Methodology
This is the technical reference for how SmartRetireCalc calculations work — the formulas, data sources, and assumptions behind every projection. It is documented and open to scrutiny. For a plainer-language walkthrough, see How it works.
How SmartRetireCalc models retirement
The core retirement projection is a deterministic year-by-year model. Starting from your current accounts, it steps through each year and tracks each account type separately, applying investment growth, your inflation-adjusted spending, retirement income (Social Security, pensions, annuities), estimated federal taxes and Medicare costs, and required minimum distributions. Each year’s ending balances carry forward to the next. The output is a single deterministic funding outcome for the modeled assumptions — not a probability of success — shown across three return scenarios.
Core modeling principles
- Deterministic and reproducible — the same inputs always produce the same year-by-year output.
- Published official values where available — latest IRS / CMS / SSA schedules are used directly.
- Forward-year assumptions are disclosed — future statutory values that don't exist yet are projected and labeled.
- Account types modeled separately — so withdrawal order and tax treatment stay correct.
- Estimates, not advice — for educational planning, not a substitute for a financial planner or CPA.
- U.S.-focused today — federal rules only; state taxes are not modeled.
Official values vs. projected assumptions
Some inputs are published government figures. Others are estimates the engine derives for years the government has not yet set.
Official 2026 Official values
Where a published IRS, CMS, or SSA schedule exists, the engine uses it directly. The latest official year currently wired in is 2026: federal tax brackets, the standard deduction, the age-65 additional deduction, and the Medicare IRMAA schedule (MAGI thresholds and Part B/D surcharge dollars).
Projected assumption Projected assumptions
For calendar-anchored years after the latest official table, the engine projects statutory dollar values rather than freezing them at nominal 2026 amounts:
- Federal brackets and deductions — inflation-based forward projection using the scenario inflation assumption and the statutory $50 rounding convention. Tax rates are unchanged. (Taxes)
- IRMAA MAGI thresholds — projected under the statutory CPI-based framework, with the plan inflation assumption used as the planning proxy for CPI. (Medicare & IRMAA)
- IRMAA surcharge dollars — projected on a separate 5.5% annual Medicare cost-growth planning assumption, independent of the scenario inflation assumption. This is not statutory indexing.
Actual future tax and Medicare figures are established by the government annually, and projected values are planning estimates. A projection with no anchoring calendar year keeps the frozen official 2026 schedule for every year.
Methodology topics
Anchored reference
The sections below preserve the anchors used by existing links and bookmarks. Topics that now have a dedicated page show a summary and a link; the rest carry their full detail inline.
Projection Engine
The deterministic year-by-year loop: starting balance, blended investment return, inflation-adjusted withdrawals in tax-efficiency order, estimated taxes, RMD compliance, and how a funding shortfall differs from portfolio depletion.
Read the full Projection Engine methodology →Inflation
Living expenses grow with your inflation assumption (default 3.0%). Social Security is modeled with a COLA proxy tied to the base inflation rate; the temporary inflation-spike stress test raises spending only.
Read the full Inflation methodology →Social Security Bridge
The Bridge Calculator compares claiming Early, at Full Retirement Age, and at 70 by simulating your savings through the bridge years and picking the highest total lifetime wealth. A simplified Phase 1 model — flat effective tax rate, no IRMAA or RMDs.
Read the full Social Security Bridge methodology →RMDs
Required Minimum Distributions begin at age 72, 73, or 75 depending on birth year (SECURE 2.0), computed as the prior year-end pre-tax balance ÷ the IRS Uniform Lifetime Table divisor. Roth accounts are exempt. In the projection the RMD is forced out before any Roth conversion and counts as ordinary income.
Read the full RMDs methodology →Accounts
Every account you enter is collapsed into a small set of tax buckets — pre-tax, Roth, taxable, savings, and non-deductible IRA — plus net-worth-only real assets, loans, and annuity accounts. The bucket determines growth, the fixed withdrawal order (savings → taxable → non-deductible IRA → pre-tax → Roth), and tax treatment. Only pre-tax balances are split by owner, for per-spouse RMDs.
Read the full Accounts methodology →Backtesting
Portfolio Lab is a separate engine that replays actual historical price and dividend data month by month — a deterministic historical replay, not a forecast or Monte Carlo. It supports buy-and-hold or periodic rebalancing, reports calendar-year and 3/5/10/15/20-year trailing returns and rolling 12-month windows, models no taxes, fees, or withdrawals, and never changes the retirement projection.
Read the full Backtesting methodology →Pensions & Annuities
In the main projection, each pension or annuity account is its own guaranteed-income stream — its own start age, its own all-or-nothing inflation COLA, and its own taxable portion (100% by default) — and the active streams offset spending each year. The standalone Annuity Income Calculator (SPIA / DIA / QLAC) and the Pension vs Lump Sum Calculator are separate tools and do not feed the retirement projection.
Read the full Pensions & Annuities methodology →Safe Withdrawal Rate
A deliberately simpler model than the main projection: one fixed withdrawal rate, one fixed nominal return, one fixed inflation rate, no taxes or other income. Each year the inflation-adjusted withdrawal is taken first, then growth is applied to what’s left. Shows a six-rate comparison and seven deterministic stress scenarios — not a probability of success.
Read the full Safe Withdrawal Rate methodology →Taxes
A progressive federal bracket model with the standard deduction, the age-65 additional deduction, and the temporary senior deduction (2025–2028, then $0). For calendar-anchored years after 2026 the bracket edges and deductions are inflation-projected; rates and the fixed §86 / NIIT thresholds are not.
Read the full Taxes methodology →Medicare & IRMAA
Income-related Part B and Part D surcharges on a two-year lookback, using the official 2026 schedule. Future MAGI thresholds are projected on the statutory CPI-based framework; future surcharge dollars are projected on a separate 5.5% Medicare cost-growth planning assumption (not CPI indexing). The top tier is “$500,000 and above” ($750,000 MFJ).
Read the full Medicare & IRMAA methodology →Roth Conversions
Fixed, Fill-to-Bracket, and Fill-to-IRMAA strategies. The solved strategies fit the year’s final taxable income (or modeled Medicare MAGI) under a ceiling taken from that row’s tax-year and IRMAA policy — including F1C/F1D projected future values. Conversion taxes are funded from primary pre-tax, then Roth.
Read the full Roth Conversions methodology →Scenario modeling
Every calculation shows three parallel projections (Average, Below Average −1%, Significantly Below Average −2%). The Scenarios hub and Scenario Comparison tool add pre-configured and custom deep-dives.
Read the full Scenario modeling methodology →Sources & transparency
Official figures come from published IRS Revenue Procedures, CMS annual announcements, SSA tables, and the U.S. Code. Each topic page lists the specific sources it relies on. Where the engine projects a future statutory value, the projection method and its basis are stated on the relevant topic page rather than left implicit.
Limitations
An implementation-grounded map of what SmartRetireCalc does not model and where it is deliberately simplified: the deterministic main projection (no Monte Carlo, no fees), taxable-account taxation, the fixed withdrawal order, pension/annuity COLA and survivor handling, Social Security scope, which calculators are standalone, backtesting and risk analytics boundaries, and the few known implementation issues.
Read the full Limitations methodology →Questions about the methodology? Contact us. · About SmartRetireCalc. · Disclaimer
Social Security
You enter your benefit in today’s dollars for your chosen claiming age; the projection indexes it forward at the plan inflation rate and adds no further claiming-age adjustment. The Social Security calculators apply the SSA claiming-age rules (FRA by birth year, early-claim reduction, 8%/yr delayed credit to 70).
Read the full Social Security methodology →