost basis tracking so only actual gains are counted
- Capital gains included in Social Security provisional income calculation
Retirement Accounts
- Traditional and Roth 401(k) with 2026 limits ($24,500 + $8,000 catch-up)
- SECURE 2.0 super catch-up: $11,250 for ages 60–63
- Traditional and Roth IRA ($7,500 + $1,100 catch-up)
- Traditional IRA deduction phase-out ranges
- Roth IRA income phase-outs
- Required Minimum Distributions (RMDs) using IRS tables
- RMDs start at age 73 (or 75 if born 1960+)
- Employer matching contributions
Tax-Efficient Withdrawal Insights (Pro)
See how different withdrawal sequences may affect your estimated tax burden over time.
- Compare strategies: taxable-first, traditional-first, Roth-first, or proportional
- Tax torpedo warnings when income may push Social Security into higher taxation
- Roth conversion window identification
- Marginal tax rate projections year by year
Goal Planning (Pro)
Track specific financial goals and see how they fit into your overall projections.
- Custom goals for travel, education, home purchases, and more
- Feasibility scoring based on projected balances
- Impact analysis on retirement outlook
Expense Phase Modeling (Pro)
Research suggests spending patterns often change throughout retirement. This optional feature models three phases:
- Go-Go phase: Early active years at full planned spending
- Slow-Go phase: Moderate reduction as activity decreases (default 85%)
- No-Go phase: Lower discretionary spending in later years (default 75%)
Monte Carlo Simulations (Pro)
Monte Carlo runs 1,000 simulations with year-by-year return variation to model sequence-of-returns risk. Results show a range of outcomes, not a prediction.
- Percentile bands (10th, 25th, 50th, 75th, 90th) showing the spread
- Estimated success probability (how often the portfolio lasts)
What We Don't Calculate
To keep the tool focused, we've intentionally excluded some areas:
- State and local income taxes (federal only)
- Alternative Minimum Tax (AMT)
- Estate and inheritance taxes
- Itemized deductions (we use the standard deduction)
- Pension income (can be entered as "other income")
- Part-time work during retirement
- Long-term care or detailed healthcare costs
- Divorce, remarriage, or complex family structures
- Social Security survivor benefits
- Automated Roth conversion ladders
Default Assumptions
Projections use these baseline assumptions. You can create what-if scenarios to see how different values affect your estimates.
These are starting points based on historical averages—actual future returns and inflation will differ.
Data Sources
Tax brackets, contribution limits, and Social Security parameters come from official sources and are updated annually:
- IRS publications for federal tax brackets, deductions, and retirement limits
- Social Security Administration for bend points, FRA tables, and COLA rates
- Historical market data for default return and volatility assumptions
Limitations
No projection can predict the future. Markets fluctuate, tax laws change, and personal circumstances evolve. The estimates shown here are meant to help you explore possibilities—not to guarantee outcomes or tell you what to do.
We recommend reviewing your plan periodically and working with a qualified financial advisor or tax professional for personalized guidance.