How calculations work

SmartRetireCalc runs a simple year-by-year projection from your Current Age to End Age. Each year we apply income, spending, taxes, conversions, withdrawals, and then apply growth.

1) Timeline

• We loop from Current Age → End Age.
• Returns use pre-retirement assumptions before Retirement Age and post-retirement after.

2) Spending and inflation

• You enter spending “today”.
• Each future year spending increases by Inflation rate.

3) Social Security

• Social Security starts at your entered SS start age.
• In the MVP, SS is treated as ordinary income for tax estimation (simplified).
• Future enhancements may model partial SS taxation and COLA more precisely.

4) Roth conversions

If enabled, we convert money from Pretax → Roth each year:

• None: no conversion.
• Fixed amount: convert the same amount each year (capped by available pretax balance).
• Fill-to-bracket: convert enough to fill taxable income up to a chosen bracket top (simplified model).

5) Withdrawals (to fund spending)

To fund spending shortfall after SS, the MVP withdrawal order is:

1. Taxable
2. Pretax (includes estimating incremental tax impact)
3. Roth

6) Taxes

• The MVP uses simplified federal ordinary brackets + a placeholder standard deduction.
• Only ordinary-income style tax is modeled (no detailed capital gains yet).

7) RMDs

• If enabled, RMD logic forces minimum pretax withdrawals starting at an RMD age (or override).
• Those withdrawals increase taxable income (ordinary income in this simplified model).

8) What the chart shows

• X-axis = age
• Y-axis = Total end-of-year balance (Pretax + Roth + Taxable)

9) Tests and verification

We maintain unit tests to ensure the engine returns a stable year list and that major strategies behave as expected (e.g., fill-to-bracket converts when room exists). Exact results depend on assumptions and simplified tax rules.

Please read the Disclaimer.