Accounts

How SmartRetireCalc groups your accounts into tax buckets, how each bucket grows, the order money is withdrawn, and how the account a dollar sits in changes its tax, RMD, and Roth-conversion treatment.

Overview

The projection does not track individual accounts through retirement. When a projection runs, every account you entered is collapsed into a small set of tax buckets, and the year-by-year model works on those bucket balances. The bucket a dollar lands in determines how it grows, when it can be withdrawn, and how it is taxed. This page describes those buckets and how the Projection Engine uses them.

Account types SmartRetireCalc models

Five buckets carry balances forward through the projection:

Three further account categories affect net worth but are never withdrawn from to fund spending: real assets (home, car, boat), loans, and annuity accounts. They are covered in Net-worth-only accounts below.

Ownership: you and a spouse

Each account you enter has an owner (you, your spouse, or joint). The projection uses that owner information in exactly one place: pre-tax balances are split into your pre-tax bucket and a separate spouse pre-tax bucket, so each person’s Required Minimum Distributions can be resolved on their own birth cohort and start age.

Roth, taxable, savings, and non-deductible IRA balances are aggregated across all owners into one bucket each — the model does not track whose Roth IRA or whose brokerage account a dollar came from. Real assets have no owner field. The engine does not model community-property rules, per-spouse contribution eligibility, or account-titling effects beyond the pre-tax RMD split.

Contributions

If you enter ongoing contributions, the model adds them each year until that person reaches their retirement age, then stops. Contributions can be set for you and a spouse separately, into three destinations each — pre-tax, Roth, and taxable — plus a flat annual employer amount (added to the pre-tax bucket, or Roth if specified).

The entered amounts grow with the plan inflation assumption each year, so a “$20,000/yr” contribution keeps pace in real terms rather than shrinking.

How balances are projected

Each investment bucket has its own stock/bond mix, and each year it grows by the blended return for that mix (pre-tax and Roth default to 80% equity; the taxable brokerage bucket defaults to 100% equity; the non-deductible IRA bucket defaults to 80%). The spouse pre-tax bucket uses the same mix as your pre-tax bucket. The savings bucket is different: it grows at a single flat savings rate and is never exposed to the stock/bond return or to a modeled market crash.

Within each projection year the order is: forced distributions and the Roth-conversion decision, then the spending withdrawal waterfall, then the tax bill, then that year’s contributions, and finally growth on the closing balance. Because growth is applied last, a Required Minimum Distribution is effectively calculated on the prior year-end balance. See Projection Engine for the full annual order of operations and Assumptions for how the return and inflation figures are set.

Withdrawal order

When planned spending (plus any loan payments) is not covered by Social Security, pension, and annuity income, the shortfall is drawn from the buckets in a fixed tax-efficiency order:

1. Guaranteed income — Social Security, pension, and annuity payments are applied first and reduce the amount that has to come from accounts.
2. Required Minimum Distributions — any RMD is forced out of the pre-tax buckets and counted toward the spending need before discretionary withdrawals begin.
3. Savings / cash
4. Taxable brokerage
5. Non-deductible Traditional IRA
6. Your pre-tax, then spouse pre-tax
7. Roth — used last

This order is not user-configurable. The federal tax and IRMAA bill the withdrawals generate is funded separately: from any guaranteed-income surplus for the year first (Social Security + pension/annuity beyond spending and loan payments), then from your primary pre-tax bucket, then from Roth — with the pre-tax funding withdrawal itself grossed up because it is also taxable (see Taxes). If the buckets cannot cover the full spending need, the projection records a funding shortfall rather than going negative — see Projection Engine.

Tax treatment by bucket

• Pre-tax and spouse pre-tax withdrawals — fully taxable as ordinary income in the year taken, along with RMDs and Roth conversions from these buckets.
• Roth withdrawals — treated as qualified and entirely tax-free. The model does not check the age-59½ or five-year rules.
• Savings withdrawals — not taxed (the principal is already-taxed cash); only the interest it earns each year is not separately taxed either, which slightly overstates savings growth.
• Taxable brokerage withdrawals — not taxed in the projection at all. SmartRetireCalc does not track cost basis, does not distinguish principal from gain, and does not model realized capital gains, the preferential long-term capital-gains rates, qualified dividends, or an annual dividend/interest tax drag on this bucket. Treat the taxable-brokerage result as an upper bound; a real brokerage account would owe some tax on gains and distributions.
• Non-deductible Traditional IRA withdrawals — only the portion above your after-tax basis is ordinary income, applied pro-rata:

Social Security is taxed under its own provisional-income rules, and pension/annuity income is ordinary income by default. See Taxes for the bracket model and Social Security for benefit taxation.

Required Minimum Distributions

RMDs apply to the pre-tax and spouse pre-tax buckets only. Roth balances are never subject to lifetime RMDs in the model, and the non-deductible IRA bucket is not driven by the RMD rule in the projection. Each spouse’s RMD is resolved on their own birth cohort. If a forced distribution is larger than that year’s spending need, the surplus is modeled as reinvested into the taxable brokerage bucket (it left the tax-deferred account and was taxed). Full detail — start ages, the Uniform Lifetime Table divisor, and sequencing — is on the RMDs page.

Roth conversions

A modeled Roth conversion moves dollars from your primary pre-tax bucket into the Roth bucket. The full converted amount is added to that year’s ordinary income, and the conversion is capped at the available primary pre-tax balance — it cannot convert the spouse pre-tax bucket or the non-deductible IRA. The tax on the conversion is funded from the primary pre-tax bucket, then Roth. Any RMD for the year is forced out first and cannot be satisfied by a conversion. The conversion strategies (Fixed, Fill-to-Bracket, Fill-to-IRMAA) are described on the Roth Conversions page.

Net-worth-only accounts

These accounts appear in the net-worth total but are never sold or drawn down to fund retirement spending:

• Real assets (home, car, boat) — carried at the value you entered, held constant for the whole projection. No appreciation, depreciation, or sale event is modeled.
• Loans — shown as a liability. The monthly payment × 12 is added to the annual spending need. Payoff is not tracked automatically; exclude or delete a loan once it is paid off so its payments stop.
• Annuity accounts — carry an asset value for net worth and an annual income amount that begins at a start age and offsets the spending need. The payment is taxable ordinary income by default (correct for an employer pension or a pre-tax-funded annuity); for a non-qualified annuity you can enter a smaller taxable amount. The deeper annuity payout math lives in the Guaranteed Income Annuity Calculator.

Every account — of any type — can be individually excluded from the calculation without being deleted. An excluded account contributes nothing to any bucket, net-worth total, annuity income, or loan payment, and can be re-included later.

How accounts appear in results

Each projection year reports:

• End-of-year balances: pre-tax (your bucket and the spouse bucket combined into one figure), Roth, taxable, savings, and non-deductible IRA.
• A spending-source breakdown — how much of that year’s spending came from pre-tax, Roth, taxable, savings, and the non-deductible IRA.
• The amount converted to Roth, the RMD taken, taxable ordinary income, the taxable portion of Social Security, and full net worth including real assets and loans.

Important modeling notes

• Accounts are modeled as aggregate bucket balances, not individually — per-account performance, fees, and allocation drift are not tracked.
• The taxable brokerage bucket has no cost-basis, capital-gains, dividend, or NIIT modeling; the savings bucket’s interest is untaxed.
• Early-withdrawal penalties, 72(t) schedules, inherited/beneficiary IRAs, HSAs, 529s, and Qualified Charitable Distributions are not modeled.
• The withdrawal order is fixed and cannot be reordered per scenario.

Official sources

• IRS Publication 590-B — Traditional/Roth IRA distributions and the Form 8606 basis pro-rata rule
• IRS Publication 575 — pension and annuity income taxation (the fully-taxable default)
• IRS Publication 590-A — IRA contribution limits and eligibility (noted as not enforced by the model)