Calculator assumptions

The calculators are illustrations, not financial or tax advice. They use 2026 figures and keep things simple on purpose. Here's everything they assume.

Everywhere

• Investment returns are steady every year. Real markets go up and down, and returns are never guaranteed.
• Fees aren't included.
• Your inputs are saved in your own browser (local storage) so they survive a refresh. They're never sent anywhere; "Reset to defaults" clears them.
• "Today's dollars" means after inflation. Nobody knows future inflation; 3% is roughly the long-run U.S. average.

1. Where your income goes

Federal

• 2026 federal brackets and standard deduction: $16,100 single, $32,200 married filing jointly, $24,150 head of household (IRS Rev. Proc. 2025-32). Head of household uses the single limits for the Roth IRA, QBI, additional Medicare and investment income tax.
• Dependents: a $2,200 child tax credit for each child under 17 and a $500 credit for each other dependent, reduced by $50 for every $1,000 of income over $200,000 ($400,000 married). The credit comes off federal income tax first; up to $1,700 a child beyond that comes back as a refund, limited to 15% of earned income over $2,500. Massachusetts: a $1,000 exemption per dependent, a $6,800 personal exemption for head of household, and the $440 refundable Child and Family Tax Credit for each child under 13 (other dependents who qualify, such as a parent 65 or older, aren't counted). Other states' dependent exemptions and credits aren't included, and they use single rates for head of household.
• No other tax credits, itemized deductions, or other income.
• Income sources: you (and a spouse) can each have up to three, such as a W-2 job and a business on the side. If a job has no 401(k), none of that pay goes into one; a business can always have a Solo 401(k).
• W-2 employee: income is wages from a job; you pay half of Social Security and Medicare.
• 1099 / LLC: a sole proprietor or single-member LLC taxed the default way. Self-employment tax is 15.3% on 92.35% of profit (Social Security up to $184,500, Medicare on all of it, plus 0.9% above $200,000 single / $250,000 married). Half of it is deducted from income for income tax. Pre-tax 401(k) and HSA money lowers income tax but not self-employment tax.
• S corp: you pay yourself a salary; payroll tax (your half and the company's half) applies only to the salary, and the rest of the profit comes out as distributions without Social Security or Medicare tax. The company's half is a business expense. You enter your salary and your distributions separately; the business's profit is the two together, plus the company's half of payroll tax and any Solo 401(k) employer contribution, since those are paid before distributions. The IRS requires a reasonable salary for the work you do, and an S corp adds costs (payroll, a separate tax return, possibly state fees) that aren't included.
• QBI deduction: 20% of qualified business income (1099 / LLC profit after half the self-employment tax and 401(k)-style plan contributions; S corp distributions, not salary), up to 20% of taxable income. Above $201,750 of taxable income (single) or $403,500 (married) it phases in over $75,000 / $150,000: service businesses (finance, consulting, law, health, and similar) phase out entirely, and other businesses are limited to 50% of the wages they pay. The $400 minimum deduction and the property-based limit aren't included. States don't use the QBI deduction.
• Solo 401(k): business owners use the same 401(k) options (pre-tax or Roth, and after-tax contributions converted to Roth). The employer contribution slider goes up to the maximum: 20% of net self-employment income (1099 / LLC) or 25% of salary (S corp), pre-tax, within each person's $72,000 total. It lowers income tax but not Social Security or Medicare tax.
• Other business deductions and expenses aren't included; enter profit after expenses.
• Social Security: 6.2% on wages up to $184,500. Medicare: 1.45%, plus 0.9% above $200,000 (single) or $250,000 (married).
• The HSA is funded through payroll, so it also avoids Social Security and Medicare tax. 401(k) contributions don't.
• Married couples: each spouse has their own income type and income. Social Security tax stops at each person's own $184,500 wage base (wages use it up first, then self-employment income); the 0.9% additional Medicare tax applies to combined earnings above $250,000. Each spouse with earnings has their own 401(k) limit, shared across all their plans, and each can have an IRA. The HSA uses the family limit.

Accounts and 2026 limits

• 401(k): $24,500 for pre-tax and Roth combined, split however you choose. Catch-up contributions for ages 50 and up aren't included.
• Mega backdoor Roth: assumes your plan allows after-tax contributions and converts them to Roth inside the plan. Your 401(k) contributions plus the mega backdoor can't exceed $72,000, or your pay if that's less (an S corp salary, or 1099 profit minus half the self-employment tax); "Max out" fills whatever room is left. Employer contributions also count toward the $72,000 but aren't included here, so your real room may be smaller.
• HSA: $4,400 for self-only coverage, $8,750 for family coverage ("Max out" uses family coverage for married couples and anyone with dependents).
• IRA: $7,500 per person. Direct Roth IRA contributions phase out between $153,000 and $168,000 of income (single) or $242,000 and $252,000 (married), measured after pre-tax 401(k) and HSA contributions.
• Backdoor Roth IRA: a non-deductible traditional IRA contribution converted to Roth. Assumes you have no other pre-tax IRA money, which would make part of the conversion taxable (the pro-rata rule).
• Taxable investing, when you choose each account: a percentage of what's left after taxes, payroll saving, and the Roth IRA; a percentage of gross income; or a set dollar amount each month.

State

• Each state's 2026 brackets, standard deduction, personal exemption, and credits come from the Tax Foundation.
• Pre-tax 401(k) and HSA contributions lower state tax everywhere except: Massachusetts and Pennsylvania tax 401(k) contributions, and California and New Jersey tax HSA contributions.
• Massachusetts has no standard deduction. It uses a personal exemption ($4,400 single, $8,800 married, $6,800 head of household, plus $1,000 per dependent) and lets you deduct up to $2,000 per person of Social Security and Medicare tax.
• Connecticut's personal exemption shrinks as income rises and is gone by about $45,000 (single).
• New York City residents pay city income tax on top of New York State's, on the same taxable income: 3.078% to 3.876% (the top rate starts at $50,000 single, $90,000 married, $60,000 head of household). It applies wherever state tax does, including stock and home sales and rental income. New York also has an $11,200 standard deduction for head of household and a $1,000 exemption per dependent. Not included: New York's Empire State child credit, the city's small household and school tax credits, and the city's unincorporated business tax (on self-employment income) and corporate tax on S corps.
• Not included: local income taxes (such as New York City, Maryland and Indiana counties, and many Ohio and Pennsylvania cities), other states' phase-outs of deductions and credits at higher incomes, and the few states that let you deduct federal tax.

Definitions

• Bracket: the tax rate on your next dollar of income.
• Effective tax rate: total tax divided by gross income.
• Savings rate: everything you save (401(k), HSA, IRAs, and other savings) divided by gross income, or by after-tax income (gross income minus all taxes).

Saving for college

• For children under 17 from step 1 (up to 4). Each starts college at 18 for four years; the yearly cost (average 2025-26 tuition, fees, room and board from the College Board: $26,000 public in-state, $46,000 out of state, $61,000 private) grows at the rate you choose. What's saved, and the monthly saving, is split evenly.
• Savings earn your expected return from step 2. A 529 grows tax-free for qualified costs. A taxable account pays tax on 1.5% dividends each year and on gains when sold. Used for something else, a 529's earnings are taxed at your federal and state rates plus a 10% penalty, and a state deduction is taken back.
• State deduction: Massachusetts up to $1,000 a year ($2,000 married) and New York up to $5,000 ($10,000 married), for the state's own plan; other states' deductions aren't included. The deduction flows into step 1's state tax, and the monthly 529 saving comes out of what's left to spend there (not your savings rate, since it ends when your children finish college).

Pre-tax or Roth?

• Compares your employee 401(k) contribution (or $24,500 if you haven't entered one) made pre-tax versus Roth, valued at your work-optional age in today's dollars, using the return and ages from step 2.
• The tax you save by going pre-tax is assumed to be invested at the same return, so both choices cost the same today. Taxes on that invested savings aren't included.
• Withdrawals are taxed at the federal bracket you choose for later plus your current state rate (none in states that tax 401(k) contributions, since you've already paid that tax). If the rate later equals today's, the two come out exactly even.
• Assumes today's tax rates stay in place. If rates rise, Roth looks better.

Roth or taxable?

• Compares the same after-tax dollars (your mega backdoor amount, or $20,000 a year) invested each year until your work-optional age, using the return, inflation, and ages from step 2. Results are in today's dollars.
• Taxable account: dividends are taxed every year and reinvested; 75% are qualified (taxed like long-term gains) and 25% are taxed as ordinary income. Remaining gains are taxed when you sell at the end.
• Rates: 2026 long-term capital gains brackets (0% up to $49,450 single / $98,900 married, 15% up to $545,500 / $613,700, 20% above), the 3.8% net investment income tax above $200,000 single / $250,000 married, and your state's top rate on your income. Today's rates are used for the whole period, including the final sale.
• Rebalancing uses a 50% relative band: an investment is only sold when it drifts 50% from its target. With steady returns that never happens, so no gains are realized before the end. Real markets occasionally would.
• The Roth is assumed to be withdrawn tax-free (held at least five years and taken after age 59½).

2. Saving and financial independence

• Work can become optional at an age or in a year. Married: the plan lasts until the younger of you reaches the age you plan for, and ages shown are yours.
• Uses your income and savings rate (of gross income) from step 1, invested monthly on top of what you've already saved. New savings go into pre-tax, Roth and taxable accounts in the same mix as your plan in step 1.
• Everything is in today's dollars: the investment return you choose is adjusted for the inflation rate you choose (8% with 3% inflation is about 4.85% after inflation).
• Spending is what's left after taxes and saving in step 1 ("left to spend"), or the monthly spending goal you enter. The 10%, 20%, and 30% comparisons use the same income and taxes with their own savings.
• Once work is optional, each year's withdrawal (at the start of the year) covers what Social Security, a pension and self-employed income don't, plus the tax on it. Pre-tax money is taxed at your federal bracket once work is optional plus your state rate (none in states that already taxed your 401(k) contributions). In a taxable account, only the gain is taxed: the share above your cost basis, at 0% federal if that bracket is 12% or less, 15% up to the 32% bracket and 20% above, plus your state rate. Roth withdrawals are tax-free. Withdrawals come from each kind of account in proportion, and the cost basis share stays the same over time.
• Can spend: the most you could spend each year in all (savings, Social Security, pension and other income, after tax), rising with inflation, so the money lasts exactly to the age you plan for (100 by default).
• Lasts to: the age your savings run out at your spending, or "100+" if they don't.
• Withdrawal rate: each year's withdrawal from savings as a share of the balance at the start of that year.
• "Plan to age" shows longevity risk: planning for a longer life lowers what you can safely spend each year.
• Financially independent (step 1): no saving years. Step 1's income is a pension or annuity, taxed as ordinary income with no payroll tax; step 2 plans spending from your savings, the pension and Social Security.

Social Security

• Each person's benefit at full benefit age (67 for anyone born in 1960 or later), from their Social Security statement. Claiming earlier lowers it by 5/9% a month for the first 36 months and 5/12% a month after that (70% at 62); waiting past 67 raises it 8% a year (124% at 70). Benefits keep up with inflation, so they're in today's dollars.
• Benefits start at the later of the claiming age and your work-optional age. Spousal and survivor benefits and the earnings test aren't modeled; enter a spousal benefit as your spouse's own if that's what they'll get.
• "Expect less than promised" cuts every benefit by that share, for anyone worried about the trust fund.
• Taxes: up to 85% of benefits are federally taxable, using the IRS formula on half the benefits plus other income (pension, self-employed income and pre-tax withdrawals), taxed at your bracket once work is optional. States aren't assumed to tax benefits; most don't.

Longevity

• The chance you're alive at each age follows a Gompertz mortality curve: average (deaths most common around 88), longer (good health and higher income, around 92) or shorter (around 84). Married: the chance one of you is alive, assuming your lifespans are independent. A 65-year-old has about a 1 in 3 chance of reaching 90 on average.
• Chance of outliving your money: for each year the money can first fall short in the Monte Carlo futures, the chance that you (or one of you) is still alive then, added up.

Chance of success (Monte Carlo)

• 2,000 futures, each with a random return every year drawn from a bell curve that compounds to your expected return on average, with your volatility as its standard deviation. Inflation is held steady. The random numbers are fixed, so results only change when your inputs do.
• Chance it lasts: the share of futures in which savings last to the age you plan for. The confidence tiles find the spending, or the savings rate, that lasts in your chosen share of futures.
• Real markets have streaks and occasional crashes worse than a bell curve suggests, so treat this as a guide.

Your investments

• A holdings file is read in your browser and never uploaded or saved. Holdings are sorted into asset classes by ticker or name, and into pre-tax, Roth or taxable by their account's name (IRA, 401(k) and similar are pre-tax; anything with Roth is Roth; everything else is taxable).
• History: US stocks and T-bills since 1927, international stocks since 1991 and emerging markets since 1990 (Kenneth French Data Library); 10-year Treasuries and Baa corporate bonds since 1928 (Aswath Damodaran, NYU). Expected returns are history minus 1 point by default, and you can enter your own for any class.

A concentrated stock position

• The position is held in a taxable account, on top of your savings in step 2. Its value and cost basis are what you enter; the basis is fixed in dollars, so in today's dollars it shrinks with inflation and the taxable gain grows.
• 1,000 futures. Each year the stock and your other investments each get a random return from a bell curve that compounds to their expected return, with their own volatility, drawn together so they move partly in step ("Moves with the market" is the correlation). The same futures are used for all three plans.
• Keep it all: never sold unless spending needs it. Sell gradually: equal amounts of today's shares are sold each year over the years you choose, down to the share you keep. Sell a set percentage: that share of whatever you still hold is sold each year, so each sale is smaller, down to the share you keep. Sell it all: everything is sold as soon as the restriction ends. The restriction is in months (quarters); sales happen once a year, the first as soon as it ends (6 months in, for a 6-month lockup), with the stock and your other investments growing until then.
• The gain is taxed as a long-term capital gain on top of your other income: step 1's income while you work, and the middle of your federal bracket once work is optional. That covers the 0%, 15% and 20% federal rates, the 3.8% net investment income tax, and your state's brackets (for Massachusetts, 5% and the 4% surtax on income over about $1 million). What's left after tax is invested with your other money.
• Once work is optional, spending comes from your other investments first and then from the stock. A future succeeds if the money lasts to the age you plan for.
• Not included: short-term gains, the stock's dividends, a stock held in a 401(k) (net unrealized appreciation), and other ways to diversify such as donating shares, exchange funds, options strategies or harvesting losses elsewhere. Real single stocks can fall further and stay down longer than a bell curve suggests.

Rent or buy a home

• The home's value grows at the price growth you choose and rent at the rent growth; insurance and HOA dues rise with inflation. Property tax and maintenance are a share of the home's value each year.
• Typical costs by area are rough averages of effective property tax rates, insurance, long-run price growth and price-to-rent ratios; they're a starting point, not a quote.
• Rent or buy: the buyer pays the down payment and closing costs; the renter invests that money instead. Each year whoever spends less invests the difference at your expected return in a taxable account (1.5% dividends taxed each year, gains taxed when sold). Buying costs the closing costs plus any buyer's agent fee; selling costs the realtor commission (3% by default, as when you pay only your own agent; 5% to 6% if you pay both) plus other selling costs such as transfer taxes and attorney fees (1%). Net worth counts selling the home (those selling costs, the mortgage, and tax on any gain over the $250,000 / $500,000 exclusion after 2 years) and selling the investments. Buying pays off the first year it's ahead; if renting and investing pulls ahead again later and stays ahead, the years buying is ahead are shown. Living there for good compares to the age you plan for, and the home passes to heirs with a stepped-up basis.
• Tax savings while you live there: mortgage interest (on up to $750,000 of loan) and state and local taxes, capped at $40,400 in 2026 (rising 1% a year, shrinking above $505,000 of income, and back to $10,000 from 2030), only to the extent they beat the standard deduction, at your federal bracket from step 1.
• Rental years: rent less vacancy and property management, minus property tax, insurance, HOA, maintenance, mortgage interest and depreciation (the building's share of the price and closing costs over 27.5 years), taxed at your federal and state bracket plus the 3.8% net investment income tax if it applies. Losses offset up to $25,000 of other income below $100,000 of income (phased out by $150,000); otherwise they wait for rental income or the sale.
• Second home: no rent comes in, and owning it costs the same (mortgage, property tax, insurance, HOA and upkeep), with mortgage interest and property tax still deductible to the extent they beat the standard deduction (assuming your main home doesn't already use up the $750,000 loan limit or the SALT cap). You can add what using it is worth to you a year, such as the vacation rentals you'd otherwise pay for, rising with inflation. Selling it within 3 years of moving out keeps the home-sale exclusion if you lived there 2 years; otherwise the whole gain is taxed. Living there 0 years means you bought it only as a second home or a rental.
• Selling a rental: depreciation is taxed at up to 25% (plus state and net investment income tax), the rest of the gain as a long-term capital gain. The home-sale exclusion applies if you lived there at least 2 years and sell within 3 years of moving out. Kept for good, the home passes to heirs with a stepped-up basis, so neither is taxed.
• Annualized return: the rate that makes the down payment, closing costs, each year's cash in and out (counting the rent you don't pay while living there) and what you net at the end add up to zero (an internal rate of return), after tax. Your investments: a lump sum held the same years, after tax.
• Not included: PMI, landlord insurance, moving costs, refinancing, and real ups and downs in prices and rents.

3. The long game

• Uses your plan: what you've already saved (step 2), your total yearly savings from step 1 contributed monthly, and the years, return, and inflation from step 2.
• Contributions rise with inflation each year, so they stay the same in today's dollars. That's why "after inflation" at your return matches step 2 exactly.
• Your return is compared with 4%, 6%, 8%, and 10% (all before inflation), compounding monthly.

Also: pay down debt, or invest?

• Debt interest is charged monthly at the APR divided by 12.
• The minimum payment is made either way. Once the debt is paid off, the whole payment is invested.
• Paying off debt is a guaranteed return; the investment return is not.

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