Retirement Planning Spreadsheet vs Software

What a spreadsheet is genuinely better at

Let us start where the spreadsheet wins, because it does.

• Total transparency. Every number traces to a formula you can click into. No projection tool, ours included, is as inspectable as a sheet you wrote.
• Total flexibility. A rental property with a weird depreciation schedule, an inheritance with conditions, a business sale in year seven — you can model anything you are willing to build.
• No account, no subscription, no vendor. The file is yours, forever, in a format that will still open in twenty years.
• You learn the mechanics. Building the model teaches you more about your own finances than using anyone's software will.

If your situation is a straightforward "save this much, retire at 67, spend that much", a spreadsheet is a perfectly respectable answer and you should not let anyone sell you out of it.

What you actually have to build

The trouble starts when the question stops being "how big will the balance be" and starts being "how much of it can I spend after tax". Here is the machinery that sits between those two questions.

The failure mode nobody warns you about

It is not a broken formula. It is the single "expected return" cell.

A spreadsheet that grows the portfolio by 6% every year produces a smooth, reassuring curve — and quietly assumes away the risk that actually ends retirements. Two retirees with identical average returns can end up in completely different places depending on whether the bad years came first or last, because withdrawals during a downturn sell more shares to raise the same dollars. That is sequence of returns risk, and averaging makes it invisible.

Modelling it properly means either a Monte Carlo simulation across thousands of randomised paths or a replay of real historical sequences. Both are buildable in a spreadsheet. Neither is a weekend.

When a spreadsheet is still the right answer

• Your plan is straightforward and you mainly want to see the balance grow.
• You have an unusual asset or arrangement no general-purpose tool models, and it dominates the plan.
• You want to learn the mechanics, in which case building it yourself is the best possible exercise.
• You already have a model you trust and maintain, and it answers the questions you actually ask.

When to stop maintaining it

• You are trying to decide on Roth conversions, and the answer depends on brackets, IRMAA and future RMDs interacting.
• You are retiring before Medicare and need to model premiums and the subsidy cliff.
• You want a probability rather than a point estimate.
• You have caught yourself not updating the bracket tab for two years — this is the most common one, and the most dangerous, because the model still looks right.

The same list, already built

Take the table above — the one listing what you would have to construct yourself — and read it back as a list of things that already exist. That is the entire pitch, and it is worth being concrete about the rows that cost a spreadsheet-builder the most weekends.

• Progressive federal brackets, as data. The bracket table is a dated, versioned file shipped with the app rather than a set of nested IFs or a lookup range you have to re-key every year. The 2026 file carries all seven ordinary brackets for single and married-filing-jointly plus the standard deduction. Correcting it does not mean auditing formulas.
• State income tax for all 50 states and DC, at three declared levels of fidelity — 28 states plus DC with full bracket tables, nine with no income tax, 13 at a single flat rate — and the app tells you which one it is applying to you. Almost nobody builds this into a spreadsheet; almost everybody assumes a flat percentage and moves on.
• Social Security taxation via provisional income. The circularity that makes this genuinely hard in a spreadsheet — withdrawals raise provisional income, which makes more of the benefit taxable, which raises the withdrawal needed to hit your target spending — is resolved by the engine, not left as a circular-reference warning you switched iterative calculation on to silence.
• RMDs on the IRS Uniform Lifetime Table with SECURE 2.0 start ages, applied per person, so a couple's two schedules do not have to be maintained as two parallel columns.
• Medicare Part B and Part D with IRMAA on the two-year MAGI lookback — the row that most hand-built models omit entirely, and the reason a Roth conversion at 63 produces a surprise at 65.
• Withdrawal order and tax lots as a comparison, not an assumption. Cash, taxable, traditional, Roth and HSA are five separate ledgers; four named drawdown orders can be run against each other; taxable sales use real FIFO / LIFO / HIFO / lowest-tax-first lot selection.
• Sequence-of-returns risk, done properly. A seeded Monte Carlo of up to 5,000 trials, plus a backtest against every rolling window of real annual US market returns and CPI-U inflation from 1928 to 2024. A single average-return cell — the standard spreadsheet approach — cannot express this at all.

Free, with no account, and your plan stays on your device — see how the no-sign-up model works. You can download a full copy of the plan at any time, which is the spreadsheet property people are most reluctant to give up: the file is yours, it is not held in an account, and nothing stops working if we do.

Keep the spreadsheet if…

Software is not automatically the upgrade, and a page arguing otherwise from a software vendor deserves suspicion. These are the cases where the spreadsheet genuinely wins, and none of them are things we intend to change.

• Your situation does not fit anyone's data model. This is the spreadsheet's permanent, structural advantage and it is the honest reason to keep one. A blank grid will model an earn-out on a business sale, a per-unit-financed property portfolio, an unusual equity-compensation schedule or a cross-border pension. Planomy models accounts, income streams, expenses, life events, goals and scenarios — and if what you need is not expressible in those, no amount of engine quality helps.
• You want to see and change every formula. Auditability is a real requirement, not a quirk. In a spreadsheet you can click a cell and read the arithmetic. In a planner you get the assumptions, the inputs and the year-by-year output, but the bracket interpolation is not something you can step through. If you will not trust a number you cannot trace, keep building.
• You enjoy it. Not a joke. Building the model is how a lot of people come to actually understand their own retirement, and that understanding is worth more than the output. If the spreadsheet is the thinking rather than a chore, do not outsource the thinking.
• You are planning outside the US. Here the spreadsheet is not merely competitive, it is the better tool. Planomy's engine is US-only — federal brackets, state income tax, Social Security, Medicare, IRMAA, RMDs — and a US planner given a non-US situation returns a confident wrong answer rather than an error. Your own model at least encodes your own tax system.
• You want a person, or live balances. Two things neither option on this page provides: Planomy sells no advice and has no advisers attached to it, and it has no market-price or holdings feed. Balances are typed, or imported from a Plaid connection on Plus — exactly as in your spreadsheet.

The pragmatic answer: use both

Nothing forces a choice. Keep the spreadsheet for the parts you like owning — a property model, a business sale, a bespoke income stream — and let software carry the tax code, the RMD tables and the simulations. Feed the spreadsheet's outputs in as inputs. That is how a lot of careful planners actually work, and it beats either purist position.

If you want to see the difference immediately, take the retirement year your spreadsheet currently says is safe and run it through the planner with the same balances. If the answer moves, the gap is almost always tax or sequence risk — the two things a hand-built model is most likely to be missing.

Frequently asked questions

Is a retirement planning spreadsheet good enough?

For a straightforward plan, often yes — a spreadsheet is transparent, flexible and free. It stops being enough when the answer depends on progressive tax brackets, the taxation of Social Security, RMDs, Medicare IRMAA surcharges and sequence-of-returns risk interacting with each other, because all of those have to be built and then maintained by hand.

What is the biggest mistake in DIY retirement spreadsheets?

Using one flat average return for every year. It produces a smooth curve that hides sequence-of-returns risk — the fact that a bad decade at the start of retirement does far more damage than the same decade at the end, because withdrawals during a downturn sell more shares. Modelling it needs Monte Carlo or historical sequences, not an average.

Can a spreadsheet handle Roth conversion planning?

Only with a lot of work. A useful conversion model needs the full bracket table, the provisional-income formula that decides how much of your Social Security is taxable, projected RMDs, and IRMAA's two-year lookback — because a conversion today can raise a Medicare premium two years later. Each is buildable; getting them to interact correctly and stay current is the hard part.

Do I have to give up my spreadsheet to use planning software?

No, and many careful planners keep both. Use the spreadsheet for anything bespoke that no general tool models — a property, a business sale, an unusual income stream — and let software carry the tax code, the IRS tables and the simulations. Feed one's outputs in as the other's inputs.

Is there free retirement planning software, or do I have to pay?

There is free software. Planomy's full planner is free with no account and stores your plan on your device; several brokerages offer free planners tied to accounts you hold with them; and some subscription products have free tiers. Check how each is funded, because that shapes what the free version is designed to do.

Related reading

• Sequence of returns risk — the thing an average return hides.
• What is a safe withdrawal rate? — the number most spreadsheets hard-code.
• Best retirement planning software — the rest of the category.
• Compound Growth Calculator — the part a spreadsheet does well, without the spreadsheet.
• Planomy pricing — what is free, what a free account adds, and what Plus costs.
• All free calculators — 35+ single-question tools, no account.
• All guides — the strategy behind the numbers.