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How the math works

Printed from www.outlastretirement.com/how-the-math-works. Figures are the tax year 2026 amounts unless a rule says otherwise. This is education about how the app works, not tax, legal or financial advice.

OutlastRetirement answers one question: does your money outlast you? It works it out on your own device, one year at a time, from the plan you enter. This page explains how: what happens in each projected year, how the plan is stress-tested, and every tax and benefit rule it applies, with a link to the official source for each.

One year at a time

The projection starts in your plan year and runs to the end of the plan, the last Life Expectancy you entered. Each year it works out what comes in (salary, Social Security, pensions, annuities, rental income), what you spend (your lifestyle spending, health coverage, Medicare premiums, debts and life events), and what the shortfall between them is.

The shortfall is drawn from your accounts in the order your withdrawal strategy sets: Taxable First, Pre-Tax First, Roth First or Pro-Rata. Withdrawals are sized so they also pay the tax they cause, because a withdrawal from a Pre-Tax account is itself income. Required minimum distributions, Roth conversions and your saving while you work happen in the same year, and the accounts then grow at the returns you assumed, less your investment fees (fund expenses and any advisor fee), which come off the invested accounts each year.

Your plan, and every calculation on it, stays in your browser. Nothing is sent to us to be worked out.

Taxes, worked out every year

Each year’s income goes through the federal income tax (brackets, the standard deduction and the extra amounts at 65, capital gains rates, the 3.8% tax on investment income, the alternative minimum tax), the taxable share of Social Security, and your state’s income tax by its own rules or a flat rate you set.

The same income decides your Medicare premiums two years later (IRMAA) and, before 65, your ACA premium credits. Because a withdrawal or a Roth conversion can push income over one of those lines, the plan counts all of it together rather than one tax at a time.

Dollar thresholds grow with your inflation assumption from the current tax year’s figures. Each rule, the figures it uses, what the app simplifies, and the official page that sets it are listed further down.

Today’s dollars and future dollars

Figures can be shown in today’s dollars, with inflation taken out so a number reads as buying power now, or in future dollars, the amounts as they will appear on a statement. The choice changes how numbers are shown, never the result. The charts, Monte Carlo, guardrails, optimizers and the printed report all follow the same setting and say which one they use.

Will it last?

The headline verdict combines two views of the plan: the projection with your average returns, and the share of 1,000 simulated markets in which the money lasts. On track means it lasts on average and in at least 90% of simulated markets; Mostly on track, 75% to 89%; At risk, under 75%; Runs short means even average returns do not cover the spending.

Monte Carlo: 1,000 simulated markets

The Monte Carlo runs your plan 1,000 times, each with a different sequence of yearly returns. Each year’s return is drawn so that the middle trial grows at exactly the return you entered, with swings set by the market volatility figures on your plan. Those volatility figures move the result more than anything else, and lowering them raises the success rate without making the plan any safer.

The trials come from a fixed seed, so the same plan gives the same answer every time. You can choose to draw instead from blocks of real market years from 1928 on, so bad years arrive in runs the way they did, and you can add uncertain inflation, an uncertain lifespan drawn from the Social Security life table, and the chance of needing paid long-term care.

Every real retirement since 1928

History is the other test. The plan is run through each real stretch of stock and bond returns and inflation since 1928, starting the year you retire, at your own stock and bond mix: raw history, not averages. The result says how many of those retirements the plan lasted through and which start year was hardest, and it searches for the most you could spend and still last through every one: your own version of William Bengen’s SAFEMAX (“safe max”), the highest starting withdrawal that survived every historical retirement in his 1994 research and the origin of the 4% rule, worked out after tax with your own income, accounts and horizon. If you set a Keep at Least amount, the Monte Carlo and the historical starts count a run as lasting only if your accounts never end a retired year below it.

Premium compares the plan’s spending with other rules over the same starts: the guardrails, spending a fixed percent of the portfolio every year, and Bob Clyatt’s 95% rule (that percent, or 95% of last year’s spending, whichever is more). Both percent rules start at the plan’s own first-year spending and its share of the portfolio then. Spending the same share of what is left never runs out on paper; the comparison shows what it costs in lean years.

You can set the record to start in 1871 instead, which adds 57 earlier start years from Robert J. Shiller’s data (Yale University, the data behind Irrational Exuberance): S&P stock returns with dividends, a 10-year Treasury return rebuilt from his long-term yields, and his consumer price index. Over the years both cover, 1928 to 2022, his figures and the 1928-on table (Aswath Damodaran, NYU Stern) average within a tenth of a point a year. The Monte Carlo’s historical bootstrap stays on 1928 onward.

You can also replay a single start year, or a named crash such as 1929, 1973 or 2008, and watch the plan year by year. In these replays Social Security’s cost-of-living raise and the tax brackets follow the inflation of the period.

Spending guardrails

Spending guardrails are an optional rule for spending less when markets fall. After a year with a negative return, spending skips that year’s inflation raise; after a crash in the first retired year, it is cut 10%. Once the portfolio is back on your plan’s own path, the skipped raises are restored and the cut is lifted. With essential spending marked, the rule never cuts below it.

Withdrawal-rate guardrails are a second, separate rule: they compare last year’s spending rate with the rate your own plan expected for that year, and step spending down or up when it drifts outside a band you set. Scheduled changes, such as Social Security starting, never trigger them.

A guardrail usually leaves more money by spending less, so the app shows both sides: the balance left and how far spending fell over the whole retirement.

The optimizers

The optimizers re-run your whole plan many times and compare the results. The Social Security claiming matrix tries every claiming age from 62 to 70 for each of you. The Tax Optimizer Hub compares three withdrawal orders with three levels of Roth conversion, and the Roth conversion ladder searches conversion sizes and withdrawal orders together. A contribution-split search tries 25 mixes of Pre-Tax and Roth saving, and a solver finds the lowest average return your plan could survive.

Each optimizer ranks by a measure it names, such as the ending balance or lifetime benefits, and shows the taxes and Medicare surcharges behind each result. None of them changes your plan unless you apply its suggestion.

What it is, and what it is not

OutlastRetirement is educational software, not financial, tax or legal advice. It models the rules listed below as written for the current tax year, carried forward with your inflation assumption; it cannot know future law. Where a rule is simplified, the list says how. Your own figures, and an advisor who knows your situation, are the final check.

Every rule, with its official source

The same list the app shows under Help → How the numbers are figured: 42 rules, the figures each uses, what the app simplifies, and the official page behind it.

Which year’s figures this plan uses

Every figure is the newest its agency has published. Where that is older than 2026, the plan grows it forward and this table says so.

AreaFigures fromNote
Federal income taxTax year 2026The IRS figures for the current tax year; later years grow them by your Tax Bracket Inflation Rate.
Social SecurityTax year 2026The wage base, the earnings-test amounts and the announced increase; the benefit formula is set in law.
Medicare and health coverageTax year 2026Part B and Part D premiums, the income-surcharge tiers and the poverty line behind the marketplace credit.
Retirement accountsTax year 2026Contribution and catch-up limits, the HSA limits and the charitable-distribution limit.
Estate and inheritanceTax year 2026The federal exemption and each state’s own.
StatesTax year 2026Every state’s own rules, except the two below.
CaliforniaTax year 2025The latest California has published, grown by your Tax Bracket Inflation Rate for 2026 and later. California usually publishes the next year’s figures in December; they replace these when it does.
Washington capital gains deductionTax year 2025The latest Washington has published; the law grows it with inflation from there.

Federal income tax

Federal income tax brackets

Ordinary income (wages, pensions, the taxable part of Social Security, IRA and 401(k) withdrawals, and Roth conversions) is taxed in seven brackets from 10% to 37%, after the standard deduction. On a joint return the 10% bracket covers the first $24,800 of taxable income, and a single filer reaches 37% above $640,600. In later years every bracket grows by the Tax Bracket Inflation Rate you set.

Figures from: tax year 2026

What the app simplifies: Brackets grow at your inflation rate in a smooth line rather than by the IRS index and its rounding, and there is no head of household or qualifying surviving spouse status.

Official source:

Standard deduction and the extra amount at 65

The app takes the standard deduction every year: $32,200 on a joint return and $16,100 for a single or separate filer. Each person 65 or older adds $1,650 on a married return or $2,050 on a single one. Both amounts grow each year with your Tax Bracket Inflation Rate.

Figures from: tax year 2026

What the app simplifies: Itemized deductions (mortgage interest, state and local taxes, gifts to charity, medical costs) and the extra amount for blindness are not modeled. A surviving spouse files as single from the year of the death, where the law allows a joint return for that year.

Official source:

The extra deduction for people 65 and older (2025-2028)

For tax years 2025 through 2028, each person 65 or older gets an extra $6,000 deduction on top of the standard deduction. Each person's amount shrinks by 6 cents for every dollar of income above $75,000 on a single return or $150,000 on a joint one, so a couple's is gone at $250,000. A married couple filing separately cannot claim it. Because withdrawals and conversions change the income it depends on, the app works the deduction out together with each year's withdrawals.

Figures from: 2025-2028 (set in law, not adjusted for inflation)

Official source:

The IRS has published this law only as a newsroom release so far; the form instructions follow at filing time.

Capital gains and qualified dividends

Long-term gains and qualified dividends sit on top of your other taxable income and are taxed at 0%, 15% or 20%. On a joint return the 0% rate covers taxable income up to $98,900 ($49,450 single). Gains come from selling taxable-account investments to pay for spending, and dividends from the yearly yield on that account. Only the qualified share of that yield gets these rates: the rest, such as interest and bond-fund payouts, is taxed as ordinary income. You set the share under Plan → Spending → Withdrawals (Qualified share of that yield, 100% unless you change it), or Detailed Holdings sets it from each holding.

Figures from: tax year 2026

What the app simplifies: Every gain is treated as long-term; short-term gains are not modeled. The split between qualified and ordinary dividends is one percentage for the whole taxable account, applied every year.

Official source:

The 3.8% tax on investment income

A 3.8% tax applies to investment income (dividends, gains, net rent and income from an annuity bought with taxable money) to the extent your income is above $250,000 on a joint return, $200,000 single or $125,000 filing separately. These thresholds are set in law and do not rise with inflation.

Figures from: Set in law, not adjusted for inflation

Official source:

Alternative minimum tax

The app also works out the alternative minimum tax and adds any amount by which it exceeds regular tax. The exemption is $140,200 on a joint return and $90,100 single, and it phases out at high incomes. The minimum tax starts from taxable income and adds back what it does not allow: the standard deduction, or in a year that itemizes the state and local tax line, since mortgage interest, gifts and medical costs are deductible under both. It rarely applies to a household that takes the standard deduction.

Figures from: tax year 2026

What the app simplifies: Stock option exercises and private activity bond interest, the other common triggers, are not modeled.

Official source:

Married filing separately: two returns

When you choose married filing separately, the app prepares two returns. The household's income is divided between them by the split you set (half each by default), and each return has its own standard deduction, brackets, state tax and Medicare income test. Separate filers who lived together have no base amount before Social Security becomes taxable, cannot take the senior deduction, and get no ACA premium tax credit.

Figures from: tax year 2026

What the app simplifies: One ratio divides all income; the app does not assign each account or paycheck to the spouse who owns it, and community-property rules are not modeled.

Official sources:

Payroll taxes while you work

While you work, the app charges the employee share of payroll tax: 6.2% for Social Security on wages up to $184,500 and 1.45% for Medicare on all wages. An extra 0.9% Medicare tax applies to wages above $250,000 for a couple ($200,000 single). The Social Security wage limit grows each year.

Figures from: tax year 2026

What the app simplifies: The wage limit grows at your general inflation rate, standing in for the national average wage index that actually sets it.

Official source:

Living abroad: the US foreign tax credit

A US citizen abroad still owes US tax on everything, so a move abroad adds the country's tax on top. The foreign tax credit gives some of it back, the way Form 1116 limits it: in two separate baskets, general (pensions, IRA withdrawals and wages) and passive (dividends and capital gains), each capped at the US tax on that basket's foreign-source income, so foreign tax on investments can never reduce US tax on a pension, or the other way round. US Social Security, US pensions, IRA money and US dividends are US-source income, which earns no credit at all unless the country's tax treaty re-sources it; the move's treaty setting says whether it does. Credit left unused in a year carries forward ten years within its own basket. Tax on a Roth, social contributions and a wealth tax never earn a credit.

Figures from: tax year 2026

What the app simplifies: The one-year carryback, the separate country-by-country lines of the form, the election that skips Form 1116 for a small credit, and the foreign earned income exclusion (wages earned abroad take the credit instead) are not modeled.

Official sources:

Social Security

How much of your Social Security is taxed

Up to 85% of Social Security can be taxable. The app follows the IRS worksheet: it adds half your benefits to your other income for the year, including that year's withdrawals and Roth conversions, and compares the total with $32,000 and $44,000 on a joint return ($25,000 and $34,000 single). Below the first line none of the benefit is taxed, between the lines up to half, and above the second up to 85%. These lines are set in law and do not rise with inflation.

Figures from: Set in law, not adjusted for inflation

Official source:

Claiming age: early and delayed benefits

You enter each benefit at full retirement age, which is 67 for anyone born in 1960 or later and between 66 and 67 for births from 1943 to 1959. Claiming earlier reduces the benefit for life (to 70% at 62 when full retirement age is 67), and waiting past full retirement age adds 8% a year until 70. Benefits then rise each year by the cost-of-living rate you set.

Figures from: Set in law

Official sources:

Spousal benefit

With the spousal benefit switched on, a spouse whose own full benefit is less than half of the other's receives the difference as a top-up. It starts no earlier than 62 and no earlier than the other spouse's claim, and it is reduced when it starts before full retirement age (at 62 it is 65% of the full top-up). It earns no credits for waiting past full retirement age.

Figures from: Set in law

What the app simplifies: Benefits on a former spouse's record and the one-year marriage test are not modeled, and the earnings test does not reduce the top-up.

Official source:

Survivor benefit

When a spouse dies, the survivor keeps the larger of their own benefit and a survivor benefit on the deceased spouse's record. That benefit is based on what the deceased was receiving, or on their full benefit with any credits earned for waiting if they had not yet claimed, and is 71.5% of it when started at 60, rising to 100% at the survivor's full retirement age. If the deceased claimed early, the survivor benefit is capped at the larger of their reduced benefit and 82.5% of their full one.

Figures from: Set in law

What the app simplifies: The survivor is assumed to start the survivor benefit in the first year they can rather than delay it, and survivors born 1957 to 1961 use the retirement full-retirement-age table.

Official source:

Working while collecting: the earnings test

If you claim before full retirement age and still earn wages, Social Security holds back one dollar of benefits for every two dollars you earn above $24,480. In the year you reach full retirement age the limit is $65,160, and one dollar is held back for every three. At full retirement age the benefit is recalculated to credit the months held back, and the app raises your benefit to match. Only wages and self-employment income count; pensions, withdrawals and investment income do not.

Figures from: tax year 2026

What the app simplifies: The app counts whole years, so in the year you reach full retirement age it tests the whole year's earnings rather than only the months before that birthday; the first-year monthly test is not modeled.

Official source:

Medicare and health coverage

Medicare premiums and the income surcharge (IRMAA)

From 65, the app charges each person the Medicare Part B premium ($202.90 a month) and a Part D premium at the national base amount ($38.99 a month). Higher incomes pay a surcharge on both, in five steps: the first above $109,000 single or $218,000 joint, the top one at $500,000 or $750,000, where Part B is $689.90 a month. Premiums grow by the Medicare inflation rates you set and the income steps by your Tax Bracket Inflation Rate, except the top step, which the law holds fixed through 2027.

Figures from: tax year 2026

What the app simplifies: Tax-exempt interest, which counts in Medicare's income test, is not modeled, and Part D is priced at the national base premium rather than your plan's price.

Official sources:

The two-year lookback and Form SSA-44

Medicare sets each year's surcharge from the tax return filed two years earlier, so the app prices each year from its income two years before. In the first two years it uses the earlier returns you enter, or that year's own income if you leave them blank. After a spouse stops working or dies, an optional setting models Form SSA-44, which asks Social Security to use current income instead; the app then charges whichever premium is lower.

Figures from: tax year 2026

What the app simplifies: Only a spouse stopping work or dying is detected as a life-changing event; you can declare the others yourself.

Official source:

ACA premium tax credit and the 400% line

Before Medicare, a retired household with marketplace coverage gets a premium tax credit only if its income is between 100% and 400% of the federal poverty line. The app flags any year over the 400% line ($84,600 for a couple, $62,600 single) and, if you entered an expected credit, charges it back as tax that year. In a state that has not expanded Medicaid it also flags years below the poverty line ($15,650 for one person), where there is neither Medicaid nor a credit.

Figures from: tax year 2026

What the app simplifies: The credit's amount is your own estimate rather than worked out from benchmark premiums, and the poverty line is the current year's rather than the prior year's the law uses.

Official sources:

Health savings account

HSA contributions of up to $4,400 (self-only) or $8,750 (family), plus $1,000 from 55, reduce taxable income. The app pays qualified medical costs from the HSA tax-free before any other account: Medicare premiums, long-term care, and the out-of-pocket share of costs before Medicare, but not ordinary health insurance premiums before 65 unless you mark them as continuation or unemployment coverage. Only if every other account and the cash reserve run out does the HSA pay other spending, taxed as income plus a 20% additional tax before 65. What is left at the end of the plan passes to heirs, who pay income tax on it the year they inherit.

Figures from: tax year 2026

What the app simplifies: The split between premiums and out-of-pocket costs before Medicare is a planning figure you set (70% premiums by default), and contributions do not stop automatically at Medicare enrollment.

Official sources:

Retirement accounts

Required minimum distributions

Required minimum distributions start at 73, or 75 for anyone born in 1960 or later. Each year's minimum is the Pre-Tax balance divided by the Uniform Lifetime Table factor for the owner's age, 26.5 at 73 and smaller every year after. When the first spouse dies, the survivor treats the account as their own, and the minimums follow the survivor's age and start age.

Figures from: Set in law and regulation

What the app simplifies: The household's Pre-Tax accounts are one pool owned by the first spouse while alive; there is no separate table for a spouse more than ten years younger, no delay of the first minimum to April 1, and no still-working exception.

Official sources:

Withdrawals before 59½

A Pre-Tax withdrawal before 59½ carries a 10% additional tax on its taxable part, and California adds 2.5%. Roth conversions carry no penalty. The app assumes none of the IRS exceptions, such as leaving an employer at 55 or a series of equal yearly payments, so a plan that draws early shows the penalty.

Figures from: Set in law

What the app simplifies: Ages are whole calendar-year ages, so 59½ is reached in the year you turn 60, and it is measured on the first spouse's age.

Official sources:

Roth conversions

You can convert a fixed amount each year or fill up to the top of a bracket you choose. A conversion is taxable income the year it is made, and it also counts in the Social Security test, the senior deduction and the Medicare surcharge two years later. If your Pre-Tax money includes after-tax contributions, only the pre-tax share of each converted dollar is taxed, as on Form 8606.

Figures from: Set in law

What the app simplifies: The after-tax share is measured across the whole Pre-Tax pool, 401(k) money included, where the law looks at IRAs only.

Official sources:

Roth withdrawals and the five-year rules

Before 59½, a Roth withdrawal comes first from contributions (no tax, no penalty), then from conversions oldest first, then from earnings. The taxable part of a conversion withdrawn within five tax years, counted from January 1 of the conversion year, carries the 10% penalty but no income tax; earnings withdrawn early are taxed and penalized. From 59½ the app treats Roth withdrawals as tax-free.

Figures from: Set in law

What the app simplifies: The separate five-year rule for the Roth account itself is assumed to be met by 59½.

Official sources:

Contribution limits and catch-ups

Workplace plans such as a 401(k) allow $24,500 of your own contributions, plus $8,000 from 50, or $11,250 instead at ages 60 through 63. IRAs allow $7,500, plus $1,100 from 50. Someone whose wages are over $150,000 must make catch-up contributions as Roth. Direct Roth IRA contributions phase out between $242,000 and $252,000 of income on a joint return ($153,000 to $168,000 single). The app uses these limits for its warnings and for Auto-Max; it does not cap what you enter.

Figures from: tax year 2026

What the app simplifies: The Roth catch-up test uses the same year's wages rather than the prior year's wages from that employer, and later years' limits grow at your Tax Bracket Inflation Rate.

Official sources:

The 2026 figures are from the IRS notice; the IRA rules behind them are from the 2025 edition of Publication 590-A, the latest the IRS has published.

Giving from an IRA: qualified charitable distributions

Once required distributions begin, you can send part of each year's minimum from Pre-Tax straight to charity. That part counts toward the minimum but stays out of taxable income, the Social Security test and the Medicare income test. The app caps it at the minimum and at $111,000 a year, a limit that rises with inflation.

Figures from: tax year 2026

What the app simplifies: There is one cap for the household rather than one per spouse; gifts from 70½ before minimums begin, and the one-time gift to a split-interest trust, are not modeled.

Official source:

What heirs pay on an inherited IRA

An heir other than a spouse must empty an inherited IRA by the end of the tenth year after the death. If the owner had already reached their required-distribution age, the heir must also take a yearly minimum in years one to nine, based on the heir's life expectancy; the app uses that schedule by default and taxes each withdrawal at the heir's own brackets and other income. Inherited Roth money is tax-free, and a taxable account passes with its cost basis stepped up.

Figures from: Set in law and regulation

What the app simplifies: Heirs who may stretch withdrawals over their lifetime (a minor child, a disabled or chronically ill heir, or one close in age) are not singled out, and there is no deduction for estate tax paid on the same dollars.

Official sources:

Estate and inheritance

Federal estate tax and portability

The estate is valued once, at the end of the plan: your accounts, home equity, other property and life insurance you own. Federal estate tax is 40% of what exceeds the exemption, $15,000,000 per person, grown each year by your Tax Bracket Inflation Rate unless you turn that off. A married couple gets two exemptions, on the assumption that the first spouse's estate elects portability; lifetime gifts above the annual exclusion use up part of it, and state estate tax paid is deducted first.

Figures from: tax year 2026

What the app simplifies: Only the second death is modeled; trusts, marital-deduction planning, probate costs and debts are not, and an annuity you bought is left out of the estate.

Official sources:

Lifetime gifts

You can give $19,000 a year to each person (twice that when a couple splits gifts) without using any of your estate exemption; the amount grows with inflation. Gifts above it reduce the exemption left at death.

Figures from: tax year 2026

What the app simplifies: Paying tuition or medical bills directly, and front-loading five years of 529 gifts, are not modeled.

Official source:

Generation-skipping transfer tax

A share left to a grandchild, or anyone else two generations down, above the $15,000,000 generation-skipping exemption is taxed at 40% on top of estate tax. Unlike the estate exemption, it is not doubled for a married couple, because it cannot pass between spouses.

Figures from: tax year 2026

What the app simplifies: There is no exception for a grandchild whose own parent has already died.

Official source:

State estate taxes

A dozen states and the District of Columbia charge their own estate tax, based on where you live at the end of the plan. Each state's own shape applies: its own graduated table in Minnesota, Oregon and Washington (above $3,000,000), the old federal credit table in Massachusetts (from $2,000,000), Rhode Island, Maryland and Illinois, and in New York a cliff, where an estate more than 5% above the exemption ($7,350,000) loses it entirely. Maryland subtracts inheritance tax paid from its estate tax.

Figures from: tax year 2026

What the app simplifies: Hawaii, Maine and the District of Columbia are priced at their top rate above the exemption rather than through their graduated tables.

Official sources:

State inheritance taxes

Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania tax what each heir receives, at a rate set by the heir's relationship to you. Spouses are exempt everywhere; in Pennsylvania a child pays 4.5%, a sibling 12% and others 15%, while Kentucky, Maryland and New Jersey exempt children entirely. Life insurance paid to a named beneficiary is left out in all five.

Figures from: tax year 2026

Official sources:

Cost basis when the first spouse dies

When the first spouse in a couple dies, what they owned in the taxable account takes a new cost basis equal to its market value that year, so the survivor's later sales show less gain. Held jointly, half is reset; in one spouse's name, all of it if that spouse dies first and none if the other does. In a community-property state all of it is reset. Concentrated stock positions follow the same rule; Pre-Tax accounts never get a new basis. At the second death heirs get a full reset.

Figures from: Set in law, not adjusted for inflation

What the app simplifies: Death is taken to fall at the start of its year. The plan never holds the taxable account below its cost basis, so the law's step-down for a loss does not arise. Community property follows the state you live in that year, so property brought from a common-law state, California's quasi-community property and opt-in community-property trusts are not modeled; years abroad use the jointly-held rule.

Official source:

States

States with no income tax, and the flat-rate option

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming do not tax wages or retirement income, so the app charges no state income tax there. Washington is not on this list: it taxes capital gains, and from 2028 large incomes, so Washington residents choose Washington, which has its own rules below. Instead of any state's own rules you can choose Other State, one flat rate you enter (5% by default), with your choice of whether it taxes Social Security and pensions.

Figures from: tax year 2026

What the app simplifies: The flat rate has no brackets, deductions or credits.

Official sources:

Every other state, by its own rules

The other 35 states and the District of Columbia are each priced from a table of their own 2026 rules: their brackets or flat rate, standard deduction and personal exemptions, whether they tax Social Security (some only above an income line), and their retirement exclusion — how much of a pension or IRA withdrawal each person may leave out, from what age, and where it shrinks with income. Georgia, for example, leaves out up to $65,000 a person from 65, including interest and dividends; New Jersey leaves out up to $100,000 for a couple from 62 but nothing once income passes $150,000; Iowa and Mississippi leave out all of it. Government and military pensions are exempt where the state exempts them, Massachusetts adds its 4% surtax on income over about $1.1 million, and Maryland and Indiana include a typical county income tax.

Figures from: Tax year 2026

What the app simplifies: Credits, itemized deductions and smaller exclusions are left out; an exclusion a state gives each spouse separately is shared between them; Social Security that a state phases in gradually is taxed in full above the line; the 2026 figures are carried forward unchanged except where the state indexes them; and county taxes use a typical rate, not your county's.

Official sources:

California

California taxes income in nine brackets from 1% to 12.3% after a $5,706 standard deduction ($11,412 joint), plus 1% on income over $1,000,000. Social Security is exempt; pensions, IRA withdrawals and conversions are taxed in full, except up to $20,000 of military retirement pay for moderate incomes. California does not recognize HSAs, so contributions and growth are taxed each year, and early retirement withdrawals carry an extra 2.5%.

Figures from: Tax year 2025, the latest California has published, grown by your Tax Bracket Inflation Rate for 2026 and later

What the app simplifies: California indexes these figures to its own price index each year; the plan grows them from 2025 by your Tax Bracket Inflation Rate instead, and replaces them when California publishes the next year's. The 1% tax over $1,000,000 is not indexed. Itemized deductions are not modeled.

Official sources:

New York, New York City and Yonkers

New York taxes income in its own brackets after a $8,000 standard deduction ($16,050 joint), and the brackets step down as the law schedules: in 2027 the five lowest rates each fall by a tenth of a point, the first from 3.9% to 3.8%, and in 2033 the top rate returns to 8.82%. Above $107,650 of New York income, the benefit of the lower brackets is gradually taken back. Social Security and government pensions are exempt, and from 59½ each person can exclude up to $20,000 of private pensions, IRA withdrawals and Roth conversions. New York City and Yonkers residents pay the local tax too, when you select it.

Figures from: tax year 2026

What the app simplifies: The $20,000 exclusion is pooled between spouses who are both 59½ or older, and New York City's household and school tax credits are not modeled.

Official sources:

Illinois

Illinois taxes income at a flat 4.95% after an exemption of $2,925 per person, plus $1,000 for each person 65 or older; the exemption disappears above $250,000 of federal income ($500,000 joint). Social Security, pensions, IRA and 401(k) withdrawals and Roth conversions are all exempt, at any age.

Figures from: tax year 2026

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Colorado

Colorado taxes federal taxable income at a flat 4.4%. From 65 all Social Security is subtracted, and from 55 to 64 it is subtracted in full when income is under the state's limit. Pensions, IRA withdrawals and conversions from 59½, and Social Security, share one subtraction of $20,000 per person from 55 ($24,000 from 65), and military retirees under 55 can subtract up to $15,000.

Figures from: tax year 2026

What the app simplifies: One-year rate cuts that Colorado makes when it collects a surplus are not projected, and a joint return's Social Security is split evenly between spouses.

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Pennsylvania

Pennsylvania taxes income at a flat 3.07%, with no standard deduction or exemption. Social Security and pensions are exempt, as are IRA and 401(k) withdrawals from 59½, and a Roth conversion is not taxed at any age. Your own 401(k) contributions while working are taxed as wages, because Pennsylvania does not exclude them.

Figures from: tax year 2026

What the app simplifies: An early withdrawal is taxed in full, where Pennsylvania taxes only the part above your own contributions.

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Virginia

Virginia taxes income in brackets from 2% to 5.75% after a $8,750 standard deduction ($17,500 joint) and personal exemptions. Social Security is exempt. From 65 each person gets a $12,000 age deduction, reduced dollar for dollar as income other than Social Security passes $50,000 single or $75,000 married, and up to $40,000 of military retirement pay per person is subtracted.

Figures from: tax year 2026

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Washington

Washington taxes long-term capital gains at 7% above a standard deduction of $278,000 that grows with inflation, plus 2.9% more on the part over $1,000,000; a married couple shares one deduction. Dividends, and gains inside 401(k)s and IRAs, are not taxed. From 2028 Washington also taxes income over $1,000,000 at 9.9%, one deduction per household, counting wages, pensions, IRA withdrawals and Social Security, and counting capital gains only above their own deduction. The capital gains tax is credited against the income tax, so a household pays whichever of the two is larger. Choose Washington as your state income tax jurisdiction to include both; the no-income-tax choice leaves them out.

Figures from: The 2025 capital gains deduction, the latest Washington has published

What the app simplifies: Every realized gain is treated as long-term, and the charitable deductions are not modeled. The income tax's $1,000,000 deduction stays fixed through 2029 and then rises by one year of inflation every second year, as the law is written.

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Planning assumptions

Investment fees

Every return in the plan is before fees. Each year, after the year's return, the plan takes your fund expenses and any advisor fee off your Pre-Tax, Roth, Taxable and HSA balances, so a year grows by the return times one minus the fee. The default is 0.10% for fund expenses, about what a portfolio of broad index funds costs, and no advisor fee. The fees are not deductible, and the same fees apply to an heir's inherited accounts. Risk → What fees cost you shows your plan beside the same plan with a 1% advisor fee (or without the one you pay).

Figures from: Your own figures; not deductible under current law

What the app simplifies: Fees come off once a year at year end, not daily. A fund's expense ratio also lowers what it pays out, so the taxable account's dividends are slightly overstated, which errs toward more tax. The cash reserve, the home and a concentrated stock position pay no fee.

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Social Security trust fund stress test

An optional stress test cuts every Social Security benefit from a chosen year onward, to show what happens if the trust fund runs out before Congress acts. Its defaults, a 22% cut from 2032, come from the Trustees' latest projection that the retirement trust fund is depleted in 2032 and that income then pays 78% of scheduled benefits. It is off unless you turn it on.

Figures from: 2026 Trustees Report

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Try the demo plan to see all of this on a fictional household, or read the release notes for what changed recently.