# Planomy — full text

> Complete readable text of every public Planomy guide and calculator page, in
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>
> Planomy is a free, local-first US retirement and personal-finance planner.
> Educational planning software, not financial, tax or investment advice.
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# Guides

## 401(k) Rollover Options: Compare All 4 When You Quit
URL: https://planomy.net/guides/401k-rollover-options
Summary: Leave it, roll to an IRA, move it to a new 401(k), or cash out — what each really costs, plus the 60-day and 20%-withholding traps that cost people thousands.

Job change

### 401(k) Rollover Options When You Leave a Job

When you change jobs, your old 401(k) doesn't have to move — but
you have four choices, and picking the wrong one (or handling the
paperwork carelessly) can cost you thousands in taxes and
penalties. Here's how to decide.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- You have four options for an old 401(k): leave it, roll it into an IRA, roll it into your new employer's 401(k), or cash it out.

- A direct rollover (money moves trustee-to-trustee) avoids all tax withholding; an indirect rollover triggers a mandatory 20% withholding and a 60-day deadline.

- Cashing out is almost always the worst choice — you owe income tax plus, if under 59½, a 10% early-withdrawal penalty, and you lose decades of tax-deferred growth.

- An IRA gives you the widest investment menu; a new 401(k) keeps things consolidated, may allow loans, and preserves a clean path for a backdoor Roth.

- Match Roth-to-Roth and pre-tax-to-pre-tax to avoid an accidental taxable conversion.

#### Your four options at a glance

When you leave an employer, the money in your 401(k) is yours —
at least the part that's vested. Your own deferrals always are;
employer money may still be sitting on a cliff or graded schedule,
so check where you stand before you set a leaving date. The
schedules, and what forfeits, are covered in
how to calculate your 401(k) employer match.
What happens next is up to you.
Every path leads to one of four destinations, and the right one
depends on your investment preferences, whether you might do a
backdoor Roth, and how much you value simplicity.

A high-level comparison. "Best for" is a starting point, not a rule.

| Option
| Tax hit now?
| Best for

| Leave it in the old plan
| None
| Great, low-cost plan; balance above the force-out limit

| Roll into an IRA
| None (direct)
| Wide investment choice, consolidation, low fees

| Roll into a new 401(k)
| None (direct)
| Simplicity, loan access, keeping a clean backdoor-Roth path

| Cash out
| Income tax + 10% penalty if under 59½
| Almost no one — true emergencies only

#### Option 1 — Leave it where it is

If your old employer's plan is good — low-cost index funds, maybe
access to a stable-value fund or an institutional share class you
can't get elsewhere — there's often nothing wrong with leaving the
money put. Your investments keep growing tax-deferred and nothing
is taxed.

Two catches. First, small balances can be forced out:
plans can automatically cash out or roll over balances below a
threshold (commonly $7,000) after you leave, so a small account may
not be able to stay. Second, it's easy to forget an old
account across several job changes, leaving your portfolio
scattered and hard to rebalance. If you're the type to lose track,
consolidation is worth something.

#### Option 2 — Roll it into an IRA

Rolling your old 401(k) into a traditional IRA is the most popular
choice, and for good reason: an IRA at a major brokerage gives you
a nearly unlimited investment menu and often lower fees than a
workplace plan. You keep full control, and you can consolidate
several old 401(k)s into one place.

Match the tax character: roll pre-tax 401(k) money
into a traditional IRA, and Roth 401(k)
money into a Roth IRA. A useful side benefit of
moving Roth 401(k) money to a Roth IRA is that Roth IRAs have
no required minimum distributions during your lifetime,
while Roth 401(k)s historically did.

The one big downside: putting pre-tax money into a
traditional IRA can block a clean backdoor Roth. Thanks to
the pro-rata rule, a large pre-tax IRA balance makes future
backdoor Roth conversions partly taxable. If you're a high earner
who uses — or might use — the
backdoor Roth IRA, rolling
into your new 401(k) instead keeps that door open.

#### Option 3 — Roll it into your new employer's 401(k)

If your new job offers a solid 401(k) that accepts incoming
rollovers, moving the old balance in keeps everything under one
roof. Advantages over an IRA:

- Simplicity — one account, one login, one rebalancing decision.

- Loan access — 401(k)s can allow loans; IRAs cannot.

- Backdoor Roth stays clean — 401(k) balances are invisible to the IRA pro-rata rule.

- Stronger creditor protection in some states, and the ability to delay RMDs on that money if you keep working past the RMD age at that employer.

The trade-off is a narrower investment menu and potentially higher
fees than a self-directed IRA. Compare the expense ratios before
deciding.

#### Option 4 — Cash out (usually a mistake)

Taking the money as cash is the most expensive option by far. A
cash-out is treated as a taxable distribution: you owe ordinary
income tax on the whole amount, and if you're under 59½ you
generally owe an additional 10% early-withdrawal penalty.
On top of that, the plan withholds 20% for federal taxes up front,
and you permanently lose the tax-deferred compounding that money
could have earned for decades.

Illustrative cash-out of a $50,000 pre-tax 401(k), age 40, 22% federal bracket. State tax not shown.

| Line item
| Amount

| Gross balance
| $50,000

| Federal income tax (22%)
| −$11,000

| Early-withdrawal penalty (10%)
| −$5,000

| Roughly what you keep
| ≈ $34,000

Losing roughly a third off the top is bad enough; the bigger cost
is invisible. At a 7% return, that $50,000 left invested could grow
to well over $200,000 in 25 years — see it for yourself in the
compound growth calculator.
Cashing out should be reserved for genuine emergencies with no
other option.

See both paths in your own numbers. The real cost of cashing
out is not the tax bill — it is the decades of growth that balance would have
had. Open the free planner to project
your accounts year by year, with taxes and Social Security included, and
compare keeping the money invested against taking it out.

#### Direct vs indirect rollover — get this right

How you move the money matters as much as where it goes.

##### Direct rollover (do this)

In a direct rollover, the money goes straight from the old plan to
the new account — often as a check made out to the new custodian
"for benefit of" you, or by wire. You never take possession of the
funds, so there's no withholding and no 60-day clock.
This is the clean, safe way.

##### Indirect rollover (be careful)

In an indirect rollover, the plan sends the money to you.
Two traps spring immediately: the plan must withhold
20% for federal taxes, and you have
60 days to deposit the full amount — including the
withheld 20%, which you must cover out of pocket — into the new
account. Miss the deadline or fail to replace the withheld portion,
and that shortfall becomes a taxable distribution with a possible
penalty. You're also limited to one indirect IRA-to-IRA rollover
per 12 months. Whenever possible, avoid indirect rollovers entirely.

Special case — company stock (NUA). If your 401(k)
holds appreciated shares of your employer's stock, rolling it all to
an IRA may forfeit a tax break called net unrealized appreciation,
which can let you pay lower long-term capital-gains rates on the
growth. If you hold a lot of employer stock, get advice before you
roll.

#### A simple decision path

- Is the old plan excellent and the balance large enough to stay? Leaving it is fine.

- Do you (or might you) use the backdoor Roth, or value simplicity and loan access? Lean toward the new 401(k).

- Want the widest investment choice and lowest fees, and don't need a clean backdoor path? Roll to an IRA.

- Always use a direct rollover, and never cash out unless it's a true emergency.

Whichever path you choose, it's a good moment to revisit how much
you're saving overall — the 401(k) contribution calculator
shows how your new plan's match and contribution rate shape your
long-run balance, and our guide on
401(k) vs IRA vs Roth vs HSA
covers where each future dollar should go.

#### Frequently asked questions

##### How long do I have to roll over a 401(k)?

A direct rollover has no deadline — you can move an old 401(k)
whenever you like. An indirect rollover, where the check comes
to you, must be redeposited within 60 days or it becomes a
taxable distribution.

##### Will a rollover trigger taxes?

A direct rollover of pre-tax 401(k) money to a traditional IRA
or new 401(k) is not taxable. Taxes only arise if you cash out,
miss the 60-day window on an indirect rollover, or convert
pre-tax money to Roth.

##### Can I roll a 401(k) into a Roth IRA?

Yes, but rolling pre-tax 401(k) money into a Roth IRA is a
conversion — you'll owe income tax on the amount in that year.
Roth 401(k) money rolls into a Roth IRA tax-free.

##### What happens to my 401(k) if I do nothing?

Usually it stays invested in the old plan. But balances under a
plan's force-out limit (often $7,000) can be automatically
rolled to an IRA or cashed out, so very small accounts may not
be left alone.

##### Should I roll over if I have employer stock in my 401(k)?

Be careful. Appreciated employer stock may qualify for net
unrealized appreciation treatment, which can lower your tax on
the gains. Rolling everything to an IRA can forfeit it — get
advice first.

#### Put a number on it

- Compound Growth Calculator — the real cost of cashing out vs staying invested.

- 401(k) Contribution Calculator — how your new plan's match shapes your balance.

- The Backdoor Roth IRA — why a pre-tax IRA rollover can get in the way.

- 401(k) vs IRA vs Roth vs HSA — where each new dollar should go.

#### See your accounts as one plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## 401(k) Withdrawal Taxes 2026: Rates and Penalties
URL: https://planomy.net/guides/401k-withdrawal-taxes
Summary: How 401(k), 403(b), and 457(b) withdrawals are taxed: ordinary income rates, the 10% early penalty and its exceptions, and why 20% withholding is not your bill.

Retirement taxes

### How 401(k) Withdrawals Are Taxed (2026)

Every dollar you pull from a traditional 401(k), 403(b), or 457(b)
is taxed as ordinary income — and before 59½ most withdrawals get
a 10% penalty on top. Here's exactly how the tax is figured, the
exceptions that erase the penalty, and why the 20% withholding on
your distribution check is not your actual tax bill.

Updated July 17, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Traditional 401(k), 403(b), and 457(b) withdrawals are taxed as ordinary income at your federal bracket, plus state income tax in most states.

- Before age 59½, most withdrawals also owe a 10% federal early-withdrawal penalty — but the rule of 55, disability, SEPP payments, and a dozen other exceptions can erase it.

- Governmental 457(b) plans are the exception: once you separate from your employer, withdrawals at any age skip the 10% penalty.

- The 20% withheld from a distribution check is a prepayment, not the tax — your real rate can be higher or lower, settled at filing.

- A direct rollover to an IRA or new plan avoids tax, withholding, and penalty entirely.

#### Withdrawals are ordinary income, not capital gains

Money in a traditional 401(k), 403(b), or 457(b) has never been
taxed — contributions went in pre-tax and growth was deferred. So
when it comes out, the entire withdrawal (contributions
and earnings alike) is added to your taxable income for the year
and taxed at your regular federal bracket, the same as wages.
There's no capital-gains treatment, no matter how much of the
balance is investment growth — the same growth held in a taxable
brokerage account would be taxed at the long-term rates set out in
how capital gains tax is calculated,
which is why the two accounts are worth drawing on in different
years. Employer money is treated no differently: once a match has
vested it is simply part of the pre-tax balance, so it is taxed as
ordinary income on the way out too. If you are still working out
how much of it you are actually earning, see
how to calculate your 401(k) employer match.

That means the tax on a withdrawal depends on everything else on
your return that year. A $30,000 withdrawal on top of a salary
can land in the 22% or 24% bracket; the same $30,000 taken in a
no-income year might be taxed mostly at 10–12%. Most states with
an income tax also tax the withdrawal, though several exempt
some or all retirement income.

#### The 10% early-withdrawal penalty before 59½

If you take a distribution before age 59½, the IRS
adds a 10% additional tax on the taxable amount, on
top of ordinary income tax. Withdraw $20,000 early in the 22%
bracket with a 5% state tax and you can lose roughly 37% —
$7,400 — to taxes and penalty combined. The penalty is reported
on Form 5329, which is also where you claim an
exception.

#### Exceptions that erase the penalty

The income tax always applies to traditional-account withdrawals,
but the 10% penalty disappears in more situations than most
people expect:

- Rule of 55: you leave your job (quit, fired, or retired) in or after the calendar year you turn 55, and withdraw from that employer's plan — not an IRA, and not an old plan from a previous job. Public-safety employees qualify at 50.

- SEPP / 72(t) payments: substantially equal periodic payments based on your life expectancy, at any age, if you commit to the schedule for 5 years or until 59½, whichever is longer.

- Disability (total and permanent) or death (distributions to your beneficiary).

- Medical expenses above 7.5% of adjusted gross income.

- QDRO: money paid to an ex-spouse under a qualified domestic relations order.

- Newer SECURE 2.0 exceptions: up to $5,000 for a birth or adoption, terminal illness, federally declared disaster distributions, a $1,000-per-year personal emergency withdrawal, and distributions for victims of domestic abuse.

#### The 457(b) loophole

Governmental 457(b) plans — common for state and
local government employees — are not subject to the 10% early
withdrawal penalty at all once you've separated from service.
Leave the job at 45 and withdraw at 46, and you owe ordinary
income tax but no penalty. This only covers money
contributed to the 457(b); funds rolled into it from a 401(k) or
IRA keep their penalty rules. It's a major reason to think twice
before rolling a 457(b) into an IRA, which would forfeit the
exemption.

#### The 20% withholding is not your tax rate

When a plan pays a distribution directly to you, it must withhold
20% federal tax. Two traps hide in that rule. First,
20% is just a prepayment — if the withdrawal pushes you into a
higher bracket (or adds the 10% penalty) you'll owe more at
filing; in a low bracket you'll get some back. Second, if you
meant to roll the money over yourself within 60 days, you have to
come up with the withheld 20% from other cash to complete a full
rollover, or the shortfall counts as a taxable — possibly
penalized — distribution.

A direct (trustee-to-trustee) rollover to an IRA or
your new employer's plan sidesteps all of it: no withholding, no
tax, no penalty, and the money keeps growing tax-deferred.

See what the withdrawal actually costs you. Whether a
withdrawal is taxed at 12% or 32% depends on everything else on your return
that year. Open the free planner to
project your income and taxes year by year and see where the withdrawal
lands.

#### 403(b) plans: same rules as 401(k)s

For withdrawal taxation, a 403(b) — the 401(k)
cousin for schools, hospitals, and nonprofits — follows the same
playbook: ordinary income tax, 10% penalty before 59½, the same
exception list including the rule of 55, and the same 20%
withholding on distributions paid to you. Roth 403(b) accounts
mirror Roth 401(k)s: qualified withdrawals (age 59½ plus a
5-year-old account) are entirely tax-free.

#### How to shrink the tax bill

- Wait for 59½ — or use the rule of 55 instead of paying 10% unnecessarily.

- Spread withdrawals across years to avoid stacking one big distribution into a high bracket.

- Use low-income years (early retirement, a sabbatical, a job gap) for withdrawals or Roth conversions at 10–12% rates.

- Mind the interaction effects: large withdrawals can make more of your Social Security taxable and trigger Medicare IRMAA surcharges two years later.

- Sequence your accounts: which account you tap first — taxable, tax-deferred, or Roth — changes lifetime taxes materially.

#### Frequently asked questions

##### How much tax will I pay on a 401(k) withdrawal?

The withdrawal is added to your taxable income and taxed at
your ordinary federal bracket (10–37%), plus state income tax
in most states, plus a 10% federal penalty if you're under
59½ and no exception applies. There's no single rate — it
depends on your total income that year.

##### What is the penalty for withdrawing from a 401(k) early?

10% of the taxable amount, on top of regular income tax,
reported on Form 5329. Exceptions include leaving your job in
or after the year you turn 55, disability, SEPP/72(t)
payments, large medical expenses, QDROs, and several SECURE
2.0 carve-outs like the $5,000 birth-or-adoption withdrawal.

##### Are 403(b) withdrawals taxed like 401(k) withdrawals?

Yes — identically. Traditional 403(b) withdrawals are ordinary
income, the 10% pre-59½ penalty and its exceptions apply the
same way, and Roth 403(b) qualified withdrawals are tax-free.

##### Do 457(b) withdrawals have an early-withdrawal penalty?

Governmental 457(b) plans don't — once you separate from the
employer, withdrawals at any age skip the 10% penalty (you
still owe ordinary income tax). Money rolled into the 457(b)
from other plan types keeps its original penalty rules.

##### Is the 20% withholding the same as the tax I owe?

No. The 20% withheld from a distribution paid to you is a
prepayment. Your actual tax is figured on your return — often
more than 20% once the penalty and state tax stack on, or
less if you're in a low bracket, in which case you get a
refund.

##### How do I avoid taxes on a 401(k) withdrawal entirely?

A direct rollover to an IRA or new employer's plan is
tax-free, as are qualified withdrawals from Roth accounts.
For traditional money you plan to spend, you can't avoid the
income tax — only manage the rate by timing withdrawals into
lower-income years.

#### Put a number on it

- IRA & 401(k) Withdrawal Tax Calculator — the tax and penalty on a specific withdrawal amount.

- Tax-Aware Withdrawal Calculator — see which account to tap first and what it costs in tax.

- Retirement Drawdown Calculator — project how long your balance lasts at a given withdrawal rate.

- Which Accounts to Draw Down First — the order that minimizes lifetime taxes.

- The Roth Conversion Ladder — a penalty-free way to reach 401(k) money before 59½.

#### See the tax on your actual plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Backdoor Roth IRA: The Steps and the Pro-Rata Trap
URL: https://planomy.net/guides/backdoor-roth-ira
Summary: The exact order to contribute, convert, and file Form 8606 — plus how the pro-rata rule taxes your conversion if you still hold any traditional IRA balance.

Tax strategy

### The Backdoor Roth IRA, Step by Step

If you earn too much to contribute to a Roth IRA directly,
there's a perfectly legal side door: contribute to a
traditional IRA, then convert it to Roth. Simple in theory —
but the pro-rata rule turns it into a trap for the unwary.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- A backdoor Roth IRA is a two-step move — a non-deductible traditional IRA contribution, then a conversion to Roth — that lets high earners fund a Roth despite the income limits.

- It's a workaround, not a loophole: it's widely used and reported openly on Form 8606. There is no separate "backdoor Roth account."

- The pro-rata rule is the catch: if you hold any pre-tax money in a traditional, SEP, or SIMPLE IRA, part of your conversion becomes taxable.

- The cleanest setup is a $0 balance in all non-Roth IRAs on December 31 of the conversion year — often achieved by rolling pre-tax IRA money into a 401(k) first.

- 2026 figures below are indexed for inflation and change yearly — always confirm the current limits before you contribute.

#### Why the backdoor exists

A Roth IRA is one of the best accounts in the US tax code:
money grows tax-free and comes out tax-free in retirement, with
no required distributions during your lifetime. But Roth IRAs
come with an income limit. Once your modified
adjusted gross income (MAGI) climbs past a threshold — for 2026,
roughly the mid-$150,000s for single filers and the
mid-$240,000s for married-filing-jointly, phasing out over a
band above that — you can't contribute directly at all.

Here's the quirk Congress left in place: while there's an income
limit on contributing to a Roth, there is
no income limit on converting a traditional IRA
to a Roth. Anyone, at any income, can convert. The backdoor Roth
simply chains these two facts together — you put money into a
traditional IRA (which has no income limit for
non-deductible contributions), then immediately convert
it to Roth. The result is the same Roth dollars a lower earner
could have contributed directly.

#### The two steps

##### Step 1 — Make a non-deductible traditional IRA contribution

Open (or use an existing) traditional IRA and contribute up to
the annual limit — for 2026, $7,500 if you're
under 50, with an additional catch-up for those 50 and older.
Because your income is high, you almost certainly can't deduct
this contribution, and that's fine — the whole strategy depends
on it being non-deductible. You are contributing
after-tax dollars that create "basis" in the IRA.

##### Step 2 — Convert to Roth

Shortly after the contribution settles, convert the entire
traditional IRA balance to a Roth IRA. Most brokerages let you do
this online in a couple of clicks. Because you already paid tax
on the money (it was non-deductible) and it hasn't had time to
grow, the conversion is essentially tax-free —
you only owe tax on any earnings between the contribution and the
conversion, which is typically a few dollars if you act quickly.

Do you have to wait between the steps? There's no
legally required waiting period. Many people convert within days.
A short gap mainly keeps the taxable earnings tiny. The old fear
of the "step transaction doctrine" has largely faded — Congress
has acknowledged the backdoor Roth in committee reports — but keep
the two steps clearly documented.

#### The pro-rata rule — the part that trips people up

This is the single most important thing to understand before you
try a backdoor Roth. When you convert, the IRS does not
let you cherry-pick only the after-tax dollars. Instead, it looks
at all of your non-Roth IRAs combined — traditional, SEP,
and SIMPLE IRAs — and treats every conversion as a proportional
mix of pre-tax and after-tax money. This is the
pro-rata rule, and it's calculated on
Form 8606 using
your total IRA balance on December 31 of the conversion year.

An example makes it concrete. Suppose you have a $93,000 pre-tax
traditional IRA (from an old 401(k) rollover) and you make a fresh
$7,000 non-deductible contribution, then convert $7,000 to Roth.
Your total IRA balance is $100,000, of which only 7% is after-tax
basis. So only 7% of your conversion is tax-free — the other 93%
is taxable income.

Illustrative pro-rata math for a $7,000 conversion. Figures rounded.

| Situation
| Pre-tax IRA
| After-tax basis
| Taxable portion of $7,000 conversion

| Clean backdoor (no other IRA)
| $0
| $7,000
| ≈ $0

| $93,000 pre-tax IRA in the mix
| $93,000
| $7,000
| ≈ $6,510 (93%)

| $21,000 pre-tax IRA in the mix
| $21,000
| $7,000
| ≈ $5,250 (75%)

Notice that even the "bad" cases aren't a disaster — you're not
double-taxed, you're just accelerating tax you'd eventually owe on
the pre-tax money, and the remaining basis stays with you. But
most people doing a backdoor Roth want a clean, near-zero tax
bill, which means clearing out pre-tax IRA balances first.

#### How to avoid the pro-rata problem

The goal is a $0 balance in all traditional, SEP, and
SIMPLE IRAs as of December 31 in the year you convert.
Common ways to get there:

- Roll pre-tax IRA money into your employer 401(k). Money inside a 401(k) is invisible to the pro-rata rule — only IRAs count. If your plan accepts incoming rollovers (many do), this is the classic fix.

- Convert the pre-tax IRA too — pay the tax now, then start doing clean backdoors going forward. This can make sense in a low-income year (see the Roth conversion ladder).

- Start clean. If you've never had a traditional IRA, you can do the backdoor from day one with zero complications.

Note that a spouse's IRAs are counted separately — the pro-rata
rule is per person, not per household — so one spouse can do a
clean backdoor even if the other holds a large pre-tax IRA.

#### Don't forget Form 8606

Every non-deductible contribution and every conversion must be
reported on IRS Form 8606. This is how you tell
the IRS that the money going in was already taxed, so it isn't
taxed again on the way out. Skipping the form is the most common
backdoor Roth mistake — do it several years in a row and you can
lose track of your basis and end up paying tax twice. File an 8606
for each spouse who contributes, every year you do the backdoor.

Watch your timing across tax years. IRA
contributions can be made up to the April filing deadline for the
prior year, but the pro-rata calculation uses your December 31
balance. Contributing "for last year" in the spring while carrying
a pre-tax IRA can produce a surprise tax bill. Keep the two steps
inside a clean calendar year when you can.

Worth it depends on your future tax rate. The extra Roth
space only pays off if you would otherwise be drawing that money at a higher
rate later. Open the free planner to
project your retirement income year by year — withdrawals, Social Security
and RMDs included — and see what bracket your future self lands in.

#### Is the backdoor Roth worth it?

For a high earner with no pre-tax IRA balance, yes — it's a
near-free way to add several thousand dollars of tax-free growth
every year, and it stacks on top of your 401(k). Over decades
those contributions compound into a meaningful tax-free bucket
that also helps diversify your future tax exposure. You can see
how account type changes your after-tax retirement income in the
Roth conversion calculator,
and how a stream of contributions grows with the
compound growth calculator.
If you're deciding where new dollars should go in the first place,
our guide on 401(k) vs IRA vs Roth vs HSA
lays out the priority order.

#### Frequently asked questions

##### Is the backdoor Roth IRA legal in 2026?

Yes. It remains a legal, widely used strategy, and Congress
has referenced it approvingly. Proposals to close it have been
floated but not enacted. As with any tax strategy, confirm the
rules for the current year before you act.

##### How much can I put into a backdoor Roth?

The same as any IRA — for 2026, $7,500 if you're under 50,
plus a catch-up amount if you're 50 or older. Married couples
can each do their own, doubling the household total. These
limits are indexed and change most years.

##### What is the pro-rata rule in one sentence?

When you convert, the taxable share equals the pre-tax portion
of all your traditional, SEP, and SIMPLE IRAs combined — so
any pre-tax IRA balance makes part of your backdoor conversion
taxable.

##### Does my 401(k) balance count for pro-rata?

No. Only IRAs count. Money inside a 401(k) or other employer
plan is ignored — which is exactly why rolling a pre-tax IRA
into your 401(k) can clear the way for a clean backdoor Roth.

##### Is this the same as a mega backdoor Roth?

No. The mega backdoor Roth uses after-tax contributions inside
a 401(k) and can move much larger sums, but it requires a plan
that specifically allows after-tax contributions and in-plan
conversions. The regular backdoor Roth described here uses IRAs
and is available to almost anyone.

#### Put a number on it

- Roth Conversion Calculator — estimate the tax on converting pre-tax IRA money.

- Compound Growth Calculator — see what yearly backdoor contributions grow into.

- The Roth Conversion Ladder — the bigger strategy for moving pre-tax money to Roth.

- 401(k) vs IRA vs Roth vs HSA — where each new dollar should go first.

#### See your Roth strategy in one place

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Best Retirement Planning Software in 2026: An Honest Guide
URL: https://planomy.net/guides/best-retirement-planning-software
Summary: A category guide to retirement planning software: the four questions that decide it, what each type of tool is best at, and where Planomy honestly fits.

Choosing a tool

### Best Retirement Planning Software in 2026

Almost every "best retirement software" list is a ranking of affiliate
payouts. This one is a decision framework instead: four questions that
settle it, five categories of tool, what each is genuinely good at, and
a plain account of where our own product fits and where it doesn't.

Updated July 27, 2026
·
~11 min read
·
US-focused

#### Key takeaways

- There is no single best tool. There is a best tool for how you want to work, and four questions decide it: does it need an account, is it a projection engine or a dashboard, who pays for it, and can you get your data back out?

- Projection engines answer "what happens if"; aggregation dashboards answer "where do I stand today". Buying the second when you needed the first is the most common mistake.

- Anything free that requires linking your bank accounts is usually funded by something else — advertising, lead generation, or an advisory sales team. That is not sinister, but it should be priced into your choice.

- Spreadsheets are still a legitimate answer, and stop being one the moment you need RMDs, IRMAA, provisional-income taxation of Social Security and Monte Carlo in the same model.

- Planomy is a local-first projection engine: the full planner is free with no account, your plan is stored on your device, and paid Plus is only about syncing, bank sync and more assistant messages.

#### Four questions that actually decide it

Feature checklists are useless here, because every product in this
category claims every feature. These four questions separate them,
and you can answer all four from any vendor's own website in about
ten minutes.

##### 1. Does it require an account, and does it require your bank logins?

This is the biggest fork in the road and it is rarely presented as
one. Some tools cannot function at all until you have created an
account and connected financial institutions, because aggregation
is the product. Others work from numbers you type in. Neither
is wrong, but they imply very different relationships with your data
— and very different answers to "what happens to my plan if this
company is acquired or shuts down?"

##### 2. Is it a projection engine or a dashboard?

A dashboard tells you where you stand today: net worth, allocation,
fees, spending by category. A projection engine tells you what
happens over the next 30 years if you retire at 61, convert
$40,000 a year to Roth until 73, and the market drops 30% in your
second year. Some products do both, most lean hard one way, and the
marketing copy for both sounds identical.

##### 3. Who pays for it?

There are only a handful of business models here: a subscription you
pay; free tools funded by a wealth-management or brokerage business
that hopes to manage your money; free tools funded by advertising or
referral fees; and free-and-genuinely-free tools with a narrow paid
upgrade. You are allowed to pick any of them. You are not allowed to
pretend the model has no effect on the product.

##### 4. Can you get your data out?

Ask before you start, not after you have spent six hours entering a
plan. A full export you can download and restore is the difference
between a tool and a hostage situation.

#### The five kinds of tool

Nearly everything in this category is one of five shapes. The table
below compares the shapes rather than ranking individual products,
because the shape is what determines whether a tool will suit you.

The five categories of retirement planning tool, compared on the axes that actually differ. No prices are quoted — see the note below.

| Category
| Best at
| Account required
| Typically funded by

| Subscription cloud planners
e.g. Boldin, ProjectionLab
| Deep, detailed long-horizon modelling with a lot of dials
| Yes — the plan lives in your account
| A subscription you pay

| Aggregation dashboards
e.g. Empower Personal Dashboard, Monarch Money
| Seeing everything you own in one place, automatically
| Yes — plus linked institutions
| A subscription, or a wealth-management business behind the free tools

| Brokerage and 401(k) planners
| Convenience when your money is already there
| Yes — an account with that institution
| The institution holding your assets

| Spreadsheets and templates
| Total control and complete transparency
| No
| Your own time

| Local-first planners
e.g. Planomy
| Full projections without handing over an account or bank logins
| No — optional, and only for syncing and sharing
| An optional paid tier; the planner itself is free

Why this guide names categories, not prices.
Reviewed July 27, 2026. Every "best software"
list you will find dates the moment a vendor changes a tier, and
the ones that rank products by price are the fastest to rot. The
five shapes above have been stable for years and will outlast any
specific product in them, so that is what this page commits to.
Products are named only as examples of a shape. Take the four
questions to each vendor's own site and get the current answers
there.

#### Category 1: subscription cloud planners

This is the serious end of the market — products built specifically
to model a US retirement in detail, with tax-aware withdrawals, Roth
conversion planning, Monte Carlo and scenario comparison.
Boldin (which was called NewRetirement until it
rebranded) and ProjectionLab are the two names that
come up most often, and both are genuinely good at what they do.

What you are buying is depth and polish, and what you are accepting
is a subscription and a cloud account: your plan lives on their
servers, and access to it is tied to a paid relationship. For a lot
of people that is an entirely reasonable trade — an ongoing fee for
a tool you will use for twenty years is not expensive relative to
the decisions it informs.

We have written longer, page-length comparisons for both:
Planomy vs Boldin and
Planomy vs ProjectionLab.

#### Category 2: aggregation dashboards

Empower Personal Dashboard (formerly Personal
Capital) and Monarch Money sit here. Their core
trick is connecting to your financial institutions and assembling a
live picture of net worth, allocation, fees and spending. That is a
real and valuable thing, and it is something Planomy deliberately
does not try to be.

The thing to understand is what the free ones cost you in other
currency. Empower's tools are free to use and the company is a
wealth manager — the tools are, among other things, how it meets
potential advisory clients, so households with larger balances
should expect to hear from an advisor. Again: not sinister, and
plenty of people are happy to have that conversation. Just know it
is part of the deal before you link seven accounts.

Longer version:
Planomy vs Empower Personal Dashboard.

#### Category 3: your brokerage's own planner

If your money is at a large brokerage or your 401(k) provider has a
planning tool, use it — it is free, it already knows your balances,
and for a simple situation it may be all you need. The limits are
structural rather than a criticism: it models the accounts it can
see, the assumptions are the institution's rather than yours, and it
has no particular reason to model the assets it doesn't custody.

#### Category 4: a spreadsheet

A spreadsheet is the most transparent planning tool there is, costs
nothing, needs no account, and can model anything you are willing to
build. It is a completely legitimate answer for a straightforward
plan, and it is how a lot of very good planners started.

It stops being the right answer at a specific and identifiable point:
when the questions you are asking need progressive federal brackets,
the provisional-income formula that taxes Social Security, the IRS
Uniform Lifetime Table, IRMAA's two-year lookback and a thousand
Monte Carlo paths to interact with each other. Building that
correctly is a project; maintaining it as the numbers change every
year is a hobby. We wrote the honest version of that trade-off in
retirement planning spreadsheet vs software.

#### Category 5: local-first planners — where Planomy sits

The newest shape in the category: a full planning engine that runs
in your browser, stores your plan on your device, and needs no
account to work. Planomy is one of these. The complete planner is
free forever with no sign-up, no email and no bank login, and your
plan is saved on the device you are using.

The fair objection to this category is that "runs in your browser
for free" sounds like it must be a simplified calculator wearing a
planner's clothes. The way to settle that is not to read a feature
list but to check the four things above against it, so here is
Planomy answered against its own criteria.

##### Does it require an account or bank logins? No, to both.

The complete planner opens with no account, no email and no card,
and saves to the device you are on. An account is optional and buys
only things an account is genuinely required for: a free one syncs
a single plan, enables plan sharing and check-in reminders, and
gives 5 AI assistant messages a week. Plus — $6 a month or $60 a
year — syncs unlimited plans, adds Plaid bank sync and tops the
assistant credits up to 50 a month. No planning
capability sits behind that wall, which is the specific
thing to verify on any tool claiming a free tier. Detail on the
pricing page.

##### Projection engine or dashboard? Engine.

Cash, taxable, traditional, Roth and HSA are tracked as five
separate ledgers rather than one blended balance, because every
interesting retirement question — drawdown order, conversion
timing, RMD exposure — depends on which ledger a dollar leaves
from. Four named drawdown orders can be compared side by side, with
FIFO / LIFO / HIFO / lowest-tax-first lot selection on taxable
sales. Roth conversions can be set as an amount or as
fill-to-the-top-of-a-bracket.

On the tax side: federal brackets from a dated, versioned dataset
shipped as data rather than as constants in the code; state income
tax across 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 flat rate); RMDs on the IRS Uniform Lifetime Table with
SECURE 2.0 start ages; Social Security taxation via provisional
income; and Medicare Part B and Part D with IRMAA on the two-year
MAGI lookback. Risk is handled twice over — a seeded Monte Carlo of
up to 5,000 trials, and a backtest against every rolling window of
real annual US market returns and CPI-U inflation from
1928 to 2024.

##### Who pays for it? You do not, for the planning.

Worth restating because of question 3 above: there are no ads, no
data sale and no adviser funnel behind the free tier. The revenue
model is the Plus subscription and one-time AI message packs. That
is a model you can check rather than take on trust — if a free
planner will not tell you plainly how it is funded, that is the
answer to question 3.

##### Can you get your data out? Yes, and it is the whole file.

A plan downloads as a complete file you can restore into the app
later or on another machine — the same mechanism that makes
account-free use viable. Statement data can go in as CSV or
OFX/QFX. Nothing is a walled export of summary numbers.

#### When category 5 is the wrong category for you

A category guide that only says nice things about the category its
author sits in is an advert. So: here is when to pick a different
one of the five above, phrased as category choices rather than as
complaints about any product.

-
Pick a dashboard (category 2) if the question is
"where do I stand today". Local-first planners have no
live market-price or holdings feed — that is inherent to the
shape, not a missing feature. You maintain the numbers. If
seeing an accurate current net worth without doing anything is
the job, category 5 is structurally the wrong answer and always
will be.

-
Pick a subscription cloud planner (category 1) if you
want a human attached. Some of them sell coaching or
advice alongside the software, and that is a real product
difference rather than a pricing one. Local-first planners sell
no advice. If you want someone accountable for the answer, buy
that, or hire a fee-only CFP separately — a projection is an
input to that conversation, not a substitute for it.

-
Pick category 1 or 2 if you will not click "download
a copy". The defining risk of local-first is the
defining risk of local storage: clear your browser data with no
export and no account, and the plan is gone. There are two
mitigations — a free account that syncs one plan, and an export
button — but both require you to act. A cloud account requires
nothing.

-
Keep the spreadsheet (category 4) if the modelling is
genuinely idiosyncratic. Every packaged planner,
including this one, models the situations it was built for.
A complex equity-compensation schedule, a property portfolio
with per-unit financing, or a business sale with an earn-out may
simply not have a home in any of the products in categories 1–3
or 5.

-
None of these if you are planning outside the US.
Almost every tool discussed on this page — Planomy included —
models US federal brackets, state income tax, Social Security,
Medicare, IRMAA and RMDs. In another tax system none of that
machinery applies, and a US planner will give you a confident,
wrong answer rather than an error message.

-
A budgeting app if day-to-day money is the whole
job. Planners in every one of these five categories are
long-horizon tools. Envelope budgeting, receipt splitting and
bill reminders are a different product category entirely.

#### A twenty-minute way to decide

- Write down the one question you actually want answered. "Can I retire at 61?" and "am I paying too much in fund fees?" are answered by different categories of tool.

- Decide, before you look at any product, whether you are willing to create an account and link financial institutions. That single answer eliminates about half the market.

- Try the free path of two tools from the surviving category with the same inputs. Divergent answers are informative — dig into which assumption differs rather than trusting the friendlier number.

- Check the export. If you cannot download your plan, do not build your plan there.

If step two came out as "no account, no bank logins", you can do
step three right now — the
Planomy planner opens straight into a plan with
nothing to sign up for. If you would rather start with a single
number, the FIRE number calculator
and the retirement drawdown calculator
take about a minute each.

#### Frequently asked questions

##### What is the best retirement planning software?

There is no single best one, and any list that claims otherwise is usually ranked by affiliate payout. The useful question is which category fits you: a subscription cloud planner for maximum depth, an aggregation dashboard to see everything you own, your brokerage's own tool for convenience, a spreadsheet for total control, or a local-first planner if you would rather not create an account at all.

##### Is free retirement planning software any good?

Some of it is excellent. The thing to check is how it is funded, because that shapes the product: free tools attached to a wealth manager exist partly to introduce you to advisors, free tools funded by referrals steer toward products that pay them, and free tools with a narrow paid upgrade have to keep the free version genuinely useful. Ask who pays before you ask what it costs.

##### Do I need to link my bank accounts to plan for retirement?

No. Linking accounts saves typing and keeps balances current, which is genuinely useful for tracking. But a projection is driven by balances, contributions, spending and assumptions — all of which you can type in once and update a few times a year. If you would rather not link anything, that rules out aggregation dashboards and rules in spreadsheets and local-first planners.

##### What is the difference between a retirement dashboard and a retirement planner?

A dashboard describes today: net worth, allocation, fees, spending. A planner projects the future: what your balances, taxes and income look like year by year under a set of assumptions, and what breaks the plan. Buying a dashboard when you needed a projection engine is the most common mistake in this category, because both are marketed with the same language.

##### Can I use more than one retirement planning tool?

Yes, and it is a good idea when a decision is large. Run the same inputs through two tools and compare. Where they disagree, find the assumption that differs — usually a return assumption, an inflation figure or how the tool handles taxes — rather than assuming the more optimistic answer is the correct one.

#### Keep going

- Free retirement planner with no sign-up — what "no account" actually means in practice.

- Planomy vs Boldin — on-device versus a cloud subscription planner.

- Planomy vs ProjectionLab — two projection engines, different business models.

- Planomy vs Empower Personal Dashboard — a planner and an aggregator solve different problems.

- Spreadsheet vs software — exactly what you have to build yourself.

- 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.

#### Try the category before you buy into it

Planomy's full planner — projections, taxes, Social Security, RMDs, Monte
Carlo and scenarios — opens with no account, no email and no bank
login, and saves your plan on your device. It is the cheapest way to
find out whether a projection engine is what you were missing.

Open the free planner

Read more guides

---

## Bucket Strategy for Retirement Income: 3 Buckets
URL: https://planomy.net/guides/bucket-strategy-retirement-income
Summary: How the three-bucket approach shields your stocks from a bad market, how to size and refill each bucket, and the places the strategy quietly falls short.

Retirement income

### The Bucket Strategy for Retirement Income

The bucket strategy splits your savings into short-, medium-, and
long-term "buckets" so a market crash never forces you to sell
stocks to buy groceries. It's as much a psychological tool as a
financial one — here's how it works and where it falls short.

Updated July 4, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- The bucket strategy divides your portfolio by time horizon: cash for the next couple of years, bonds for the medium term, and stocks for the long run.

- Its main job is to defend against sequence-of-returns risk — never being forced to sell stocks at a loss to fund spending.

- Systematic withdrawals — just pulling a set percentage from one blended portfolio and rebalancing — often produce similar long-run results with less complexity.

- Much of the bucket strategy's real value is behavioral: a clearly labeled cash cushion helps retirees stay invested through downturns.

- The approaches aren't mutually exclusive — a "total return with a cash buffer" hybrid captures most of the benefit.

#### What the bucket strategy actually is

The bucket strategy (popularized by financial planner Harold
Evensky and others) organizes your retirement savings not by
account type but by when you'll spend the money.
Instead of one blended portfolio, you mentally — or literally —
divide your assets into three buckets, each with a different job
and a different level of risk.

A typical three-bucket setup. Sizes and horizons vary by plan and risk tolerance.

| Bucket
| Time horizon
| Typical holdings
| Job

| 1 — Cash
| 1–2 years of spending
| Savings, money market, short CDs
| Pay the bills; never falls in a crash

| 2 — Income
| Years 3–10
| Bonds, bond funds, CDs
| Refill Bucket 1; modest, steadier growth

| 3 — Growth
| 10+ years out
| Stocks / equity index funds
| Long-run growth to outpace inflation

You spend from Bucket 1. Periodically — annually,
or after strong markets — you refill it from Bucket 2, and refill
Bucket 2 from Bucket 3 by selling stocks when they're up.
The whole point is that a bad stock year doesn't touch your grocery
money: you have one to two years of spending sitting in cash and
several more years in bonds, so you can leave the growth bucket
alone to recover.

#### Why it exists: sequence-of-returns risk

The bucket strategy is fundamentally a defense against
sequence-of-returns risk —
the danger that a market crash early in retirement
permanently damages a portfolio you're drawing from. When you sell
shares to fund spending during a downturn, you lock in losses and
leave fewer shares to recover. The cash and bond buckets act as a
buffer, so in a bad year you draw from them and give stocks time to
heal.

Think of Bucket 1 as a shock absorber. A retiree relying purely on
a "sell whatever I need each month" approach might be forced to
liquidate stocks 30% below their peak. A bucket retiree spends down
cash instead and refills only once markets recover — psychologically
and financially easier.

#### Bucket strategy vs systematic withdrawals

The main alternative is the systematic (total-return)
withdrawal approach: hold one diversified portfolio at a
target allocation (say 60% stocks / 40% bonds), withdraw a set
amount or percentage each year, and rebalance back to target. This
is the framework behind the classic 4% rule — see our guide on the
safe withdrawal rate.

Here's the part that surprises people: the two approaches
are more similar than they look. When a bucket retiree
"refills Bucket 1 after good years and lets it run down in bad
years," they are effectively doing a form of rebalancing — selling
stocks high and drawing bonds/cash low. A disciplined
total-return investor who rebalances does much the same thing with
less machinery. Studies that pit rigid bucket rules against simple
rebalanced portfolios often find similar long-run
outcomes; neither reliably beats the other by a wide margin.

How the two approaches compare on the dimensions that matter.

| Dimension
| Bucket strategy
| Systematic withdrawals

| Sequence-risk defense
| Explicit cash buffer
| Comes from the bond allocation + rebalancing

| Complexity
| Higher — manage 3 buckets and refill rules
| Lower — one portfolio, one rebalance

| Cash drag
| Higher — idle cash can lag inflation
| Lower — money stays invested to target

| Behavioral comfort
| High — visible safety cushion
| Depends on the investor's discipline

#### The trade-offs of buckets

##### The cost: cash drag

Holding one to two years of spending in cash and several more in
bonds means a meaningful slice of your portfolio isn't growing at
stock-like rates. Over a long retirement that "cash drag" can
slightly lower your ending wealth versus a more aggressive
allocation. In effect, you pay a small premium for peace of mind —
which may be entirely worth it.

##### The catch: refill discipline

The strategy assumes you'll actually refill the buckets on
schedule and won't panic-sell the growth bucket in a long bear
market. If a downturn lasts longer than your cash-plus-bond runway
(say a multi-year slump), you eventually have to sell stocks anyway
— the buckets buy time, not immunity.

Buckets aren't magic. A cash buffer delays, but
does not eliminate, the need to sell stocks in a prolonged
downturn. Sizing Bucket 1 too large just to "feel safe" can drag
returns enough to raise your long-run risk of running short. Match
the buffer to your real spending, not your anxiety.

#### Setting it up: a worked example

Suppose you retire with a $1,000,000 portfolio and
plan to spend about $40,000 a year from it (on top
of Social Security). A common three-bucket setup might look like
this:

Illustrative allocation for a $1,000,000 portfolio spending $40,000/year. Your own split depends on other income and risk tolerance.

| Bucket
| Amount
| Roughly covers

| 1 — Cash
| $80,000
| ~2 years

| 2 — Bonds / income
| $320,000
| ~8 years

| 3 — Stocks / growth
| $600,000
| Year 10 onward

In a normal year, you spend from Bucket 1 and, at year-end, sell
some appreciated stock from Bucket 3 to top the cash bucket back up
(often routing it through Bucket 2). In a down year, you
skip the stock sale entirely — you live off cash and bonds and let
the growth bucket recover untouched. Notice that this
$80k / $320k / $600k split is simply a 60% stock, 40%
bonds-and-cash portfolio wearing different labels. That's
the quiet truth of the strategy: the buckets are mostly a
framing of an asset allocation you'd likely choose anyway —
but the framing is what makes it usable under stress.

Test the buckets against a bad decade. A bucket layout is
only as good as the withdrawal plan behind it.
Open the free planner to run your own
spending and balances year by year and compare an optimistic and a
pessimistic market against the same plan.

#### The behavioral case — the real reason it works

For many retirees the strongest argument for buckets isn't the math
— it's the psychology. Watching a portfolio drop 25% is frightening,
and fear makes people sell at the worst possible time, permanently
locking in losses. A clearly labeled "two years of spending, safe in
cash" bucket makes it emotionally possible to ignore the
growth bucket during a crash and stay the course. A strategy you can
actually stick with beats an optimal one you abandon in a panic.

#### A practical hybrid

You don't have to choose purely one or the other. A popular middle
path is a total-return portfolio with a cash buffer:
keep your main money in a diversified, rebalanced portfolio (the
systematic approach), and carve off roughly one year of spending in
cash as a shock absorber you top up in good years. This captures most
of the behavioral and sequence-risk benefit of buckets with far less
complexity and cash drag.

Whichever structure you pick, the size of your first-year withdrawal
and how long your money lasts still come down to the same
fundamentals. Test your own numbers with the
retirement drawdown calculator,
sanity-check your target with the
FIRE number calculator, and
pair this with our guides on the
safe withdrawal rate and
which accounts to draw down first
for the tax side of the picture.

#### Frequently asked questions

##### How many buckets should I have?

Three is the classic setup — cash, bonds, and stocks — but some
retirees use two (cash plus a growth portfolio) for simplicity.
More buckets add complexity without much added benefit; the goal
is a spending cushion, not a filing system.

##### How big should the cash bucket be?

Commonly one to two years of spending. Larger buffers feel safer
but drag on returns because idle cash tends to lag inflation.
Match the size to your real expenses and how much market
volatility you can stomach.

##### Is the bucket strategy better than the 4% rule?

They answer different questions. The 4% rule sets how much you
can withdraw; the bucket strategy is a way to structure and
source those withdrawals. Studies find buckets and simple
rebalanced portfolios produce broadly similar long-run results.

##### When do I refill the buckets?

Most plans refill Bucket 1 annually, or opportunistically after
strong market years by selling appreciated stocks from the
growth bucket. The key discipline is refilling from gains, not
selling into a deep decline.

##### Does the bucket strategy eliminate market risk?

No. It cushions short-term shocks by giving stocks time to
recover, but a long, deep downturn can still force stock sales
once the cash and bond buckets run low. It buys time, not
immunity.

#### Put a number on it

- Retirement Drawdown Calculator — see how long your money lasts at your spending rate.

- FIRE Number Calculator — turn spending into a portfolio target.

- Sequence of Returns Risk — the risk buckets are designed to blunt.

- What Is a Safe Withdrawal Rate? — how much you can pull each year.

#### Structure your retirement income

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Can I Retire at 62? The Math, Step by Step
URL: https://planomy.net/guides/can-i-retire-at-62
Summary: Claiming Social Security at 62 cuts it to 70% of your full benefit. What that costs in dollars, the three-year Medicare gap, and the portfolio the rest needs.

Retirement timing

### Can I Retire at 62?

Sixty-two is the earliest most people can claim Social Security, which
makes it the most common retirement date in America — and one of the most
expensive. Claiming then permanently cuts the benefit to 70% of what you
would have received at 67. Here is what that costs, and what the portfolio
has to cover.

Updated July 27, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- For anyone with a full retirement age of 67, claiming at 62 pays 70% of your full benefit — a 30% cut that lasts for life and carries into a survivor's benefit.

- In the worked example below, a $2,400 monthly full benefit becomes $1,680 at 62, $2,400 at 67, or $2,976 at 70.

- Retiring at 62 and claiming at 62 are separate decisions. Retiring at 62 while delaying the claim costs roughly the same total portfolio but buys a much larger inflation-indexed floor.

- Medicare does not start until 65, so a 62-year-old retiree needs three years of self-funded health coverage.

- If you keep working before full retirement age, the earnings test withholds benefits — but they are credited back later, so it is a deferral, not a loss.

#### What claiming at 62 actually pays

Social Security quotes your primary insurance amount (PIA) —
what you would get at full retirement age, which is 67 for anyone born in 1960
or later. Claim earlier and the benefit is reduced permanently; claim later and
it grows by roughly 8% a year until 70.

Percentage of the full benefit by claiming age, for a full retirement age of 67, with dollars for a $2,400 monthly full benefit. Reductions and delayed credits are set by statute; check your own figures at ssa.gov.

| Claiming age
| % of full benefit
| Monthly
| Per year

| 62 | 70% | $1,680 | $20,160

| 63 | 75% | $1,800 | $21,600

| 64 | 80% | $1,920 | $23,040

| 65 | 86.7% | $2,080 | $24,960

| 67 (full) | 100% | $2,400 | $28,800

| 70 | 124% | $2,976 | $35,712

The reduction is not arbitrary. Benefits fall by 5/9 of 1% for each of the
first 36 months you claim early and 5/12 of 1% for each month beyond that. Five
years early is 36 months × 5/9% = 20%, plus 24 months × 5/12% = 10% — a
30% cut, which is where the 70% figure comes from.

#### The portfolio the rest requires

Suppose you want to spend $60,000 a year and your full benefit
is the $2,400 a month above. Claim at 62 and Social Security covers $20,160,
leaving a gap of $39,840 for the portfolio. A retirement
beginning at 62 is a long one — plan for 33 years — so use a withdrawal rate
near 3.75% rather than 4%:

$39,840 ÷ 0.0375 = $1,062,400.

That is the headline number for this household: a little over a million
dollars, on top of claiming early.

#### The better question: retire at 62, claim at 67

Retiring and claiming are different decisions, and separating them is the
single highest-value move available to a 62-year-old. Suppose you still stop
working at 62 but leave Social Security alone until 67:

Two ways to retire at 62 with $60,000 of spending. Today's dollars; the bridge is five years of full spending funded entirely by the portfolio.

| Approach
| Portfolio needed
| Lifetime indexed income

| Claim at 62
| $1,062,400
| $20,160/yr

| Bridge to 67, then claim
| ≈ $1,100,000
| $28,800/yr

The bridge version is built from two pieces: five years × $60,000 =
$300,000 to live on until the benefit starts, plus
($60,000 − $28,800) ÷ 0.039 ≈ $800,000 to cover the permanent
gap afterwards. Total: about $1.1 million — barely more than claiming at 62,
for an inflation-indexed income that is $8,640 a year higher, for
life, and that carries over to a surviving spouse. You are effectively
buying an annuity from Social Security with $300,000 of portfolio, at terms no
insurer will match.

That trade is not automatic — it depends on health, longevity in your family,
whether you are the higher or lower earner in a couple, and whether spending
down the portfolio early makes you uncomfortable. Our guide on
when to take Social Security
works through the break-even arithmetic, and the
break-even calculator
puts your own numbers into it.

#### The three-year Medicare gap

Medicare eligibility begins at 65. Retire at 62 and you have three years to
cover yourself: COBRA (time-limited), the ACA marketplace, a spouse's employer
plan, or part-time work with benefits. Marketplace subsidies are based on
modified adjusted gross income, which creates a genuine tension — the same
low-income years that make
Roth conversions cheap can also be
the years you most want to keep income down for coverage. Whichever way you
resolve it, price your coverage for your actual county and household and put
the number in your spending before you multiply.

#### If you keep working: the earnings test

Claiming at 62 while still earning a salary runs into the retirement earnings
test. Before full retirement age, Social Security withholds $1 of benefit for
every $2 you earn above an annual limit (the limit is indexed each year, and a
more generous rule applies in the year you reach full retirement age). The part
people get wrong: the withheld money is not confiscated. At full retirement age
your benefit is recomputed upward to account for the months withheld. It is a
deferral, not a penalty — though it does make claiming at 62 while working
close to pointless.

#### Do not forget the tax on the benefit

Social Security is taxed on a formula of its own. Add your other income plus
half your benefit to get provisional income; above $25,000
(single) or $32,000 (married filing jointly) up to half the benefit becomes
taxable, and above $34,000 / $44,000 up to 85% does. Those thresholds are
written into the statute and are not indexed to inflation, so more
retirees cross them every year. Our guide on
how Social Security is taxed
works through the calculation, and
which accounts to spend
first covers how withdrawal order changes the answer.

#### A short readiness checklist for 62

- Get your real benefit estimate from ssa.gov — not a guess, and not the maximum.

- Write down annual spending including a priced-out health insurance line for ages 62–65.

- Subtract the benefit you would actually claim, divide the gap by 0.0375, and compare to your invested assets.

- Run the same plan with the claim delayed to 67 or 70 and compare the lifetime floor.

- Check where the money lives: enough outside pre-tax accounts to fund the bridge without a tax spike.

The Social Security
claiming age calculator and the
retirement drawdown calculator
cover the first and last of those in a couple of minutes each.

#### Frequently asked questions

##### How much does claiming Social Security at 62 reduce my benefit?

If your full retirement age is 67, claiming at 62 pays 70% of your full benefit — a 30% reduction. It comes from 5/9 of 1% per month for the first 36 early months plus 5/12 of 1% per month for the next 24, and the reduction is permanent apart from annual cost-of-living increases.

##### How much money do I need to retire at 62?

Take your annual spending, subtract the Social Security you will actually claim, and divide the gap by about 3.75% for a 33-year retirement. In the worked example — $60,000 of spending and a $20,160 benefit at 62 — that is roughly $1.06 million.

##### Should I retire at 62 but wait to claim Social Security?

Often yes. Funding five years of spending from the portfolio costs roughly the same total as claiming early, but raises the inflation-indexed benefit from 70% to 100% of your full amount for life, and raises what a surviving spouse receives. Health and family longevity are the main reasons not to.

##### What do I do about health insurance between 62 and 65?

The usual routes are COBRA from your former employer, an ACA marketplace plan, coverage under a spouse's employer plan, or part-time work that carries benefits. Marketplace subsidies depend on modified adjusted gross income, so the choice interacts with how much you withdraw or convert in those years.

##### Can I work while collecting Social Security at 62?

You can, but before full retirement age the earnings test withholds $1 of benefit for every $2 of earnings above an indexed annual limit. The withheld amount is credited back through a higher benefit once you reach full retirement age, so it is a deferral rather than a permanent loss.

#### Put a number on it

- Social Security Claiming Age Calculator — see 62 through 70 side by side.

- Social Security Break-Even Calculator — the age where waiting wins.

- Retirement Drawdown Calculator — test the bridge years.

- When to Take Social Security — the full claiming decision.

- How Social Security Benefits Are Taxed — provisional income, explained.

#### See whether 62 works for you

Planomy models retiring at one age and claiming at another, with
taxes, the health-coverage gap and required distributions included — so you
can compare the two paths on the same screen instead of on the back of an
envelope. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Can I Retire on $500,000? An Honest Look
URL: https://planomy.net/guides/can-i-retire-with-500k
Summary: Half a million funds about $20,000 a year at 4%. Worked examples of when that is enough with Social Security, when it is not, and four ways to close the gap.

Retirement income

### Can I Retire on $500,000?

Yes — for some households, comfortably. No — for others, not even
close. The difference is not luck or investing skill; it is Social
Security, spending, and when you start. Here is the arithmetic that decides
which group you are in.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- $500,000 supports roughly $20,000 a year at a 4% withdrawal rate — $17,500 at 3.5%, $25,000 at 5%.

- Social Security usually provides more retirement income than the portfolio does at this level. A $2,000 monthly benefit is $24,000 a year, and it is inflation-indexed for life.

- A single retiree with $500,000 and a $2,000 benefit lands near $44,000 a year; a couple with $500,000 and $3,600 a month lands near $63,200.

- The federal tax bill at that income is small — in our worked example only $3,500 of the $24,000 benefit is taxable at all.

- The four levers that matter: delay Social Security, cut fixed costs, work part-time for a few years, and retire from a paid-off house.

#### What $500,000 actually pays

A portfolio's sustainable income is its balance multiplied by a withdrawal
rate. Nothing else. At half a million dollars:

Annual income from $500,000 at different withdrawal rates, in today's dollars. Higher rates are not "better" — they are more likely to run the balance to zero.

| Withdrawal rate
| Per year
| Per month
| Typical use

| 3.0% | $15,000 | $1,250 | Very long or very cautious retirement

| 3.5% | $17,500 | $1,458 | Retiring in your late 50s

| 4.0% | $20,000 | $1,667 | The classic 30-year rule of thumb

| 5.0% | $25,000 | $2,083 | Shorter horizon, or willing to cut in bad years

If $20,000 a year sounds thin, that is the correct reaction — and it is also
why the portfolio is rarely the whole story at this level.

#### Worked example 1: a single retiree at 67

Take a single filer retiring at full retirement age with $500,000 and a
Social Security benefit of $2,000 a month.

- Portfolio: $500,000 × 4% = $20,000

- Social Security: $2,000 × 12 = $24,000

- Total before tax: $44,000 a year — about $3,667 a month

That is a real, liveable income in much of the country, particularly without a
mortgage. And the tax on it is smaller than most people expect.

##### The tax, worked out

Social Security is taxed using provisional income: other
income plus half the benefit. Here that is $20,000 + $12,000 =
$32,000. The statutory thresholds for a single filer are
$25,000 and $34,000, so we are in the first tier only, where up to 50% of the
amount above $25,000 becomes taxable:

50% × ($32,000 − $25,000) = $3,500 of the benefit is taxable.

So taxable income before deductions is $20,000 + $3,500 = $23,500,
not $44,000. Subtract the standard deduction — larger for filers aged 65 and
over — and only a few thousand dollars is left to be taxed at the lowest rate.
A federal bill in the hundreds, not the thousands. The full mechanics are in
our guide on
how Social Security is taxed.

#### Worked example 2: a couple at 67

Two people, $500,000 between them, and combined benefits of $3,600 a month:

- Portfolio: $20,000

- Social Security: $3,600 × 12 = $43,200

- Total: $63,200 a year

Provisional income is $20,000 + $21,600 = $41,600, which sits between the
married thresholds of $32,000 and $44,000 — so the 50% tier applies and 85% of
the benefit is not in play. The couple is comfortably inside the
bottom brackets.

Watch the survivor case. When one spouse dies, the household
keeps only the larger of the two benefits and starts filing as a single
taxpayer, with a smaller standard deduction and narrower brackets. A plan
built on two benefits should be stress-tested on one — see
how much a couple needs
to retire.

#### When $500,000 is not enough

Now change one input. Same single retiree, same $24,000 benefit, but spending
$60,000 a year. The portfolio has to produce $36,000 — a
7.2% withdrawal rate. At a 3% real return, that balance is
exhausted in about 18 years: money gone at 85, with a
quarter of retirement still to fund. (The arithmetic behind that number is in
how long will my money last.)

This is the pattern at $500,000: the plan does not fail slowly, it fails at a
specific spending level. Somewhere between $44,000 and $60,000 of spending, a
workable retirement turns into a countdown. Finding your own threshold is the
entire exercise.

#### Four levers that move the answer

##### 1. Delay Social Security

Waiting from 67 to 70 raises the benefit to 124% of the full amount. Our
$2,000 becomes $2,480 a month — an extra $5,760 a year, indexed for
inflation and guaranteed for life. To buy that much sustainable income
from a portfolio at 4% you would need $144,000. Delaying is the cheapest
income increase available to a $500,000 retiree, and it is the reason many
spend the portfolio harder in their 60s on purpose.

##### 2. Cut the fixed costs, not the fun

Every $1,000 a year of permanent spending you remove is $25,000 less portfolio
you need at a 4% rate. Housing, cars and insurance are where the durable cuts
live; discretionary spending is flexible by definition and is the wrong place
to start.

##### 3. Work part-time for a few years

$15,000 a year of earnings from 65 to 70 does three things at once: it covers
spending, it lets the portfolio compound untouched, and it removes the worst
five years of sequence risk from the plan. It is worth far more than the
$75,000 of gross earnings suggests.

##### 4. Retire from a paid-off house

A mortgage is the largest fixed cost most retirees carry. Removing a $1,400
monthly payment cuts $16,800 from annual spending — see
should I pay off my mortgage
before retiring for the test of whether paying it off early is actually
worth it.

#### Check it against your own numbers

Two calculators do most of the work here: the
retirement drawdown calculator
shows how long $500,000 lasts at your spending and return assumptions, and the
Social Security claiming
age calculator prices the delay decision. If you are still saving, the
savings goal calculator shows what it
takes to turn $500,000 into a larger number by your target date.

#### Frequently asked questions

##### How much monthly income does $500,000 produce?

About $1,667 a month at a 4% withdrawal rate, $1,458 at 3.5%, and $2,083 at 5%. Those figures are inflation-adjusted spending power, not a fixed nominal payment, and they assume the balance stays invested in a diversified portfolio.

##### Can I retire at 62 with $500,000?

It is much harder than retiring at 67 with the same balance. A 33-year horizon calls for a lower withdrawal rate, roughly 3.75% or about $18,750 a year, while claiming Social Security at 62 cuts that benefit to 70% of the full amount and Medicare is still three years away.

##### How long will $500,000 last in retirement?

It depends almost entirely on the withdrawal amount. At a 3% real return, $20,000 a year lasts nearly 47 years, $30,000 a year lasts about 23 years, and $36,000 a year is gone in roughly 18. Higher withdrawals shorten the life of a portfolio non-linearly.

##### Is $500,000 plus Social Security enough to retire?

For a household spending in the low-to-mid $40,000s with an average benefit, the arithmetic works and the tax bill is small. For a household spending $60,000 or more from the same balance, it does not — the portfolio would be carrying a 7% withdrawal rate that historically does not survive a long retirement.

##### Do I pay tax on Social Security if the portfolio is my only other income?

Usually only a little. Provisional income is your other income plus half the benefit, and only the amount above $25,000 single or $32,000 married starts to make the benefit taxable. In our worked example just $3,500 of a $24,000 benefit was taxable at all.

#### Put a number on it

- Retirement Drawdown Calculator — how long $500,000 lasts at your spending level.

- Social Security Claiming Age Calculator — price the delay to 70.

- How Long Will My Retirement Savings Last? — the depletion math in full.

- How Much Do You Need to Retire? — the 25× rule, honestly.

- How Social Security Benefits Are Taxed — the provisional income formula.

#### Find your own threshold

Planomy runs a full year-by-year projection — portfolio, Social
Security, taxes and required distributions together — so you can see the
exact spending level where $500,000 stops working. Free, private, and
running in your browser.

Try Planomy free

Read more guides

---

## Free Retirement Planner With No Sign-Up Required
URL: https://planomy.net/guides/free-retirement-planner-no-signup
Summary: Planomy

No account needed

### A Free Retirement Planner That Needs No Sign-Up

Most planning tools put the sign-up wall before the answer. Planomy puts
it nowhere: the complete planner opens, runs a full projection and
saves your work without an email address. Here is exactly how that
works, and the two things you give up by staying signed out.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- The entire Planomy planner works with no account: projections, taxes, Social Security, RMDs, Monte Carlo, scenarios and every calculator. It is not a trial and it does not expire.

- Your plan is saved in your browser's storage on the device you are using. Nothing is uploaded by default, so there is no server copy for us to lose, sell or hand over.

- The two real costs of staying signed out: no sync between devices, and no way to recover the plan if you clear the browser's storage or lose the device. Export a copy — it takes one click.

- A free account exists only for the things an account is genuinely needed for: syncing one plan, sharing a plan, and check-in reminders. Plus ($6/month or $60/year) raises those limits and adds bank sync.

- Sign-up walls exist to build a marketing list and to make the product stickier. Neither of those is a reason you should have to give an email address to find out when you can retire.

#### Why almost everything asks you to sign up first

It is worth being blunt about the incentives. A sign-up wall in front
of a planning tool does four things for the company: it produces an
email address that can be marketed to, it creates a switching cost
that makes you less likely to leave, it makes usage measurable at the
level of an individual person, and — for tools attached to a
brokerage or an advisory business — it identifies you as a
prospective client with a known balance.

None of those are things a user wants. They are things the business
wants, and they are the reason the pattern is near-universal rather
than the reason it is necessary. A retirement projection is
arithmetic over numbers you supply. It does not technically require
anyone to know who you are.

#### What "no account" means here, precisely

Vague privacy language is worth nothing, so here is the mechanical
version. When you open the Planomy planner:

- The app loads and runs in your browser. The projection engine executes on your device, not on a server.

- Your plan is written to your browser's local storage on that device. It is not uploaded anywhere by default.

- There is no email address, no password, no card and no bank login involved at any point.

- You can download a full copy of your plan as a file and restore it later, on any device.

The consequence people usually care about is the one about
subpoenas, breaches and acquisitions: there is no server-side copy of
a plan you never synced. That is a structural property, not a policy
promise.

The flip side, stated plainly. Because the plan
lives in your browser's storage, clearing site data, using private
browsing, or losing the device loses the plan. This is the real cost
of the model and we would rather you hear it from us. Download an
export after your first proper session and keep it somewhere you back
up.

#### What you get without signing up

Not a stripped demo — the same engine the paid tier uses:

- Year-by-year projections with separate ledgers for cash, taxable, traditional, Roth and HSA balances, over a horizon of up to 100 years.

- Federal tax from a dated, versioned dataset — 2026 ordinary and long-term capital-gains brackets, FICA and Medicare — rather than hard-coded numbers.

- State tax for all 50 states and DC: 29 with full progressive brackets, the rest at a flat effective rate, labelled as such.

- RMDs on the IRS Uniform Lifetime Table with SECURE 2.0 start ages.

- A Social Security claiming explorer across the full 62-to-70 range, with a benefit estimate built from your earnings history.

- Medicare Part B and Part D premiums with IRMAA surcharges keyed off the two-year MAGI lookback.

- Monte Carlo across 1,000 to 10,000 trials, plus a historical backtest over every rolling window of real US returns and CPI-U inflation from 1928 to 2024.

- Four named drawdown strategies side by side, FIFO / LIFO / HIFO / lowest-tax-first lot selection on taxable sales, and Roth conversions by amount or fill-to-bracket.

- Scenarios, life events and goals, plus plan-versus-actual cash-flow tracking with optional bank sync.

Plus the 35-plus standalone
calculators, which are also free, also
need no account, and each answer one question in about a minute.

#### Signed out, free account, or Plus

The honest version of the tiering, with nothing dressed up. Notice
that the planning column does not change:

What actually changes as you move up. Everything in the planner itself is available in the first column.

| What you want to do
| No account
| Free account
| Plus

| Full projections, taxes, Social Security, RMDs
| Yes
| Yes
| Yes

| Monte Carlo, backtests, scenarios, goals
| Yes
| Yes
| Yes

| Every calculator
| Yes
| Yes
| Yes

| Download and restore your plan
| Yes
| Yes
| Yes

| Sync a plan across devices
| No
| 1 plan
| Unlimited plans

| Share a plan with a partner or advisor
| No
| Yes
| Yes

| Plan check-in reminders
| No
| Yes
| Yes

| AI plan assistant (1 credit = 1 message)
| Small daily allowance to try it
| 5 messages a week
| At least 50 a month

| Bank sync where available
| No
| No
| Yes

| Price
| $0
| $0
| $6/month or $60/year

If you do decide to sync, you can encrypt the plan before it leaves
your device, so the copy on our servers is not readable by us. The
full breakdown lives on the pricing page.

#### When you should create an account anyway

- You plan on a laptop and check on a phone. Sync is the whole reason accounts exist here.

- Two of you are planning together. Sharing needs somewhere to share from.

- You want to be nudged. A plan you never revisit decays; check-in reminders are opt-in and free.

- You keep losing the plan. If clearing browser data is a habit, a synced copy is more robust than remembering to export.

#### What no sign-up costs you

Staying signed out is a real choice with real consequences, not
just a way to dodge a form. If you are here because you do not want
to hand over an email, you should know exactly what you are giving
up in exchange — and in two of these cases the answer is that a
free account, which still costs nothing, fixes it.

-
Your plan lives or dies with this browser profile.
This is the whole cost of signing up for nothing. Clear your site
data, use a different browser, switch to a private window, get a
new laptop, and the plan is not there. It is not lost on a server
somewhere waiting for you to log in — there is no server copy,
because you did not make an account. The fix is to click download
and keep the plan file somewhere you keep things, and to do it the
first time you have entered anything you would mind retyping.

-
No sync, no sharing, no reminders — until you make a free
account. Worth separating from the above, because the
remedy is free rather than paid. A free account syncs one plan
across devices, lets you share a plan with a partner or an
adviser, and enables plan check-in reminders. None of that costs
money; it costs an email address, which is precisely the thing
you came here to avoid. That is a fair trade to decline — just
decline it knowingly.

-
The AI assistant is metered when signed out.
Signed out you get a small daily allowance to try it. A free
signed-in account gets 5 credits a week; Plus tops you up to 50 a
month. Running out affects only the assistant — projections,
scenarios, budgeting and every calculator keep working.

-
Nothing updates itself, on any tier. There is no
live market-price or holdings feed. Balances are what you type.
Bank sync via Plaid exists on Plus and imports transactions, but
it does not mark a portfolio to market. If you want a number that
refreshes without you, this is the wrong category of tool, sign-up
or no sign-up.

-
And two limits that have nothing to do with
accounts. Planomy sells no advice and has no advisers
attached to it — if you want a person to review your situation,
hire a fee-only CFP and bring the projection with you. And the
tax engine is US-only: federal brackets, state income tax, Social
Security, Medicare, IRMAA and RMDs.

#### Try it in about five minutes

Enter your age, your balances by account type, what you save, and
what you expect to spend in retirement. That is enough for a first
projection. Refine the Social Security claiming age and the
withdrawal order afterwards — those are the two inputs that move the
answer most, and both have guides:
when to take Social Security
and which accounts to draw down first.

#### Frequently asked questions

##### Is there a retirement planner that does not require an account?

Yes. Planomy's full planner opens and runs with no account, no email and no bank login, and saves your plan in your browser's storage on that device. Spreadsheets are the other no-account option. Most subscription planners and all aggregation dashboards require an account by design, because the account is where your plan or your linked institutions live.

##### Is the free version a trial?

No. The free planner does not expire, has no limit on entries, and is not a reduced version of the engine — it runs the same projections, tax modelling, Monte Carlo and scenarios. The paid tier is about syncing more than one plan across devices, bank sync where available, and a larger AI assistant allowance.

##### Where is my plan stored if I never sign in?

In your browser's local storage on the device you are using. Nothing is uploaded by default, so there is no copy on our servers. The trade-off is that clearing site data, using private browsing, or losing the device loses the plan, so download an export and keep it somewhere you back up.

##### Can I move my plan to another computer without an account?

Yes. Download a full copy of your plan as a file from the app, then restore it on the other device. That is a manual sync rather than an automatic one — if you want it to happen by itself, that is what a free account's single synced plan is for.

##### Do I have to connect my bank to use it?

No. Bank sync is optional, is a Plus feature, and exists to save typing and keep balances current for plan-versus-actual tracking. Every projection works from numbers you enter by hand, and plenty of people never connect anything.

#### Related reading

- A retirement planner that works offline — the same model, taken one step further.

- Best retirement planning software — the whole category, compared honestly.

- How much do you need to retire? — the first number to put in.

- FIRE Number Calculator — a one-minute version of the same question.

- 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.

#### No email. No card. Just the plan.

Open Planomy and you are in a working plan within a minute — full
projection, taxes, Social Security and RMDs included, saved on this
device. If you never want an account, you never need one.

Open the planner

Read more guides

---

## How to Calculate Capital Gains Tax: 2026 Brackets
URL: https://planomy.net/guides/how-capital-gains-tax-is-calculated
Summary: Long-term gains stack on top of your ordinary income. The 2026 0%, 15% and 20% breakpoints, short-term rates, the 3.8% NIIT and four worked examples.

Investment taxes

### How Capital Gains Tax Is Calculated

A long-term capital gain is taxed at 0%, 15% or 20%, and
which rate you pay depends on your total taxable income
once the gain is stacked on top of it — not on the size of the gain
by itself. That stacking rule is the piece most
explanations skip, and it is why two people with an identical
$10,000 gain can owe $0 and $1,500. Here is the whole calculation,
step by step, with the 2026 brackets and four worked examples.

Updated July 28, 2026
·
~8 min read
·
US federal, 2026 tax year

#### Key takeaways

- Gain = proceeds − cost basis. Basis is what you paid plus commissions, reinvested dividends and improvements — getting it wrong is the single most common reason a bill comes in higher than expected.

- Holding period sets the rate schedule. One year or less is short-term, taxed as ordinary income at 10–37%. More than a year is long-term, taxed at 0%, 15% or 20%.

- Long-term gains stack on top of ordinary income. Your wages and pensions fill the brackets first; the gain is then layered above them and can straddle two rates.

- A single filer pays 0% on long-term gains while total taxable income stays under $49,450 in 2026 ($98,900 married filing jointly).

- A separate 3.8% net investment income tax applies above $200,000 of modified AGI ($250,000 joint), which is what turns "15%" into an effective 18.8%.

#### The four steps, in order

Every capital gains calculation is the same four steps. Work them
in this order and the answer falls out:

- Find your gain. Sale proceeds minus your cost basis.

- Classify it. Held more than one year, or not?

- Stack it. Add the gain on top of the ordinary taxable income you already have.

- Apply the rate to each slice that lands in each band — then check the 3.8% surtax and your state.

#### Step 1: your gain is proceeds minus basis

Capital gain = what you sold it for (net of
commissions) − your cost basis.

Cost basis is not just the purchase price. It includes purchase
commissions and fees, and — for a fund or stock held in a taxable
account — every reinvested dividend, because you
already paid tax on those dividends in the year they were paid.
Counting them raises your basis and lowers your gain. For
property, basis also picks up capital improvements (a new roof),
and is reduced by depreciation you claimed.

Two basis rules worth knowing. Inherited assets get a
step-up in basis to the market value on the date
of death, which often erases decades of gain outright. Gifted
assets do the opposite: you inherit the giver's original basis
along with the asset.

#### Step 2: one year and a day is the line

The holding period decides which of two completely different rate
schedules applies. The clock starts the day after you
acquire the asset and ends on the day you sell it.

- Short-term — held one year or less. Taxed as ordinary income at your marginal rate: 10%, 12%, 22%, 24%, 32%, 35% or 37%.

- Long-term — held more than one year. Taxed at the preferential 0% / 15% / 20% rates.

The gap is large enough to be worth a calendar reminder. In the
fourth worked example below, the same $100,000 gain costs
$38,613 as a short-term gain and
$18,800 as a long-term one — a $19,813 difference
created by the sale date alone.

#### Step 3: the stacking rule

This is the mechanic that makes capital gains tax feel
unpredictable. Long-term gains are not taxed in isolation and they
are not simply added to your marginal bracket. Instead:

Your ordinary income fills the brackets first.
The long-term gain is then stacked on top of it, and each slice of
the gain is taxed at the long-term rate for the band it lands in.

So the question is never "how big is my gain" on its own — it is
"where does my total taxable income sit once the gain is added".
A gain can straddle two bands and be taxed partly at 0% and partly
at 15%, which is exactly what happens in the second example below.

#### The 2026 long-term capital gains brackets

These breakpoints are measured against your
total taxable income — after your standard or
itemised deduction, and with the gain included. They are indexed
to inflation, so they move each year.

2026 long-term capital gains rates, by total taxable income.

| Filing status
| 0% up to
| 15% up to
| 20% above

| Single
| $49,450
| $545,500
| $545,500

| Married filing jointly
| $98,900
| $613,700
| $613,700

| Head of household
| $66,200
| $579,600
| $579,600

#### The 2026 short-term (ordinary income) brackets

A short-term gain has no schedule of its own — it is dropped into
the ordinary income brackets and taxed like a paycheque. These are
the 2026 figures, again on taxable income.

2026 ordinary income brackets — the rates a short-term gain pays.

| Rate
| Single, up to
| Married joint, up to
| Head of household, up to

| 10% | $12,400 | $24,800 | $17,700

| 12% | $50,400 | $100,800 | $67,450

| 22% | $105,700 | $211,400 | $105,700

| 24% | $201,775 | $403,550 | $201,775

| 32% | $256,225 | $512,450 | $256,200

| 35% | $640,600 | $768,700 | $640,600

| 37% | above | above | above

#### Four worked examples

##### Example 1 — the gain is genuinely tax-free

Single filer, $40,000 of taxable income, sells a
fund held six years for an $8,000 long-term gain.
Stacked total: $48,000, which is below the $49,450 breakpoint. The
entire gain is taxed at 0% — federal tax on the
gain: $0. This band is real and under-used:
realising gains deliberately while you sit inside it resets your
basis higher at no cost, which is the whole idea behind
gain harvesting in early retirement.

##### Example 2 — a gain that straddles two rates

Single filer, $45,000 of taxable income, a
$10,000 long-term gain. There is $4,450 of room
left below the $49,450 breakpoint, so:

- $4,450 of the gain at 0% = $0

- The remaining $5,550 at 15% = $832.50

Total federal tax on a $10,000 gain: $832.50, an
effective rate of 8.3% — neither of the two
headline rates. This is the case a "what's my bracket" answer gets
wrong every time.

##### Example 3 — the plain 15% case

Married filing jointly, $150,000 of taxable
income, a $60,000 long-term gain. The stacked
total of $210,000 is already past the $98,900 breakpoint and well
short of $613,700, so the whole gain sits in the 15% band:
$9,000. Modified AGI is under the $250,000 joint
threshold, so no surtax applies. Effective rate:
15%.

##### Example 4 — short-term versus long-term, same gain

Single filer, $250,000 of taxable income, a
$100,000 gain, modified AGI of $350,000.

- Held 11 months (short-term). The gain stacks from $250,000 to $350,000 of ordinary income: $6,225 at 32% = $1,992, then $93,775 at 35% = $32,821.25. Add the 3.8% surtax on the full $100,000 = $3,800. Total $38,613.25 — an effective 38.6%.

- Held 13 months (long-term). The whole gain sits in the 15% band: $15,000, plus the same $3,800 surtax. Total $18,800 — an effective 18.8%.

Two months of patience is worth $19,813.25. Our
capital gains tax calculator
runs both versions side by side if you want to try your own numbers.

#### The 3.8% net investment income tax

Above a modified-AGI threshold, investment income picks up an
extra 3.8% surtax on top of whatever capital gains rate applies.
The thresholds are written into law and — like the Social Security
taxation thresholds — are not indexed to inflation:

- $200,000 — single and head of household

- $250,000 — married filing jointly

- $125,000 — married filing separately

The surtax applies to the lesser of your net investment
income and the amount by which your modified AGI exceeds the
threshold — so crossing it by $5,000 costs $190, not 3.8% of the
whole gain. In practice this is what turns the familiar 15% into
an effective 18.8%, and 20% into 23.8%.

#### Losses, the $3,000 rule, and wash sales

Capital losses net against capital gains before any rate is
applied — short-term against short-term first, long-term against
long-term, then across. If losses exceed gains, you may deduct up
to $3,000 of the excess against ordinary income in
a year ($1,500 if married filing separately) and carry the rest
forward indefinitely.

The trap is the wash sale rule: buy a
"substantially identical" security within 30 days before or after
selling at a loss, and the loss is disallowed for now — it is added
to the basis of the replacement shares instead. The window is 61
days wide in total, and it spans accounts, including your IRA.

#### Three things that are taxed differently

- Your home. Up to $250,000 of gain ($500,000 married filing jointly) is excluded outright if you owned and lived in it for two of the last five years. Only the excess is a taxable gain.

- Collectibles — art, coins, physical gold, and gold ETFs structured as grantor trusts — top out at 28% rather than 20%.

- Qualified dividends are not gains, but they use the same 0/15/20% brackets and stack the same way, so they belong in the same calculation.

#### State tax is on top, and rarely preferential

Everything above is federal. Most states tax capital gains as
ordinary income at their normal rates, with no long-term discount —
so a "15%" federal gain can be a 20%+ combined one in a
high-rate state, while nine states with no income tax charge
nothing. A handful offer a partial exclusion. Check your own
state's treatment before assuming the federal number is the whole
bill.

#### The knock-on effects people miss

A realised gain raises your adjusted gross income, and AGI is the
input to several other calculations that have nothing to do with
capital gains tax. A large sale can push more of your Social
Security benefit into the taxable bands — see
how Social Security is taxed
— trip an IRMAA threshold
that raises your Medicare premiums two years later, or phase out
credits and deductions. Which is why the sequencing question —
which accounts to draw down first
— usually matters more than the rate on any single sale.

#### Frequently asked questions

##### How do I calculate long-term capital gains tax?

Subtract your cost basis from the sale proceeds to get the
gain, confirm you held the asset more than one year, then add
the gain on top of your other taxable income. Whatever slice
of the gain falls below the 0% breakpoint ($49,450 single,
$98,900 joint in 2026) is untaxed; the slice between that and
$545,500 single ($613,700 joint) is taxed at 15%; anything
above is taxed at 20%. Add the 3.8% surtax if your modified
AGI is over $200,000 single or $250,000 joint.

##### What are the capital gains tax brackets for 2026?

For long-term gains the 2026 breakpoints on total taxable
income are 0% up to $49,450, 15% up to $545,500 and 20% above
that for single filers; 0% up to $98,900, 15% up to $613,700
and 20% above for married filing jointly; and 0% up to
$66,200, 15% up to $579,600 and 20% above for head of
household. Short-term gains use the ordinary income brackets
of 10% to 37% instead.

##### Does a capital gain push my other income into a higher bracket?

A long-term gain does not push your ordinary income up —
ordinary income fills the brackets first and the gain is
stacked above it. But the reverse is true: your ordinary
income determines which capital gains band the gain lands in,
and a large gain does raise your AGI, which can affect Social
Security taxation, Medicare IRMAA and various phase-outs. A
short-term gain is ordinary income and does push you up.

##### How much capital gains tax will I pay on $10,000?

It depends entirely on your other income. A single filer with
$40,000 of taxable income pays nothing on a $10,000 long-term
gain, because the stacked total stays under $49,450. The same
gain for someone with $150,000 of taxable income costs $1,500
at 15%. And if the asset was held a year or less, the gain is
taxed at that person's ordinary rate instead — $2,200 in the
22% bracket.

##### Can I avoid capital gains tax legally?

Several ways, none of them exotic. Hold for more than a year
to get the long-term rates. Realise gains in a year when your
taxable income keeps you inside the 0% band. Offset gains with
realised losses, respecting the wash sale rule. Hold assets in
a Roth or traditional account, where sales are not taxable
events. Donate appreciated shares to charity rather than cash.
And heirs get a step-up in basis, which erases the gain
entirely.

#### Put a number on it

- Capital Gains Tax Calculator — the stacking above, run on your own numbers.

- Tax-Aware Withdrawal Calculator — what a sale costs against an IRA withdrawal.

- Which Accounts to Draw Down First — where a taxable sale fits in the order.

- How Social Security Is Taxed — the AGI knock-on from a big gain.

- The Roth Conversion Ladder, Explained — why a conversion and a 0% gain harvest compete for the same room.

- How 401(k) Withdrawals Are Taxed (2026) — the ordinary-income treatment a taxable gain avoids.

#### See the gain inside your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Open the calculator

---

## How Long Will My Retirement Savings Last?
URL: https://planomy.net/guides/how-long-will-my-money-last
Summary: The depletion formula behind the answer, a table showing how long a portfolio lasts at each withdrawal rate and real return, and why an average return misleads.

Retirement income

### How Long Will My Retirement Savings Last?

There is an exact answer to this question, and it fits on one line.
Understanding it tells you something no calculator output can: which of
your assumptions the answer actually depends on, and how violently it moves
when they change.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- How long money lasts depends on three numbers: the balance, the annual withdrawal, and the real (after-inflation) return.

- The formula is n = ln(1 ÷ (1 − r × P ÷ W)) ÷ ln(1 + r) — portfolio P, withdrawal W, real return r.

- If your withdrawal is less than the real return times the balance (W ≤ r × P), the money never runs out on paper.

- $1,000,000 spending $50,000 a year lasts 20 years at a 0% real return, 26 years at 2%, and 41 years at 4%.

- Every year of longevity you buy gets more expensive: going from 25 to 30 years costs far less than going from 30 to 35.

#### The formula

Start with a portfolio P, withdraw W at the
end of each year, and earn a real return r on what is left.
The number of years n before the balance hits zero is:

n = ln( 1 ÷ (1 − r × P ÷ W) ) ÷ ln(1 + r)

Everything is in today's dollars, so r is a real return — about 4% for
a stock-heavy portfolio, about 2% for a balanced one, and 0% is a reasonable
worst case for a very conservative one. Using real returns and a real
withdrawal is what lets you ignore inflation in the rest of the arithmetic.

##### Worked, step by step

P = $1,000,000, W = $50,000, r = 4%:

- r × P = 0.04 × $1,000,000 = $40,000 — what the portfolio earns in year one.

- r × P ÷ W = $40,000 ÷ $50,000 = 0.8 — the share of the withdrawal that growth covers.

- 1 − 0.8 = 0.2 — the share that has to come out of principal.

- ln(1 ÷ 0.2) = ln(5) = 1.609; ln(1.04) = 0.0392.

- n = 1.609 ÷ 0.0392 = 41.0 years.

Step 2 is the one worth staring at. Only 20% of that $50,000 comes out of
principal — which is why the balance lasts four decades rather than the
twenty years a naive "$1m ÷ $50k" would suggest.

#### The table

Years until a $1,000,000 portfolio is exhausted, by annual inflation-adjusted withdrawal and real return, with withdrawals taken at the end of each year. "Never" means growth covers the withdrawal indefinitely. Scale proportionally for other balances: $500,000 spending $25,000 lasts as long as $1,000,000 spending $50,000.

| Annual withdrawal
| Rate on $1m
| 0% real
| 2% real
| 4% real
| 6% real

| $40,000 | 4.0% | 25.0 | 35.0 | Never | Never

| $50,000 | 5.0% | 20.0 | 25.8 | 41.0 | Never

| $60,000 | 6.0% | 16.7 | 20.5 | 28.0 | Never

| $70,000 | 7.0% | 14.3 | 17.0 | 21.6 | 33.4

| $80,000 | 8.0% | 12.5 | 14.5 | 17.7 | 23.8

| $100,000 | 10.0% | 10.0 | 11.3 | 13.0 | 15.7

Read across any row and you see how much the return assumption is worth. Read
down any column and you see how much the spending assumption is worth. In every
case the spending column moves the answer more — which is the single most
useful fact in retirement planning, because spending is the input you control.

#### The line where the money never runs out

Set W = r × P and the formula divides by zero: growth exactly covers the
withdrawal and the balance never falls. That is the entire idea behind a
"safe" withdrawal rate. At a 4% real return, withdrawing 4% is the boundary; at
a 2% real return it is 2%.

So why does the
4% rule stop at 4% when stocks have
historically returned more? Because real portfolios do not deliver a smooth
real return. The rule's margin exists to survive the sequence of returns, not
the average of them.

#### Why the average return misleads

This formula assumes the same return every year. Markets do not work that way,
and when you are withdrawing, the order of returns changes the outcome
even when the average is identical. Two retirees with the same average return
can end up decades apart, because selling shares into a downturn permanently
removes shares that would have participated in the recovery. That is
sequence-of-returns risk, and it
means the table above is a centre estimate, not a promise.

Treat the number as a midpoint. A projection that says "your
money lasts 31 years" really means "in a smooth world it lasts 31 years; in a
bad first decade it lasts materially fewer." Plans that survive both are built
with a cash buffer, flexible spending, or both — see the
bucket strategy.

#### What the formula leaves out

-
Social Security and pensions. Once they start, W falls
sharply — often the single biggest improvement to the answer. Model the
pre- and post-benefit phases separately rather than averaging them.

-
Taxes. If the money sits in a traditional IRA, a $50,000
withdrawal is not $50,000 of spending. Use after-tax spending as W, or gross
up the withdrawal — see
which accounts to spend first.

-
Required minimum distributions. From your
RMD age onwards the IRS sets a
floor on withdrawals from pre-tax accounts, whatever your plan says.

-
Real spending patterns. Spending often falls in the middle
years and rises again for healthcare late in retirement, rather than tracking
inflation in a straight line.

#### Run it on your own balance

The retirement drawdown
calculator applies exactly this arithmetic to your numbers, year by year,
and the inflation impact calculator
shows what a fixed withdrawal is worth after 20 or 30 years of price rises.
If you are still building the balance, the
compound growth calculator works the
same maths in the other direction.

#### Frequently asked questions

##### How long will $1 million last in retirement?

At $40,000 a year it lasts 25 years with no real growth and never runs out at a 4% real return. At $60,000 a year it lasts about 17 years with no growth, 20 years at a 2% real return, and 28 years at 4%. The withdrawal amount matters more than the return.

##### What is the formula for how long savings will last?

n = ln(1 divided by (1 minus r times P divided by W)) divided by ln(1 plus r), where P is the balance, W is the annual withdrawal and r is the real return. If W is less than or equal to r times P the portfolio never depletes, because growth covers the whole withdrawal.

##### Should I use a real or a nominal return?

A real return, if your withdrawal is expressed in today's dollars — which is how people naturally think about spending. Mixing a nominal return with a real withdrawal is the most common error in these calculations and it overstates how long the money lasts by many years.

##### Does this account for market crashes?

No. The formula assumes a constant return, so it produces a central estimate. A poor sequence of returns in the first decade of withdrawals shortens the real answer, which is why plans add a cash buffer, flexible spending, or a lower starting withdrawal rate.

##### How does Social Security change the answer?

Dramatically, because it cuts the withdrawal the portfolio has to cover. A household spending $60,000 with a $30,000 benefit only needs $30,000 from savings, and halving the withdrawal typically more than doubles how long the balance lasts.

#### Put a number on it

- Retirement Drawdown Calculator — the same maths, year by year, on your balance.

- Inflation Impact Calculator — what a fixed withdrawal is worth in 25 years.

- What Is a Safe Withdrawal Rate? — where the 4% boundary comes from.

- Sequence of Returns Risk — why the average return is not the answer.

- The Bucket Strategy — structuring withdrawals to survive bad years.

#### Stop guessing at the horizon

Planomy replaces the single-line formula with a full year-by-year
projection: Social Security, taxes, required distributions and changing
spending, all in one plan you can adjust and compare. Free, private, and
running in your browser.

Try Planomy free

Read more guides

---

## Retirement Number Calculator: How Much Do I Need?
URL: https://planomy.net/guides/how-much-do-i-need
Summary: Turn retirement spending and Social Security into a portfolio target on one screen, with the same target shown at 3%, 3.5%, 4%, and 5% withdrawal rates.

Retirement planning calculator

### How Much Do I Need?

Turn retirement spending and guaranteed income into a quick
portfolio target. This is a simple deterministic estimate, not
advice.

#### Find your retirement number

Method: FI number = (annual spending - guaranteed income) divided
by the withdrawal rate, with the portfolio-funded spending gap
floored at zero.

#### Estimated result

Fill in the inputs above to see an estimate.

-

Each row uses the same portfolio-funded spending gap and changes only the withdrawal rate.

| Withdrawal rate
| Portfolio target

| 3% | -

| 3.5% | -

| 4% | -

| 5% | -

#### Turn the target into a plan

This target assumes one flat withdrawal rate forever and ignores tax. Planomy
projects your actual savings, Social Security and taxes year by year, so you
can see whether the balance really gets there. Free, private, and running in
your browser.

Build your full plan free

#### Keep planning

- When Can I Retire? - project when savings may reach your target.

- What Is a Safe Withdrawal Rate? - see what the percentage means and where it can break down.

- How Social Security Benefits Are Taxed - learn why tax treatment matters to the estimate.

- FIRE Number Calculator - turn the same target into a retire-early age.

- Retirement Drawdown Calculator - test how long the portfolio lasts at your spending.

- Social Security Claiming Age Calculator - firm up the guaranteed-income figure you entered.

#### Build your full plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Build your full plan free

Read more guides

---

## How Much Does a $500,000 Annuity Pay Per Month?
URL: https://planomy.net/guides/how-much-does-a-500k-annuity-pay-per-month
Summary: $500,000 pays about $3,300 a month over 20 years at a 5% return. Full payout table from $50,000 to $2 million, by term, rate and the age you start.

Retirement income

### How Much Does a $500,000 Annuity Pay Per Month?

A $500,000 lump sum paying out over 20 years at a 5%
return produces about $3,300 a month. Stretch the
same money to 30 years and it drops to $2,684;
compress it to 15 and it rises to $3,954. The
premium is only one of three numbers that decide the answer —
the payout period and the interest rate matter just as much, and
this page works all three.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- At a 5% return, $500,000 pays $3,954 a month over 15 years, $3,300 over 20, $2,923 over 25 and $2,684 over 30.

- The payouts scale linearly with the premium: $250,000 pays exactly half of the $500,000 figure, $1 million exactly double.

- The formula is Payment = P × i ÷ (1 − (1 + i)−N) — premium P, monthly rate i, number of payments N.

- Starting later pays more per month purely because there are fewer payments left: $500,000 spread to age 90 pays $2,684 a month from 60 but $3,300 from 70.

- An insurer's lifetime quote is not this number. A real single-premium immediate annuity pools mortality risk, so it can pay more than a self-funded schedule — and it stops when you die rather than leaving a balance.

#### The direct answer

Spread $500,000 evenly over a fixed number of years, letting the
unspent balance keep earning 5% a year, and the monthly cheque is:

- 15 years — $3,954 a month ($47,448 a year)

- 20 years — $3,300 a month ($39,600 a year)

- 25 years — $2,923 a month ($35,076 a year)

- 30 years — $2,684 a month ($32,208 a year)

Every one of those figures exhausts the $500,000 exactly at the end
of the period. Nothing is left over, which is the trade you are
making: a bigger cheque in exchange for a shorter guarantee.

#### The full table, $50,000 to $2 million

Monthly income from a lump sum, at a 5% annual return, with the balance exactly exhausted at the end of the period. Figures are before tax. Payouts scale linearly, so a premium not listed here can be read off the nearest row: $400,000 is twice the $200,000 row.

| Lump sum
| 15 years
| 20 years
| 25 years
| 30 years

| $50,000 | $395 | $330 | $292 | $268

| $100,000 | $791 | $660 | $585 | $537

| $200,000 | $1,582 | $1,320 | $1,169 | $1,074

| $250,000 | $1,977 | $1,650 | $1,461 | $1,342

| $300,000 | $2,372 | $1,980 | $1,754 | $1,610

| $500,000 | $3,954 | $3,300 | $2,923 | $2,684

| $1,000,000 | $7,908 | $6,600 | $5,846 | $5,368

| $2,000,000 | $15,816 | $13,199 | $11,692 | $10,736

#### Where the numbers come from

This is the standard annuity payment formula — the same one
that prices a mortgage, run backwards:

Payment = P × i ÷ (1 − (1 + i)−N)

P is the lump sum, i the monthly interest rate (annual rate
divided by 12) and N the total number of payments (years × 12).

##### Worked, step by step

P = $500,000, a 5% annual return, over 20 years:

- i = 0.05 ÷ 12 = 0.0041667; N = 20 × 12 = 240.

- (1 + i)−N = 1.0041667−240 = 0.36864.

- 1 − 0.36864 = 0.63136.

- P × i = $500,000 × 0.0041667 = $2,083.33.

- Payment = $2,083.33 ÷ 0.63136 = $3,300 a month.

Over 240 months that is $792,000 of income from $500,000 of
principal. The extra $292,000 is interest earned on the shrinking
balance — which is exactly why a longer payout period does not
cut the cheque proportionally.

#### The interest rate matters more than people expect

Hold the premium and the term fixed and vary only the rate. $500,000
over 25 years:

Monthly income from $500,000 over 25 years, by annual return. A 0% return is simply the premium divided by 300 payments.

| Annual return
| Monthly income
| Total paid out

| 0% | $1,667 | $500,000

| 3% | $2,371 | $711,300

| 4% | $2,639 | $791,700

| 5% | $2,923 | $876,900

| 6% | $3,222 | $966,600

Three percentage points of return is worth $850 a
month — a 36% difference in income from the same
$500,000. When an insurer quotes you a payout, the rate baked into it
is doing most of the work, and it is rarely disclosed directly.

#### Starting age: why 70 pays more than 60

If the goal is income to age 90, starting later means fewer payments
to fund from the same money:

Monthly income from $500,000 running to age 90 at a 5% return, by the age you start.

| Start age
| Years of payments
| Monthly income

| 60 | 30 | $2,684

| 62 | 28 | $2,768

| 65 | 25 | $2,923

| 67 | 23 | $3,052

| 70 | 20 | $3,300

| 75 | 15 | $3,954

This is the same mechanism behind
delaying Social
Security, and it is worth comparing the two before buying
anything. Delaying a benefit you already own is usually cheaper than
buying income from an insurer.

A real insurer quote is a different product. The
table above is a self-funded schedule: your own money,
amortised. A single-premium immediate annuity (SPIA) pools mortality
across thousands of buyers, so the insurer can pay out more than your
own balance would support — but the payments stop when you die,
with nothing left for heirs unless you buy a period-certain or
cash-refund rider, which lowers the payment. Always compare an actual
quote against the equivalent row here before deciding.

#### What the payout figures leave out

-
Tax. Money from a qualified account (an IRA or
401(k) annuity) is fully taxable as ordinary income. In a
non-qualified annuity bought with after-tax money, the exclusion
ratio makes part of each payment a tax-free return of your
principal. See what a withdrawal really costs with the
withdrawal tax
calculator.

-
Inflation. A level $3,300 buys roughly half as
much after 25 years at 3% inflation. Inflation-adjusted annuities
exist and start materially lower. The
inflation impact
calculator puts a number on it.

-
Fees and surrender charges. Variable and indexed
annuities carry ongoing costs that a fixed immediate annuity does
not, and most contracts penalise early exit for several years.

-
Longevity beyond the term. A 20-year certain
annuity bought at 65 pays nothing from 85 onward. If that is the
risk you are trying to remove, a lifetime contract — not a
fixed term — is the product that removes it.

#### Run it on your own number

The annuity payout
calculator takes any premium, rate and period and shows both the
fixed-term and to-life-expectancy versions side by side. If you are
weighing this against simply drawing down a portfolio, the
retirement drawdown
calculator and
how long will my money
last answer the same question without an insurer in the middle.

#### Frequently asked questions

##### How much does a $500,000 annuity pay per month?

About $3,300 a month over a 20-year payout period at a 5% return, $2,923 over 25 years and $2,684 over 30 years. Over 15 years it is $3,954. These figures exhaust the $500,000 exactly at the end of the term, and they are before tax.

##### How much does a $100,000 annuity pay per month?

About $660 a month over 20 years at a 5% return, $585 over 25 years and $537 over 30 years. Payouts scale linearly with the premium, so $100,000 pays exactly one fifth of what $500,000 pays over the same period at the same rate.

##### How much does a $1 million annuity pay per month?

About $6,600 a month over 20 years at a 5% return, $5,846 over 25 years and $5,368 over 30 years. Over a 15-year period it is $7,908 a month, or $94,896 a year, which exhausts the million exactly at the end.

##### Is annuity income taxed?

It depends where the money came from. Payments from an annuity held inside an IRA or 401(k) are fully taxable as ordinary income. In a non-qualified annuity bought with money you had already paid tax on, the exclusion ratio treats part of each payment as a tax-free return of principal and taxes only the earnings portion.

##### Does an annuity pay more if I wait until 70?

Yes, if the income has to last to a fixed age. $500,000 running to age 90 pays $2,684 a month starting at 60 but $3,300 starting at 70, simply because there are 120 fewer payments to fund. Insurer lifetime quotes rise with age for the same reason, plus shorter life expectancy.

#### Put a number on it

- Annuity Payout Calculator — any premium, rate and period, with the full schedule.

- Pension Lump Sum vs Monthly — the same maths applied to a pension offer.

- Retirement Drawdown Calculator — the drawdown alternative to buying income.

- How Long Will My Savings Last? — the depletion formula behind the table.

- The Bucket Strategy — where guaranteed income fits in a wider plan.

#### Is an annuity actually the missing piece?

A payout table answers one question. Planomy answers the one behind it:
given your Social Security, taxes and spending, how much guaranteed
income do you actually need? Build the projection, then decide.
Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## How Much Does a Couple Need to Retire?
URL: https://planomy.net/guides/how-much-does-a-couple-need-to-retire
Summary: Two Social Security benefits, one longer joint horizon, and the survivor drop that most plans ignore — the arithmetic of retiring together, worked end to end.

Retirement planning

### How Much Does a Couple Need to Retire?

A couple is not two retirement plans stapled together. There are two
Social Security benefits, a longer horizon than either person faces alone,
and one event no single-person plan has to survive: the day the household
goes from two benefits to one.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Start the same way as anyone else — annual spending minus combined Social Security, divided by a withdrawal rate — but use a longer horizon, because the odds that one of you lives past 90 are much higher than for either alone.

- Worked example: $80,000 of spending, $48,000 of combined benefits, a 3.6% rate — a target of about $890,000.

- The survivor keeps only the larger of the two benefits. In the example, household Social Security falls from $48,000 to $31,200 — a 35% cut.

- Spending does not fall 35%. A widely used planning assumption is that a survivor needs about 75% of the couple's spending, and they now file as a single taxpayer with narrower brackets.

- The single most effective fix is free: have the higher earner delay to 70, which raises the survivor's floor for life.

#### The base calculation

The method is the same one in our guide to
how much you need to retire: take
annual spending, subtract guaranteed income, and divide the gap by a
sustainable withdrawal rate. For a couple, both inputs change.

Take a couple retiring at 65 who spend $80,000 a year, with
monthly benefits of $2,600 and $1,400 — $48,000 a year
combined.

- Gap: $80,000 − $48,000 = $32,000 a year from the portfolio.

- Horizon: plan to 95, not 90. For a 65-year-old couple, the chance that at least one is still alive at 90 is considerably higher than for either individually, and the plan has to cover whoever is still here.

- Rate: 3.6% rather than 3.8%, reflecting that longer horizon.

- Target: $32,000 ÷ 0.036 = $888,889 — call it $890,000.

That is 11× spending, far below the 25× rule of thumb, because two Social
Security benefits are covering 60% of the budget. This is the single biggest
reason couples often need less than they fear — and why a plan that ignores
Social Security produces a number that keeps people working years longer than
necessary.

#### The event most plans skip

Now run the scenario every couple's plan should be stress-tested against: one
spouse dies at 80. Three things happen at once.

The same household before and after. Benefits shown in today's dollars; the survivor keeps only the larger benefit.

|
| Both alive
| Survivor alone

| Social Security | $48,000 | $31,200

| Spending | $80,000 | $60,000

| Gap from portfolio | $32,000 | $28,800

| Filing status | Married jointly | Single

Household income drops 35% while spending drops
25%. The portfolio's job barely shrinks — from $32,000 a year
to $28,800 — even though there is one fewer person to support. Planners call
this the widow's penalty, and it is made worse by the tax code:

-
A single filer reaches every bracket sooner than a married couple, on income
that has hardly changed.

-
The provisional-income thresholds that decide
how much of the benefit is
taxed drop from $32,000/$44,000 to $25,000/$34,000.

-
IRMAA thresholds for a single filer
are roughly half the married ones, so the same income can now trigger a
Medicare surcharge.

The survivor's own target, run through the same method at a shorter horizon —
$28,800 ÷ 0.04 = $720,000 — is only about 19% below the
couple's $890,000. Whatever else you take from this page: the plan does not get
much cheaper when one of you is gone.

#### Four fixes, in order of value

##### 1. Delay the higher earner's benefit

This is the highest-value move available and it costs nothing but patience.
Delaying the $2,600 benefit from 67 to 70 raises it to $3,224 a month, so the
survivor's floor rises from $31,200 to $38,688 a year —
indexed, guaranteed, for as long as either of you lives. The lower earner can
claim earlier to cover cash flow in the meantime. The full logic is in
when to take Social
Security.

##### 2. Keep tax diversity

A survivor filing as a single taxpayer has far less room in the low brackets. A
household with Roth money, taxable money and pre-tax money can control taxable
income in a way that an all-traditional household cannot — which is another
reason the low-income years before benefits start are worth spending on
Roth conversions while you are
still filing jointly and the brackets are wide.

##### 3. Choose the pension survivor option deliberately

If either of you has a defined benefit pension, the single-life option pays
more each month and stops at death. Combined with the loss of a Social Security
benefit, that can cut a survivor's guaranteed income twice over. See
pension lump sum or monthly
payment.

##### 4. Remember there are two of everything

IRAs are individual accounts, so a couple has two sets of
required minimum distributions,
two contribution limits while working (including a spousal IRA for a
non-earning spouse), and two health-coverage decisions if you retire at
different times. Coordinating retirement dates — one person working two extra
years to carry health insurance and let the portfolio compound — is one of the
most common and most effective adjustments couples make.

#### Run your own two-person plan

Start with the FIRE number calculator
for the base target and the
claiming age
calculator for each benefit, then test the survivor case with the
retirement drawdown calculator
using the reduced income and the reduced-but-not-halved spending.

#### Frequently asked questions

##### How much does a couple need to retire at 65?

Take annual spending, subtract both Social Security benefits, and divide the gap by about 3.6% to reflect a joint horizon. In our example — $80,000 of spending and $48,000 of combined benefits — that is roughly $890,000, or about 11 times spending.

##### What happens to Social Security when one spouse dies?

The survivor keeps the larger of the two benefits and the smaller one stops. A household receiving $48,000 between two benefits of $2,600 and $1,400 a month would drop to $31,200 a year — a 35% cut in guaranteed income while most fixed costs continue.

##### Does a couple need twice as much as a single person?

No. Housing, utilities, insurance and many other costs are shared, and there are two Social Security benefits rather than one. But a couple does need a longer planning horizon, because the chance that at least one partner lives into their 90s is much higher than for an individual.

##### What is the widow's penalty in retirement?

The combination of losing the smaller Social Security benefit and moving from joint to single tax filing. Income falls sharply while spending falls much less, and the survivor faces narrower tax brackets, lower Social Security taxation thresholds and lower Medicare IRMAA thresholds on similar income.

##### Should both spouses retire at the same time?

Not necessarily. Staggering retirement dates so one partner keeps employer health coverage for a year or two is one of the most valuable adjustments available, particularly before either of you reaches Medicare eligibility at 65, and it lets the portfolio compound untouched for longer.

#### Put a number on it

- FIRE Number Calculator — the base target from your combined spending.

- Social Security Claiming Age Calculator — price the higher earner delaying.

- Retirement Drawdown Calculator — stress-test the survivor case.

- When Should You Take Social Security? — the survivor benefit logic in full.

- How Much Do You Need to Retire? — the method this page builds on.

#### Plan for both of you

Planomy models two people, two benefits and two sets of required
distributions in one projection — including the survivor scenario most
plans never test. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## How Much Is a 6-Month Emergency Fund? (With Table)
URL: https://planomy.net/guides/how-much-is-a-6-month-emergency-fund
Summary: Six months of essential expenses, not six months of income. $4,000 a month of essentials means $24,000. Table for 3, 6, 8 and 12 months, and how long it takes.

Cash and safety net

### How Much Is a 6-Month Emergency Fund?

Six months of essential expenses — not six months
of income, and not six months of everything you spend. If your rent,
food, utilities, insurance, transport and minimum debt payments come to
$4,000 a month, a six-month fund is $24,000. The
distinction matters: most households cut 20–30% of their spending
the moment income stops, so sizing on gross pay overshoots the target
by tens of thousands.

Updated July 27, 2026
·
~7 min read
·
US-focused

#### Key takeaways

- Size the fund on essential monthly expenses, not income and not total spending.

- $3,000 of essentials a month → $18,000 for six months. $5,000 → $30,000. $8,000 → $48,000.

- Three months suits a dual-income household in a stable field; six is the default; eight to twelve suits single earners, commission or contract income, and anyone within a few years of retirement.

- Saving $500 a month reaches a $24,000 target in about 45 months once a 4% high-yield account is doing part of the work — 48 months without it.

- Keep it somewhere boring and instant: a high-yield savings account, or a short CD ladder for the portion you are unlikely to need this quarter.

#### What counts as an essential expense

An emergency fund covers the version of your life where income has
stopped. That is a smaller number than your normal spending, and
writing it down honestly is most of the work:

- Housing — rent or mortgage, property tax, condo or HOA fees.

- Utilities — power, water, heat, internet, phone.

- Food — groceries at a normal weekly shop, not restaurants.

- Insurance — health, auto, home or renters, life. Health cover is the one that gets expensive fast if employer coverage ends.

- Transport — car payment, fuel, transit pass, essential maintenance.

- Minimum debt payments — the minimums, not the accelerated payoff you make in good months.

- Childcare and medication — whatever cannot simply be paused.

What does not belong: holidays, subscriptions you would
cancel, dining out, gifts, hobby spending, extra debt payments, and
retirement contributions. Those are the 20–30% that disappears
the week a job does.

#### The table

Emergency fund target by essential monthly expenses and months of cover. Find your essentials in the left column and read across to the number of months your situation calls for.

| Essential expenses / month
| 3 months
| 6 months
| 8 months
| 12 months

| $2,000 | $6,000 | $12,000 | $16,000 | $24,000

| $3,000 | $9,000 | $18,000 | $24,000 | $36,000

| $4,000 | $12,000 | $24,000 | $32,000 | $48,000

| $5,000 | $15,000 | $30,000 | $40,000 | $60,000

| $6,000 | $18,000 | $36,000 | $48,000 | $72,000

| $8,000 | $24,000 | $48,000 | $64,000 | $96,000

The arithmetic is deliberately trivial — months ×
essential expenses. What is not trivial is picking the number of
months, and that is where most of the real difference sits.

#### How many months do you actually need?

-
Three months. Two stable incomes, no dependants
relying on one of them, a skill in demand, no self-employment.
Three months is a floor, not a target — it is roughly one
hiring cycle.

-
Six months. The default for most households, and
the answer to "how much should I have saved." It covers a normal
job search with a margin for the first month of severance
paperwork.

-
Eight to twelve months. Single-income households,
commission or contract earners, business owners, anyone in a
specialised field where the next role takes longer to find, and
anyone with a variable-income spouse. Twelve is also the sensible
number if a large deductible or an older home means a
five-figure surprise is plausible.

-
Two to three years, in retirement. Once you are
drawing from a portfolio the fund stops being a job-loss buffer and
becomes a market buffer, so it is sized in years of spending rather
than months. That is the cash bucket in the
bucket
strategy, and it exists to stop you selling into a downturn
— see sequence of
returns risk.

#### How long it takes to get there

Target divided by monthly saving, with interest shortening it a
little. A $24,000 target:

Months to reach a $24,000 emergency fund from zero, with and without a 4% APY high-yield savings account. Scale proportionally for other targets.

| Saved per month
| In a 0% account
| At 4% APY

| $300 | 80 months | 71 months

| $500 | 48 months | 45 months

| $750 | 32 months | 30 months

| $1,000 | 24 months | 23 months

| $1,500 | 16 months | 16 months

Four years is a long time to stare at an unfinished goal, which is
why the useful move is to break it up. One month of
essentials is the first milestone and it removes most of
the day-to-day fragility. Three months is the second. Six is the
destination.

A starter fund comes before the full one. If you
carry credit-card debt above about 15%, the standard order is: build
one month of essentials, then attack the debt with everything spare,
then finish the fund. Sitting on $24,000 of cash while paying 22% on
a card costs money every month — the
debt payoff calculator shows
how much.

#### Where to keep it

Two requirements, in order: you can reach it within a day or two, and
its value does not fall when you need it. That rules out stocks and
anything with a lock-up, and it argues against a chequing account
paying nothing.

-
A high-yield savings account for the whole fund is
the simple, correct answer for most people. Fully liquid, federally
insured up to the limit, and currently paying enough to roughly keep
pace with inflation.

-
A short CD ladder for the back half. Keep two or
three months liquid and ladder the rest at three- or six-month
spacing so a rung matures regularly. That earns a locked rate
without ever needing to break a CD early — the
CD ladder calculator builds
the schedule.

-
Not in a retirement account. Pulling from an IRA or
401(k) before 59½ adds a 10% penalty to the income tax, which
is the most expensive possible way to handle an emergency. The
withdrawal tax
calculator puts a figure on it.

#### Mistakes that make the fund useless

- Sizing on gross income. Six months of a $90,000 salary is $45,000; six months of that household's essentials is often closer to $24,000. The gap is years of saving spent on the wrong target.

- Forgetting health insurance. If your cover is through work, the post-employment premium is a new essential expense that appears exactly when income stops.

- Investing it. The emergency and the market downturn tend to arrive in the same month; that correlation is the entire argument for cash.

- Never refilling it. A fund spent on a car repair and not rebuilt is a fund you no longer have. Restarting the transfer is the last step of every emergency.

#### Size yours

The emergency fund
calculator takes your essential monthly expenses and the months of
cover you want, and shows the gap between the target and what you have
today plus how long it takes to close at your saving rate. From there,
savings rate shows what is left
over for everything else.

#### Frequently asked questions

##### How much is a 6-month emergency fund?

Six times your essential monthly expenses. At $3,000 a month of essentials that is $18,000; at $4,000 it is $24,000; at $6,000 it is $36,000. Use essential expenses — housing, utilities, food, insurance, transport and minimum debt payments — rather than income or total spending, which typically overstates the target by 20 to 30 percent.

##### Should an emergency fund be based on income or expenses?

Expenses, and specifically essential expenses. Income is the wrong basis because it includes tax, retirement contributions and discretionary spending you would stop immediately. A household earning $90,000 gross might need $24,000 for six months rather than the $45,000 an income-based rule would suggest.

##### Is a 3-month emergency fund enough?

It is enough for a two-income household in a stable, in-demand field with no dependants relying on a single earner. For a single-income household, commission or contract income, or a specialised role where a job search takes longer, six to twelve months is the safer range.

##### How long does it take to save a 6-month emergency fund?

Divide the target by what you can save each month. A $24,000 target takes about 48 months at $500 a month, 24 months at $1,000, and 16 months at $1,500. A 4% high-yield savings account shortens the $500 case to roughly 45 months. Hitting one month of essentials first removes most of the day-to-day fragility.

##### Where should I keep my emergency fund?

A high-yield savings account for the whole amount is the simple answer: fully liquid, federally insured, and paying enough to roughly keep pace with inflation. Some savers keep two or three months liquid and put the rest in a short CD ladder. Never keep it in stocks or in a retirement account you would have to pay a penalty to reach.

#### Size it and build it

- Emergency Fund Calculator — your target, your gap, and how long it takes to close.

- CD Ladder Calculator — a maturity schedule for the part you will not touch this quarter.

- Debt Payoff Calculator — when high-rate debt should come first.

- The Bucket Strategy — what the cash buffer becomes in retirement.

- Retirement Readiness Checklist — the cash buffer in context of everything else.

#### See the fund inside the whole plan

An emergency fund is one line of a household balance sheet. Planomy puts
it next to the debts, the retirement accounts and the projection, so
you can see what holding more cash costs you and what it protects.
Free, private, and running in your browser.

Try Planomy free

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---

## How Much Do I Need to Retire at 55?
URL: https://planomy.net/guides/how-much-to-retire-at-55
Summary: Retiring at 55 means funding a 40-year retirement and bridging to Social Security. The worked math, the withdrawal rate it needs, and how to reach the money.

Early retirement

### How Much Do You Need to Retire at 55?

Retiring at 55 is not the same problem as retiring at 65 with a
smaller number. You are funding a retirement that could run 40 years,
paying for your own health insurance for a decade, and living entirely
off savings until Social Security starts. Here is the arithmetic, worked
end to end.

Updated July 27, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- A 40-year retirement calls for a lower withdrawal rate than the classic 4% — roughly 3.5%, which means about 29× your portfolio-funded spending instead of 25×.

- Social Security still helps, just later. The extra money you need is the cost of bridging the years before it starts, not a second full portfolio.

- In our worked example — $70,000 of spending, $30,000 of Social Security at 67 — the target lands near $1.46 million. Ignore Social Security entirely and it is $2 million.

- Money is reachable before 59½ through the rule of 55, 72(t) payments, Roth contributions, and a taxable brokerage account — but rolling that 401(k) to an IRA can destroy the rule-of-55 option.

- Health insurance from 55 to Medicare at 65 is the line item that most 55-year-old plans underestimate.

#### Start with the withdrawal rate, not the number

Every "how much do I need" answer is really a withdrawal rate in disguise. If
you can safely pull 4% of your portfolio each year, you need 25× your annual
spending (1 ÷ 0.04 = 25). Pull 3.5% and you need about 28.6×. The 4% rule was
built around a 30-year retirement — the standard case for
someone retiring at 65. Retire at 55 and you may be planning for 40.

Longer horizons need a lower rate, because there are more years for a bad
decade to compound against you. A common way to scale the rule of thumb:

Illustrative withdrawal rates by horizon. The multiple is simply 1 ÷ the rate. See our guide on the safe withdrawal rate for where these numbers come from and how much confidence to place in them.

| Retire at
| Years planned (to 95)
| Withdrawal rate
| Multiple of spending

| 70 | 25 | 4.0% | 25×

| 65 | 30 | 3.8% | 26×

| 60 | 35 | 3.6% | 28×

| 55 | 40 | 3.5% | 29×

That single change — 4.0% down to 3.5% — raises the target by about 14% before
you have accounted for anything else. It is the first price of retiring ten
years early.

#### The worked example

Take a household that spends $70,000 a year in retirement,
retires at 55, and expects $30,000 a year of Social Security
starting at 67. Everything below is in today's dollars, so the returns quoted
are real (after-inflation) returns.

##### Step 1 — the part Social Security covers

From 67 onward, the portfolio only has to produce the gap:
$70,000 − $30,000 = $40,000 a year. At a 3.5% withdrawal rate
that is $40,000 ÷ 0.035 = $1,142,857. Call it $1.14 million.

##### Step 2 — the bridge from 55 to 67

For twelve years the portfolio carries the whole $70,000, not $40,000. The
extra burden is $30,000 a year for 12 years = $360,000 of
spending. That money is invested while it waits, so its present value is a
little less: discounted at a 2% real return over an average delay of about six
and a half years, $360,000 × 0.879 ≈ $316,000.

##### Step 3 — add them up

Target portfolio at 55 for $70,000 of spending with $30,000 of Social Security starting at 67. Today's dollars.

| Component
| Amount
| Where it comes from

| Lifetime gap after 67
| $1,142,857
| $40,000 ÷ 3.5%

| Bridge, ages 55–67
| $316,000
| 12 × $30,000, discounted at 2% real

| Target at 55
| ≈ $1,460,000
| About 21× spending

Two things are worth noticing. First, the answer is 21× spending, not
29× — Social Security is doing a lot of work, and any answer that ignores it
will overshoot badly. Second, if you strip Social Security out entirely (you
distrust it, or you have very few covered earnings), the number becomes
$70,000 ÷ 0.035 = $2,000,000. The spread between $1.46m and
$2m is the single biggest assumption in the whole plan.

The bridge years run hot. Spending $70,000 from a $1.46m
portfolio is a 4.8% withdrawal rate — well above the 3.5% the long horizon
implies. That is intentional: the rate falls to about 2.7% once Social Security
starts. But it means a bad market in your first few years bites harder than the
averages suggest. This is exactly
sequence-of-returns risk, and it
is the strongest argument for holding a cash and bond buffer through the bridge.

#### Getting at the money before 59½

Having enough is only half the problem at 55. Most retirement money is locked
behind a 10% early-withdrawal penalty until 59½, so you need four and a half
years of accessible spending. The routes, in rough order of usefulness:

-
A taxable brokerage account. No penalty, no age rules, and
long-term gains may be taxed at 0% or 15%. The cleanest bridge fuel, and the
reason early retirees usually save outside their 401(k) as well as inside it.
Just don't fund it instead of the match: capture the full employer
match first, then send the surplus to the brokerage account, because no
bridge account returns what a match pays on day one. Work out what yours is
worth in
how to calculate your 401(k) employer match.

-
The rule of 55. If you leave your employer in or after the
calendar year you turn 55, you can take penalty-free distributions from
that employer's 401(k) or 403(b). It never applies to IRAs — which
means rolling the 401(k) into an IRA on your way out the door
forfeits it. Income tax is still due; only the penalty is waived.

-
72(t) / SEPP payments. A series of substantially equal
periodic payments from an IRA, penalty-free at any age, but locked in for the
longer of five years or until 59½. Rigid, and breaking the schedule triggers
retroactive penalties.

-
Roth IRA contributions. Your own direct contributions (not
earnings, not conversions) come out any time, tax- and penalty-free.

Notice what is missing: the
Roth conversion ladder. Conversions
become penalty-free five years after each one, so a conversion at 55 unlocks at
60 — by which point you are already past 59½ and everything is open anyway. The
ladder is a brilliant tool for someone retiring at 45; for someone retiring at
55 it solves a problem you do not have. What conversions are still
worth doing at 55 is a tax play, not an access play — see below.

#### Health insurance is the line item people miss

Medicare starts at 65. Retire at 55 and you are buying your own coverage for a
decade, at ages when premiums are at their highest and a bad year can be
expensive. The options are usually COBRA from your old employer (time-limited),
the ACA marketplace, a spouse's plan, or part-time work that carries benefits.

We are not going to quote a premium, because the honest answer is that it
varies enormously by state, age, household size and income. What matters for
your plan is the method: get a real quote for your county and household,
add a deductible-sized cushion, and put the total in your spending number
before multiplying by 29. A $12,000 annual health line item raises a
3.5% target by $342,857 — this is not a rounding error.

#### The consolation prize: a decade of cheap tax years

From 55 until Social Security and required distributions arrive, your taxable
income can be remarkably low — you are living partly off already-taxed
brokerage money and basis. Those are the best years of your life for
Roth conversions: you can
deliberately fill the bottom brackets with converted dollars, shrink the
traditional balance that will one day be forced out as
required minimum distributions,
and pay a low rate doing it. Retiring at 55 gives you roughly 18 of those
years — more runway than almost anyone else gets.

#### Run it with your own numbers

Swap in your spending, your Social Security estimate and your own retirement
age: the FIRE number calculator turns
spending into a target, and the
retirement drawdown calculator
shows how long a given portfolio survives at a given spending rate. If the
number looks distant, the
savings rate calculator is the honest
test of how many years of saving stand between you and it.

#### Frequently asked questions

##### Is $1.5 million enough to retire at 55?

In our worked example — $70,000 a year of spending with $30,000 of Social Security starting at 67 — a target near $1.46 million clears the bar, so $1.5 million works for that household. Change the spending and the answer moves fast: at $90,000 of spending the same method lands near $2 million.

##### What withdrawal rate is safe for a 40-year retirement?

Most research puts a 40-year horizon around 3.25% to 3.5% rather than the 4% used for a 30-year retirement, because a long horizon gives a bad sequence of early returns more time to compound against you. A 3.5% rate implies saving about 29 times your portfolio-funded spending.

##### Can I take money out of my 401(k) at 55 without a penalty?

Often yes, under the rule of 55: if you separate from your employer in or after the calendar year you turn 55, distributions from that employer's plan skip the 10% penalty. Income tax still applies, it does not cover IRAs, and rolling the 401(k) into an IRA gives the option up permanently.

##### Do I still count Social Security if I retire at 55?

Yes. Retiring early stops adding to your earnings record, which can lower the benefit, but it does not remove it. Check your estimate at ssa.gov rather than assuming, and remember it starts at 62 at the earliest — the years before that are the bridge your portfolio has to fund.

##### What is the biggest expense people forget when retiring at 55?

Health insurance between 55 and Medicare at 65. It is a new, recurring, age-rated cost that never appeared in a working budget, and because every dollar of annual spending needs roughly 29 dollars of portfolio behind it, underestimating it by a few thousand a year moves the target by six figures.

#### Put a number on it

- FIRE Number Calculator — turn your spending into a portfolio target in one screen.

- Retirement Drawdown Calculator — test whether the bridge years hold up.

- What Is a Safe Withdrawal Rate? — why 3.5% and not 4% over 40 years.

- How 401(k) Withdrawals Are Taxed — the rule of 55 and every other penalty exception.

- Sequence of Returns Risk — the risk the bridge years concentrate.

#### Model your own early retirement

Planomy projects the bridge years, Social Security, taxes and
required distributions together — so you can see whether retiring at 55
holds up, year by year, instead of trusting a single multiple. Free,
private, and running in your browser.

Try Planomy free

Read more guides

---

## How Much Do You Need to Retire? The 25x Rule, Honestly
URL: https://planomy.net/guides/how-much-to-retire
Summary: The 25x rule and the 4% math worked end to end, how Social Security lowers your number, and the two places the rule breaks down: inflation and taxes.

Retirement planning

### How Much Do You Need to Retire?

The honest answer starts with one number: your annual spending in
retirement. Multiply it by about 25, subtract what Social Security
and pensions will cover, and you have a target worth chasing.
Here's how that math works — and where it breaks down.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- Start from spending, not income. Your retirement number is built on what you'll spend each year, not what you earn today.

- The 25× rule is the quick estimate: multiply annual spending by 25 (the inverse of a 4% withdrawal rate) to get a portfolio target.

- Social Security and pensions shrink the number a portfolio has to cover — subtract them from spending before you multiply.

- Inflation means your future spending is higher than today's; plan in today's dollars and let a real (after-inflation) return do the work.

- The 25× figure is a pre-tax target. Traditional-account balances are worth less after tax, so your account mix matters.

#### Start with spending, not a magic number

Most people ask "how much do I need to retire?" hoping for a
single dollar figure — a million, two million, some round
number. But there is no universal answer, because the real
driver is intensely personal: how much you spend in a
year. A couple who spends $45,000 a year needs a
fraction of what a couple spending $120,000 needs, even if both
retire at the same age.

So the first job is to estimate your retirement
spending, which is not the same as your spending today. Some
costs fall — you stop saving for retirement, the mortgage may be
paid off, commuting and work clothes disappear, and the kids are
(hopefully) independent. Others rise — health care, travel in the
early "go-go" years, and eventually long-term care. A common
planning shortcut is to assume you'll spend 70–85% of your
pre-retirement income, but the honest approach is to build a
rough budget of what your life will actually cost.

#### The 25× rule: turning spending into a target

Once you have an annual spending figure, the fastest way to a
portfolio target is the 25× rule: multiply your
annual spending by 25. Spend $60,000 a year? Your target is
roughly $1.5 million. Spend $40,000? About $1 million.

Where does 25 come from? It's simply the inverse of the
4% safe withdrawal rate.
If you can safely withdraw 4% of a portfolio in the first year
and adjust for inflation thereafter, then 1 ÷ 0.04 = 25 years of
spending is the size of portfolio you need. Prefer a more
conservative 3.33% withdrawal? Multiply by 30 instead. The
FIRE number calculator
runs this exact math and lets you dial the withdrawal rate up or
down to see how the target moves.

Portfolio target at different spending levels and withdrawal rates.

| Annual spending
| At 4% (25×)
| At 3.5% (~29×)
| At 3.33% (30×)

| $40,000
| $1.00M
| $1.14M
| $1.20M

| $60,000
| $1.50M
| $1.71M
| $1.80M

| $80,000
| $2.00M
| $2.29M
| $2.40M

| $120,000
| $3.00M
| $3.43M
| $3.60M

#### Subtract Social Security and pensions first

Here's the step people forget, and it's the one that makes
retirement far more attainable than the headline number
suggests. Your portfolio doesn't have to cover all of
your spending — only the part that other income doesn't.

Suppose you'll spend $60,000 a year, and Social Security will pay
you and your spouse a combined $30,000 a year. Your portfolio
only needs to cover the remaining $30,000 gap.
Apply the 25× rule to the gap, not the whole: 25 × $30,000 =
$750,000, not $1.5 million. Social Security just
cut your target in half. A pension, annuity, or rental income
works the same way — each dollar of reliable outside income is a
dollar your portfolio doesn't have to generate.

This is why when you claim Social Security matters so
much: delaying from 62 to 70 can raise your benefit by more than
75%, shrinking the gap your savings must fill. You can compare
claiming ages with the
Social Security claiming age calculator.

The gap method in one line: (Annual spending −
annual Social Security & pension income) × 25 = portfolio
target. Everything else is refinement.

#### Don't let inflation fool you

A number that looks huge today will look ordinary in 30 years,
because inflation quietly erodes what a dollar buys. At 3%
inflation, prices roughly double every 24 years — so $60,000 of
spending today becomes about $120,000 of spending by the time a
35-year-old retires.

The clean way to handle this is to plan in today's
dollars and use a real (after-inflation) rate
of return for your projections. If you expect 7% nominal growth
and 3% inflation, plan around a ~4% real return. That keeps every
figure in money you understand today, and the 25× target already
bakes in inflation-adjusted withdrawals. To see how much
purchasing power inflation strips away over time, run the
inflation impact calculator.

#### Will your savings actually get there?

Knowing the target is half the battle; the other half is whether
your current savings and contributions will reach it in time.
Two levers dominate: how much you save each year
and how many years it compounds. A 25-year-old
saving 15% of income has a far easier path than a 45-year-old
starting from zero, because decades of compounding do most of the
heavy lifting.

Your savings rate — the share of income you set
aside — is the single biggest predictor of when you can retire,
and it works from both ends: a higher rate means more going in
and a lower spending level to sustain. The
savings rate & FI calculator
turns your rate into a years-to-independence estimate, and the
compound growth calculator
shows how a given monthly contribution grows over the decades.

One caveat when you work out your own rate: an employer match is
part of what gets saved each year, so leaving any of it unclaimed
quietly lowers the rate you thought you were hitting. It is also
the cheapest way to raise that rate, because the extra dollars are
not yours to begin with. Before you conclude you need to save more
out of pocket, check what your plan actually pays —
how to calculate your 401(k) employer match
covers the common formulas and the per-paycheck timing rule that
can cut a match short even when you contribute the full amount.

Check the number against your actual savings. A 25× target
assumes one flat withdrawal rate forever.
Open the free planner to project your
contributions, Social Security and taxes year by year and see whether the
balance really gets there.

#### The number is pre-tax — your account mix matters

The 25× target quietly assumes your withdrawals are what you get
to spend. But a dollar in a traditional 401(k) or
IRA is taxed as ordinary income when you withdraw it, so
a $1.5 million pre-tax balance might only fund $1.2–1.3 million of
real spending. A dollar in a Roth is tax-free,
and a dollar in a taxable brokerage is taxed only
on its gains.

Two people with identical $1.5 million balances can have very
different sustainable spending depending on where that money
lives. That's why it pays to understand the
different account types
and to think about the
order you draw them down.
If most of your savings is pre-tax, consider padding your target
to account for the future tax bill.

Not advice. The 25× rule is a planning
estimate built on historical market data, not a guarantee. Your
real number depends on your spending, time horizon, other income,
health, and risk tolerance. Treat it as a starting point to
refine, then stress-test it.

#### Frequently asked questions

##### Is $1 million enough to retire?

It depends entirely on your spending and other income. At a
4% withdrawal rate, $1 million supports about $40,000 a year
from the portfolio. Add Social Security and that might fund a
comfortable retirement for a modest-spending household — but
it would fall short for someone spending $100,000 a year.

##### How does the 25× rule work?

Multiply the annual spending your portfolio must cover by 25.
It's the inverse of the 4% withdrawal rate: 1 ÷ 0.04 = 25. For
a more conservative plan, use 30× (a 3.33% rate). Subtract
Social Security and pensions from spending before you
multiply, since those reduce what your savings must provide.

##### Should I count Social Security in my retirement number?

Yes. Reliable outside income lowers the amount your portfolio
must generate. If you spend $60,000 and Social Security covers
$30,000, your portfolio only needs to cover the $30,000 gap —
roughly $750,000 at a 4% rate rather than $1.5 million.

##### Does the retirement number account for taxes?

The 25× figure is a pre-tax target. Withdrawals from
traditional accounts are taxed as income, Roth withdrawals are
tax-free, and taxable-account withdrawals are taxed only on
gains. If most of your savings is pre-tax, pad the target to
cover the future tax bill.

##### How do I plan for inflation?

Plan in today's dollars and use a real (after-inflation) rate
of return — for example, 4% real if you expect 7% growth and
3% inflation. The 25× target already assumes your withdrawals
rise with inflation each year, so your spending keeps its
purchasing power.

#### Put a number on it

- FIRE Number Calculator — turn your spending into a portfolio target and a date.

- Retirement Drawdown Calculator — see how long savings last at your spending and return.

- Savings Rate & FI Calculator — how fast your savings rate gets you there.

- What Is a Safe Withdrawal Rate? — the 4% rule behind the 25× shortcut.

#### Find your retirement number

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## How Much Will a 529 Grow in 10, 15 or 18 Years?
URL: https://planomy.net/guides/how-much-will-a-529-grow
Summary: $300 a month from birth reaches about $116,000 by age 18 at a 6% return — $64,800 contributed and $51,400 of growth. Full table by amount, term and rate.

College savings

### How Much Will a 529 Grow in 10, 15 or 18 Years?

$300 a month into a 529 from birth reaches about
$116,000 by age 18 at a 6% average return. You
contributed $64,800 of that; the other $51,400 is
growth, and none of it is taxed if it goes to qualified
education costs. Cut the term to ten years and the same $300 a month
reaches $49,164 — the balance grows with the contribution, but
the growth share grows with time.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- At a 6% return, $300 a month reaches $49,164 in 10 years, $87,246 in 15 and $116,206 in 18.

- Growth as a share of the balance rises sharply with time: 27% of the balance at 10 years, 44% at 18.

- The formula is FV = PMT × ((1 + i)N − 1) ÷ i — monthly contribution PMT, monthly rate i, number of months N.

- Return assumption is worth more than any other input over 18 years: $300 a month gives $94,678 at 4% and $144,026 at 8%.

- Age-based portfolios deliberately reduce the return in the last five years. Plan on 6–7% early and 3–4% near the end rather than one flat number for the whole ride.

#### The direct answer

Contribute a fixed amount monthly, earn 6% a year, and the balance
at the end is:

529 balance from a level monthly contribution at a 6% annual return, compounded monthly, starting from zero. Figures are nominal, not inflation-adjusted.

| Monthly contribution
| After 10 years
| After 15 years
| After 18 years
| Contributed by 18

| $100 | $16,388 | $29,082 | $38,735 | $21,600

| $200 | $32,776 | $58,164 | $77,471 | $43,200

| $300 | $49,164 | $87,246 | $116,206 | $64,800

| $500 | $81,940 | $145,409 | $193,677 | $108,000

| $1,000 | $163,879 | $290,819 | $387,353 | $216,000

Compare the last two columns on the $300 row. Eighteen years of
contributions total $64,800 and the account holds $116,206 —
44% of the balance was never contributed by anyone.
At ten years that share is only 27%. Time, not contribution size, is
what turns a savings account into a college fund.

#### Where the numbers come from

FV = PMT × ((1 + i)N − 1) ÷ i

PMT is the monthly contribution, i the monthly return
(annual rate ÷ 12) and N the number of months. Add a starting
balance by compounding it separately: lump × (1 +
i)N.

##### Worked, step by step

$300 a month, 6% a year, 18 years:

- i = 0.06 ÷ 12 = 0.005; N = 18 × 12 = 216.

- (1.005)216 = 2.93677.

- 2.93677 − 1 = 1.93677.

- 1.93677 ÷ 0.005 = 387.35.

- FV = $300 × 387.35 = $116,206.

If you also start with a lump sum — a $5,000 baby gift, say
— add $5,000 × 2.93677 = $14,684, for a total of about
$130,900. Front-loaded money has the whole 18 years
to compound, which is why a single early gift often beats several
later ones.

#### How much does the return assumption matter?

Balance after 18 years from $300 a month, by assumed annual return. Contributions total $64,800 in every row.

| Annual return
| Balance at 18
| Growth
| Growth share

| 4% | $94,678 | $29,878 | 32%

| 5% | $104,761 | $39,961 | 38%

| 6% | $116,206 | $51,406 | 44%

| 7% | $129,216 | $64,416 | 50%

| 8% | $144,026 | $79,226 | 55%

Four percentage points is worth $49,348 —
three quarters of everything you contributed. It is also the input
you have least control over, which is the argument for treating 6%
as a planning midpoint and re-checking the balance every couple of
years rather than trusting a projection made at birth.

Age-based portfolios do not return 6% the whole way.
Almost every 529 offers an enrolment-year or age-based option that
starts stock-heavy and shifts to bonds and cash as college
approaches. That is the right design — you cannot recover from
a 30% drop eighteen months before tuition — but it means the
last few years grow at 3–4%, not 6–7%. A single flat rate
over 18 years modestly overstates the ending balance. Plan on the
table above as an upper-middle estimate.

#### What fees quietly remove

529 costs come in layers: an underlying fund expense ratio, sometimes
a plan administration fee, and in advisor-sold plans a sales load.
The difference between a 0.15% index-based direct plan and a 1.0%
advisor-sold one is 0.85% a year, every year.

On the $300-a-month, 18-year case that is roughly the gap between the
6% and the 5% rows above — about $11,400, or
more than three years of contributions, handed over in fees. The
investment fee
calculator shows the same arithmetic on any balance. Direct-sold
plans are almost always the cheaper route, and you are not restricted
to your own state's plan unless you want the state tax deduction.

#### Growth is only tax-free if it is spent correctly

The whole case for a 529 is that the $51,406 of growth in the base
case is never taxed — provided it goes to qualified expenses:
tuition, fees, books, required equipment, and room and board for a
student enrolled at least half-time. Up to $10,000 a year can go to
K–12 tuition, and up to $10,000 lifetime to student loan
repayment per beneficiary.

Non-qualified withdrawals are taxed on the earnings portion
as ordinary income plus a 10% penalty — contributions always
come back tax-free. Two common escapes if the money is not needed:
change the beneficiary to another family member, or use the
scholarship exception, which waives the penalty (though not the
income tax) on an amount up to the scholarship received.

#### Contribution mechanics worth knowing

- No federal contribution limit, but contributions are gifts, so they sit under the annual gift-tax exclusion before a gift-tax return is needed.

- Five-year front-loading. You can elect to treat a single large contribution as if it were spread over five years for gift-tax purposes — the standard way grandparents fund an account at birth and buy the maximum compounding time.

- State income tax deductions are the main reason to use your own state's plan. Amounts and rules vary widely, and some states offer none at all — the 529 calculator and the state pages cover the specifics.

- Aggregate balance caps exist per plan, generally in the $300,000–$600,000 range, and stop new contributions rather than growth.

#### Project your own account

The 529 college savings
calculator runs this arithmetic on your balance, contribution and
timeline against a projected cost of college, and the
compound growth
calculator shows the same curve for any goal. If you are weighing
college saving against retirement saving, the
how much do I need guide is
the other half of that decision — there are loans for college
and none for retirement.

#### Frequently asked questions

##### How much will a 529 grow in 18 years?

At a 6% average annual return, $300 a month from birth reaches about $116,206 by age 18, of which $64,800 is contributions and $51,406 is growth. $500 a month reaches about $193,677 and $100 a month about $38,735. A starting lump sum of $5,000 adds roughly another $14,684 over the same period.

##### How much will a 529 grow in 10 years?

At a 6% return, $300 a month reaches about $49,164 after 10 years, against $36,000 contributed — growth is 27% of the balance. Over 18 years the growth share nearly doubles to 44%, which is why starting early matters far more than contributing more later.

##### What is the average rate of return on a 529 plan?

It depends entirely on the investment option, not on the 529 wrapper itself. A stock-heavy portfolio has historically averaged more than a bond-heavy one, and most savers use an age-based option that starts aggressive and shifts conservative near enrolment. Planning at 6% is a reasonable midpoint, with the last few years growing at 3 to 4 percent as the glide path de-risks.

##### Is 529 growth taxed?

Not if it is spent on qualified education expenses — tuition, fees, books, required equipment, and room and board for at least half-time students. Non-qualified withdrawals are taxed on the earnings portion as ordinary income plus a 10% penalty; your contributions always come back tax-free. Changing the beneficiary to another family member avoids the problem entirely.

##### How much should I put in a 529 each month?

Work backwards from the projected cost and the years remaining rather than picking a round number. As a reference point, $300 a month from birth reaches about $116,000 by 18 at a 6% return and $500 a month reaches about $194,000. If retirement saving is not yet on track, fund that first — there are loans for college and none for retirement.

#### Project it on your numbers

- 529 College Savings Calculator — your balance and contribution against the projected cost of college.

- Compound Growth Calculator — the same curve for any goal and timeline.

- Investment Fee Calculator — what an extra 0.85% a year removes over 18 years.

- Savings Goal Calculator — the monthly amount a target actually requires.

- How Much Do I Need to Retire? — the goal that comes before college saving.

#### College is one goal among several

Planomy models the 529 alongside retirement accounts, the mortgage and
everything else, so you can see what raising the college contribution
does to the rest of the plan before you commit to it. Free, private,
and running in your browser.

Try Planomy free

Read more guides

---

## How Social Security Is Taxed: The 50% and 85% Rules
URL: https://planomy.net/guides/how-social-security-is-taxed
Summary: Provisional income explained with worked examples, the thresholds where 50% and then 85% of your benefit becomes taxable, and which states still tax benefits.

Retirement income

### How Social Security Benefits Are Taxed

Most people are surprised to learn their Social Security check can
be taxed at all. Whether it is — and whether 0%, 50%, or 85% of it
counts as income — comes down to one number the IRS calls
provisional income. Here's exactly how it works.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- Whether your benefits are taxed depends on provisional income (also called combined income): your other income, plus tax-exempt interest, plus half of your Social Security.

- At most, 85% of your benefit is ever subject to federal income tax — never 100%. Many lower-income retirees pay zero.

- The federal thresholds ($25,000 / $34,000 single; $32,000 / $44,000 married) are set in law and are not indexed to inflation, so more retirees cross them over time.

- Being taxed on 85% is not the same as an 85% tax rate — it means 85% of the benefit is added to taxable income and taxed at your ordinary rate.

- Most states don't tax Social Security, but a handful still do; rules change, so check your state.

#### The one number that decides everything: provisional income

Federal taxation of Social Security hinges on a figure the IRS
calls provisional income (you'll also see it
called "combined income"). It is not the same as your adjusted
gross income. You calculate it like this:

Provisional income = your adjusted gross income
(excluding Social Security) + any tax-exempt
interest (yes, even muni-bond interest counts here)
+ 50% of your annual Social Security benefit.

That last piece surprises people: you add back half of
your Social Security to decide how much of it gets taxed. Once you
have your provisional income, you compare it to a set of
thresholds that depend on your filing status.

#### The thresholds (2026)

These dollar figures were written into law in the 1980s and 1990s
and, unlike most tax numbers, are not adjusted for
inflation. That's why a rule originally aimed at
higher-income retirees now reaches many middle-income ones.

Federal provisional-income thresholds. Fixed in law — the same for 2026 as prior years.

| Filing status
| Up to 50% taxable above
| Up to 85% taxable above

| Single / head of household
| $25,000
| $34,000

| Married filing jointly
| $32,000
| $44,000

| Married filing separately
| $0 (usually 85%)
| $0

How the bands work, for a single filer:

- Provisional income below $25,000: none of your benefit is taxed.

- $25,000–$34,000: up to 50% of your benefit may be taxable.

- Above $34,000: up to 85% of your benefit may be taxable.

For married-filing-jointly, use $32,000 and $44,000 instead. Note
the crucial words "up to": crossing a threshold doesn't instantly
tax the full 50% or 85%. The taxable amount phases in gradually as
your income rises through the band, which is why the actual
worksheet (IRS Publication 915) takes a few lines.

#### Worked examples

##### Example 1 — A modest retiree pays nothing

Say you're single, collecting $22,000 a year in Social Security and
withdrawing $10,000 from a traditional IRA. Provisional income =
$10,000 + $0 tax-exempt interest + half of $22,000 ($11,000) =
$21,000. That's below the $25,000 first threshold,
so none of your Social Security is taxed. You may
owe a little tax on the IRA withdrawal, but the benefit itself is
tax-free.

##### Example 2 — A middle-income couple crosses into the 85% band

Now imagine a married couple with $40,000 of combined Social
Security and $40,000 of traditional IRA withdrawals. Provisional
income = $40,000 + half of $40,000 ($20,000) =
$60,000. That's above the $44,000 upper threshold
for joint filers, so they land in the 85% band. A large share of
their $40,000 benefit — up to roughly $34,000 — gets added to
taxable income and taxed at their ordinary rate. It is not an 85%
tax; it means up to 85 cents of each benefit dollar joins the pile
of income the brackets then apply to.

85% taxable ≠ 85% tax rate. This is the most
common misunderstanding. "Up to 85% of your benefit is taxable"
means 85% of the benefit amount is included in your
taxable income. If your marginal bracket is 12%, the actual tax on
that included portion is 12% — not 85%.

#### The "tax torpedo" — why one extra dollar can hurt

Here's a subtlety worth understanding. In the phase-in ranges,
each additional dollar of other income can make more of your
Social Security taxable at the same time — so one extra dollar
of an IRA withdrawal might add $1.50 or $1.85 to your taxable
income. This "tax torpedo" can push your effective marginal rate
well above your stated bracket, sometimes to 40.7% or higher for
middle-income retirees.

The practical lesson: where your retirement income comes
from matters a lot. Roth withdrawals don't count toward provisional
income, so filling some of your spending from a Roth can keep more
of your Social Security tax-free. This is one more reason to think
about which accounts to draw down first
and to build a Roth bucket earlier through a
Roth conversion ladder.

The torpedo only shows up year by year. Provisional income
is a whole-year figure, so you cannot see the crossing points one withdrawal
at a time. Open the free planner to
project your benefits, withdrawals and taxes across every year of retirement
and see which ones cross a threshold.

#### How much and when you claim also matters

The size of your benefit — and therefore how much of it can be
taxed — depends heavily on the age at which you claim. Claiming
early permanently shrinks the check; delaying past full retirement
age grows it. You can model the trade-off with the
Social Security claiming age calculator,
and see how the taxable slice fits into your overall retirement
income in the tax-aware withdrawal calculator.

#### State taxation of Social Security

Federal rules are only half the story. The good news: the
large majority of states do not tax Social Security
benefits at all, including states with no income tax
(like Florida, Texas, and Washington) and many that simply exempt
benefits.

A small and shrinking number of states still tax benefits to some
degree, though almost all of them provide exemptions based on age
or income, so many retirees in those states owe nothing at the
state level anyway. Because states change these rules frequently —
several have phased out their Social Security tax in recent years —
you should check your specific state's current treatment rather
than rely on an old list. As a rule of thumb: assume no state tax,
but verify if you live in a state that historically taxed benefits.

Planning tip: if you're choosing where to retire,
state taxation of Social Security is usually a minor factor compared
to overall cost of living, property taxes, and how the state treats
pension and IRA income. Don't let the Social Security piece drive
the whole decision.

#### How you actually pay the tax

Unlike a paycheck, Social Security doesn't automatically withhold
income tax unless you ask it to. If a meaningful share of your
benefit is taxable, you have two ways to stay current with the IRS
and avoid an underpayment penalty:

- Voluntary withholding. File Form W-4V with the Social Security Administration to have federal tax withheld directly from your monthly benefit — you can choose 7%, 10%, 12%, or 22%. This is the simplest option for most retirees.

- Quarterly estimated payments. Send the IRS estimated tax four times a year. This gives you more control but takes more discipline and record-keeping.

Many retirees find withholding from the benefit — and from any IRA
distributions — the easiest path, because it spreads the tax across
the year and mirrors how withholding worked during their working
lives. If your income varies year to year, revisit the amount each
January.

#### Three ways to keep more of your benefit

Because provisional income drives the whole calculation, anything
that lowers it can shrink the taxable slice of your Social Security.
A few levers worth knowing:

- Lean on Roth income. Qualified Roth withdrawals never enter provisional income, so a larger Roth balance gives you spending that doesn't push benefits into the taxable bands.

- Do conversions before you claim. Converting traditional money to Roth in the low-income years before Social Security starts fills up low brackets and reduces later required distributions that would otherwise inflate provisional income.

- Mind the timing of big withdrawals. A one-off large IRA withdrawal in a benefit year can drag more of your Social Security into the 85% band; spreading it across years may keep you lower. A realised capital gain does the same thing, and for the same reason — see how capital gains tax is calculated for what a sale adds to the income that drives the thresholds.

None of these change the thresholds — they change where your income
lands relative to them. That's exactly the kind of multi-year
sequencing our
Roth conversion ladder
guide walks through in detail.

#### Frequently asked questions

##### Is Social Security ever 100% tax-free?

Yes. If your provisional income is below the first threshold —
$25,000 single or $32,000 married filing jointly — none of your
benefit is subject to federal income tax. Many retirees with
modest other income pay nothing on their benefits.

##### Can more than 85% of my benefit be taxed?

No. Federal law caps the taxable portion at 85% of your benefit,
no matter how high your income. The remaining 15% is always
free from federal income tax.

##### Does a Roth withdrawal increase the tax on my benefits?

No. Qualified Roth IRA and Roth 401(k) withdrawals are not
included in provisional income, so drawing from Roth accounts
can keep more of your Social Security tax-free. Traditional
withdrawals and even tax-exempt muni interest do count.

##### Are the income thresholds adjusted for inflation?

No. The $25,000/$34,000 and $32,000/$44,000 thresholds are
fixed in law and have not changed for decades, so each year a
little inflation pushes more retirees into taxable territory.

##### Do I have to pay state tax on Social Security?

In most states, no. A shrinking handful still tax benefits,
usually with generous age- or income-based exemptions. Rules
change often, so confirm your own state's current treatment.

#### Put a number on it

- Social Security Claiming Age Calculator — how claiming age changes your benefit.

- Tax-Aware Withdrawal Calculator — see the after-tax picture of your income mix.

- Which Accounts to Draw Down First — keep provisional income in check.

- The Roth Conversion Ladder — build tax-free income that doesn't count.

#### Plan around the tax on your benefits

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## How to Calculate Your 401(k) Employer Match
URL: https://planomy.net/guides/how-to-calculate-401k-employer-match
Summary: The three match formulas employers use, run line by line on a real salary, plus the per-paycheck timing trap and the vesting schedule behind it.

Accounts and taxes

### How to Calculate Your 401(k) Employer Match

A match arrives as a formula — "50% of the first 6%" — and almost
nobody is shown what that means in dollars. It is two
multiplications once you know which pay figure the plan looks at.
Here is how to run it on your own salary, and the three plan rules
that change the answer after you do.

Updated July 28, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- Every match formula carries two numbers: how much of your pay it looks at, and how much of that slice it pays. "50% of the first 6%" looks at 6% of pay and hands back half of it — 3% of pay.

- Two lines of arithmetic: eligible pay × the cap percent is what you must contribute; × the match rate is what the employer adds.

- Most plans match per pay period, not per year. Hitting the $24,500 deferral limit in October can stop the match in October too, unless the plan runs a true-up.

- The match does not use up your $24,500 deferral limit — it counts against the separate $72,000 total-additions cap.

- Match dollars can be subject to vesting; your own contributions never are. A safe harbor match is 100% vested the day it lands.

#### What a match formula is actually saying

A matching formula never states a dollar amount, because it has
to work for a $45,000 salary and a $450,000 one. What it states
instead is a pair of percentages, and reading them in the right
order is the whole trick:

- The cap percent — the slice of your pay the plan is willing to look at. Contribute more than this and the extra is unmatched.

- The match rate — how many cents the employer adds per dollar inside that slice.

"50% of the first 6%" is cap percent 6, match rate 50. The
employer's maximum is the two multiplied together: 3% of your
pay. Four shapes cover the overwhelming majority of US plans:

The employer maximum is always the cap percent times the match rate, tier by tier. Your own plan document governs — these are the shapes, not your numbers.

| Formula as written
| You must put in
| Employer adds

| 50% of the first 6%
| 6% of pay
| 3.0% of pay

| 100% of the first 4% (dollar for dollar)
| 4% of pay
| 4.0% of pay

| 100% of the first 3%, then 50% of the next 2% (safe harbor basic)
| 5% of pay
| 4.0% of pay

| 100% of the first 1%, then 50% of the next 5% (QACA safe harbor)
| 6% of pay
| 3.5% of pay

Notice that the headline rate is a poor guide to generosity. A
dollar-for-dollar match on 4% pays more than a 50% match on 6%,
even though the second number looks twice as good.

#### The two lines of arithmetic

Take a $80,000 salary and the most common formula in the country,
50% of the first 6%.

##### Step 1 — Start from match-eligible pay, not gross pay

The plan document defines the compensation the formula runs on.
Base salary is always in; bonuses, commission and overtime
sometimes are not. Two hard edges apply on top: pay above the IRS
annual compensation limit — $360,000 for 2026 —
is invisible to the formula, and pay earned before you met the
plan's eligibility period usually is too.

##### Step 2 — Multiply eligible pay by the cap percent

6% × $80,000 = $4,800. That is the contribution
you have to make yourself to put the whole matchable slice on the
table. Anything less and you leave part of the match behind;
anything more is unmatched.

##### Step 3 — Multiply that by the match rate

50% × $4,800 = $2,400. That is the employer
money, and it is worth restating as a percent of pay: $2,400 on
$80,000 is a 3% raise conditional on your own 6%.

##### Step 4 — Do it tier by tier if the formula has tiers

A tiered formula is the same arithmetic run twice and added up.
Same $80,000 salary, safe harbor basic formula:

- First tier: 3% of $80,000 = $2,400 from you, matched at 100% → $2,400.

- Second tier: the next 2% = $1,600 from you, matched at 50% → $800.

- You contribute 5% ($4,000); the employer adds $3,200, or 4% of pay.

Contributing above the cap percent is still worth doing
— it just is not matched. The cap percent is the point where free
money stops, not the point where saving stops being useful. For
most people 6% of pay is nowhere near enough to retire on.

##### Where to find your own formula

The authority is the Summary Plan Description,
which your employer must give you and must update when the plan
changes. Your recordkeeper's site usually restates it on the
contribution-election screen. Search the SPD for "matching
contribution", "safe harbor", "true-up", "eligible compensation"
and "vesting" — those five terms contain everything that changes
the number.

#### The timing trap: most matches are calculated per paycheck

This is the part the arithmetic above hides, and it is the single
most expensive misunderstanding about matching. If the plan
calculates the match per pay period, the cap percent
applies to each individual paycheck — so a paycheck with no
deferral gets no match, no matter how much you contributed
earlier in the year.

Take a $200,000 salary, 24 pay periods, and 50% of the first 6%
per period:

Same salary, same formula, same $24,500 of your own money — $1,000 of difference, created entirely by the deferral percent.

| Your election
| You defer per period
| Periods with a deferral
| Match received

| 15% (front-loaded)
| $1,250
| 20 of 24
| $5,000

| 12.25% (spread evenly)
| $1,020.83
| 24 of 24
| $6,000

At 15% you hit the $24,500 elective-deferral limit during period
20; payroll then shuts your deferral off, and with it the $250 of
match that each of the last four paychecks would have carried.
Spread the same $24,500 across all 24 periods and every paycheck
clears the 6% bar.

The true-up is the escape hatch. Many plans run
a year-end reconciliation that recalculates the match on your
annual totals and deposits whatever the per-paycheck method
missed. True-ups are common but not required by law, and
a plan that has one usually funds it months after year end. If
the SPD does not mention one, treat the per-paycheck result as
final and pace your contributions to last all twelve months.

#### Vesting: the match is not yours the day it lands

Your own deferrals are 100% yours immediately, always. Employer
money is different — a plan may make you earn it over a service
schedule, and anything unvested is forfeited if you leave:

- Immediate — the whole match is yours on day one. Required for a safe harbor basic or enhanced match, which is part of what the employer buys by adopting one.

- Cliff — nothing, then everything. Capped at three years of service for matching contributions (two for a QACA safe harbor match).

- Graded — a rising slice each year, capped at a six-year schedule that reaches 20% after two years of service and 100% after six.

Vesting matters most when you are weighing a job change: leaving
two months before a cliff date can cost more than a raise is
worth. It also survives the exit — vested match money moves with
you, which is one of the things to check before you choose among
the rollover options when you leave a job.

#### Does the match count toward the $24,500 limit?

No — and this is worth being precise about, because two different
caps are in play and only one of them is the number people quote.
Your deferrals answer to the elective-deferral limit; the match
answers to the much larger total-additions limit.

2026 figures per IRS Notice 2025-67. The 60–63 catch-up replaces the age-50 figure in those four years rather than stacking on it; catch-up contributions sit on top of the total-additions limit.

| Limit
| 2026
| What it covers

| Elective deferral
| $24,500
| Your own pre-tax and Roth contributions only

| Catch-up, age 50+
| +$8,000
| Extra deferral room from the year you turn 50

| Catch-up, ages 60–63
| +$11,250
| The enlarged catch-up for those four years

| Total annual additions
| $72,000
| Your deferrals plus the match, profit sharing and after-tax contributions

| Annual compensation limit
| $360,000
| The most pay any match formula is allowed to look at

In practice the $72,000 ceiling only binds people whose plans
allow large profit sharing or after-tax contributions. A match on
a normal formula lands nowhere near it — 4% of the $360,000
compensation limit is $14,400.

#### Two newer wrinkles worth asking about

The match can now be Roth. SECURE 2.0 lets plans
offer employer contributions as Roth money. Take it that way and
the match is taxable income to you in the year it is made and
reported on a 1099-R, but it grows and comes out tax-free
afterwards. It is optional for the plan, and whether it beats the
pre-tax default is the same bracket-now-versus-bracket-later
question as Roth versus traditional deferrals.

Student-loan payments can count as deferrals.
Since 2024, a plan may treat your qualified student-loan payments
as if they were 401(k) contributions and match them. If loan
payments are the reason you are not contributing, this is the
first question to put to HR — it is the one way to collect a match
without deferring salary.

Not advice. The 2026 contribution and
compensation limits above come from IRS Notice 2025-67. Your match
formula, eligible-compensation definition, true-up and vesting
schedule are all set by your employer's plan document, not by the
IRS — read the Summary Plan Description, and confirm anything
that affects a real decision with your plan administrator or a
qualified tax professional.

#### Frequently asked questions

##### How do I calculate my 401(k) employer match?

Multiply your match-eligible pay by the formula's cap percent
to get the contribution you must make, then multiply that by
the match rate to get the employer's dollars. On a $80,000
salary with "50% of the first 6%": 6% × $80,000 = $4,800 from
you, and 50% × $4,800 = $2,400 from the employer. Run each
tier separately and add them if the formula is tiered.

##### What does "50% up to 6%" mean?

It means the plan looks at the first 6% of your pay that you
contribute and adds 50 cents for every dollar inside that
slice. The employer's maximum is the two multiplied: 3% of
pay. Contributing 10% does not raise the match — the extra 4%
sits outside the slice the formula considers.

##### Does the employer match count toward the $24,500 limit?

No. The $24,500 elective-deferral limit for 2026 applies only
to your own pre-tax and Roth contributions. The match counts
against the separate total annual additions limit of $72,000,
which covers your deferrals, the match, profit sharing and
after-tax contributions combined.

##### What percent should I contribute to get the full match?

Exactly the formula's cap percent — 6% for "50% of the first
6%", 4% for a dollar-for-dollar match on 4%, 5% for the safe
harbor basic formula. If the plan matches per pay period and
has no true-up, that percent has to be on every paycheck of
the year, so do not set a rate high enough to hit the annual
deferral limit early.

##### What is a safe harbor match?

A match written to one of the formulas Congress pre-approved,
which exempts the plan from the annual nondiscrimination
testing that otherwise limits what high earners may defer. The
basic version is 100% of the first 3% plus 50% of the next 2%;
the enhanced version is usually 100% of the first 4%. In
exchange, a safe harbor basic or enhanced match must be fully
vested immediately.

##### Can I lose my employer match if I leave the job?

Only the unvested portion. Your own contributions and their
growth are always 100% yours. Employer match money may sit on
a vesting schedule — up to a three-year cliff or a six-year
graded schedule — and whatever has not vested when you leave
is forfeited back to the plan. A safe harbor match is vested
immediately, so there is nothing to lose.

#### Put a number on it

- 401(k) Contribution Calculator — enter your formula and salary and see the match, the shortfall, and what it compounds to.

- Roth vs Traditional 401(k) — which bucket your own deferrals should go into.

- 401(k) vs IRA vs Roth vs HSA — why the match comes before every other dollar.

- Take-Home Pay Calculator — what raising your deferral actually costs per paycheck.

- 401(k) Rollover Options — what happens to vested match money when you leave.

- HSA Contribution Limits and Rules (2026) — where the next dollar usually goes once the match is captured.

- How 401(k) Withdrawals Are Taxed (2026) — what the vested match costs you on the way back out.

#### See what the match is worth by the time you retire

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## HSA Rules 2026: Limits, the 20% Penalty, and Age 65
URL: https://planomy.net/guides/hsa-contribution-limits-and-rules
Summary: The 2026 HSA contribution limits, whether employer money counts toward them, the last-month rule, the 20% withdrawal penalty, and what changes at 65.

Accounts and taxes

### HSA Contribution Limits and Rules (2026)

The health savings account is the only account in the US tax code
that is untaxed on all three legs — going in, growing, and coming
out. The catch is that it comes with more eligibility rules than
any other account. Here is what you can put in for 2026, what
counts against your limit, and what happens when you take money
out.

Updated July 28, 2026
·
~10 min read
·
US-focused

#### Key takeaways

- 2026 limits: $4,400 self-only and $8,750 family, plus a $1,000 catch-up from age 55.

- Employer contributions count against your limit — the seed, the match, and your own payroll deferrals all share the same cap.

- Eligibility is month by month: you need qualifying high-deductible coverage on the 1st, no disqualifying second coverage, and no Medicare.

- Non-medical withdrawals before 65 cost income tax plus a 20% additional tax. At 65 the 20% disappears.

- Claiming Social Security after 65 backdates Medicare Part A up to six months — stop contributing six months early or you create an excess.

#### The 2026 contribution limits

The IRS sets HSA limits a year ahead in a revenue procedure. The
2026 figures come from Rev. Proc. 2025-19:

2026 HSA limits per IRS Rev. Proc. 2025-19. The age-55 catch-up is fixed at $1,000 by statute (IRC §223(b)(3)) and is not inflation-indexed, which is why it has not moved in years.

| Coverage
| 2025 limit
| 2026 limit
| Catch-up at 55+

| Self-only
| $4,300
| $4,400
| +$1,000

| Family
| $8,550
| $8,750
| +$1,000

So the most a 55-year-old with family coverage can put in for
2026 is $9,750 — and if their spouse is also 55
or older, the couple can add a second $1,000, but only into the
spouse's own HSA. More on that below.

Contributions for a tax year are not locked to the calendar
year. You have until the federal filing deadline
— April 15, 2027 for the 2026 tax year — to fund the account,
with no extension even if you extend your return.

##### Your health plan has to qualify first

An HSA is only available alongside a
high-deductible health plan (HDHP), and "high
deductible" has a statutory definition that also moves each year:

2026 HDHP definition per IRS Rev. Proc. 2025-19. A plan that pays anything other than preventive care before the minimum deductible is met is not an HDHP, no matter how large its deductible is.

| Plan feature
| Self-only
| Family

| Minimum annual deductible
| $1,700
| $3,400

| Maximum out-of-pocket
| $8,500
| $17,000

Your plan documents or your HR portal will usually say
"HSA-eligible" outright. If they don't, check the deductible
against the table above before you open an account.

#### Do employer contributions count toward the limit?

Yes — and this is the single most expensive
misunderstanding about HSAs. The annual limit is a limit
on all contributions to your account from every source,
not a limit on what you personally add. That includes:

- the employer's automatic seed or wellness deposit;

- the employer's match on your contributions;

- your own contributions made through payroll;

- anything you deposit directly at the custodian;

- a one-time qualified HSA funding distribution from an IRA.

Worked example, 2026 self-only coverage: your employer deposits
$1,000 in January and matches 50% of what you defer. Your own
room is $4,400 − $1,000 = $3,400, and if the
match is counted too, deferring $2,267 pulls a $1,133 match and
lands you exactly at the cap. Defer the "obvious" $4,400 and you
are $1,000 over.

Everything your employer put in shows up in
Box 12, code W of your W-2 — including the money
you deferred yourself, because payroll deferrals are legally
employer contributions. Start from that box, not from your own
memory of what you contributed. The
HSA contribution calculator
does the subtraction and the per-paycheck arithmetic for you.

An excess contribution is not free to fix.
Money over the limit is subject to a 6% excise tax for
every year it stays in the account. Withdraw the excess
and the earnings it generated before your filing
deadline and the 6% goes away; the earnings are still taxable
income in the year you take them out.

#### Married couples and the family limit

The family limit is a limit for the couple, not
per person. If either spouse has family HDHP coverage, the two of
them share $8,750 in 2026, divided however they
agree — and if they don't agree, the default split is 50/50.
Two HSAs do not buy two limits.

The catch-up is the exception. It is genuinely per person, and it
must be deposited into that person's own HSA. A
couple who are both 55+ can contribute $8,750 + $1,000 + $1,000 =
$10,750 for 2026, but the second $1,000 cannot
sit in the first spouse's account. If only one spouse has an HSA,
the other spouse's catch-up is simply lost — a good reason to
open a second account well before 55.

#### Who is eligible, month by month

HSA eligibility is tested on the first day of each
month. To be eligible for a month you must:

- be covered by a qualifying HDHP on the 1st;

- have no other health coverage that isn't an HDHP — a spouse's traditional plan, a parent's plan, TRICARE, or VA medical benefits received in the last three months can all disqualify you (dental, vision, disability, accident and specific-disease policies are fine);

- not be enrolled in any part of Medicare;

- not be claimable as a dependent on someone else's tax return.

The quiet disqualifier is the health FSA. A
general-purpose health FSA — yours or your spouse's,
because its funds can pay your expenses — blocks HSA eligibility
for the entire plan year. A limited-purpose FSA
restricted to dental and vision does not. Same for an HRA: a
general-purpose one disqualifies you, a limited-purpose or
post-deductible one doesn't.

##### Partial years: proration and the last-month rule

If you're only eligible for part of the year, the default is
simple proration: one twelfth of the annual limit for
each month you were eligible on the 1st. Start
self-only HDHP coverage on May 1, 2026 and your limit is
$4,400 × 8/12 = $2,933.

The last-month rule overrides that. If you are
eligible on December 1, you may contribute the
full annual limit for that year regardless of how few
months you were covered. The price is a testing period: you must
stay HSA-eligible from December 1 of the contribution year
through December 31 of the following year. Break
it — a job change onto a traditional plan, an FSA election,
Medicare — and the amount you would not otherwise have been
allowed is added back to your income and hit with an
extra 10% tax.

Both routes are legitimate. Use the last-month
rule when your coverage is stable into the following year; use
straight proration when it isn't. The rule is an option, not a
default — you choose it by how much you contribute.

#### Taking money out: the 20% rule and what changes at 65

Withdrawals fall into three buckets, and the age-65 line is the
one people plan around.

Qualified medical expenses are those listed in IRS Publication 502. The 20% additional tax also does not apply if you become disabled or on withdrawals after death.

| Withdrawal
| Before 65
| 65 and older

| Qualified medical expense
| Tax-free
| Tax-free

| Anything else
| Income tax + 20%
| Income tax only

That 20% is not the 10% early-withdrawal penalty you may know
from a 401(k) — it is double, and it applies on top of ordinary
income tax. But it vanishes at 65. From that birthday on, an HSA
behaves like a traditional IRA for non-medical spending and stays
tax-free for medical spending: strictly better than a 401(k) on
both counts, with no required minimum distributions
ever.

After 65, Medicare Part B, Part D and Medicare Advantage
premiums are themselves qualified expenses, so they can
be paid tax-free out of the HSA. Medigap premiums are the
exception and are not qualified. Long-term care insurance
premiums qualify up to an age-based annual cap.

##### The receipt strategy

There is no deadline for reimbursing yourself.
An expense incurred after the HSA was established can be
reimbursed this year, next year, or in twenty years — as long as
it was never deducted on Schedule A or paid from another
tax-advantaged account. That is why people who can afford to pay
medical bills out of pocket, invest the HSA instead, and keep the
receipts: the balance compounds tax-free for decades and the old
receipts become a tax-free withdrawal permit later.

See what the HSA does to the whole plan. An HSA
is a retirement account that happens to pay medical bills, so its
real value shows up in your seventies.
Open the free planner to
project it alongside your 401(k), taxes and Medicare costs.

#### Pre-tax or after-tax? It depends how you contribute

Both routes end up deductible, but they are not equally good:

- Through payroll (a Section 125 cafeteria plan): the money escapes federal income tax and FICA — 7.65% of Social Security and Medicare tax you never pay. Nothing to claim on your return.

- Direct to the custodian: you contribute after-tax dollars and take an above-the-line deduction on Form 8889, which you can claim without itemizing. The income tax comes back; the 7.65% FICA does not.

On a $4,400 self-only contribution, that difference is about
$337 a year. If your employer offers payroll
deduction, use it. Direct contributions are still worth making
for anyone self-employed or on an individual-market HDHP, and for
topping up before the April deadline.

Your state may not follow. HSAs are a federal
construct, and a small number of states — California and
New Jersey among them — do not conform: contributions
are not deductible for state income tax and the account's
earnings are taxable at the state level each year. The federal
treatment is unaffected, but keep a note of your state's rule
before you count the full deduction.

#### The Medicare trap on the way out

Enrolling in Medicare — including Part A alone, even if
it costs you nothing — ends HSA eligibility from the
first day of that month. If you are working past 65 on an
employer HDHP and want to keep contributing, you have to actively
not enroll.

The trap is the lookback. When you claim Social Security at or
after 65, enrollment in Part A is backdated up to six
months (never earlier than the month you turned 65).
Any HSA contribution made in those retroactive months becomes an
excess contribution after the fact. The standard fix is to
stop contributing six months before you claim or
enroll. Timing that alongside your claiming decision is covered
in when to take Social Security.

You can still spend the HSA after enrolling in Medicare
— the balance never expires, and Medicare premiums are qualified
expenses. It is only new contributions that stop.

Not advice. HSA limits, HDHP thresholds and the
list of qualified expenses are set by the IRS and change every
year; state conformity varies. The 2026 figures here come from
IRS Rev. Proc. 2025-19 and Publication 969. Confirm current
numbers and your own eligibility with the IRS or a qualified tax
professional.

#### Frequently asked questions

##### Do HSA contribution limits include employer contributions?

Yes. The annual limit covers every dollar that reaches the
account from any source — the employer's seed, the employer's
match, your payroll deferrals and any direct deposits you
make. Your personal room is the limit minus whatever the
employer puts in. Check Box 12, code W of your W-2 for the
running total.

##### What are the 2026 HSA contribution limits?

$4,400 for self-only coverage and $8,750 for family coverage,
per IRS Rev. Proc. 2025-19. Anyone 55 or older can add a
$1,000 catch-up, which is fixed by statute and not
inflation-indexed. Contributions for 2026 can be made until
April 15, 2027.

##### What is the penalty for a non-qualified HSA withdrawal?

Before age 65, money taken out for anything other than a
qualified medical expense is taxed as ordinary income plus a
20% additional tax. From 65 onward the 20% no longer applies,
so a non-medical withdrawal is simply ordinary income — the
same treatment as a traditional IRA. The 20% is also waived on
disability or death.

##### Can I contribute to an HSA once I'm on Medicare?

No. Enrollment in any part of Medicare, including premium-free
Part A, ends eligibility from the first of that month. Because
claiming Social Security at or after 65 backdates Part A by up
to six months, most people stop HSA contributions six months
before they claim to avoid creating an excess contribution
retroactively.

##### Are HSA contributions pre-tax or after-tax?

Both are possible. Contributions made through your employer's
payroll are pre-tax and also avoid the 7.65% FICA tax.
Contributions you send to the custodian yourself are made with
after-tax money and deducted on Form 8889 — you get the income
tax back but not the FICA, so payroll is the better route when
it is offered.

#### Put a number on it

- HSA Contribution Calculator — your 2026 room after the employer's share, and the tax it saves.

- 401(k) vs IRA vs Roth vs HSA — where the HSA sits in the funding order.

- Which Accounts to Draw Down First — why the HSA is usually spent last.

- Medicare IRMAA Calculator — the premium surcharges an HSA can help pay.

- Tax-Aware Withdrawal Calculator — model the order you tap each account.

- How to Calculate Your 401(k) Employer Match — the one account that comes before the HSA in the funding order.

- When Should You Take Social Security? — why claiming at or after 65 forces you to stop contributing six months early.

#### Model the HSA as part of the whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Is $1 Million Enough to Retire?
URL: https://planomy.net/guides/is-1-million-enough-to-retire
Summary: What a million dollars really pays each year, how your retirement age changes the safe number, the tax you still owe, and the spending level where it breaks.

Retirement income

### Is $1 Million Enough to Retire?

A million dollars is the number everyone grew up naming, and it is
still a serious amount of money — it just does not answer the question on
its own. Two things decide whether it is enough: what age you stop working,
and what account the money is sitting in.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- $1,000,000 supports roughly $35,000 to $40,000 a year in today's dollars, depending on how long the retirement has to last.

- Retirement age matters more than markets: the same balance safely funds $35,000 at 55 and $40,000 at 70.

- A million dollars in a traditional 401(k) is not a million dollars of spending. At a 15% effective tax rate it is closer to $850,000.

- With a $30,000 Social Security benefit added, the same portfolio produces a household income near $68,000 at 65 — the level most retirees are actually asking about.

- Spend $80,000 a year from it with no other income and the balance is gone in about 16 years.

#### What a million dollars pays, by retirement age

The sustainable withdrawal rate falls as the horizon lengthens, because a long
retirement gives a bad run of early returns more time to do damage. Planning to
age 95 from each starting age:

Illustrative sustainable income from $1,000,000 in today's dollars, planning to age 95. Rates follow the same horizon scaling used throughout our guides.

| Retire at
| Years to fund
| Withdrawal rate
| Income per year

| 55 | 40 | 3.5% | $35,000

| 60 | 35 | 3.6% | $36,000

| 65 | 30 | 3.8% | $38,000

| 70 | 25 | 4.0% | $40,000

The spread is narrower than people expect — about $5,000 a year between
retiring at 55 and at 70. What changes far more is everything around
the portfolio: fifteen extra years of Social Security accrual, fifteen fewer
years of self-funded health insurance, and fifteen more years of compounding
if you keep saving.

#### Add Social Security and the picture changes

Almost nobody retires on a portfolio alone. Take a 65-year-old couple with
$1,000,000 and a combined benefit of $30,000 a year:

- Portfolio at 3.8%: $38,000

- Social Security: $30,000

- Total before tax: $68,000 a year

For a couple with no mortgage, $68,000 of largely tax-favoured income is a
comfortable retirement in most of the country. For a couple with a $2,000
monthly mortgage payment, $24,000 of that disappears before anything else does
— which is why
whether to pay off the
mortgage is a bigger question at this balance than the choice of index fund.

#### The million that is not a million

Where the money lives changes what it is worth. Consider three portfolios, all
showing $1,000,000 on the statement:

The same headline balance, in three different tax homes. Effective rates are illustrative; yours depends on total income, filing status and state.

| Where it sits
| What tax is owed on withdrawal
| Rough spendable value

| Roth IRA / Roth 401(k)
| None on qualified withdrawals
| $1,000,000

| Taxable brokerage
| Capital gains on the gain only, often 0% or 15%
| $950,000+

| Traditional 401(k) / IRA
| Ordinary income on every dollar
| ≈ $850,000 at a 15% effective rate

Most people's million is mostly traditional, which means the honest planning
number is nearer $850,000 — and it comes with
required minimum distributions
that eventually force withdrawals whether you want the income or not. The
years between retiring and RMDs starting are the window to fix that, one
bracket at a time, with a
Roth conversion ladder.

#### Where a million dollars breaks

Suppose the portfolio has to carry $80,000 a year on its own —
an early retiree, or someone whose benefit has not started. That is an 8%
withdrawal rate. Even with a 3% real return, the balance runs out in
roughly 16 years. At $60,000 a year with the same return it
lasts about 23 years; at $40,000 it stretches to nearly 47.

Same portfolio, same markets — three completely different retirements,
separated only by the spending line. The
depletion arithmetic is worth
understanding, because it is the most sensitive number in any plan.

Averages hide the risk. All of the figures above assume a
steady real return. Real markets do not deliver one. A 30% drop in your first
two retirement years while you are withdrawing $40,000 does permanent damage
that a later recovery cannot fully undo — that is
sequence-of-returns risk, and it
is why plans built on average returns look safer than they are.

#### Three ways to make a million work harder

-
Delay Social Security to 70. It converts portfolio risk into
guaranteed, inflation-indexed income at a rate no annuity matches — roughly
24% more benefit than claiming at full retirement age.

-
Spend flexibly. Trimming withdrawals by 10% after a bad year
(a guardrails approach) supports a higher starting rate than a fixed
inflation-adjusted withdrawal does. See
the safe withdrawal rate.

-
Control the tax mix. Drawing from taxable, traditional and
Roth in the right order can add years to a portfolio without changing a
single investment — see
which accounts to spend
first.

#### Test it against your own plan

Use the retirement drawdown
calculator to see how long $1,000,000 survives at your spending level, and
the withdrawal order calculator
to see how much of it the tax code takes back.

#### Frequently asked questions

##### How much interest or income does $1 million generate per year?

Sustainably, about $35,000 to $40,000 a year in inflation-adjusted terms, depending on how many years the money has to last. That is a total-return withdrawal, not an interest payment, and it assumes a diversified portfolio rather than cash.

##### Can a couple retire on $1 million?

Frequently yes. At 65, a $1,000,000 portfolio supporting $38,000 a year plus a $30,000 combined Social Security benefit produces about $68,000 before tax, and the tax owed on that mix is modest. The plan gets much tighter if a mortgage or self-funded health insurance is still in the budget.

##### Is $1 million enough to retire at 55?

It supports about $35,000 a year over a 40-year horizon, and you would be paying for your own health insurance for a decade with no Social Security until at least 62. It works for a genuinely low-spending household and does not work for a typical one.

##### Why is a million in a 401(k) worth less than a million in a Roth?

Because every dollar leaving a traditional 401(k) is taxed as ordinary income. At a 15% effective rate, a $1,000,000 traditional balance is closer to $850,000 of spending power, and required minimum distributions eventually force the withdrawals whether you need the money or not.

##### How long will $1 million last if I spend $80,000 a year?

About 16 years assuming a 3% real return and no other income — an 8% withdrawal rate is roughly double what a long retirement supports. At $60,000 a year the same portfolio lasts around 23 years, and at $40,000 it stretches to nearly 47.

#### Put a number on it

- Retirement Drawdown Calculator — how long a million lasts at your spending level.

- Withdrawal Order Calculator — how much of it goes to tax.

- How Long Will My Retirement Savings Last? — the formula behind the answer.

- What Is a Safe Withdrawal Rate? — where 3.5% to 4% comes from.

- Which Accounts to Spend First — keeping more of the million.

#### See what your million actually funds

Planomy projects your portfolio, Social Security, taxes and
required distributions year by year, so you can see the spending level a
million dollars supports in your situation — not in a generic one. Free,
private, and running in your browser.

Try Planomy free

Read more guides

---

## Should I Pay Off My Mortgage Before Retiring?
URL: https://planomy.net/guides/pay-off-mortgage-before-retiring
Summary: The present-value test that settles the rate-versus-return argument, the tax spike from using IRA money, and when a paid-off house is worth lost flexibility.

Retirement planning

### Should I Pay Off My Mortgage Before Retiring?

The usual advice — compare your mortgage rate to your expected return —
is right for a 40-year-old and incomplete for a 64-year-old. Three things
change at retirement: where the payoff money comes from, what the payment
does to your withdrawal rate, and how much liquidity is worth.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- The clean test: compare the present value of the payments you have left to the payoff amount. If the PV is lower, keeping the mortgage wins.

- In the worked example — $180,000 at 3.25% with 12 years left — the remaining payments are worth about $152,000 today, so paying it off costs roughly $28,000 of value.

- Flip the rate to 7% and the same test reverses: paying off wins by about $6,000.

- Paying off with traditional IRA money can be the deciding factor: netting $180,000 at a 24% marginal rate takes a $236,842 withdrawal, and can push more Social Security into tax and trigger an IRMAA surcharge two years later.

- The strongest non-financial argument is real: removing a payment permanently lowers required withdrawals, which directly reduces sequence-of-returns risk.

#### The test that actually settles it

Paying off a mortgage buys you one thing: freedom from a fixed stream of future
payments. So the honest question is what that stream is worth today. If the
present value of your remaining payments is less than the payoff
amount, you would be overpaying to escape them.

Take a concrete case: $180,000 outstanding at
3.25% with 12 years left. Principal and
interest are about $1,511 a month — $18,135 a year. Discount
those 12 payments at the 6% you expect your portfolio to earn:

PV = $18,135 × (1 − 1.06−12) ÷ 0.06 = $18,135 × 8.384 =
$152,038

Payoff cost: $180,000. Keeping the mortgage is worth about
$28,000.

Same $180,000 balance and 12-year term at different mortgage rates, discounted at a 6% expected return. Annual approximation of monthly payments.

| Mortgage rate
| Annual payment
| PV at 6%
| Payoff cost
| Verdict

| 3.25% | $18,135 | $152,038 | $180,000 | Keep it (+$28,000)

| 5.00% | $19,978 | $167,489 | $180,000 | Keep it (+$12,500)

| 6.00% | $21,078 | $176,718 | $180,000 | Roughly a wash

| 7.00% | $22,213 | $186,231 | $180,000 | Pay it off (+$6,200)

The pattern is not a coincidence: the test tips right around where the mortgage
rate crosses the discount rate. (It crosses a little above 6% here only because
treating twelve monthly payments as one year-end payment understates their
present value slightly.) That is the rate-versus-return rule of thumb,
derived rather than asserted — and now with a dollar figure attached rather
than a vague "you'd come out ahead". Use a conservative expected return; the
saving from a payoff is certain, and the portfolio return is not.

#### Where the money comes from can outweigh everything above

A retiree rarely has $180,000 in cash lying idle. If the payoff comes out of a
traditional 401(k) or IRA, every dollar is ordinary income in the year you take
it:

- To net $180,000 at a 24% marginal rate you must withdraw
$180,000 ÷ 0.76 = $236,842. The tax cost is
$56,842, which comfortably swamps the $28,000 the
present-value test was arguing about.

- A spike that size can push part of the withdrawal into a higher bracket
than 24%, make more of your
Social Security taxable, and
cross an IRMAA threshold that raises
Medicare premiums two years later.

The order of preference for payoff money is therefore the same as the general
drawdown order: cash and
taxable brokerage first (only the gain is taxed, often at 0% or 15%), then
spread pre-tax withdrawals across several years, and leave Roth money alone. If
you want the mortgage gone, retiring the balance over three or four calendar
years usually beats doing it in one.

Do not empty the emergency fund to do it. Home equity is not
spendable. Once the money is in the house, getting it back means selling,
borrowing against it, or a reverse mortgage — all slow, all expensive, and all
least available exactly when you need cash urgently. Keep the
cash cushion intact.

#### What a paid-off house genuinely buys

The financial test above is not the whole answer, because a mortgage payment is
not just a cost — it is a rigid cost. Removing $18,135 a year of
obligatory spending changes the shape of the plan:

-
Lower withdrawals, lower sequence risk. A household spending
$70,000 from a $1.4m portfolio is at 5%. Remove the mortgage and it is
$51,865, or 3.7% — the same portfolio, a materially safer plan. This is a
direct reduction in
sequence-of-returns risk,
because you are no longer forced to sell as much in a bad year.

-
Lower taxable income. Smaller withdrawals mean lower AGI,
which ripples into Social Security taxation, IRMAA, and how much room you
have for cheap
Roth conversions.

-
Resilience. A household with no mortgage can cut spending far
more deeply in a crisis than one with a payment due on the first of the month.

#### And the deduction? Mostly gone

"Keep the mortgage for the tax deduction" is dated advice. Mortgage interest is
only deductible if you itemize, and the standard deduction is now large enough
that most households — especially retirees with no state income tax on Social
Security and a small mortgage balance late in the term — take the standard
deduction instead. If you are not itemizing, your mortgage interest provides no
tax benefit at all, and the after-tax cost of the loan is simply its rate.

#### Putting it together

- Low rate, taxable money required, plenty of liquidity: keep the mortgage and invest the difference.

- High rate relative to what you expect to earn: pay it off — the arithmetic and the peace of mind agree.

- Only pre-tax money available: do not do it in one year. Spread it, or make extra principal payments from cash flow instead.

- Close to the line, and the payment is a large share of spending: lean toward paying it off. The risk reduction is worth more than a small expected-return edge.

The mortgage payoff calculator shows
the interest saved and the date the balance hits zero under extra payments, and
the retirement drawdown
calculator shows what removing the payment does to how long your portfolio
lasts.

#### Frequently asked questions

##### Should I use my 401(k) to pay off my mortgage?

Rarely in a single year. Every dollar leaving a traditional 401(k) is ordinary income, so netting $180,000 at a 24% marginal rate takes a $236,842 withdrawal and roughly $57,000 of tax, plus knock-on effects on Social Security taxation and Medicare premiums two years later.

##### Is it better to pay off the mortgage or invest?

Compare the present value of your remaining payments to the payoff amount using your expected return as the discount rate. The test tips wherever the mortgage rate crosses your expected return — but use a conservative return, because the interest saving is certain and the return is not.

##### Does paying off my mortgage reduce the amount I need to retire?

Yes, substantially, but only for the years the payment would have run. Removing $18,000 a year of spending lowers your required withdrawal immediately, which lowers your withdrawal rate and reduces sequence-of-returns risk for the rest of the plan.

##### Is the mortgage interest deduction a reason to keep the loan?

Usually not any more. Interest is only deductible if you itemize, and the standard deduction is large enough that most retirees do not. If you take the standard deduction, your mortgage interest gives you no tax benefit and the loan simply costs its stated rate.

##### What if I can only pay off part of the mortgage?

Partial payments are fine and often better. Recasting or making extra principal payments from cash flow reduces the balance without a single large taxable withdrawal, and you keep the liquidity that a full payoff would have locked into the house.

#### Put a number on it

- Mortgage Payoff Calculator — interest saved and the new payoff date.

- Retirement Drawdown Calculator — what removing the payment does to the plan.

- Which Accounts to Spend First — where the payoff money should come from.

- Sequence of Returns Risk — why a lower fixed cost is a real risk reduction.

- How Much Do You Need to Retire? — how spending drives the target.

#### See the payoff inside a full plan

Planomy models the mortgage, the withdrawal that would clear it and
the tax it triggers in one projection — so you can compare paying it off,
spreading it, or keeping it, on the same screen. Free, private, and running
in your browser.

Try Planomy free

Read more guides

---

## Pension Lump Sum or Monthly Payment?
URL: https://planomy.net/guides/pension-lump-sum-vs-monthly
Summary: Turn the offer into a payout rate, test it against a 4% withdrawal, then price what the rate hides: no cost-of-living rises, survivor options, employer risk.

Retirement income

### Pension Lump Sum or Monthly Payment?

Your employer offers a monthly pension for life, or a single cheque
today. The comparison looks impossible because the two numbers are in
different units — so convert them into the same unit first, then price the
four things that conversion leaves out.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Divide the annual pension by the lump sum to get a payout rate. A $30,000 pension against a $450,000 lump sum is 6.7% — far above the ~4% a portfolio safely supports.

- The catch: most private pensions have no cost-of-living increases. At 2.5% inflation, a fixed $30,000 buys about $18,300 of today's goods after 20 years.

- The survivor election is part of the price — a joint-and-survivor pension pays less each month but keeps paying a spouse.

- A lump sum must be moved by direct rollover to an IRA, or it is taxed as income with 20% withheld.

- Rough guide: a high payout rate with a survivor option favours the pension; a low payout rate, a shaky sponsor, or a strong need for flexibility and legacy favours the lump sum.

#### Step 1: convert the offer into a payout rate

A monthly pension and a lump sum become comparable the moment you express the
pension as a percentage of the cash you are giving up:

Payout rate = annual pension ÷ lump sum offer

Example: $2,500 a month is $30,000 a year. Against a $450,000 lump sum:
$30,000 ÷ $450,000 = 6.7%.

Now you have something to judge. A portfolio of your own safely supports
something in the region of 3.5% to 4%
a year, adjusted for inflation. A 6.7% payout rate is well above that, which is
a strong signal in the pension's favour before any adjustments.

The same $450,000 lump sum against different monthly offers. The benchmark column is what the lump sum would sustainably produce at a 4% inflation-adjusted withdrawal rate.

| Monthly pension
| Annual
| Payout rate
| 4% benchmark
| Signal

| $1,500 | $18,000 | 4.0% | $18,000 | Neutral — take the flexibility

| $2,000 | $24,000 | 5.3% | $18,000 | Pension ahead on income

| $2,500 | $30,000 | 6.7% | $18,000 | Pension well ahead

| $3,000 | $36,000 | 8.0% | $18,000 | Pension strongly favoured

#### Step 2: subtract the missing inflation increases

This is the adjustment that changes minds. The 4% benchmark is an
inflation-adjusted withdrawal — it rises with prices every year. Most
private-sector pensions are fixed in nominal dollars and never rise at all.
(Many federal and some state plans do include increases; check yours rather
than assuming.)

What a fixed $30,000 pension buys in today's dollars at 2.5% inflation. Divide by (1.025 raised to the number of years).

| Years from now
| Inflation factor
| Real value of $30,000

| 10 | 1.280 | $23,436

| 20 | 1.639 | $18,308

| 25 | 1.854 | $16,181

| 30 | 2.098 | $14,302

A 6.7% payout rate that erodes to less than half its purchasing power over a
long retirement is not really 6.7%. A reasonable way to think about it: the
fixed pension is generous early and thin late, while the portfolio withdrawal
is level throughout. If you are 65 and healthy, the late years matter. If you
are 70 with a modest life expectancy, the early years dominate and the fixed
payment looks better.

#### Step 3: price the survivor election

Pension offers usually come in several shapes: single life (largest monthly
payment, stops at your death), or joint and survivor at 50%, 75% or 100%
(smaller payment, continues to a spouse). The reduction is the price of
insuring your spouse's income, and choosing single life to maximise the monthly
figure is one of the most consequential mistakes available in retirement
planning — particularly for a household that also loses the smaller
Social Security benefit when
one spouse dies.

A lump sum sidesteps the question: whatever remains passes to your heirs. That
legacy value is real, and it is the strongest argument for the lump sum in
households where both partners already have secure income.

#### Step 4: weigh the risks on each side

The risks do not disappear — they change owner.

| Risk
| Monthly pension
| Lump sum

| Outliving the money
| Employer's problem — paid for life
| Yours — depends on withdrawal rate

| Inflation
| Yours, unless the plan has increases
| Manageable — invest for real growth

| Markets
| Not your problem
| Yours entirely

| Sponsor failure
| Real, though private plans are insured by the PBGC up to statutory limits
| None once rolled over

| Legacy for heirs
| Nothing beyond the survivor election
| Whatever is left

| Your own decisions
| Nothing to manage
| You must not overspend it

Government and church plans are generally outside PBGC coverage, and the
insurance caps matter most for high earners with large accrued benefits. If
your monthly amount is modest and the plan is a private one, sponsor risk is a
small factor; if it is large, it deserves attention.

#### Step 5: do not fumble the tax

If you take the lump sum, move it by direct rollover into an
IRA — trustee to trustee, never touching your bank account. Take the cheque
yourself and the plan must withhold 20%, and you have 60 days to redeposit the
full amount including the part they withheld. This is the same trap covered in
our guide to
401(k) rollover options, and it is
entirely avoidable.

Once in an IRA, the money is taxed like any other pre-tax balance: ordinary
income on withdrawal, subject to
required minimum distributions
later. Monthly pension payments are also ordinary income, so tax treatment is
broadly neutral between the two — what changes is your control over
when the income lands, which is worth real money if you are also doing
Roth conversions or watching an
IRMAA threshold.

#### A workable decision rule

- Payout rate above about 6% with a survivor option — the pension is hard to beat, especially as the floor under your essential spending.

- Payout rate near 4% or below — the lump sum gives you the same income with flexibility, inflation protection and a legacy.

- Somewhere in between — decide on the softer factors: health, whether you have other guaranteed income, and how much you value not having to manage the money.

- Both, if offered. Some plans allow a partial lump sum. Covering essentials with the pension and keeping the rest liquid is often the best of both.

The annuity payout calculator shows
what income a lump sum would buy on the open market — a useful reality check on
whether your employer's offer is generous — and the
retirement drawdown calculator
tests how long the lump sum would last under your own spending.

#### Frequently asked questions

##### How do I compare a pension to a lump sum?

Divide the annual pension by the lump sum to get a payout rate, then compare it to the 3.5% to 4% a portfolio sustainably supports. Adjust downward if the pension has no cost-of-living increases, and account for the survivor election and the value of leaving money to heirs.

##### Is a 6% pension payout rate good?

It is well above what a portfolio safely supports, so on income alone the pension wins. The question is whether it stays ahead: a fixed payment loses roughly a third of its purchasing power in 15 years at 2.5% inflation, while a 4% portfolio withdrawal is designed to keep pace.

##### Should I take the lump sum and buy an annuity instead?

Sometimes worth checking. Price what your lump sum would buy in the commercial market and compare it to the employer's monthly offer. Employer pensions often quote better terms because they are not paying a commercial insurer's costs, but the comparison is quick and occasionally surprising.

##### How is a pension lump sum taxed?

As ordinary income if you take it in cash, with 20% mandatory withholding and a 60-day window to complete a rollover. Move it by direct trustee-to-trustee rollover into an IRA instead and nothing is taxed until you withdraw it.

##### What happens to my pension if my former employer goes under?

Private-sector defined benefit plans are generally insured by the Pension Benefit Guaranty Corporation up to statutory limits, so most participants would continue to be paid. Government and church plans are typically outside that coverage, and very large accrued benefits can exceed the caps.

#### Put a number on it

- How Much Does a $500k Annuity Pay Per Month? — the payout table behind a lump-sum-to-income comparison.

- Annuity Payout Calculator — what a lump sum buys on the open market.

- Retirement Drawdown Calculator — how long the lump sum would last.

- 401(k) Rollover Options — how to move the money without a tax bill.

- What Is a Safe Withdrawal Rate? — the benchmark the payout rate is judged against.

- How Much Does a Couple Need to Retire? — why the survivor election matters.

#### Test the offer inside your plan

Planomy lets you model the pension and the lump sum as two
scenarios side by side, with taxes, Social Security and spending included,
so you can see which one leaves the household better off at 85. Free,
private, and running in your browser.

Try Planomy free

Read more guides

---

## Planomy vs Boldin: Which Retirement Planner Fits?
URL: https://planomy.net/guides/planomy-vs-boldin
Summary: A fair comparison of Planomy and Boldin (formerly NewRetirement): on-device versus cloud account, free planner versus subscription, and which suits you.

Head to head

### Planomy vs Boldin (formerly NewRetirement)

Both are serious US retirement planners rather than budgeting apps, and
both will give you a defensible answer. They differ on three
structural things — where your plan is stored, whether an account is
required, and how the product is paid for — and those three things
decide it.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Boldin (called NewRetirement until its rebrand) is a cloud, account-based planning platform with a free tier and paid subscription tiers, known for depth and for offering human help alongside the software.

- Planomy is a local-first planner: the full engine is free with no account, your plan is stored on your device, and the paid tier is only about syncing, bank sync and assistant messages.

- If you want a plan that follows you across devices without thinking about it, and you like having the option of talking to a person, the cloud subscription model is the better fit.

- If you would rather not create an account or put your finances on someone's server at all, a local-first planner is the only shape that satisfies that — and it works offline as a side effect.

- Both model US taxes, Social Security, Medicare and RMDs seriously. This is not a comparison where one side has an engine and the other has a toy.

#### The honest summary

Boldin has been in this market for years, has a large and engaged
user base, and is built around the idea that a retirement plan is a
living document you maintain in an account — with the option of
bringing a human into it. That is a coherent, well-executed product
philosophy and for a large number of people it is the right one.

Planomy starts from a different premise: that the projection is
arithmetic over numbers you supply, so it should run on your device,
need no account, and cost nothing. Everything else follows from that
— including the things it is worse at.

Neither of those premises is wrong. Pick the one that matches how you
want to hold your financial life.

#### The comparison

Structural differences only. We do not quote Boldin's prices or plan limits here — see the note below the table.

| Axis
| Planomy
| Boldin

| Where your plan is stored
| On your device by default; optional encrypted sync
| In your account, on their servers

| Account required
| No — optional, for sync and sharing only
| Yes

| Cost of the planning itself
| Free, forever, with no account
| A free tier plus paid subscription tiers — check their site

| What the paid tier buys
| Unlimited synced plans, bank sync, more assistant messages — $6/month or $60/year
| Additional planning capability and services — check their site

| Human help available
| No. Software only; we sell no advice
| Yes — they offer paid human help alongside the software

| Works with no connection
| Yes, after the first load
| No — it is a cloud product

| Cross-device sync
| With an account: 1 plan free, unlimited on Plus
| Inherent — the account is the plan

| US tax, Social Security, Medicare, RMDs
| Modelled in detail (see below)
| Modelled in detail — this is a strength of theirs

| Full data export
| Yes — download and restore a complete plan file
| Check their current export options

Read Boldin's tiers on Boldin's site. Reviewed
July 27, 2026. Boldin runs a free tier and paid
subscription tiers whose contents have moved over the years, and a
competitor quoting them from memory is how comparison pages end up
misleading. So this page quotes none of it. What it does assert —
that Boldin is account-based and cloud-hosted, and that human help
is available alongside the software — is structural, checkable, and
the actual basis for choosing between the two.

#### Where your plan lives is the real decision

Everything else in that table is downstream of one row. A cloud
account means your plan is available everywhere, is backed up
without you thinking about it, and can be shared or looked at by
someone helping you. It also means there is a server-side copy of
your financial situation, that access depends on an ongoing
relationship with a company, and that the tool stops working when
the network does.

On-device storage inverts every one of those. No server copy, no
dependency, works on a plane — and if you clear your browser data
without an export, the plan is gone. There is no version of this
trade-off where you get both sides for free, and any product telling
you otherwise is glossing.

#### "Free" here does not mean a reduced engine

The usual reason to be suspicious of a free planner against a
paid one is that "free" normally means a stripped tier designed
to make you upgrade. That is worth checking, so here is the
specific thing to check: nothing in Planomy's paid tier
is a planning feature. Plus buys unlimited synced plans
instead of one, an AI assistant top-up to 50 credits
a month instead of 5 a week, bank sync and priority support. That
is the entire paywall.

Every number Boldin would compete with Planomy on is on the free,
signed-out side of that line. Concretely, the projection running
in an account-free browser tab is doing this:

- Federal tax read from a dated, versioned dataset shipped with the app — the 2026 file carries all seven ordinary brackets for single and married-filing-jointly, plus the standard deduction and long-term capital-gains thresholds. It is data, not constants in the code, so it can be corrected without a rebuild.

- State income tax for all 50 states and DC, at three levels of fidelity that the app labels rather than hides: 28 states plus DC carry full bracket tables, nine states levy no income tax at all, and the remaining 13 are modelled at their single flat rate.

- Separate running ledgers for cash, taxable, traditional, Roth and HSA balances — not one blended pot — because the tax on a withdrawal depends entirely on which of those it comes from.

- RMDs on the IRS Uniform Lifetime Table with SECURE 2.0 start ages, for you and for a partner independently.

- Medicare Part B and Part D with IRMAA surcharges keyed off the two-year MAGI lookback — which is what makes a Roth conversion at 63 cost you money at 65.

- Monte Carlo with a seeded run of up to 5,000 trials, and a historical backtest over every rolling window of real annual US market returns and CPI-U inflation from 1928 to 2024.

- Roth conversions specified either as a flat amount or as fill-to-the-top-of-a-bracket, with the IRMAA consequence carried through.

If you find a planning capability behind Planomy's paywall, we
have mis-built something. The comparison you should be making
against Boldin is about shape and support, not about which engine
you are allowed to run.

#### Pick Planomy if…

- You do not want to create an account, hand over an email, or put your finances on anyone's server to get a projection.

- You want the whole planning engine free rather than a limited free tier that pushes you toward an upgrade.

- You want it to keep working offline, and to keep working if we disappear — the plan file is yours.

- You want plan-versus-actual tracking of real spending against the plan, with bank sync as an option rather than a requirement.

#### Where Boldin is the better answer

We would rather lose you on this page than have you spend an
evening typing a plan into the wrong tool. These are the reasons
to close this tab and go to Boldin — they are real, and none of
them are things we are quietly planning to fix.

-
You want the option of a person. This is the
cleanest dividing line between the two products. Boldin sells
human help alongside the software; Planomy sells no advice and
has no advisers attached to it, by design and not as a gap. If
what you actually want is someone to look at your situation and
answer for their answer, that is a legitimate thing to want and
we do not offer it. Planomy's AI assistant reads your plan and
explains it — it is not a fiduciary and does not pretend to be.

-
You want the plan to survive the device without
thinking about it. A cloud account is backed up because
that is what it is. Planomy's default is the opposite: clear
your browser data with no export and no account, and the plan is
gone. There is a free account that syncs one plan, and there is
a download-a-copy button, but both are things you have to
do. If you know you will not do them, the cloud model
protects you from yourself and this one does not.

-
You want a large community and years of accumulated
material. Boldin has been in this market for a long
time and has forums, classes and a body of user-written material
around it. Planomy is new. When you get stuck on a modelling
question at 11pm, that difference is worth something real.

-
Your state tax bill is the crux of the decision and you
live in one of the 13 flat-rate states. 28 states plus
DC carry full bracket tables in Planomy; nine have no income tax
to model; the remaining 13 use a single flat rate. The app tells
you which kind it is using for your state rather than hiding it,
but if the state line is what your retirement decision turns on
and you are in that third group, treat it as an estimate and
verify it elsewhere.

Notably not on that list: depth of the tax engine,
Monte Carlo, Roth conversion modelling or Social Security timing.
Both products take those seriously, and choosing between them on
those grounds means comparing two things that are both adequate.

#### The cheapest way to decide

Run the same inputs through both free paths and compare the year your
money runs out. Where the two answers diverge, the culprit is almost
always one of three assumptions: the real return, the inflation
figure, or how the tool handles the tax on withdrawals. Our
drawdown order guide
and safe withdrawal rate guide
explain what to look for. Planomy's free path needs no sign-up, so
the comparison costs you nothing but the typing.

#### Frequently asked questions

##### Is Boldin the same as NewRetirement?

Yes — Boldin is the current name of the product that was previously called NewRetirement. If you have read older articles or forum threads referring to NewRetirement, they are talking about the same platform.

##### Is Planomy a free alternative to Boldin?

It is a free planner in the same category, though the two are shaped differently. Planomy's complete planning engine is free with no account and stores your plan on your device; its paid tier is about syncing, bank sync and AI assistant messages rather than about unlocking planning features. Whether it is a substitute depends mainly on whether you want a cloud account.

##### Which one models taxes better?

Both take US tax modelling seriously — this is not a case of one having an engine and the other a rule of thumb. Rather than trusting a claim from either vendor, run the same scenario through both and inspect where the tax lines diverge. That comparison tells you more about which assumptions suit your situation than any feature list.

##### Can I use Planomy without giving an email address?

Yes. The full planner opens with no account, no email and no card, and saves your plan in your browser's storage on that device. An account is only needed if you want to sync across devices, share a plan, or receive check-in reminders.

##### What happens to my plan if I stop paying?

With Planomy, nothing — the planner is free, so cancelling Plus only stops extra synced plans, bank sync and the larger assistant allowance, and your plan stays on your device. With any subscription-only planner, check the vendor's own policy on what happens to a stored plan after a subscription lapses, and confirm you can export it before you build one.

#### Related reading

- Best retirement planning software — the whole category, by shape.

- Planomy vs ProjectionLab — the other subscription planner people evaluate.

- Free retirement planner with no sign-up — what no-account really means.

- Which accounts to draw down first — the assumption most likely to make two tools disagree.

- 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.

#### Compare them on your own numbers

Planomy's full planner — projections, US taxes, Social Security, RMDs,
Monte Carlo and scenarios — opens with no account and no card, so
running your plan through it costs nothing but the typing.

Open the free planner

Read more guides

---

## Planomy vs Empower Personal Dashboard
URL: https://planomy.net/guides/planomy-vs-empower
Summary: One aggregates your linked accounts and is funded by a wealth manager. The other projects a plan on your device with no account. They solve different problems.

Head to head

### Planomy vs Empower Personal Dashboard

These two are often compared and shouldn't be, at least not as
substitutes. Empower's dashboard is built to show you where you stand
today across every account you link. Planomy is built to project where
you are heading. Plenty of people should use one of each.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Empower Personal Dashboard (formerly Personal Capital) is a free account-aggregation dashboard: link your institutions and see net worth, allocation, fees and spending in one place.

- It is free to use because Empower is a wealth-management business — the free tools are, among other things, how the firm meets prospective advisory clients, so expect outreach, particularly with larger balances.

- Planomy is a projection engine that runs on your device with no account and no required bank linking. It answers "what happens if", not "what do I own right now".

- Aggregation requires linking accounts, by definition. If you are unwilling to do that, no dashboard can help you and a planner is what you want.

- Using both is a legitimate answer: the dashboard for a live picture of today's balances, the planner for the decisions.

#### They are not the same kind of product

The single most useful thing to understand before comparing these is
that they sit in different categories. A dashboard describes the
present: what you own, how it is allocated, what you are paying in
fees, where the money went last month. A projection engine describes
futures: what your balances, taxes and income look like each year for
thirty years under a set of assumptions, and which assumption breaks
the plan.

Empower's dashboard does include retirement planning features fed by
your linked accounts, and they are genuinely useful for a quick read.
But the thing it is best at is aggregation, and the thing
Planomy is best at is projection. Choosing between them on a feature
checklist misses this entirely.

#### The comparison

What each is structurally built to do. Verify anything about Empower's current tools and terms on their own site.

| Axis
| Planomy
| Empower Personal Dashboard

| What it is primarily for
| Projecting a plan year by year, with taxes
| Aggregating linked accounts into one live picture

| Account required
| No
| Yes

| Bank and brokerage linking
| Optional, on the Plus tier
| Central — the product depends on it

| Who pays for it
| You, optionally — $6/month or $60/year for Plus. The planner is free
| Free to use; Empower is a wealth-management firm

| Should you expect a sales conversation?
| No — we sell software, not advice
| Yes — advisory outreach is part of the model, especially at higher balances

| Where your data sits
| On your device by default; optional encrypted sync
| In your account with them, plus credentials held by the aggregation layer

| Control over planning assumptions
| Explicit — returns, inflation, withdrawal order, conversion strategy, claiming age
| Their planning tools use their own methodology — read their disclosures

| Works with no connection
| Yes, after the first load
| No — live aggregation needs the network

| Live balances without typing
| Only with Plus bank sync; otherwise you enter them
| Yes — this is the core strength

Confirm Empower's current offering with Empower.
Reviewed July 27, 2026. Empower's free tools have
been renamed and re-scoped more than once — they were Personal
Capital before the acquisition — so any specific feature list
written by a competitor is a liability rather than a service. What
this page asserts is structural and slow-moving: it aggregates
rather than projects, it requires an account and linked
institutions, and the tools sit alongside a wealth-management
business. Verify the specifics on their site.

#### On "free" tools from a wealth manager

This deserves saying carefully, because it is easy to make it sound
like an accusation and it isn't one. Empower's tools are free and
well built. Empower is also a large wealth-management business, and
the tools serve the business by putting the firm in front of people
with assets to manage. Users with meaningful balances have long
reported being contacted by an advisor.

That is a completely normal way to fund software, and if you want an
advisor conversation it is arguably a feature. The only mistake is
not knowing it is part of the arrangement before you link seven
accounts. Price it in, decide, and move on.

The comparison in one line. With Empower you pay in
data and attention and get automation. With Planomy you pay in typing
(or $6 a month for bank sync) and get a projection engine that does
not need to know who you are.

#### The three questions a dashboard structurally cannot answer

This is not a knock on aggregation. An aggregator's job is to tell
you what is true right now, and Empower's does that well. But a
retirement decision is a question about a future that depends on
the order you do things in, and that requires a different kind of
machinery. Three worked examples of the gap:

##### "Should I convert to Roth this year, and how much?"

A correct answer has to price the conversion against
next year's marginal bracket, against the extra tax on
Social Security the conversion drags into the taxable base, and
against the IRMAA surcharge it triggers on Medicare Part B and
Part D two years later — that two-year MAGI
lookback is why a conversion at 63 shows up as a bill at 65. In
Planomy you can set a conversion as a flat amount or as
fill-to-the-top-of-a-bracket and watch all three effects land on
the year-by-year table. A balance aggregator has no year-by-year
table to land them on.

##### "Which account do I spend first?"

Planomy keeps five separate ledgers — cash, taxable, traditional,
Roth and HSA — because the tax on a dollar depends entirely on
which one it came out of. It compares four named drawdown
orders side by side, and for taxable sales it applies real lot
selection: FIFO, LIFO, HIFO, or lowest-tax-first. A dashboard
that shows a single blended net-worth line has, by construction,
thrown away the distinction the question turns on.

##### "What if the first five years are bad?"

Sequence-of-returns risk is invisible in an average. Planomy runs
a seeded Monte Carlo of up to 5,000 trials, and separately
backtests your plan against every rolling window of real annual US
market returns and CPI-U inflation from 1928 to
2024 — so you can see the actual 1966 and 2000 retirees,
not a bell curve. Current balances, however accurate, say nothing
about this.

Underneath all three sits the tax engine: federal brackets from a
dated, versioned dataset rather than constants in the code, state
income tax for all 50 states and DC, and RMDs on the IRS Uniform
Lifetime Table with SECURE 2.0 start ages.

#### Use both, honestly

There is no rule against it, and the combination covers each one's
weakness. Keep an aggregation dashboard for the live picture of
balances and fees; keep a planner for decisions like when to claim
Social Security, whether to convert to Roth before RMDs start, and
which accounts to spend first. Update the planner's balances from the
dashboard a few times a year and you have most of the benefit of both
with none of the confusion.

#### Who Planomy is not for — the dashboard version

If what you actually wanted was the dashboard, take the dashboard.
These are the reasons a dashboard user should not switch, and
they all come back to the same trade: a planner asks you to type,
and gives you a future in return.

-
The appeal of Empower is that it updates itself.
This is the honest dealbreaker, so it goes first. Planomy has no
live market-price or holdings feed at all — there is no version
of it where your share prices refresh overnight. Balances are
what you type, or what an optional Plaid bank connection imports
on the Plus tier, and even that imports transactions rather than
marking a portfolio to market. If seeing today's number without
doing anything is the point, we do not do the point.

-
You will not maintain it. Follows from the
above and is worth saying plainly. A planner you update twice a
year is useful; a planner you updated once in 2026 and never
touched again is worse than the dashboard, because it looks
authoritative while being stale. Be honest about which of those
you will be.

-
You want an investment view — allocation drift,
fund overlap, fee analysis on live holdings. Empower's
free tools are genuinely built for this and Planomy is not.
Planomy models the effect of fees on a projection; it does not
X-ray your actual fund lineup.

-
You want someone to call. Empower is a wealth
manager and the dashboard is, openly, the top of that funnel —
which is a fine trade if advice is what you are after. Planomy
sells no advice, has no advisers, and will never ring you. That
cuts both ways and you should pick the side you want.

-
You are planning outside the US. Federal
brackets, Social Security, Medicare, IRMAA and RMDs are all
US-specific and none of it transfers.

#### Where to start

If you already know roughly what you own, you can have a real
projection in about ten minutes with no account:
open the planner. If you want a single number
first, the net worth calculator
and the investment fee impact calculator
cover two of the things people open a dashboard for in the first
place.

#### Frequently asked questions

##### Is Empower Personal Dashboard really free?

The dashboard tools are free to use. Empower is a wealth-management firm, and the free tools are part of how it meets prospective advisory clients — people with larger balances should expect to be contacted by an advisor. That is a normal way to fund software, but it is worth knowing before you link accounts.

##### Can I use a retirement planner without linking my bank accounts?

Yes. Aggregation dashboards need linked institutions because aggregation is the product, but a projection engine works from balances, contributions, spending and assumptions you enter yourself. Planomy requires no linking at all; bank sync is an optional Plus feature that saves typing.

##### Which is better for deciding when to retire?

A projection engine, because that question is about the future rather than the present. You want year-by-year modelling of taxes, Social Security, Medicare and RMDs under assumptions you control. A dashboard is better at telling you what you own today and what you are paying in fees.

##### Is it sensible to use both?

Yes, and many people do. Use the dashboard for a live picture of balances, allocation and fees; use the planner for decisions like claiming age, Roth conversions and withdrawal order. Refresh the planner's balances from the dashboard a few times a year.

##### What was Empower Personal Dashboard called before?

Personal Capital. Empower acquired it and rebranded the tools, so older articles and forum threads referring to Personal Capital are describing the same dashboard.

#### Related reading

- Best retirement planning software — dashboards versus projection engines.

- Free retirement planner with no sign-up — planning without linking anything.

- Net Worth Calculator — the dashboard number, without a dashboard.

- Investment Fee Impact Calculator — what fees cost over a lifetime.

- 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.

#### Get the projection the dashboard doesn't give you

Planomy models your next thirty years year by year — federal and state
tax, Social Security, Medicare and IRMAA, RMDs, Monte Carlo — from
numbers you enter, with no account and no linked institutions.

Open the free planner

Read more guides

---

## Planomy vs ProjectionLab: How to Choose
URL: https://planomy.net/guides/planomy-vs-projectionlab
Summary: Both project a retirement year by year. The differences that matter are what you pay for, whether an account is required, and how you like to work with a model.

Head to head

### Planomy vs ProjectionLab

These two are closer to each other than to anything else in the
category: both are genuine projection engines rather than dashboards,
both are browser-based, and both attract people who want to see the
mechanics rather than a single reassuring number. The differences are
about money, accounts and taste.

Updated July 27, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- ProjectionLab is a subscription, browser-based planner with a strong reputation for interactive modelling and visual clarity, and a large following in the FIRE community.

- Planomy is a free, local-first planner: the full engine costs nothing, needs no account, and stores your plan on your device; the paid tier is about syncing, bank sync and assistant messages.

- The decision is usually settled by one question — are you happy to pay a subscription for a planning tool, and to hold a plan in an account?

- Both are strongest on the same axis: modelling what happens, year by year, under assumptions you control. Neither is trying to be a budgeting app.

- Try both free paths with identical inputs. Where the answers diverge, the assumption that differs is the thing worth understanding — not the friendlier number.

#### What they have in common

It is worth starting here, because the shared ground is large. Both
run in a browser. Both are projection engines: you describe a
household, a set of accounts, contributions, a retirement date and
some assumptions, and you get a year-by-year path rather than a
single headline figure. Both let you model life events and compare
scenarios instead of committing to one future. Both attract the kind
of person who wants to know why the answer moved.

If you have been looking at aggregation dashboards and finding them
unsatisfying, both of these are the correct kind of tool — see
the category guide
for why that distinction matters so much.

#### The comparison

Structural axes only. We do not quote ProjectionLab's prices, tiers or storage specifics — those are theirs to state and ours to not get wrong.

| Axis
| Planomy
| ProjectionLab

| Business model
| Free planner; optional Plus at $6/month or $60/year
| Paid subscription — check their pricing page

| Account required to plan
| No
| Yes for a saved plan — check what their trial or demo allows

| Where your plan is stored
| On your device by default; optional encrypted sync
| They publish their own data-storage options — check their site

| Works with no connection
| Yes, after the first load
| Check their documentation

| Typical audience
| People who want a full US retirement projection without an account or a subscription
| Strong following among FIRE and early-retirement planners

| Plan-versus-actual tracking
| Yes — compare real spending against the plan, with optional bank sync on Plus
| Check their current feature set

| AI assistant over your plan
| Yes, with a message allowance
| Check their site

| Full data export
| Yes — download and restore a complete plan file
| Check their current export options

Get ProjectionLab's specifics from ProjectionLab.
Reviewed July 27, 2026. This one matters more than
usual: ProjectionLab ships quickly, so a feature list written here
would be wrong within a quarter and would look like we were
describing an older version to our own advantage. This page
therefore restricts itself to things that change slowly — the
business model, whether an account is needed to plan, and where the
plan is held. Everything else, read on their site.

You will notice several "check their site" cells. That is
deliberate. ProjectionLab is a good product being actively developed,
and a competitor's page confidently describing its feature set is
exactly the sort of thing that goes stale and turns into a
misrepresentation. The axes we are confident about are stated
plainly; the rest we would rather you verify at the source.

#### The FIRE-specific machinery, since that is the shared audience

People comparing these two products are usually not asking "can it
do a retirement projection". They are asking whether it handles the
specific manoeuvres an early retiree cares about. So rather than a
generic capability list, here is what Planomy does on exactly those
points — all of it in the free, no-account tier.

##### Bridging the years before 59½

The whole early-retirement problem is funding a gap with money that
is mostly in accounts you are penalised for touching. Planomy keeps
cash, taxable, traditional, Roth and HSA as five separate ledgers
and lets you compare four named drawdown orders against each other,
so the bridge is something you can see and test rather than assume.
On taxable sales it applies real lot selection — FIFO, LIFO, HIFO
or lowest-tax-first — which is the difference between a plausible
bridge and an accurate one.

##### The Roth conversion ladder

Conversions can be set as a flat amount or as
fill-to-the-top-of-a-bracket, and the projection carries the
consequences forward: the effect on provisional income and
therefore on how much of your Social Security becomes taxable, and
the IRMAA surcharge on Medicare Part B and Part D that lands
two years after the conversion year. If you are
laddering in your early 60s, that lookback is the thing that
catches people out. See the
Roth conversion ladder guide
for the strategy itself.

##### Sequence-of-returns risk, two ways

A 40-year retirement is far more exposed to a bad first decade than
a 25-year one, so this matters more here than in a conventional
plan. Planomy runs a seeded Monte Carlo of up to 5,000 trials, and
separately backtests against every rolling window of real annual US
market returns and CPI-U inflation from 1928 to 2024.
The backtest is the more useful of the two for FIRE, because it puts
you in the shoes of the actual 1966 and 2000 retirees rather than
sampling from a distribution that has never had a decade like theirs.

##### Underneath all of it

Federal brackets from a dated, versioned dataset rather than
constants in the code; state income tax for all 50 states and DC;
RMDs on the IRS Uniform Lifetime Table with SECURE 2.0 start ages;
scenarios, life events and goals; and plan-versus-actual tracking of
what you really spent. Plus adds unlimited synced plans, bank sync
and a larger AI assistant allowance — never a planning feature. See
the pricing page.

#### Pick ProjectionLab if…

- You enjoy a highly interactive, visual modelling experience and are happy to pay for the polish.

- You are planning an early retirement in the FIRE mould and want a tool with a community of people doing the same thing.

- A subscription for a tool you will open weekly is an easy decision for you.

- You have looked at their site and their storage and export model suits you — genuinely, go and read it.

#### Pick Planomy if…

- You want the complete planning engine at no cost, with no account and no email address.

- You want your plan to sit on your device rather than in a subscription you have to maintain.

- You want the US tax machinery — brackets from a dated dataset, provisional-income taxation of Social Security, IRMAA's two-year lookback, RMDs on the IRS tables — modelled explicitly rather than approximated.

- You want to track what you actually spent against the plan, not just project forward.

#### Who Planomy is not for, in this particular comparison

A comparison page that concludes "and so you should obviously choose
us" is not a comparison. These are the reasons someone weighing
these two should pick the other one.

-
You want to model something genuinely unusual.
This is the honest gap between a mature paid modelling tool and a
new one. Planomy's building blocks are accounts, income streams,
expenses, life events, goals and scenarios; if your situation
needs something those do not express — an intricate equity
compensation schedule, a property portfolio with per-unit
financing, a business sale with an earn-out — you will hit the
edge of what it models, and a tool with more modelling primitives
is worth paying for.

-
Non-US or dual-country planning. Planomy's tax
engine is US-only: federal brackets, state income tax, Social
Security, Medicare, IRMAA and RMDs. There is no partial credit
here — if you are planning a retirement in another tax system,
none of the machinery above applies to you.

-
You want live balances rather than typed ones.
There is no market-price or holdings feed. You maintain the
numbers, or you connect a bank on Plus and it imports
transactions. Neither marks a portfolio to market.

-
Your state tax is the crux and you are in one of the 13
flat-rate states. 28 states plus DC have full bracket
tables; nine have no income tax; the remaining 13 use a single
flat rate. The app labels which it is using, but if that line
decides your retirement, verify it independently.

-
You want a person, or a community. Planomy sells
no advice and has no advisers. It is also new, which means no
forum full of people who have already solved your modelling
problem. That is a real cost of picking the newer product and
we are not going to pretend otherwise.

#### How to actually test them

Pick one decision you genuinely face — retire at 60 versus 63,
convert to Roth before RMDs or not, claim Social Security at 62
versus 70 — and run it through both with identical inputs. Then
compare the year-by-year tax line, not just the ending balance. A
planner's opinion about taxes is where most of the divergence
between two credible tools comes from. Our
Roth conversion ladder
and Social Security claiming
guides give you a scenario worth testing with.

#### Frequently asked questions

##### Is Planomy a free alternative to ProjectionLab?

It is a free planner in the same category — a genuine year-by-year projection engine rather than a dashboard — and its full engine is available with no account and no subscription. Whether it substitutes for ProjectionLab depends on which product's modelling style and feature set you prefer, so the honest answer is to try both.

##### Which is better for FIRE planning?

ProjectionLab has a large, visible following among early-retirement planners. Planomy models the same mechanics — long horizons of up to 100 years, historical backtests over rolling windows since 1928, Monte Carlo, and the withdrawal-order and Roth-conversion decisions that dominate a long retirement — and adds a FIRE number calculator. Run a scenario through both and judge on the output.

##### Do I have to subscribe to get a full projection from Planomy?

No. Every projection feature — taxes, Social Security, Medicare and IRMAA, RMDs, Monte Carlo, historical backtests, scenarios, life events and goals — is in the free tier with no account. Plus is about syncing unlimited plans across devices, bank sync where available, and a larger AI assistant allowance.

##### Why does this page not list ProjectionLab's prices and features?

Because we would get them wrong eventually. Prices and feature sets change without notice, and a stale figure on a competitor comparison is both misleading and a real liability. We state the structural differences we are confident about and point you at their site for everything else.

##### Can I move a plan between the two?

Not directly — there is no shared plan format in this category. Planomy exports a complete plan file you can download and restore into Planomy on another device. If you are evaluating both, expect to enter the core numbers twice; it takes about ten minutes once you have them written down.

#### Related reading

- Best retirement planning software — the five shapes of tool.

- Planomy vs Boldin — the other subscription planner in this bracket.

- Free retirement planner with no sign-up — the no-account model explained.

- FIRE Number Calculator — a one-minute scenario to test both with.

- 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.

#### Run your scenario through Planomy first

It is free, it needs no account, and it takes about ten minutes to get a
real year-by-year projection with US taxes, Social Security and RMDs
modelled. Then compare it against anything else you are evaluating.

Open the free planner

Read more guides

---

## 401(k) vs IRA vs Roth vs HSA: 2026 Limits and Order
URL: https://planomy.net/guides/retirement-account-types
Summary: What each account costs in tax now, later or never, the 2026 contribution limits side by side, and the filling order that puts each dollar in the right place.

Account strategy

### 401(k) vs IRA vs Roth vs HSA: Where Each Dollar Goes

Every tax-advantaged account is a deal with the government about
when you pay tax — now, later, or never. Knowing the
trade-offs, the 2026 limits, and the right filling order can add
tens of thousands of dollars to a lifetime of saving.

Updated July 4, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- Accounts differ by when tax is paid: traditional = tax later, Roth = tax now / never again, HSA = never (for medical) — a rare triple-tax-free deal.

- 2026 limits (approx.): 401(k) employee deferral $24,500 (+$8,000 catch-up at 50+); IRA $7,500 (+$1,100 catch-up); HSA $4,400 self / $8,750 family.

- The employer match is an instant, guaranteed return — always capture it first.

- A sensible priority order: match → HSA → Roth/Traditional IRA → max the 401(k) → taxable brokerage.

- Which of Roth vs. traditional wins depends on your tax rate now versus in retirement — spreading across both hedges the bet.

#### The one idea behind every account: when do you pay tax?

Strip away the jargon and every retirement account answers a single
question — at what point does the IRS take its cut?
There are three answers, and each account is just one of them in a
wrapper:

- Tax later (traditional / pre-tax). You deduct contributions now, the money grows untaxed, and you pay ordinary income tax on every dollar you withdraw in retirement. Great if your tax rate will be lower later.

- Tax now, never again (Roth). You contribute after-tax dollars — no deduction — but growth and qualified withdrawals are completely tax-free. Great if your tax rate will be higher later, or you just value certainty.

- Never taxed at all (HSA, for medical use). A health savings account is deductible going in, grows tax-free, and comes out tax-free for qualified medical costs — the only account that's untaxed on all three legs.

Because nobody knows their future tax rate for certain, most people
benefit from holding some of each — a mix of pre-tax, Roth,
and taxable money gives you levers to pull in retirement. That
flexibility is exactly what makes a smart
withdrawal order
and a Roth conversion ladder
possible later.

#### The accounts, side by side (2026)

Here are the major players, their approximate 2026 contribution
limits, and how each is taxed. Treat the figures as close estimates
— confirm the exact current-year numbers before you rely on them.

Approximate 2026 contribution limits and tax treatment. Catch-up amounts apply at age 50+ (age 55+ for the HSA). Income limits may restrict Roth IRA and deductible IRA eligibility.

| Account
| 2026 limit
| Catch-up
| Tax treatment

| 401(k) / 403(b) — employee
| $24,500
| +$8,000 (50+)
| Traditional: tax later. Roth 401(k): tax now, tax-free later.

| Traditional IRA
| $7,500
| +$1,100
| Deductible now (income limits apply if you have a workplace plan); taxed on withdrawal.

| Roth IRA
| $7,500
| +$1,100
| After-tax now; tax-free growth and withdrawals. Direct contributions phase out at higher incomes.

| HSA — self-only
| $4,400
| +$1,000 (55+)
| Triple tax-free for medical: deductible, grows untaxed, tax-free qualified withdrawals.

| HSA — family
| $8,750
| +$1,000 (55+)
| Same as above; requires a qualifying high-deductible health plan.

A few notes worth knowing. The 401(k) employee limit is separate
from the employer match — matching dollars sit on top of your
$24,500. The IRA limit is a combined cap across your
traditional and Roth IRAs, not per account. And the HSA catch-up is
$1,000 starting at 55, not 50. You can size your own 401(k)
contribution and match with the
401(k) contribution calculator,
and your HSA room with the
HSA contribution calculator.
The HSA has the most eligibility conditions of any account here —
see HSA contribution limits and rules
for what counts against the cap and what happens on the way out.

#### The 401(k): start with the free money

A workplace 401(k) (or 403(b) for nonprofits) is usually the
foundation, for one reason above all others: the employer
match. A typical match — say, 50% of your contributions up
to 6% of pay — is an instant 50% return on those dollars, before the
market does anything. There is no other investment that reliably
hands you 50% risk-free. Whatever else you do, contribute at least
enough to capture the full match; anything less is leaving guaranteed
money on the table. See exactly how much with the
401(k) contribution calculator,
or read
how to calculate your 401(k) employer match
to turn a formula like "50% of the first 6%" into dollars on your own
salary — and to check whether your plan vests the match immediately.

Many plans now offer both traditional and Roth 401(k) options. The
match itself typically lands in the pre-tax bucket regardless. Your
own deferrals can go to whichever flavor fits your tax situation.

#### IRAs: your own account, more investment freedom

An IRA (Individual Retirement Arrangement) is an account you open
yourself, outside of work, usually with far more investment choice
and lower fees than a 401(k). The 2026 limit is about $7,500
(plus a $1,100 catch-up at 50+), combined across traditional and
Roth.

The Roth IRA is a saver's favorite: tax-free growth,
tax-free withdrawals, no lifetime RMDs, and you can always pull your
contributions (not earnings) back out penalty-free. Direct Roth
contributions phase out at higher incomes, though a "backdoor" Roth
is a common workaround. The traditional IRA gives a
deduction now, but if you're also covered by a workplace plan the
deduction phases out as income rises — so higher earners often use
the traditional IRA only as a stepping stone to a backdoor Roth.

#### The HSA: the quiet champion

If you have a qualifying high-deductible health plan,
the HSA is arguably the single best account in the tax code. It's the
only one that's tax-free on all three legs: you deduct contributions,
the balance grows untaxed, and withdrawals for qualified medical
expenses are tax-free. Contributions also usually dodge FICA (payroll)
tax when made through your employer — an edge even a Roth doesn't have.

The power move: if you can afford to pay current medical bills out of
pocket, invest the HSA and let it compound for decades,
saving your receipts to reimburse yourself tax-free later. After 65,
non-medical withdrawals are taxed like a traditional IRA (no penalty),
so a worst case still looks like a solid pre-tax account. Estimate your
room and the tax it saves with the
HSA contribution calculator,
and see how HSA and 401(k) deferrals lift your paycheck's take-home
with the take-home pay calculator.

#### The priority order: where each dollar should go

Given limited dollars, here's a widely used order of operations. Fill
each tier before moving to the next; adjust for your own situation.

- 401(k) up to the full match. Free money and an instant return — always first.

- Max the HSA (if you're eligible). Triple tax advantage beats everything else dollar for dollar.

- Max an IRA — Roth or traditional. Low fees, wide investment choice; Roth if you expect higher future taxes, traditional if lower.

- Go back and max the 401(k) up to the $24,500 employee limit (plus catch-up if 50+).

- Taxable brokerage account. No contribution limit and fully flexible — the home for everything beyond the tax-advantaged caps.

One caveat: if your employer 401(k) has bad, high-fee funds, some
savers prefer to max the IRA before returning to the 401(k) beyond the
match. And high-interest debt (credit cards) should generally be
cleared before steps 2–5, since paying off 20% interest is a
guaranteed 20% return.

Why a taxable account still matters. Beyond flexibility,
a taxable brokerage gets favorable long-term capital-gains rates,
including a 0% bracket for lower-income years (the mechanics are in
how capital gains tax is calculated),
and a step-up in cost
basis at death. It's also the account that funds the early-retirement
"gap years" while you run a Roth conversion ladder — which is why the
order in which you fill accounts shapes the order in which you'll
draw them down.

See the priority order play out. Where each dollar should go
depends on the tax rate you expect to draw it back out at.
Open the free planner to project your
accounts year by year, with taxes, Social Security and RMDs included, and
compare a different contribution mix against your current one.

Not advice. Contribution limits, income phase-outs,
and deduction rules change yearly and depend on your filing status and
workplace coverage. The 2026 figures here are approximate; verify
current limits and consult a tax professional for your situation.

#### Frequently asked questions

##### How much can I contribute to a 401(k) in 2026?

The employee deferral limit is about $24,500, with an additional
catch-up of roughly $8,000 if you're 50 or older. Employer matching
contributions are on top of that employee limit.

##### Should I choose a Roth or a traditional account?

Roth wins if your tax rate will be higher in retirement than today;
traditional wins if it will be lower. Since the future is unknown,
many savers split contributions across both to hedge and to create
flexibility in retirement.

##### Is an HSA really better than a 401(k)?

Dollar for dollar, the HSA is uniquely powerful because it's
tax-free on contributions, growth, and qualified medical
withdrawals — a triple advantage no other account offers. But you
need a qualifying high-deductible health plan, and you should still
grab your full 401(k) match first.

##### What order should I fund my accounts in?

A common order: contribute to the 401(k) up to the full employer
match, then max the HSA, then max an IRA, then finish maxing the
401(k), then invest in a taxable brokerage account. Pay off
high-interest debt before the later steps.

##### What if I've maxed all my tax-advantaged accounts?

Use a regular taxable brokerage account. It has no contribution
limit, gets favorable long-term capital-gains treatment, and
provides the flexible, penalty-free money that's especially useful
for bridging an early retirement.

#### Size your contributions

- 401(k) Contribution Calculator — find the percent that captures your full match.

- HSA Contribution Calculator — your 2026 room and the tax it saves.

- HSA Contribution Limits and Rules (2026) — eligibility, the employer's share, and the 20% withdrawal tax.

- Take-Home Pay Calculator — see how pre-tax contributions change your paycheck.

- Which Accounts to Draw Down First — the other half of the story, for retirement.

#### See your accounts working together

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## A Retirement Planner That Works Offline
URL: https://planomy.net/guides/retirement-planner-that-works-offline
Summary: Most planners stop at the login screen with no connection. Planomy installs to your device, keeps your plan in local storage, and projects while offline.

Local-first

### A Retirement Planner That Works Offline

A cloud planner without a connection is a login screen. A local-first
one is a working plan. If you fly a lot, live somewhere with unreliable
internet, or simply do not want your financial life to depend on
someone else's uptime, this is the difference that matters.

Updated July 27, 2026
·
~7 min read
·
US-focused

#### Key takeaways

- Planomy's projection engine runs in your browser, not on a server, so the arithmetic never needs a round trip.

- After the first visit the app installs to your device and keeps working with no connection — you can add it to a home screen or dock and open it like any other app.

- Your plan lives in your browser's storage on that device, so it is there whether or not the network is.

- What genuinely needs a connection: the first load, the AI assistant, bank sync, cloud sync and sharing, and refreshing the published tax dataset. Everything else does not.

- Tax brackets ship with the app as a bundled dataset and are upgraded from a published file when you are online, so an offline projection still uses real brackets rather than failing.

#### Why almost nothing in this category works offline

It is an architectural consequence, not laziness. If the projection
is calculated on a server and your plan is stored in a database
behind an account, then absolutely everything — including looking at
a chart you generated last week — requires a request to that server.
No connection, no product. Aggregation dashboards have it worse
still: their core value is a live feed from your institutions, which
is definitionally online.

That architecture is a fine choice with real benefits: it makes
cross-device sync trivial and lets the vendor ship changes instantly.
It just means the tool is unusable on a plane.

#### What makes a planner work offline

Three properties have to hold at once, and Planomy holds all three.

##### 1. The engine runs on your device

Every projection — year-by-year balances, federal and state tax,
Social Security, Medicare and IRMAA, RMDs, Monte Carlo across up to
10,000 trials, and the historical backtest over rolling windows from
1928 to 2024 — is computed in your browser. Monte Carlo runs in a
background worker so a large pass does not freeze the page. None of
it calls out to a server.

##### 2. The app itself is cached on your device

On its first load in a modern browser, Planomy registers a service
worker that keeps a copy of the application on your device. On later
visits the app opens from that copy. You can also install it — "Add
to Home Screen" on a phone, or the install action in a desktop
browser — and launch it as a standalone window.

##### 3. Your data is already local

The plan is written to your browser's storage on that device, so
there is nothing to fetch. This is the same property that lets the
planner work with
no account at all;
offline capability is the second thing you get from it.

#### What still needs a connection — and what doesn't

An honest split. Everything in the left column keeps working with the network off, once you have loaded the app once.

| Capability
| Works offline
| Notes

| Year-by-year projections and charts
| Yes
| Computed in your browser

| Federal and state tax, RMDs, IRMAA
| Yes
| Brackets ship bundled with the app

| Monte Carlo and historical backtest
| Yes
| Runs in a local background worker

| Scenarios, life events, goals, budgeting
| Yes
| All local

| Editing and saving your plan
| Yes
| Written to on-device storage

| Downloading a plan export
| Yes
| The file is generated locally

| The very first load
| No
| You have to download the app once

| Refreshing the published tax dataset
| No
| Falls back to the bundled copy

| AI plan assistant
| No
| The model runs remotely

| Bank sync, cloud sync, sharing
| No
| All are network features by definition

On the tax data specifically. A versioned tax
dataset is bundled into the app, and a published file upgrades it
when you are online. That means an offline projection still uses real
brackets rather than refusing to run — but if you have been offline
for a long stretch across a year boundary, reconnect once so the
dataset can refresh before you rely on the tax lines.

#### Who this actually matters for

- People who plan on planes and trains. Long-haul flights are when a lot of people finally sit down with this stuff.

- Rural and intermittent connections. A tool that half-loads is worse than one that just opens.

- Anyone who dislikes their financial data being a network round trip. Offline capability and privacy come from the same architecture here.

- People who want the plan to outlive the vendor. An exported plan file and a local copy do not stop working if a company does.

Test this rather than believe it. Reviewed
July 27, 2026. Offline capability is the one claim
on this site you can falsify yourself in under a minute, so please
do: load the planner, turn off Wi-Fi, and reload the tab. Either it
comes back with your plan intact or it does not, and no marketing
copy survives that test. Do the same to any other planner claiming
the same thing — most cloud tools will show you an error page.

#### The costs of offline, stated plainly

Every one of these is the mirror image of a benefit above. Offline
capability is not free; it is bought with exactly these four
things, and if any of them matters more to you than working on a
plane, a cloud planner is the better buy.

-
The plan is only as safe as the device. This is
the big one, and it is not a caveat — it is the deal. Local
storage means clearing your browser data, losing the laptop or
wiping the phone takes the plan with it. There is no server-side
copy to restore from, because not having one is the entire point.
Two mitigations exist — download a plan file, or use a free
account that syncs one plan — and both are things you have to
remember to do. An offline-capable tool cannot protect you from
this; only the habit can.

-
Nothing updates itself. No market-price feed and
no holdings feed. Balances are what you type, or what a Plaid
connection imports on Plus — and bank sync is, obviously, one of
the features that needs the network. A planner that works offline
is a planner whose numbers you maintain by hand.

-
The tax dataset refreshes online, not off.
Federal brackets ship as a dated, versioned data file rather than
as constants in the code, which is what lets them be corrected
without shipping a new build — but picking up a corrected file
needs a connection. Offline you are running whatever version was
cached on your last online visit. It will not go stale mid-flight,
and it will not quietly update either.

-
Anything genuinely server-side stays unavailable.
The AI plan assistant runs on a server and cannot answer with the
network off. Neither can plan sharing, cloud sync or bank sync.
Offline covers the whole projection — it does not cover the
features that are, by definition, someone else's computer.

Two further limits unrelated to connectivity, so you do not
discover them later: Planomy sells no advice and has no advisers
attached to it, and the tax engine is US-only — federal brackets,
state income tax, Social Security, Medicare, IRMAA and RMDs.

One more, specific to this page: if you want the plan on
three devices without thinking about it, local-first is
working against you. That is exactly what an account is for, and
a free account syncing one plan may be all you need.

#### Try it, then turn your Wi-Fi off

It is a thirty-second test. Open the
planner, build a rough plan, install it if your
browser offers to, then disconnect and reload. The projection will
still be there. While you are at it, the
sequence of returns risk
guide pairs well with a long flight.

#### Frequently asked questions

##### Can a retirement planner really work without an internet connection?

Yes, if the projection engine runs in your browser and your plan is stored on your device. Planomy caches the application with a service worker on the first visit, so later visits open from that local copy and every projection, chart, Monte Carlo run and edit works with no connection. Server-based planners cannot do this, because the calculation itself lives on their servers.

##### Do I need to install anything?

No. It runs in a normal browser tab. You can optionally install it — Add to Home Screen on a phone, or the install action in a desktop browser — which gives you a standalone window and makes the offline behaviour more obvious, but nothing about the planning requires it.

##### Are the tax brackets still correct offline?

A versioned tax dataset is bundled into the app, so an offline projection uses real brackets rather than failing. A published file refreshes that dataset when you are online. If you have been offline for a long time, reconnect once so the data can update before you lean on the tax figures.

##### What happens to my plan if I clear my browser data?

It is deleted, because that is where it lives when you are not signed in. This is the genuine cost of the local-first model. Download a plan export after your first real session and keep it somewhere you back up, or create a free account so one plan is synced.

##### Does the AI assistant work offline?

No. The assistant sends your question to a model running remotely, so it needs a connection. Nothing else does — projections, taxes, Monte Carlo, scenarios and editing all keep working, and running out of assistant messages or connectivity never blocks the planner itself.

#### Related reading

- Free retirement planner with no sign-up — the same architecture, from the privacy angle.

- Best retirement planning software — where local-first sits in the category.

- Planomy vs Boldin — on-device versus cloud, in detail.

- Sequence of returns risk — good reading for the flight.

- 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.

#### Open it once. It works from then on.

Planomy loads into your browser, keeps your plan on your device, and
keeps projecting whether or not you have a connection. Free, no
account, nothing to install unless you want to.

Open the planner

Read more guides

---

## Retirement Spreadsheet vs Planning Software
URL: https://planomy.net/guides/retirement-planning-spreadsheet-vs-software
Summary: A spreadsheet gives you total control and costs nothing. Here is exactly what you have to build yourself, and the point where dedicated software starts to win.

Build or buy

### Retirement Planning Spreadsheet vs Software

A spreadsheet is the most transparent planning tool there is, and for a
straightforward plan it is genuinely enough. This is an honest account
of what you have to build yourself to get past that point, and the
specific moment the maintenance stops being worth it.

Updated July 27, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- A spreadsheet wins on transparency and control: every formula is visible, nothing is hidden, and no vendor can change it under you.

- It loses the moment the interactions get real — progressive brackets, the provisional-income formula for Social Security, RMD divisors, IRMAA's two-year lookback and Monte Carlo all have to be built and maintained by you.

- The most common spreadsheet failure is not a wrong formula; it is a flat average return. Averaging away the order of returns hides the single biggest risk to an early retirement.

- A good test: if your model has a single "return %" cell and no tax table, you have a savings projection, not a retirement plan.

- You do not have to choose one forever. Keep the spreadsheet for the parts you enjoy owning, and let software carry the tax and simulation machinery.

#### 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 specific pieces of a retirement plan, and who builds them.

| Piece of the plan
| In a spreadsheet
| In Planomy

| Balance growth by account type
| Easy — this is what spreadsheets are for
| Built in, per account type

| Progressive federal brackets
| A lookup table you build and update every year
| From a dated, versioned tax dataset

| State income tax
| Usually skipped, or one flat rate
| 50 states and DC; 29 with full brackets, the rest flat-rate and labelled

| Tax on Social Security
| The provisional-income formula, hand-built and circular
| Modelled directly

| Required minimum distributions
| IRS divisor table, transcribed by hand
| IRS Uniform Lifetime Table with SECURE 2.0 start ages

| Medicare premiums and IRMAA
| Almost always missing — it needs a two-year MAGI lookback
| Part B and D with the lookback modelled

| Withdrawal order and tax lots
| A serious modelling project on its own
| Four strategies compared, with FIFO/LIFO/HIFO/lowest-tax lot selection

| Sequence-of-returns risk
| Needs Monte Carlo or historical paths, not an average
| 1,000–10,000 trials, plus rolling historical windows since 1928

| Annual maintenance
| Yours — brackets, limits and thresholds move every year
| Ships with the app

| Cost
| Free, plus your time
| Free, no account required

#### 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.

A quick self-test. Open your model. Does it have a
tax table, or a single effective-rate cell? Does it show a range of
outcomes, or one line? Does it reduce the traditional balance by an
RMD after 73 whether you want the money or not? Three noes means the
model is a savings projection — useful, but not the thing you would
want to retire on.

#### 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.

#### Check your spreadsheet against a full projection

Take the retirement year your model says is safe and run the same
balances through Planomy — federal and state tax, Social Security,
Medicare, RMDs and Monte Carlo included. Free, no account, plan
stays on your device.

Open the free planner

Read more guides

---

## RMD Rules 2026: Age 73, April 1, and the 25% Penalty
URL: https://planomy.net/guides/rmd-rules-and-deadlines
Summary: When RMDs start, the once-only April 1 deadline that can double a year of taxable income, how the amount is calculated, QCDs, and the penalty for missing one.

Retirement taxes

### RMD Rules and Deadlines (2026)

Once you hit a certain age, the IRS makes you start withdrawing from
your tax-deferred accounts — and taxes the result. Here are the
required minimum distribution rules that matter in 2026: when they
start, how they're calculated, the deadlines, and the steep penalty
for missing one.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- RMDs start at age 73 for anyone reaching 73 between 2023 and 2032; the start age rises to 75 in 2033.

- Your first RMD can be delayed until April 1 of the year after you turn 73 — but every RMD after that is due by December 31.

- The amount is your prior-year-end balance ÷ an IRS life-expectancy factor from the Uniform Lifetime Table.

- Missing an RMD triggers a 25% excise tax on the shortfall — cut to 10% if corrected promptly.

- Roth IRAs have no RMDs for the original owner, and since 2024 neither do Roth 401(k)s.

#### What an RMD is and why it exists

A required minimum distribution (RMD) is the
minimum amount you must withdraw each year from most tax-deferred
retirement accounts once you reach the mandatory age. The logic is
straightforward: traditional 401(k)s and IRAs let you deduct
contributions and defer taxes for decades. The RMD rules exist so
the government eventually collects the income tax it postponed —
you can't shelter the money in a tax-deferred account forever.

RMDs apply to traditional IRAs, SEP and SIMPLE IRAs, and
traditional 401(k), 403(b), and 457(b) plans. Each
withdrawal is taxed as ordinary income in the year you take it,
which is why RMDs can quietly push you into a higher bracket, raise
the taxable portion of your Social Security, or trigger Medicare
premium surcharges.

#### The starting age in 2026: 73

The SECURE 2.0 Act reshaped the RMD start age. As of 2026, the
rules are:

- If you were born 1951–1959, your RMDs begin at age 73.

- If you were born 1960 or later, your RMDs begin at age 75 (starting in 2033).

So for essentially everyone reaching the threshold in 2026, the
magic number is 73. If you turn 73 in 2026, this
is your first RMD year. (Older rules used 70½ and then 72; those no
longer apply to people starting now, though anyone who already
began taking RMDs under the old ages simply continues.)

#### The deadlines — and the one-time first-year exception

This is where people trip up. There are two different deadlines,
and only the first year gets special treatment.

Deadlines assume you turn 73 in 2026. The first-year delay is a one-time option, not a recurring one.

| Which RMD
| Deadline
| Note

| First RMD (for 2026)
| April 1, 2027
| Required beginning date — can be delayed to this date

| Second RMD (for 2027)
| Dec 31, 2027
| Still due even if you delayed the first

| Every RMD after
| Dec 31 each year
| No extensions

The catch with delaying your first RMD to April 1: you'd then take
two RMDs in the same calendar year (the delayed
first one by April 1, and the second by December 31). Stacking two
distributions into one year can spike your taxable income, so many
people take the first RMD in the year they turn 73 rather than
deferring it. Which choice is cheaper depends on your bracket in
each year — worth modeling before you decide.

#### How the RMD amount is calculated

The formula is simpler than its reputation:

RMD = (account balance on Dec 31 of the prior year) ÷
(life-expectancy factor for your age)

The life-expectancy factor comes from the IRS
Uniform Lifetime Table, which most account owners
use. As you age, the factor shrinks, so the fraction of your
account you must withdraw slowly rises. A rough sense of the
factors:

Selected Uniform Lifetime Table factors (illustrative). The exact table is published by the IRS and used by your custodian.

| Age
| Factor
| Approx. % withdrawn

| 73 | 26.5 | ~3.8%

| 75 | 24.6 | ~4.1%

| 80 | 20.2 | ~5.0%

| 85 | 16.0 | ~6.3%

| 90 | 12.2 | ~8.2%

Example: if your traditional IRA held $500,000 on December 31 of
last year and you're 73, your RMD is $500,000 ÷ 26.5 ≈
$18,868. If your spouse is more than 10 years
younger and is your sole beneficiary, you get to use a different,
more generous table. The
RMD calculator handles the
arithmetic and the age factors for you.

##### If you have multiple accounts

You calculate an RMD for each account separately, but the
aggregation rules differ by account type. IRAs can
be aggregated — total the RMDs across all your traditional IRAs and
take the sum from any one (or any combination) of them.
401(k)-type plans cannot be aggregated: each
plan's RMD must come out of that specific plan.

See your RMDs before they arrive. An RMD is only a problem
when it lands on top of everything else you are drawing that year.
Open the free planner to project your
required distributions alongside your other income and taxes, year by year.

#### The penalty for missing an RMD

Skipping or shorting an RMD is expensive. The IRS charges a
25% excise tax on the amount you failed to
withdraw. If your RMD was $18,000 and you took nothing, that's a
$4,500 penalty — on top of the ordinary income tax you'll still owe
when you do withdraw.

The one bit of good news from SECURE 2.0: if you correct the
shortfall promptly — generally by taking the missed amount and
filing Form 5329 within a two-year correction window — the penalty
drops from 25% to 10%. The IRS can also waive it
entirely for reasonable cause. Still, the cleanest move is to
automate your RMD with your custodian so you never miss the
December 31 deadline.

Deadline discipline matters. Custodians will
calculate your RMD, but you are responsible for taking it.
Set an annual reminder, or better, ask your provider to distribute
it automatically each fall.

#### Ways to soften the RMD tax hit

RMDs are mandatory, but their tax impact isn't fixed. A few common
strategies:

- Qualified charitable distributions (QCDs). If you're 70½ or older, you can send up to an inflation-adjusted annual limit (around $108,000 in 2026) directly from your IRA to charity. A QCD counts toward your RMD but is excluded from taxable income — often better than taking the RMD and donating separately.

- Roth conversions before 73. Converting traditional dollars to Roth in your lower-income "gap years" between retirement and RMD age shrinks the balance that will later be subject to RMDs. See the Roth conversion ladder guide and the Roth conversion calculator.

- Mind the ripple effects. A large RMD can raise the taxable share of Social Security and push you over an IRMAA threshold, raising Medicare premiums two years later. Check the Medicare IRMAA calculator.

#### Roth accounts: the big exception

Roth IRAs have never required RMDs for the original
owner — the money can stay invested and tax-free for your
whole life. And as of 2024, SECURE 2.0 eliminated RMDs from
Roth 401(k) and Roth 403(b) accounts too, so you
no longer need to roll a Roth 401(k) to a Roth IRA just to dodge
RMDs. Inherited Roth accounts are a separate matter and generally
do carry distribution requirements for beneficiaries.

This Roth advantage is a major reason people pre-pay tax through
conversions: dollars moved to Roth escape the RMD machine entirely,
giving you more control over your taxable income in your 70s and
80s.

Not advice. RMD rules are detailed and change with
legislation; figures like the QCD limit and life-expectancy factors
are set by the IRS and adjust over time. Confirm current numbers and
your specific situation with the IRS or a qualified tax professional.

#### Frequently asked questions

##### At what age do RMDs start in 2026?

Age 73 for anyone born between 1951 and 1959. If you were born
in 1960 or later, your RMDs won't begin until age 75 (starting
in 2033). For anyone reaching the threshold in 2026, the start
age is 73.

##### When is my RMD due each year?

By December 31. The one exception is your very first RMD, which
you may delay until April 1 of the following year — but doing so
means taking two RMDs in that second year, which can raise your
taxable income.

##### How is the RMD amount calculated?

Divide your account balance as of December 31 of the prior year
by the IRS life-expectancy factor for your age from the Uniform
Lifetime Table. At 73 the factor is about 26.5, so roughly 3.8%
of the balance. The factor shrinks each year, so the percentage
rises with age.

##### What is the penalty for missing an RMD?

A 25% excise tax on the amount you failed to withdraw, on top of
the regular income tax. If you correct the shortfall promptly and
file Form 5329, the penalty drops to 10%, and the IRS may waive it
for reasonable cause.

##### Do Roth accounts have RMDs?

Roth IRAs have no RMDs for the original owner, and since 2024
Roth 401(k) and Roth 403(b) accounts don't either. Inherited Roth
accounts are treated differently and generally do have
distribution requirements for beneficiaries.

#### Put a number on it

- RMD Calculator — estimate this year's required distribution from your balance and age.

- Roth Conversion Calculator — see how converting before 73 shrinks future RMDs.

- Medicare IRMAA Calculator — check whether a big RMD triggers premium surcharges.

- Which Accounts to Draw Down First — fit RMDs into a smart withdrawal order.

#### Plan around your RMDs before they hit

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Roth Conversion Ladder: The 5-Year Rule, Explained
URL: https://planomy.net/guides/roth-conversion-ladder
Summary: Why the gap years between retiring and RMDs are your conversion window, how to fill a tax bracket without tripping an IRMAA cliff, and a full worked example.

Tax strategy

### The Roth Conversion Ladder, Explained

A Roth conversion ladder — also called a Roth ladder, or
an IRA conversion ladder — moves money from a traditional IRA
into a Roth IRA one slice a year, deliberately in your lowest-tax
years, so it can grow and be withdrawn tax-free later.
Each slice becomes available penalty-free five years after it is
converted, which is what turns a series of conversions into a
rung-by-rung income stream for early retirement. Done well, it
can shave five and six figures off a lifetime tax bill.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- A conversion moves money from a traditional (pre-tax) IRA to a Roth IRA; you pay ordinary income tax on the amount now so it grows and comes out tax-free later.

- The five-year rule means each conversion's principal must sit in the Roth for five tax years before you can withdraw it penalty-free (if you're under 59½).

- The gap years between retiring and the start of RMDs and Social Security are usually your lowest-income, lowest-tax years — the prime conversion window.

- The goal is bracket filling: convert just enough to top up a low tax bracket without spilling into the next one.

- Watch for IRMAA cliffs — Medicare premium surcharges that jump the moment income crosses a threshold two years later.

#### What a Roth conversion ladder actually is

Most retirement savers spend decades filling traditional
401(k)s and IRAs — accounts funded with pre-tax dollars. You got a
deduction going in, the money grew untaxed, and every dollar you
eventually withdraw is taxed as ordinary income. That's a fine deal
if your tax rate in retirement is lower than it was while working.
But a big traditional balance is also a looming tax liability: it
forces required minimum distributions (RMDs) in your
70s and can push you into higher brackets exactly when you least
want it.

A Roth conversion is the antidote. You move some
money from the traditional IRA to a Roth IRA and pay ordinary income
tax on the converted amount this year. In exchange, that money now
grows tax-free and comes out tax-free in retirement, with no future
RMDs on the Roth. A conversion ladder is simply
doing this in a planned sequence over several years — a rung at a
time — to control how much tax you pay in any single year and to
satisfy the five-year rule described below.

For early retirees, the ladder does double duty: it's also a way to
access retirement money before 59½ without the 10% early-withdrawal
penalty. Converted principal (not earnings) can be withdrawn
penalty-free once it has aged five years, so a ladder started at 45
can begin funding living expenses at 50. You can compare the pure
tax math of a single conversion with our
Roth conversion calculator.

#### The five-year rule (and why it forces a "ladder")

There are actually two different five-year rules for Roth IRAs, and
confusing them is a classic mistake.

- The conversion five-year rule. Each amount you convert must remain in the Roth for five tax years before you can withdraw that converted principal penalty-free if you're under 59½. The clock starts on January 1 of the conversion year, and each conversion has its own clock — which is exactly why you build a "ladder," converting every year so a fresh rung matures every year.

- The account five-year rule. Separately, your earnings come out tax-free only once you're both 59½ and have had any Roth IRA open for at least five years.

Because each conversion is locked for five years, an early retiree
who wants a steady, penalty-free income stream at 50 needs to have
started converting at 45. Convert in 2026, and that rung is
accessible in 2031; convert again in 2027, accessible in 2032; and
so on. Line up enough rungs and each year one matures to fund the
next year of spending. Once you reach 59½, the penalty and the
conversion clock stop mattering — the ladder is really a bridge for
the pre-59½ years.

Order of withdrawals from a Roth. The IRS treats
Roth IRA withdrawals as coming out in a fixed order: your regular
contributions first (always tax- and penalty-free), then converted
amounts oldest-first (subject to the five-year rule), then earnings
last. That ordering is what makes a ladder practical.

#### Why the gap years are the golden window

Picture a common retirement timeline. You stop working at, say, 60.
Social Security might not start until 67 or 70. RMDs from your
traditional accounts don't begin until 73 (rising to 75 for younger
cohorts). That leaves a stretch — often 7 to 13 years
— where your taxable income can be remarkably low: no paycheck, no
Social Security yet, no forced RMDs. If you're living partly off a
taxable brokerage account or cash, your taxable income
might be near zero.

Those are the years to convert. Every dollar of low-bracket space
you leave unused is gone forever — and every dollar you convert now
at, say, 12% is a dollar you won't be forced to pull later at 22% or
24% when RMDs and Social Security stack on top of each other. This
is the crux: a Roth conversion ladder deliberately pulls
income forward into your cheapest tax years to avoid a pile-up of
income in your most expensive ones.

It also shrinks future RMDs. Because Roth IRAs have no RMDs during
your lifetime, every dollar you convert is a dollar that will never
be force-distributed. You can see how large your future RMDs would
otherwise be with the RMD calculator —
for many people the number is eye-opening and is the whole reason to
convert.

See how wide your own gap years are. How much room you have
to convert depends on your income, your spending and your account balances in
each of those years. Open the free
planner to project them year by year, with taxes and Social Security
included, and see what the window is actually worth.

#### Bracket filling: the art of "how much"

The question is never "should I convert everything?" — a giant
conversion just shoves you into high brackets today. The goal is
bracket filling: convert exactly enough to reach the
top of a target bracket and stop.

Suppose you're married filing jointly and, before any conversion,
your taxable income is $30,000. If your plan is to stay within the
12% bracket, and the top of that bracket sits around $96,000 of
taxable income (approximate 2026 figure), you have roughly $66,000 of
"room" to convert at 12%. Convert $66,000 and you fill the bracket;
convert $80,000 and the last chunk spills into the 22% bracket. Many
people repeat this every year of the gap window, converting a
similar bracket-filling amount annually.

Illustrative bracket-filling math for a married-filing-jointly retiree. Bracket thresholds are approximate 2026 figures; confirm current numbers before acting.

| Item
| Amount

| Taxable income before conversion | $30,000

| Top of the 12% bracket (approx.) | $96,000

| Room to convert at 12% | $66,000

| Tax on the conversion (~12%) | ~$7,900

| Effective rate on converted dollars | ~12%

Compare that ~12% now against the 22–24% those same dollars might
cost later, once RMDs and Social Security fill the low brackets, and
the appeal is obvious. Ideally you pay the conversion tax from a
taxable account rather than by withholding from the
conversion itself, so the full amount lands in the Roth and keeps
growing.

#### IRMAA cliffs and other cautions

Conversions raise your income, and several things in the tax code
key off income in ways that can bite:

- IRMAA (the Medicare surcharge). Once you're 63+, remember that Medicare Part B and D premiums are set by your income from two years earlier, and they jump at hard thresholds. Convert one dollar over an IRMAA bracket and your surcharge steps up for the whole year — a true cliff, not a gradual phase-in. Check thresholds with the Medicare IRMAA calculator before finalizing an amount.

- ACA premium subsidies. If you buy health insurance on the marketplace before Medicare, a conversion can raise your income and shrink your premium tax credit. This tension often makes the pre-Medicare gap years a balancing act between converting and preserving subsidies.

- Capital-gains stacking. Conversion income is ordinary income and can push your long-term capital gains out of the 0% bracket into the 15% bracket. Gains sit on top of ordinary income rather than in a bracket of their own, so a conversion effectively spends the same 0% room you might have used to harvest gains — how capital gains tax is calculated shows the stacking order and what the switch to 15% costs.

- Taxation of Social Security. Higher income can increase the share of your Social Security benefits that is taxable.

- Pay the tax from outside. Using converted dollars to pay the tax shrinks the Roth and, before 59½, can itself trigger a penalty on the withheld amount.

#### A worked example: the five-year bridge

Meet Dana, who retires at 55 with $800,000 in a traditional IRA and
$250,000 in a taxable brokerage account. She wants to spend about
$60,000 a year and won't claim Social Security until 70. Her plan:
live off the brokerage account while laddering conversions in her
low-income gap years.

Simplified illustration of Dana's conversion ladder. Figures are rounded and ignore growth for clarity; real planning should include growth, deductions, and current-year tax tables.

| Age
| Converted that year
| Spends from
| Rung becomes accessible

| 55 | $50,000 | Brokerage | At age 60

| 56 | $50,000 | Brokerage | At age 61

| 57 | $50,000 | Brokerage | At age 62

| 58 | $50,000 | Brokerage | At age 63

| 59 | $50,000 | Brokerage | Age 59½+ rules ease

| 60 | $50,000 | Age-55 rung matures | —

For the first five years Dana lives off her brokerage account while
each year's conversion quietly ages. Because her only taxable income
in those years is the conversion itself (plus small brokerage
dividends and gains), each $50,000 conversion is taxed at a low
effective rate — likely landing mostly in the 10–12% brackets. By age
60, the rung she converted at 55 has cleared its five-year hold and
can be withdrawn penalty-free to fund spending, while she keeps
converting. By the time RMDs would have loomed at 73, her traditional
balance is far smaller — so her forced distributions, and the taxes
on them, are far smaller too.

The savings come from rate arbitrage: paying ~12% on
conversions now instead of 22%+ on RMDs later, plus decades of
tax-free Roth growth and no lifetime RMDs on the converted money.
Whether the trade wins depends on your bracket now versus later — the
exact comparison our Roth conversion calculator
is built to make.

Not advice. Conversions are irreversible and
interact with IRMAA, ACA subsidies, state taxes, and your full income
picture. The examples here are simplified and use approximate 2026
figures. Model your own numbers and consider a CPA or fee-only advisor
before converting.

#### Frequently asked questions

##### What is a Roth conversion ladder?

It's a multi-year sequence of Roth conversions — moving money from
a traditional IRA to a Roth IRA a slice at a time — timed for your
lowest-tax years. Each conversion aged five years can then be
withdrawn penalty-free, creating a "ladder" of accessible funds.
You will also see it called a Roth ladder or an IRA
conversion ladder — the same strategy under different names.

##### What is the difference between a Roth conversion and a Roth conversion ladder?

A conversion is a single event: you move an amount from a
traditional IRA to a Roth IRA and pay income tax on it that
year. A ladder is a deliberate sequence of them, one a
year, sized to fill a low tax bracket. The sequence is what
creates the ladder — because each conversion unlocks
penalty-free five years later, converting every year from
age 45 means a rung matures every year from age 50, giving
you spendable income before 59½ without touching the 10%
penalty.

##### How does the five-year rule work for conversions?

Each converted amount must stay in the Roth for five tax years
before that principal can be withdrawn penalty-free if you're under
59½. The clock starts January 1 of the conversion year, and every
conversion has its own five-year clock.

##### When is the best time to do Roth conversions?

Usually in the "gap years" after you retire but before Social
Security and RMDs begin, when your taxable income — and therefore
your tax rate — is at its lowest. Those low-bracket years are when
converting is cheapest.

##### How much should I convert each year?

Typically just enough to "fill" a target tax bracket without
spilling into the next one. That means converting up to the top of,
say, the 12% or 22% bracket and stopping, while also watching IRMAA
and ACA thresholds.

##### Can a Roth conversion trigger higher Medicare premiums?

Yes. Conversions raise your income, and Medicare's IRMAA surcharges
jump at hard income thresholds two years later. Crossing a threshold
by even a dollar raises your Part B and D premiums for the year, so
size conversions carefully once you're 63 or older.

#### Run your own numbers

- Roth Conversion Calculator — compare converting now versus paying tax later.

- RMD Calculator — see the future distributions a ladder can shrink.

- Medicare IRMAA Calculator — check the surcharge cliffs before you convert.

- Which Accounts to Draw Down First — how conversions fit your overall withdrawal plan.

- 401(k) vs IRA vs Roth vs HSA — where each dollar should live in the first place.

#### Plan your conversion window

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Roth vs Traditional 401(k): The Rule of Thumb
URL: https://planomy.net/guides/roth-vs-traditional-401k
Summary: The single question that settles it, when each side actually wins, how the employer match is always taxed later, and why splitting contributions can beat both.

Saving & accounts

### Roth vs Traditional 401(k): How to Choose

Both accounts get money into the market tax-advantaged — the only
real difference is when you pay the tax. The right choice
comes down to one question: is your tax rate likely to be higher
now, or in retirement? Here's how to answer it for your situation.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- Traditional = deduct now, pay tax on withdrawals later. Roth = pay tax now, withdraw tax-free later.

- The tie-breaker is your tax rate now vs. in retirement. Lower now → Roth. Higher now → traditional.

- The employer match is always pre-tax (traditional), no matter which bucket you choose — free money either way.

- Roth wins on flexibility: no RMDs on Roth 401(k)s since 2024, and tax-free income helps control future Medicare and Social Security taxation.

- You don't have to pick one — splitting contributions hedges your bet against unknown future tax rates.

#### The one difference that matters: timing of tax

A traditional and a Roth 401(k) are the same account wrapper with
the same investment options and the same combined contribution
limit. What separates them is when the IRS takes its
cut.

- Traditional 401(k): your contributions come out of your paycheck before tax, lowering your taxable income today. The money grows tax-deferred, and you pay ordinary income tax on every dollar you withdraw in retirement.

- Roth 401(k): your contributions are made with after-tax dollars, so there's no deduction today. But the money grows tax-free, and qualified withdrawals in retirement — including all the growth — come out completely tax-free.

That's the whole trade. Traditional gives you a tax break now;
Roth gives you a tax break later. Everything else is a
consequence of that single choice.

#### The rule of thumb: compare your tax rates

Because the only difference is when you're taxed, the
math reduces to a simple comparison: the account that's
taxed at your lower rate wins.

- If your tax rate will be higher in retirement than it is today, Roth wins — pay the lower rate now.

- If your tax rate will be lower in retirement than it is today, traditional wins — take the deduction now at your high rate and pay the lower rate later.

- If the rates are the same, it's a mathematical wash — but Roth still edges ahead on flexibility (more on that below).

A crucial subtlety: the traditional contribution frees up cash
(the tax you didn't pay). To make the comparison fair, you'd need
to invest that tax savings too. If you'd just spend it, Roth's
forced "pay tax now" discipline effectively lets you shelter more.
The Roth vs traditional 401(k) calculator
runs both scenarios side by side with your own numbers.

Guessing your retirement tax rate is the hard part.
Open the free planner to project your
retirement income year by year — withdrawals, Social Security and RMDs — and
see what bracket your future self actually lands in before you choose.

#### When each account tends to win

##### Roth usually makes sense if…

- You're early in your career or in a relatively low bracket, and expect your income (and rate) to rise.

- You believe tax rates in general will be higher in the future.

- You have a long time horizon, so decades of tax-free growth compound in your favor.

- You want tax diversification and flexibility over your taxable income in retirement.

##### Traditional usually makes sense if…

- You're a high earner in a peak bracket now (say 32%+) and expect to spend from a lower bracket in retirement.

- You want to lower this year's tax bill — for example, to stay under an income threshold for a credit or subsidy.

- You plan to retire early and do Roth conversions in low-income gap years, converting pre-tax dollars cheaply later.

Simplified illustration. $10,000 of gross pay at a 22% rate now, growing 5x, taxed at 22% (Roth's tax paid upfront). Same rate assumption makes them equal before flexibility.

|
| Traditional
| Roth

| Contributed to plan
| $10,000
| $7,800*

| Balance after 5x growth
| $50,000
| $39,000

| Tax at withdrawal (22%)
| −$11,000
| $0

| After-tax spendable
| $39,000
| $39,000

*Roth contributes $7,800 because $2,200 of the $10,000 went
to tax up front. At an equal tax rate the two are identical — the
difference only appears when the rates differ, or when Roth's other
perks kick in.

#### The employer match is always traditional

One point that surprises people: your employer's matching
contributions always go into a pre-tax (traditional) bucket,
even if you contribute to the Roth side. (SECURE 2.0 now permits
Roth matching if a plan offers it, but it's still uncommon and the
match is taxable to you in the year it's made.) In practice, most
Roth 401(k) savers end up with a traditional sub-account holding
the match — automatic tax diversification.

Whatever you choose, contribute at least enough to capture
the full match first. A 50% or 100% match is an instant,
guaranteed return no investment can beat — leaving it on the table
is the single most expensive 401(k) mistake. Only after the match
should you weigh Roth vs. traditional on the rest. If you are not
sure what your plan's formula pays, work through
how to calculate your 401(k) employer match
first — it also covers the per-paycheck timing rule that can cut
the match short even when you contribute the full amount. See the
account priority order guide
for where the 401(k) fits among your other options, and the
401(k) contribution calculator
to size your paycheck deferral. If you are on a high-deductible
health plan, the account that usually comes next is the HSA — it
is the only one that is untaxed going in and coming out,
and its own ceiling is lower than most people assume once the
employer's contribution is counted. The
HSA contribution limits and rules
cover how much room you actually have before you decide how much
of the rest belongs in a Roth 401(k).

##### Don't forget state taxes

The comparison isn't just about federal brackets. If you work in a
high-tax state today but plan to retire somewhere with no state
income tax, a traditional contribution lets you
skip your state's tax now and avoid it entirely later — a real
edge for traditional. The reverse is also true: expecting to move
to a higher-tax state in retirement tilts you toward
Roth. Because state tax rates vary so widely and
you may not know where you'll settle, this is one more reason the
"unknowable future rate" problem pushes many savers toward
spreading their bets across both account types rather than
committing entirely to one.

#### Roth's underrated advantages

Even when the tax-rate math is a tie, Roth 401(k)s carry perks that
tilt the decision:

- No required minimum distributions. Since 2024, Roth 401(k)s are exempt from RMDs during the owner's lifetime, just like Roth IRAs. Traditional 401(k)s force taxable withdrawals starting at 73 — see the RMD rules guide.

- Tax-free income controls other taxes. Roth withdrawals don't count as taxable income, so they can keep you under thresholds that raise the taxable portion of Social Security or trigger Medicare IRMAA surcharges.

- Hedge against rising rates. Today's tax rates are historically moderate and some provisions are scheduled to change; a Roth locks in a known rate now.

- Better for heirs. Inherited Roth dollars are generally tax-free to beneficiaries, versus taxable traditional inheritances.

#### Why splitting is often the smart answer

Here's the honest truth: you can't know your future tax
rate. Careers change, tax law changes, and where you'll
live in retirement is uncertain. Rather than betting everything on
one guess, many savers split — directing part of
their contribution to traditional and part to Roth.

Splitting builds tax diversification: in retirement you'll
have both taxable (traditional) and tax-free (Roth) buckets to draw
from, letting you fine-tune your taxable income each year — filling
low brackets from the traditional account and topping up tax-free
from Roth. That flexibility is exactly what makes a
smart drawdown order
possible. A reasonable default for someone genuinely unsure is a
50/50 split, adjusted toward traditional in peak-earning years and
toward Roth in leaner ones.

Not advice. The best choice depends on your
current bracket, expected retirement income, state taxes, and goals,
and tax law changes over time. Use this as a framework and confirm
specifics with a qualified tax professional.

#### Frequently asked questions

##### Is a Roth or traditional 401(k) better?

Neither is universally better — it depends on your tax rate now
versus in retirement. Roth wins if your rate will be higher
later (common for younger or lower-income savers); traditional
wins if your rate is higher now and will fall in retirement.

##### Does the employer match go into the Roth 401(k)?

Traditionally no — matching contributions go into a pre-tax
bucket even if you contribute to the Roth side. SECURE 2.0 now
allows Roth matching if a plan offers it, but it's still
uncommon and would be taxable to you in the year it's made.

##### Can I contribute to both Roth and traditional 401(k)?

Yes. You can split your contributions between the two, as long
as your combined total stays within the annual IRS limit.
Splitting gives you tax diversification and hedges against
unknown future tax rates.

##### Do Roth 401(k)s have required minimum distributions?

Not anymore. Starting in 2024, Roth 401(k)s are exempt from
RMDs during the owner's lifetime, matching Roth IRAs.
Traditional 401(k)s still require distributions beginning at age
73.

##### Which should I choose if I have no idea what my future tax rate will be?

Split your contributions between Roth and traditional. Building
both taxable and tax-free buckets lets you manage your taxable
income flexibly in retirement, which is valuable no matter which
way tax rates move.

#### Put a number on it

- Roth vs Traditional 401(k) Calculator — compare both with your own income and tax rates.

- 401(k) Contribution Calculator — size your paycheck deferral and capture the full match.

- 401(k) vs IRA vs Roth vs HSA — where the 401(k) fits in your priority order.

- RMD Rules and Deadlines (2026) — the withdrawals a Roth 401(k) now avoids.

#### See the Roth vs traditional trade-off for you

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Safe Withdrawal Rate: Is the 4% Rule Still Safe?
URL: https://planomy.net/guides/safe-withdrawal-rate
Summary: Where the 4% rule came from, why researchers now argue for 3.5% to 4.5%, how sequence risk breaks the average, and the guardrails that let you spend more.

Retirement income

### What Is a Safe Withdrawal Rate?

For a 30-year retirement, a safe withdrawal rate is
somewhere between 3.5% and 4.5% of your starting portfolio,
raised with inflation each year after that — about
$35,000 to $45,000 a year on $1 million. It is the share of your
portfolio you can spend in year one and keep spending without
running out of money. The famous answer is "4%." The honest
answer is "it depends," and the rest of this guide is what it
depends on.

Updated July 4, 2026
·
~8 min read
·
US-focused

#### Key takeaways

- The 4% rule comes from historical research (Bengen and the Trinity study) showing a 4% first-year withdrawal, raised each year for inflation, survived every 30-year US retirement on record.

- Modern research argues both sides: some say 3.3%–3.5% is safer for long or early retirements; others say 4.5%+ is fine if you stay flexible.

- Sequence-of-returns risk — a bad market in your first decade — is the real threat, not the long-run average return.

- Guardrails (spend a bit less after bad years, more after good ones) let you start higher and rarely run dry.

- Withdrawals from pre-tax accounts are taxable, so your "safe" spending is a pre-tax number — plan for the tax bill.

#### The 4% rule and where it came from

In 1994, financial planner William Bengen asked a deceptively
simple question: if a retiree pulls a fixed, inflation-adjusted
amount from a stock-and-bond portfolio every year, how much can
they take without the money running out over 30 years? Testing
every rolling 30-year period in US market history, he found that
a starting withdrawal of about 4% of the portfolio,
increased each year to keep pace with inflation, never failed —
even for retirees unlucky enough to start just before the crashes
of 1929 or 1966.

A few years later, three professors at Trinity University ran a
related study that became the rule's namesake. The "Trinity
study" tested various stock/bond mixes and withdrawal rates
across 15-, 20-, 25-, and 30-year windows, and reported the
success rate — the share of historical periods in which
the portfolio survived. For a 30-year retirement with a
50–75% stock allocation, a 4% inflation-adjusted withdrawal
succeeded in the vast majority of periods. That's the origin of
the shorthand you hear everywhere: "spend 4% of your
nest egg the first year."

The 4% rule also has a handy inverse. If 4% a year is safe, then
the portfolio you need is your annual spending times 25 (because
1 ÷ 0.04 = 25). Want to spend $60,000 a year? Aim for roughly
$1.5 million. That "multiply by 25" shortcut is exactly what our
FIRE number calculator
does, and it's why savings rate matters so much on the way there —
you can see the years-to-independence math in the
savings rate & FI calculator.

#### Why the modern debate lives between 3.5% and 4.5%

The 4% rule is a finding about the worst case in US
history, not a promise about the future. That leaves room for
reasonable people to argue in both directions.

##### The case for a lower rate (3.3%–3.5%)

Three worries push some planners below 4%. First,
longer horizons: the original studies covered 30
years, but someone retiring at 45 may need the money to last 50
years, and failure rates climb as the horizon stretches. Second,
valuations: when stocks are expensive and bond
yields are low relative to history, future returns may be thinner
than the historical average that fed the 4% result. Third,
global data: studies that include non-US
countries — which didn't all enjoy the 20th-century US bull market
— produce lower "safe" rates. This camp often lands near 3.3% to
3.5%, which corresponds to saving 28–30 times your spending.

##### The case for 4% or higher

Others argue 4% is too conservative in practice. The rule assumes
you mechanically raise spending with inflation and never adjust,
even while watching your portfolio shrink — behavior no real
retiree exhibits. It also ignores Social Security, which for many
households covers a large slice of spending and effectively lowers
the withdrawal the portfolio has to shoulder. And in most
historical periods, a 4% retiree didn't just survive — they
died with more money than they started with, because good
decades vastly outnumbered bad ones. If you're willing to stay
flexible, a starting rate of 4.5% or even 5% can be reasonable.

Rule of thumb: a lower withdrawal rate buys
safety but demands a bigger portfolio and more years of saving.
Moving from 4% to 3.33% raises your target from 25× spending to
30× — about 20% more money. There's no free lunch; you're
trading years of work for peace of mind.

#### Sequence-of-returns risk: the danger the average hides

Here's the single most important idea in retirement withdrawal.
Two retirees can experience the exact same average return
over 30 years and end up in wildly different places — one
comfortable, one broke — purely because of the order
in which those returns arrived. This is sequence-of-returns risk.

The reason is that you're selling shares to fund spending. If a
bear market hits in your first few years, you sell more shares at
depressed prices to raise the same dollars, permanently shrinking
the base that has to recover. A great market later can't fully
undo the damage, because there are fewer shares left to grow. The
same bad decade arriving at the end of retirement barely
matters, because by then you've already funded most of your
spending.

A quick illustration. Imagine two $1,000,000 portfolios, each
withdrawing $40,000 (4%) a year, and each averaging the same
return — but in opposite order.

Illustrative only — a simplified two-year sketch of how return order matters when you're withdrawing.

| Scenario
| Year 1 return
| Year 2 return
| Balance after 2 years*

| Bad year first
| −20%
| +20%
| $873,600

| Good year first
| +20%
| −20%
| $921,600

*Withdraw $40,000 at the start of each year, then apply
the return. Same two returns, same average — a $48,000 gap after
just two years. Over a full retirement the divergence compounds
dramatically.

This is why early retirees fear a bad first decade and why the
order of returns, not the average, is what actually sinks
portfolios. You can watch how long a balance lasts under
different return and spending assumptions with the
retirement drawdown calculator.

A percentage cannot tell you if your plan survives. Sequence
risk is specific to your balances, your spending and your timing.
Open the free planner to project them
year by year, with taxes and Social Security included, and test a weaker
market against the same plan.

#### Guardrails and dynamic withdrawals

The 4% rule assumes rigid, robotic spending. Real retirees adjust
— and that flexibility is worth a lot. Dynamic withdrawal
strategies let you start with a higher rate because you
agree to cut back when markets are poor.

The best-known approach is the Guyton-Klinger
guardrails. You set an initial rate (say 5%) and two
guardrails around it. If a bad market pushes your current
withdrawal rate above the upper guardrail (you're now pulling too
large a share of a shrunken portfolio), you trim spending, often
by 10%. If a strong market drops your rate below the lower
guardrail, you give yourself a raise. Small, occasional
adjustments dramatically cut the odds of running out — and let
you spend more in good times.

Other flexible methods include simple percentage-of-portfolio
withdrawals (always take X% of the current balance, so
spending naturally falls after a bad year), spending "floors and
ceilings," and the "bond tent" — holding extra bonds right around
your retirement date to blunt sequence risk when it matters most.
The common thread: a willingness to spend a little less after bad
years is what lets you safely spend more overall.

#### How taxes change the picture

Withdrawal-rate studies talk about gross portfolio
withdrawals. But the number you actually care about is what lands
in your checking account after the IRS takes its share — and that
depends heavily on which accounts you're drawing from.

- Traditional 401(k)/IRA withdrawals are taxed as ordinary income. Pulling $50,000 might leave you $42,000–$45,000 after federal tax, depending on your bracket and other income.

- Roth withdrawals are tax-free in retirement, so a dollar out is a dollar spent.

- Taxable brokerage withdrawals are only taxed on the gains, often at favorable long-term capital-gains rates — and sometimes at 0%.

Two retirees with identical portfolios but different account mixes
have very different sustainable spending. This is why a "4% rule"
figure should be treated as pre-tax, and why the order in
which you tap accounts is a strategy of its own — see our guides on
which accounts to draw down first
and the Roth conversion ladder.
Taxes also aren't the end of it: high income in retirement can
trigger Medicare premium surcharges, which you can check with the
Medicare IRMAA calculator.

Not advice. A safe withdrawal rate is a planning
framework built on historical data, not a guarantee. Your own
answer depends on your time horizon, other income, flexibility,
and risk tolerance. Treat any single rate as a starting point to
stress-test, not a promise.

#### Frequently asked questions

##### Is the 4% rule still valid in 2026?

It remains a reasonable planning anchor. Critics point to high
valuations and longer retirements as reasons to lean toward
3.5%; defenders note that flexible spending and Social Security
make 4%+ workable. Most planners use 4% as a baseline and then
stress-test with lower rates and flexible-spending rules.

##### What's a safe withdrawal rate for early retirement?

Because an early retiree may need 40–50 years of income rather
than 30, many use a more conservative 3% to 3.5%. Using
guardrails — cutting spending after bad markets — lets some
early retirees start higher while keeping failure risk low.

##### What is sequence-of-returns risk?

It's the danger that a poor run of returns early in retirement
permanently damages a portfolio you're drawing from, even if
the long-run average return is fine. The order of returns
matters far more when you're withdrawing than when you're still
saving.

##### Do withdrawal rates account for taxes?

No. The 4% rule and similar studies measure gross portfolio
withdrawals. Traditional-account withdrawals are taxed as
income, Roth withdrawals are tax-free, and taxable-account
withdrawals are taxed only on gains — so your after-tax
spending depends on your account mix.

##### How do I turn a withdrawal rate into a savings target?

Divide 1 by the rate to get a multiple of spending. At 4% you
need 25× your annual spending; at 3.33% you need 30×. Our FIRE
number calculator does this instantly and projects when you'll
reach the target.

#### Put a number on it

- Retirement Drawdown Calculator — see how long savings last at your spending and return.

- FIRE Number Calculator — turn a withdrawal rate into a portfolio target and a date.

- Savings Rate & FI Calculator — how fast your savings rate gets you there.

- Which Accounts to Draw Down First — make each withdrawal dollar go further after tax.

#### Stress-test your own withdrawal plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Sequence of Returns Risk: Why Early Losses Ruin Plans
URL: https://planomy.net/guides/sequence-of-returns-risk
Summary: Two retirees, identical average returns, opposite outcomes — why the order only matters once you are withdrawing, and the defenses that actually work.

Retirement income

### Sequence of Returns Risk, Explained

Two retirees can earn the same average return over 30 years and end
up worlds apart — one comfortable, one out of money — purely because
of the order in which those returns arrived. That's
sequence-of-returns risk, and it's the quiet threat every retiree
should understand.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- Order matters when you withdraw. The same set of returns in a different sequence can leave you rich or broke, even at an identical average.

- The danger concentrates in the first 5–10 years of retirement — bad early returns while you're selling shares do lasting damage.

- While you're saving, sequence risk barely matters — early losses can even help by letting you buy cheap.

- Defenses include a cash buffer, a bond tent, flexible spending guardrails, and simply keeping your withdrawal rate modest.

- Stress-testing — backtesting against history or running many random scenarios — reveals how exposed your plan is.

#### What sequence-of-returns risk actually is

Sequence-of-returns risk (sometimes just "sequence risk") is the
danger that the timing of good and bad investment returns
— not just their long-run average — determines whether your money
lasts. It only bites when cash is flowing out of
the portfolio. During your working years, when you're adding
money, the same risk is largely harmless and can even work in your
favor.

The mechanism is simple once you see it. When you withdraw a fixed
amount to live on and the market drops, you must sell
more shares to raise those dollars. Those shares are gone
— they can't participate in the eventual recovery. A great year
later lifts a smaller share count, so it can't fully repair the
damage. Sell into strength instead of weakness and the opposite
happens: you preserve shares, and compounding works for you.

#### A worked example: same returns, opposite order

Nothing makes this clearer than numbers. Picture two retirees,
each starting with $1,000,000 and withdrawing $50,000 at the start
of every year. Both experience the exact same five annual returns
— a −15%, a −10%, and three good years — but in opposite order.

Illustrative sketch. Withdraw $50,000 at the start of each year, then apply that year's return. Same five returns, same average — very different endings.

| Year
| Bad-first return
| Bad-first balance
| Good-first return
| Good-first balance

| Start
| —
| $1,000,000
| —
| $1,000,000

| 1
| −15%
| $807,500
| +20%
| $1,140,000

| 2
| −10%
| $681,750
| +15%
| $1,253,500

| 3
| +15%
| $726,513
| +15%
| $1,384,525

| 4
| +20%
| $811,815
| −10%
| $1,201,073

| 5
| +20%
| $914,178
| −15%
| $978,912

Same five returns. Same average. Yet after five years the
"good-first" retiree has about $65,000 more — and
critically, the "bad-first" retiree dug a hole early that a
normal-length retirement would keep compounding. Stretch this over
30 years of withdrawals and the gap can be the difference between
dying with a surplus and running out at 84.

Try the same swap on your own plan. The order of returns only
matters in the context of what you are withdrawing.
Open the free planner to project your
balances and spending year by year and compare an optimistic and a
pessimistic market against the same plan.

#### Why the first decade is the danger zone

Sequence risk isn't spread evenly across retirement — it's
heavily concentrated in the five to ten years around your
retirement date, sometimes called the "fragile decade."
Early on, your portfolio is at its largest and you have the most
years of withdrawals still ahead, so a deep loss permanently
shrinks the base that has to fund everything that follows.

The same bad market arriving late in retirement barely
registers, because by then you've already funded most of your
spending and have fewer years left to cover. This asymmetry is why
planners obsess over the transition into retirement, and why
"I'll just ride it out like I did while working" is dangerous
advice once you flip from saver to spender. It's also the core
reason the 4% rule
exists at all: 4% is essentially the withdrawal rate that survived
even the worst historical sequences.

The saver's mirror image: if you're still
accumulating, a crash early in your career is a gift — you buy
shares cheaply and they recover with decades to spare. Sequence
risk flips from friend to foe the moment you start withdrawing.

#### How to defend against it

You can't control the order of market returns, but you can build a
plan that survives a bad draw. The main defenses:

##### 1. Keep a cash and bond buffer

Holding one to three years of spending in cash or short-term
bonds means that when stocks fall, you spend from the buffer
instead of selling equities at depressed prices. You refill the
buffer in good years. This "bucket" approach directly neutralizes
the sell-low problem at the heart of sequence risk.

##### 2. Build a bond tent around your retirement date

A bond tent means temporarily raising your bond allocation in the
years just before and after retirement — when sequence risk peaks
— then gradually shifting back toward stocks as the fragile decade
passes. You accept lower expected growth exactly when a crash would
hurt most, and take more risk later when it's safer to do so.

##### 3. Stay flexible with guardrails

A willingness to trim spending after bad years dramatically cuts
failure risk. Dynamic-withdrawal rules like Guyton-Klinger
guardrails cut spending modestly when markets fall and restore it
when they recover — letting you start at a higher rate while
staying safe. The safe withdrawal rate guide
walks through how guardrails work in practice.

##### 4. Keep the withdrawal rate modest

The lower your starting withdrawal rate, the less a bad sequence
can hurt you. Dropping from 4.5% to 3.5% gives your portfolio far
more room to absorb an ugly first decade. The trade-off is a bigger
nest egg — see how much you need to retire
for that math.

##### 5. Build a guaranteed-income floor

The more of your essential spending is covered by income that
doesn't depend on the market — Social Security, a pension, or an
annuity — the less a bad sequence can hurt you, because you're
forced to sell fewer shares when prices are down. Delaying Social
Security to age 70 is one of the cheapest ways to buy a larger,
inflation-adjusted income floor; each year of delay raises the
benefit that keeps paying no matter what stocks do. When your
must-pay bills are covered by guaranteed sources, the portfolio is
free to ride out volatility with your discretionary spending, and
sequence risk shrinks to something you can live with rather than
something that can sink you.

#### Stress-test your own plan

Because averages hide sequence risk, a plan that looks fine "on
average" can still fail under a bad draw. Two techniques expose the
weakness. Historical backtesting runs your plan
through every real market sequence on record — including retiring
into 1929, 1966, or 2000 — and reports how often it survived.
Monte Carlo simulation generates thousands of
random return sequences from realistic assumptions and reports the
share that succeed, giving you a probability rather than a single
answer.

You can see the effect of return order and spending on how long a
balance lasts with the
retirement drawdown calculator,
and translate a target withdrawal rate into a portfolio goal with
the FIRE number calculator.
Planomy itself lets you model the sequence explicitly rather
than trusting a single average return.

Not advice. Sequence-of-returns risk is a
planning concept illustrated with simplified numbers; real markets,
taxes, and spending are messier. Use these ideas to stress-test a
plan, not as a guarantee about any particular outcome.

#### Frequently asked questions

##### What is sequence-of-returns risk in simple terms?

It's the risk that the order of your investment returns — not
just the average — decides whether your money lasts. Bad
returns early in retirement, while you're withdrawing, do
lasting damage; the same returns later barely matter.

##### Why does the order of returns matter when I'm retired but not when I'm saving?

When you withdraw, a market drop forces you to sell more shares
at low prices, permanently shrinking the portfolio. When you're
saving, a drop lets you buy shares cheaply, so early losses can
actually help. The cash-flow direction reverses the effect.

##### When is sequence risk highest?

In the five to ten years around your retirement date, often
called the fragile decade. Your portfolio is largest and has
the most future withdrawals to fund, so an early loss has the
longest time to compound against you.

##### How can I protect against sequence risk?

Hold a cash and bond buffer so you don't sell stocks in a
downturn, use a bond tent around your retirement date, stay
flexible with spending guardrails, and keep your withdrawal
rate modest. Each reduces how much a bad early sequence can
hurt.

##### How do I test my plan for sequence risk?

Backtest it against historical market sequences and run Monte
Carlo simulations of many random return orders. Both reveal how
often your plan survives bad draws, rather than trusting a
single average return that hides the risk.

#### Put a number on it

- Retirement Drawdown Calculator — see how long savings last under different returns and spending.

- FIRE Number Calculator — turn a safe withdrawal rate into a portfolio target.

- What Is a Safe Withdrawal Rate? — guardrails and the 4% rule that answer sequence risk.

- How Much Do You Need to Retire? — how a lower withdrawal rate raises your target.

#### See how your plan handles a bad decade

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## Tax-Efficient Withdrawal Order: Rules and Exceptions
URL: https://planomy.net/guides/tax-efficient-drawdown-order
Summary: The taxable, then traditional, then Roth default explained — and the situations where breaking it saves more: bracket filling, RMDs, IRMAA, and what heirs get.

Retirement income

### Which Accounts to Draw Down First in Retirement

Once you've saved across taxable, traditional, and Roth accounts,
the order in which you spend them shapes your lifetime tax bill.
There's a sensible default — and just as importantly, a handful of
well-understood reasons to break it.

Updated July 4, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- The conventional order is taxable first, then tax-deferred (traditional), then Roth last — it lets tax-advantaged accounts keep compounding longest.

- But a rigid order can be a trap: draining taxable first can leave a huge traditional balance that erupts into high-tax RMDs later.

- A smarter approach blends accounts each year to "fill" low tax brackets and smooth income across retirement.

- Key reasons to deviate: bracket filling, the 0% capital-gains bracket, gap-year Roth conversions, RMD pressure, and IRMAA cliffs.

- The goal isn't the lowest tax this year — it's the lowest tax over your whole retirement.

#### The conventional order — and why it exists

The traditional rule of thumb for spending down retirement savings
is simple: taxable accounts first, tax-deferred accounts
second, and Roth accounts last.

- Taxable brokerage first. These accounts are already taxed each year on dividends and realized gains, and spending them stops that ongoing drag. Withdrawals are taxed only on gains, often at favorable long-term rates.

- Tax-deferred (traditional 401(k)/IRA) second. Leaving these alone lets them keep growing tax-deferred, but every dollar out is ordinary income — so you tap them after the cheaper taxable money.

- Roth last. Roth money grows tax-free and has no lifetime RMDs, so it's the most valuable to preserve — ideal for late-in-life spending or as a tax-free inheritance.

The logic is sound as far as it goes: spend the least tax-efficient
money first and let the most tax-efficient accounts compound the
longest. You can experiment with a simple version of this ordering
in the tax-aware withdrawal calculator.

If you hold an HSA, it belongs after all three. Spent on qualified
medical costs it is never taxed at any stage — not going in, not
growing, not coming out — which makes it the one account worth
saving for the expense most likely to arrive late in retirement.
The catch is that the exemption is conditional, and spending it on
anything else is expensive. The
HSA contribution limits and rules
cover the 20% tax on a non-qualified withdrawal and what changes
once you enroll in Medicare.

The trap in the default. Follow "taxable first"
too literally and you may spend years reporting almost no taxable
income — wasting your low brackets — while your traditional balance
balloons untouched. Then RMDs hit at 73, forcing large withdrawals
taxed at high rates, often alongside Social Security. The rigid order
can quietly maximize your lifetime tax bill even as it
minimizes it early on.

#### The better mental model: fill the low brackets every year

Modern tax-planning shifts the question from "which account do I
empty first?" to "what's the most income I can realize cheaply this
year?" The US has a progressive bracket system with a standard
deduction, so the first slice of income each year is taxed at 0%,
then 10%, then 12%, and so on. Empty years waste that cheap space
forever.

So instead of draining one account at a time, a tax-smart retiree
blends: they pull enough from the traditional account
to "fill up" a low bracket (say the 12% bracket), then top up their
spending from taxable or Roth accounts, which add little or nothing to
taxable income. The result is a smoother income line across
retirement and a lower rate on the tax-deferred money — because it's
being pulled out steadily at 10–12% rather than in a late-life RMD
spike at 22–24%.

#### Five reasons to deviate from the default

##### 1. Bracket filling

As above: realize traditional-account income (or Roth conversions) up
to the top of a target bracket each year. Filling the 10% and 12%
brackets deliberately, even in years you don't need the cash, prevents
a future pile-up. The unused low-bracket room this year is gone next
year — use it.

##### 2. The 0% long-term capital-gains bracket

Long-term capital gains and qualified dividends have their own rate
schedule, and for taxpayers with modest taxable income the rate is
0%. In a low-income year you can sell appreciated
taxable holdings, pay $0 in federal tax on the gain, and immediately
rebuy to reset your cost basis higher — "tax-gain harvesting." This
only works while your total taxable income stays under the 0%
threshold, so it competes with Roth conversions for the same low-income
space. Estimate the tax on a sale with the
capital gains tax calculator,
or read
how capital gains tax is calculated
for the stacking rule that decides whether a sale lands in the 0%
band at all.

##### 3. Gap-year Roth conversions

The low-income "gap years" between retiring and starting Social
Security and RMDs are the ideal time to convert traditional money to
Roth at low rates — the core of a
Roth conversion ladder.
Spending from your taxable account during these years keeps taxable
income low, opening room for conversions. This is a case where you
deliberately preserve the traditional account (rather than
spending it) so you can convert it on your own terms.

##### 4. RMD pressure

Required minimum distributions begin at 73 (rising to 75 for younger
cohorts) and are calculated from your traditional balance. Let that
balance grow untouched and the eventual RMDs can be large enough to
push you into a higher bracket you can't avoid. Drawing down or
converting traditional money before RMDs start is how you
defuse this — see the size of your future RMDs with the
RMD calculator.

##### 5. IRMAA cliffs

Once you're on Medicare, your Part B and D premiums are surcharged
(IRMAA) based on income from two years prior, and the surcharge jumps
at hard thresholds — cross one by a dollar and you owe the whole step.
A big traditional withdrawal or conversion can trip a cliff, so
retirees near a threshold often shift a year's spending to Roth or
taxable money to stay under it. Check the brackets with the
Medicare IRMAA calculator.

#### A worked example: default vs. blended

Consider Sam and Alex, both 63, both retired, both needing about
$70,000 a year to spend, and both holding $400,000 taxable, $700,000
traditional, and $200,000 Roth. Neither has claimed Social Security
yet.

Sam follows the rigid default. He spends only from
the taxable account. His taxable income is nearly zero for several
years — his low brackets sit empty. By 73, his traditional balance has
grown past $900,000, and RMDs plus Social Security push him into the
22–24% brackets and trip an IRMAA surcharge. His late-retirement tax
bill is steep.

Alex blends. Each year Alex withdraws about $40,000
from the traditional account — enough to fill up through the 12%
bracket — and covers the rest of the $70,000 from the taxable account.
His traditional balance shrinks steadily, so his eventual RMDs are far
smaller, and he stays clear of IRMAA cliffs.

Simplified illustration of one year for each retiree. Figures are rounded and ignore state tax and growth; brackets are approximate 2026 figures.

| This year
| Sam (rigid)
| Alex (blended)

| From taxable account | $70,000 | $30,000

| From traditional (ordinary income) | $0 | $40,000

| Roughly taxable income | ~$2,000* | ~$40,000

| Top marginal rate touched | 0–10% | 12%

| Traditional balance trend | Growing | Shrinking

| Future RMD / IRMAA risk | High | Low

*Sam's taxable income is just the small realized gains inside
his brokerage withdrawal. He looks like he's "winning" on taxes today
— but he's wasting a 12% bracket that Alex is using to permanently
move money out of the traditional account at a low rate. Over a full
retirement, Alex typically pays far less total tax and leaves more
behind.

The lesson isn't that "taxable first" is wrong — it's that the goal is
the lowest tax across all your retirement years, not the
lowest tax this year. That usually means proactively realizing
low-bracket income rather than deferring everything.

Find the cheapest order for your own numbers. Which account
to draw first depends on your balances, your spending and where your brackets
fall in each year. Open the free
planner to project the whole drawdown year by year, with taxes, Social
Security and RMDs included.

#### Other levers worth knowing

- Qualified Charitable Distributions (QCDs). From 70½, you can send up to a yearly limit directly from an IRA to charity, satisfying RMDs without adding to taxable income.

- Asset location. Holding bonds in tax-deferred accounts and stocks in taxable/Roth accounts can reduce the tax drag before you ever withdraw.

- Coordinate with Social Security timing. Delaying benefits to 70 both boosts the benefit and opens more low-income years for conversions and bracket filling first.

- Widow(er)'s tax trap. When one spouse dies, the survivor often files as single with tighter brackets — a reason to move money out of traditional accounts while both are alive.

Not advice. Optimal drawdown depends on your specific
balances, other income, state taxes, health, and goals, and the tax
figures here are approximate 2026 estimates. Use this as a framework to
explore, and consider professional guidance before making irreversible
moves.

#### Frequently asked questions

##### What is the conventional retirement withdrawal order?

Spend taxable brokerage accounts first, then tax-deferred
(traditional 401(k)/IRA) accounts, and leave Roth accounts for
last. This lets the most tax-advantaged accounts keep compounding
the longest.

##### Why would I break the conventional order?

Because draining taxable accounts first can waste your low tax
brackets and let the traditional balance grow into large, highly
taxed RMDs later. Blending withdrawals to fill low brackets each
year, do Roth conversions, and avoid IRMAA cliffs often lowers your
lifetime tax bill.

##### What does "filling a tax bracket" mean?

It means realizing income — through traditional withdrawals or Roth
conversions — up to the top of a low bracket, then stopping. You use
the cheap 10% and 12% space deliberately instead of leaving it empty
and paying higher rates later.

##### How does the 0% capital-gains bracket fit in?

In low-income years, long-term capital gains can be taxed at 0% up
to a threshold. You can sell appreciated taxable holdings tax-free
and reset your basis, but this competes with Roth conversions for the
same low-income room, so you must plan which to prioritize.

##### When should I worry about RMDs and IRMAA?

RMDs from traditional accounts begin at 73 and can force high-taxed
withdrawals, while IRMAA surcharges raise Medicare premiums at hard
income thresholds. Drawing down or converting traditional money in
your 60s helps shrink both problems before they arrive.

#### Model your drawdown

- Tax-Aware Withdrawal Calculator — order withdrawals across account types.

- Retirement Drawdown Calculator — how long the money lasts at your spending.

- Capital Gains Tax Calculator — estimate tax on selling taxable holdings.

- RMD Calculator — see the distributions a blended plan can shrink.

- The Roth Conversion Ladder, Explained — the gap-year strategy in depth.

- HSA Contribution Limits and Rules (2026) — why the HSA is usually the last account you spend.

#### Find your lowest-tax drawdown path

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Try Planomy free

Read more guides

---

## When Can I Retire? Calculator for Your FI Date
URL: https://planomy.net/guides/when-can-i-retire
Summary: Enter savings, annual contributions, and a real return to see the year your portfolio reaches your financial-independence number, projected year by year.

Retirement planning calculator

### When Can I Retire?

Estimate when your savings may reach your FI number using annual
contributions and a real return. This is a simple deterministic
estimate, not advice.

#### Project your FI date

Method: FI number = annual spending divided by the withdrawal
rate. Savings grow once per year, then the annual contribution
is added at year-end; actual markets and spending will vary.

#### Estimated result

Fill in the inputs above to see an estimate.

-

Milestones use the same return and contribution assumptions.

| Milestone
| Target
| Age
| Year
| Years from now

| 25% of FI | - | - | - | -

| 50% of FI | - | - | - | -

| 75% of FI | - | - | - | -

| 100% of FI | - | - | - | -

#### See the year-by-year path to that date

This estimate assumes a steady return and a flat withdrawal rate. Planomy
projects your contributions, Social Security, taxes and RMDs year by year, so
you can see what the date depends on. Free, private, and running in your
browser.

Build your full plan free

#### Keep planning

- How Much Do I Need? - calculate the portfolio target behind your FI date.

- What Is a Safe Withdrawal Rate? - understand the rate used in the target.

- FIRE Number Calculator - compare another quick estimate with your full plan.

- Savings Rate Calculator - see the savings rate driving the date.

- Retirement Drawdown Calculator - check the money still lasts after you stop.

#### Build your full plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real
life happens. Free, private, and running in your browser.

Build your full plan free

Read more guides

---

## When to Take Social Security: How to Decide
URL: https://planomy.net/guides/when-to-take-social-security
Summary: What each claiming age pays as a share of your full benefit, break-even ages worked out in dollars, and why a couple

Social Security

### When Should You Take Social Security?

Claiming is a one-time, largely irreversible decision worth six
figures over a lifetime. The benefit grows roughly 8% for every year you
wait between 62 and 70 — so the question is not "when can I get it" but
"how long is this income likely to be needed".

Updated July 27, 2026
·
~9 min read
·
US-focused

#### Key takeaways

- With a full retirement age of 67, claiming at 62 pays 70% of your benefit and waiting to 70 pays 124% — a 77% difference between the earliest and latest choices.

- Break-even between claiming at 62 and 70 lands around age 80 on simple arithmetic, and a few years later once you account for investing the early payments.

- Delaying is best understood as longevity insurance, not an investment: it pays off precisely in the scenario that would otherwise wreck your plan — living a very long time.

- For a married couple, the higher earner's claiming age sets the survivor benefit for as long as either spouse lives. That single fact settles most couple decisions.

- Claiming early makes sense with poor health, a short family longevity history, or no other assets to live on — not as a default.

#### What each age pays

Social Security calculates a primary insurance amount (PIA) —
the benefit at your full retirement age, which is 67 for anyone born in 1960 or
later. Claim early and it is permanently reduced; delay past full retirement
age and you earn delayed retirement credits of 8% a year until 70, when they
stop.

Benefit by claiming age for a full retirement age of 67, with dollars for a $2,000 monthly full benefit. Percentages are set by statute; verify your own estimate at ssa.gov.

| Claim at
| % of full benefit
| Monthly
| Annual

| 62 | 70% | $1,400 | $16,800

| 65 | 86.7% | $1,733 | $20,800

| 67 (full) | 100% | $2,000 | $24,000

| 68 | 108% | $2,160 | $25,920

| 70 | 124% | $2,480 | $29,760

Note what the increase is not: it is not a market return, it is not
taxable until you receive it, and it cannot be lost in a downturn. It is an
increase in an inflation-indexed payment guaranteed for as long as you live.

#### The break-even arithmetic

The natural question is when waiting overtakes claiming early. Using the $2,000
full benefit above:

##### 62 versus 67

- Claiming at 62 collects $1,400 a month for the 60 months before 67: $84,000 banked.

- From 67 onward the delayed claimer receives $600 a month more ($2,000 − $1,400).

- $84,000 ÷ $600 = 140 months = 11.7 years.

- Break-even lands at about age 78 years 8 months.

##### 62 versus 70

- Claiming at 62 collects $1,400 a month for 96 months: $134,400 banked.

- From 70 onward the delayed claimer receives $1,080 a month more ($2,480 − $1,400).

- $134,400 ÷ $1,080 = 124 months = 10.4 years.

- Break-even lands at about age 80 years 4 months.

Two honest caveats. Investing the early payments pushes the break-even later —
typically into the early or mid 80s depending on the return you assume. And
cost-of-living adjustments apply to both paths, so they largely cancel out
rather than favouring either. Our
break-even calculator
runs your own benefit through the same arithmetic.

Break-even is the wrong frame on its own. It answers "which
choice pays more in total", but total dollars are not the risk you are
managing. The plan-destroying scenario is living longer than the money
lasts. Delaying converts portfolio risk into a guaranteed inflation-indexed
income exactly in the case where you need it most. Think of the forgone
payments as the premium on longevity insurance, not as a bet.

#### For couples, the survivor benefit usually decides it

When one spouse dies, the household does not keep both benefits. The survivor
receives the larger of the two and the smaller one stops. That
makes the higher earner's claiming age a decision about income for as long as
either of you lives — typically far longer than one lifetime.

Take a couple with a $2,600 monthly benefit for the higher earner. Claiming at
67 sets the survivor floor at $31,200 a year. Delaying to 70 lifts it to
$2,600 × 1.24 = $3,224 a month, or $38,688 a year — an extra
$7,488 every year, indexed, for the rest of the survivor's life. The common
playbook follows directly: delay the higher earner as long as you can
afford to, and let the lower earner claim earlier if cash flow needs
it. There is much more on this in our guide to
how much a couple needs
to retire.

Spousal benefits sit alongside this: a lower-earning spouse can receive up to
50% of the higher earner's full benefit if that exceeds their own, reduced if
claimed before their own full retirement age, and only once the higher earner
has filed. Note that spousal benefits do not earn delayed credits — so
there is no reason for a spouse claiming purely on the record of another to
wait past their own full retirement age.

#### If you are still working

Before full retirement age, the retirement earnings test withholds $1 of
benefit for every $2 earned above an annual limit that is indexed each year (a
more generous rule applies in the year you reach full retirement age). The
withheld benefits are not lost — your benefit is recomputed upward at full
retirement age — but claiming early while earning a salary usually achieves
nothing except paperwork. Additional high-earning years can also replace low
years in your record and raise the benefit itself.

#### The tax angle nobody mentions

Delaying does more than raise the benefit. The years between retiring and
claiming are usually your lowest-income years ever, and low-income years are
valuable:

-
They are the cheapest years to run
Roth conversions, shrinking the
traditional balance before
required minimum distributions
begin.

-
They can put long-term capital gains in the 0% bracket, letting you reset the
cost basis on taxable holdings at no tax cost. That 0% band is not a separate
allowance — gains stack on top of your ordinary income, so a conversion in the
same year can push the very gains you were harvesting into the 15% band. See
how capital gains tax is
calculated for the stacking order that decides which of the two moves you
can afford in one year.

-
A larger Social Security benefit later is partly shielded: at most 85% of a
benefit is ever taxable, and the formula treats it more kindly than an IRA
withdrawal of the same size. See
how Social Security is
taxed.

The counterweight is
IRMAA: conversions in those gap years
raise the income Medicare looks at two years later, so fill brackets
deliberately rather than by accident.

One more timing trap sits at the other end of the gap years. Claiming Social
Security after 65 enrols you in Medicare Part A automatically, and that
enrolment is backdated up to six months — which retroactively disqualifies any
HSA contribution you made in those months and makes it an excess contribution.
If you are still funding an HSA, stop contributing at least six months before
you file; the
HSA contribution limits and rules
walk through the lookback and how the excess is unwound.

#### When claiming early is the right answer

- Health. A serious diagnosis or a family history of short longevity flips the arithmetic — with a shorter horizon, early payments win outright.

- No other assets. If the alternative is debt or an unsustainable withdrawal rate from a small portfolio, income today beats a larger benefit later.

- The lower earner in a couple. Claiming the smaller benefit early can fund the delay of the larger one — the best of both.

- Caring for dependants. Benefits for a qualifying child or spouse caring for one can only be paid once the worker has filed.

What is not a good reason: a vague worry that the programme will
disappear before you collect. Plan for the rules as they are, revisit if they
change, and use the
claiming age calculator
to see the difference in your own numbers.

#### Frequently asked questions

##### How much more do I get if I wait until 70?

With a full retirement age of 67, waiting to 70 pays 124% of your full benefit, or 77% more than claiming at 62. On a $2,000 full benefit that is $2,480 a month at 70 versus $1,400 at 62, and the difference is indexed for inflation and paid for life.

##### What is the break-even age for delaying Social Security?

On simple arithmetic, roughly 78 years 8 months when comparing 62 with 67, and about 80 years 4 months comparing 62 with 70. Accounting for investment returns on the early payments pushes both a few years later, typically into the early to mid 80s.

##### Should both spouses delay Social Security?

Usually not both. Because a survivor keeps only the larger of the two benefits, the standard approach is for the higher earner to delay as long as affordable — which sets the survivor floor — while the lower earner claims earlier if the household needs the cash flow.

##### Does claiming early reduce my spouse's survivor benefit?

If you are the higher earner, yes. The survivor benefit is based on what the deceased worker was receiving or entitled to receive, so claiming early permanently lowers the income the surviving spouse will have for the rest of their life.

##### Can I work and collect Social Security at the same time?

Yes, but before full retirement age the earnings test withholds $1 of benefit for every $2 of earnings above an indexed annual limit. The withheld amounts are credited back through a higher benefit at full retirement age, and after full retirement age there is no earnings test at all.

#### Put a number on it

- Social Security Break-Even Calculator — your own crossover ages.

- Social Security Claiming Age Calculator — 62 through 70 side by side.

- Can I Retire at 62? — retiring and claiming are separate decisions.

- How Social Security Benefits Are Taxed — provisional income, explained.

- The Roth Conversion Ladder — what to do with the gap years.

- HSA Contribution Limits and Rules (2026) — claiming after 65 backdates Medicare Part A and ends HSA contributions.

#### Compare claiming ages inside a real plan

Planomy projects each claiming age against your actual portfolio,
taxes and spending — so you can see what delaying costs in the gap years and
what it buys for the rest of your life. Free, private, and running in your
browser.

Try Planomy free

Read more guides

# Calculators

## 401(k) Contribution Calculator With Match: 2026 Limits
URL: https://planomy.net/calculators/401k-contribution
Summary: Free, no sign-up: find the contribution percent that captures every dollar of employer match, the free money you are leaving behind, and the 2026 limit.

Free 401(k) contribution calculator

### How much should I contribute to my 401(k)?

Start with the number that captures your entire employer match —
it's the only guaranteed return in investing, and contributing a
percent or two below it is the most common and most expensive
mistake in personal finance. Enter your salary, your current rate,
and your employer's match formula to see the match you're capturing,
the exact percent that captures all of it, the dollars you're
leaving behind each year, and where the whole thing lands by
retirement. Everything runs in your browser — nothing is uploaded.

A simplified projection, not financial or tax advice. It uses the
2026 employee contribution limit of $24,500 ($8,000 extra
contribution at age 50+), applied to your own contributions only —
the employer match doesn't count toward that limit. It assumes a
steady salary, a constant return, contributions and match paid
level through the year, and no waiting period for the employer
match to become yours. Actual limits, match rules, and match
ownership rules vary by plan.

#### How employer 401(k) matching works

Most 401(k) plans match a portion of what you contribute, up to a
cap expressed as a percent of your pay. A very common formula is
"100% of the first 3%, then 50% of the next 2%."
That means if you contribute at least 5% of your salary, your
employer adds 4% of your salary on top — a guaranteed, immediate
return you can't get anywhere else. Contribute less than 5% and
you forfeit part of that 4%, permanently.

#### Why the match is "free money"

A dollar-for-dollar match is an instant 100% return on your
contribution before the market does anything. Even a 50% match is
a 50% return. No investment reliably offers that. Passing it up to
free up a little take-home pay is almost always a losing trade —
which is why "at least contribute enough to get the full match" is
the single most repeated piece of retirement advice.

#### A worked example: what 1% short actually costs

The defaults on this page — a $90,000 salary, contributing 4%, and
the classic "100% of the first 3%, then 50% of the next 2%" match:

- You contribute $3,600. The match is 3% at 100% plus 1% at 50% = 3.5% of pay, or $3,150.

- The maximum this formula pays is 4% of pay — $3,600 — and it needs a 5% contribution to unlock.

- So contributing 4% instead of 5% forfeits $450 a year, permanently, in exchange for keeping about $17 more per bi-weekly paycheck before tax.

- Left to compound at 7% for 30 years, that $450 a year would have become roughly $42,500.

The percentage that matters is the sum of every tier's cap —
3% + 2% = 5% here. Contributing anything below it leaves guaranteed
money behind; contributing above it earns no extra match, though it
is still worth doing for the tax treatment.

#### 2026 contribution limits

| 2026 limit
| Amount

| Your contributions (under 50) | $24,500

| Catch-up, age 50–59 and 64+ | +$8,000 → $32,500

| Catch-up, ages 60–63 | +$11,250 → $35,750

| You + employer combined | $72,000

| Salary counted for plan purposes | $360,000

The employer match doesn't count toward your own limit — it falls
under the combined $72,000 cap instead, which most people never
approach. This calculator caps your contribution at the
applicable limit so a high percentage on a high salary doesn't
overstate what you can actually put in.

Two limits with sharp edges: the $360,000 compensation
cap means salary above it is invisible to the plan, so a
percentage-based match stops growing there. And if you're 50 or
over and your prior-year wages from that employer exceeded
$145,000 (indexed), SECURE 2.0 requires your catch-up
contributions to go to the Roth side.

#### The match rules that quietly cost people money

- Vesting. Your own contributions are always 100% yours. The employer's share may not be. Cliff vesting gives you nothing until a set date (up to 3 years) and then everything; graded vesting hands it over in slices over up to 6 years. Safe-harbor matches are immediately fully vested. Leaving a month before a cliff date can forfeit several years of match.

- The true-up. Most plans match per pay period, not per year. Max out your contributions by August and there are no contributions left in the last four months for the plan to match — so you lose that portion of the match unless your plan has a "true-up" provision that reconciles at year end. If it doesn't, spread contributions across all 26 pay periods.

- Auto-escalation. Many plans raise your contribution rate automatically each year. That is usually good — but check what rate it stops at, because plan defaults often top out well below what you need.

- After-tax contributions. Some plans allow non-Roth after-tax contributions above the $24,500 limit, up to the $72,000 combined cap, and permit converting them to Roth. Where offered, this "mega backdoor Roth" is the single largest tax-free savings opportunity available to an employee.

- Bonuses. Whether your contribution percentage applies to bonus pay varies by plan, and a bonus that skips the deferral can cost you match.

Each of these turns on how your plan words its formula rather than
on the arithmetic. Our guide to
how to calculate your 401(k) employer match
works through the common tiered, dollar-capped and
percentage-of-pay formulas so you can read your own summary plan
description and know what the match is actually worth.

#### How much should you contribute?

A workable order of priorities, highest guaranteed return first:

- 1. Contribute enough to capture the entire match. A 100% match is an immediate doubling; nothing else on this list competes.

- 2. Clear high-interest debt. Paying off a card at 22% is a guaranteed 22% return, better than any market expectation.

- 3. Build an emergency fund so the next surprise doesn't undo step 2.

- 4. Fund an HSA if you're eligible — the only account that is deductible going in, tax-free growing, and tax-free coming out for medical costs.

- 5. Then push the 401(k) toward the annual maximum, or use an IRA first if your plan's fund menu is expensive.

As a target rate, the common rule of thumb is 15% of gross pay
including the match — so a 4% employer match means aiming for 11%
of your own. Starting later means a higher number, not a different
rule.

#### Frequently asked questions

##### How much should I contribute to my 401(k)?

At an absolute minimum, whatever percentage captures your full
employer match — below that you're declining guaranteed money.
Beyond that, the widely used target is 15% of gross pay
including the match, so a 4% match means roughly 11% of your
own. Between the two, clearing high-interest debt and building
an emergency fund generally beat extra 401(k) contributions.

##### What contribution percent do I need for the full match?

Enough to cover every tier of your match formula. With "100% of
the first 3% plus 50% of the next 2%," the match caps out once
you contribute 5% of your salary. This calculator shows the
exact percent that captures your full match and flags how much
you're currently missing.

##### Does the employer match count toward the $24,500 limit?

No. The 2026 employee contribution limit of $24,500
(plus an $8,000 extra contribution at 50+) applies only to the money you
contribute. Employer matching and profit-sharing fall under a
separate, much higher combined limit, so the match never eats
into your own contribution room.

##### When does the employer match become yours?

It depends on your plan's vesting schedule. Cliff vesting gives
you none of the match until a set date — up to three years —
then all of it at once. Graded vesting hands it over in slices
over as long as six years. Safe-harbor matches are yours
immediately, and your own contributions always are. This tool
assumes the match vests right away; check your summary plan
description, because leaving shortly before a cliff date can
forfeit years of match.

##### What happens if I max out my 401(k) early in the year?

If your plan matches per pay period and has no "true-up"
provision, hitting the annual limit in August means there are no
contributions left in September to December for the plan to
match — so you forfeit that portion of the match. Plans with a
true-up reconcile at year end and pay it anyway. Check which
yours does before front-loading; if it doesn't true up, spread
contributions evenly across every pay period.

##### Should I choose a Roth or traditional 401(k)?

Traditional contributions lower your taxable income now and are
taxed on withdrawal; Roth contributions are made after tax and
come out tax-free later. The employer match is always
pre-tax regardless. The right choice depends on whether you
expect a higher or lower tax rate in retirement — Planomy's
full app can model both.

Compound Growth Calculator
See how contributions snowball over decades.

FIRE Number Calculator
Find the nest egg that makes work optional.

Investment Fee Impact Calculator
Check what your plan's fund menu charges you each year.

Roth vs Traditional 401(k) Calculator
Which side of the same plan your money should go into.

401(k) vs IRA vs Roth vs HSA
Where each dollar belongs once the match is captured.

Roth vs Traditional 401(k): How to Choose
Pick the Roth or pre-tax side of the same 401(k).

#### Find out what your contribution rate buys

Capturing the match is step one. The question underneath it is
whether your rate gets you to a retirement you'd actually accept.
Planomy takes this contribution and projects the whole thing —
taxes, Social Security, spending, and a retirement date you can
move — so you can test 5% against 11% and see the difference in
years. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## California 529 Calculator: Cost Gap and CA Tax Rules
URL: https://planomy.net/calculators/529-california
Summary: Project a ScholarShare 529 against four years of California college costs, get the monthly amount that closes the gap, and see why CA gives no state deduction.

Free California 529 calculator

### California 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and California savers should also
know the CA state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### California 529 (ScholarShare) tax benefits

California has historically offered no state income-tax
deduction for 529 contributions — the benefit for
California savers is the federal one: tax-free growth and tax-free
qualified withdrawals. Legislation proposed in the 2025–26 session
(SB 529) would add a deduction of up to $5,000 ($10,000 joint,
with income limits) for ScholarShare contributions; check its
current status before counting on it.

One California-specific caution: non-qualified withdrawals are hit
with an extra 2.5% California penalty tax on
earnings, on top of the federal 10%. Since there's no deduction
tying you to ScholarShare, Californians can shop any state's plan
purely on fees and investment options.

529 tax benefits in other states: NY · NJ · VA · OH · IL · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### Does California give a tax deduction for 529 contributions?

Historically no — California is one of the states with an income tax but no 529 deduction or credit. A bill in the 2025–26 legislative session (SB 529) proposes adding one with income limits; verify its current status. The federal benefits — tax-free growth and tax-free qualified withdrawals — apply regardless.

##### Which 529 plan should a California resident use?

Any state's plan. With no California deduction tied to ScholarShare, compare plans purely on fees and investment lineup. ScholarShare 529 is competitive on both, so it's a fine default, but you lose nothing by choosing another state's low-cost plan.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

New York 529 Calculator
New York's state deduction and its cap.

Illinois 529 Calculator
Illinois' deduction against a flat state rate.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Florida 529 Calculator: Savings Gap and No State Tax
URL: https://planomy.net/calculators/529-florida
Summary: Project a Florida 529 to your child

Free Florida 529 calculator

### Florida 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and Florida savers should also
know the FL state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### Florida 529 tax benefits

Florida has no state income tax, so there's no
state deduction for 529 contributions anywhere — and nothing to
lose by choosing any state's plan. The benefit for Florida savers
is the federal one: tax-free growth and tax-free qualified
withdrawals.

Florida offers its own Florida 529 Savings Plan
and the separate Florida Prepaid tuition program.
With no deduction in play, compare the savings plan against other
states' plans purely on fees and investment options.

529 tax benefits in other states: NY · CA · NJ · VA · OH · IL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### Does Florida have a 529 tax deduction?

No — Florida has no state income tax, so there's no deduction in any state's plan. Florida savers still get the federal benefits: tax-free growth and tax-free withdrawals for qualified education expenses, plus the option of the Florida Prepaid tuition program.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

California 529 Calculator
The CA deduction question, answered.

New York 529 Calculator
New York's state deduction and its cap.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Illinois 529 Calculator: Bright Start Goal and Tax
URL: https://planomy.net/calculators/529-illinois
Summary: Project a Bright Start 529 against four years of college costs and see what Illinois

Free Illinois 529 calculator

### Illinois 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and Illinois savers should also
know the IL state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### Illinois 529 (Bright Start) tax deduction

Illinois taxpayers can deduct up to $10,000 per year
($20,000 married filing jointly) of contributions to Illinois'
529 plans — Bright Start or Bright Directions — from Illinois
taxable income. At Illinois' flat 4.95% rate that's worth up to
$495 a year ($990 joint) in state tax saved.

The deduction only applies to Illinois' own plans, and Bright
Start's direct-sold index portfolios are low-cost, so for most
Illinois families the in-state plan is the clear choice.

529 tax benefits in other states: NY · CA · NJ · VA · OH · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### Is there an Illinois state tax deduction for 529 contributions?

Yes — up to $10,000 per year for single filers and $20,000 for married couples filing jointly, for contributions to Illinois' Bright Start or Bright Directions plans. At the flat 4.95% Illinois rate that's up to $495 or $990 a year in state tax saved.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

New Jersey 529 Calculator
New Jersey's income-capped deduction.

Ohio 529 Calculator
Ohio's per-beneficiary deduction and carry-forward.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## New Jersey 529 Calculator: NJBEST Goal and Deduction
URL: https://planomy.net/calculators/529-new-jersey
Summary: Project an NJBEST 529 against four years of college costs, get the monthly amount that fully funds it, and check the $10,000 NJ deduction and its $200k cap.

Free New Jersey 529 calculator

### New Jersey 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and New Jersey savers should also
know the NJ state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### New Jersey 529 (NJBEST) tax deduction

Since 2022, New Jersey taxpayers with gross income of
$200,000 or less can deduct up to
$10,000 per year of contributions to the
NJBEST 529 plan from New Jersey taxable income.
Contributions to another state's plan don't qualify, and above the
income cap there's no deduction at all.

If your income is over $200,000, the deduction doesn't apply, so
you're free to pick any state's plan on fees alone. Under the cap,
the NJBEST deduction plus federal tax-free growth usually makes the
in-state plan the better deal.

529 tax benefits in other states: NY · CA · VA · OH · IL · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### Is there a New Jersey state tax deduction for 529 contributions?

Yes, since tax year 2022 — up to $10,000 per year of NJBEST 529 contributions, but only for New Jersey taxpayers with gross income of $200,000 or less. Contributions to other states' plans don't qualify.

##### Should high earners in New Jersey still use NJBEST?

Above $200,000 of gross income the deduction disappears, so there's no state-tax reason to prefer NJBEST. Compare any state's plan on fees and investment options — the federal tax-free growth is the same everywhere.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

Ohio 529 Calculator
Ohio's per-beneficiary deduction and carry-forward.

Virginia 529 Calculator
Virginia's per-account deduction and carry-forward.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## New York 529 Calculator: Cost Gap and NY Deduction
URL: https://planomy.net/calculators/529-new-york
Summary: Project a New York 529 against four years of college costs and see what the $5,000 single / $10,000 joint NY deduction is worth — about $600 a year for couples.

Free New York 529 calculator

### New York 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and New York savers should also
know the NY state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### New York 529 tax deduction

New York taxpayers can deduct up to $5,000 per year
($10,000 married filing jointly) of contributions to New York's 529
plans — the Direct Plan or the Advisor-Guided Plan — from New York
state taxable income. At a typical 6% state rate, a couple
contributing $10,000 saves roughly $600 a year in
state tax on top of the federal tax-free growth.

Two New York quirks to know: the deduction only applies to New
York's own plans (contributions to another state's 529 don't
count), and New York treats K-12 tuition withdrawals as
non-qualified at the state level, so using the account for
private school can trigger recapture of prior deductions.

529 tax benefits in other states: CA · NJ · VA · OH · IL · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### Is there a New York state tax deduction for 529 contributions?

Yes — up to $5,000 per year for single filers and $10,000 for married couples filing jointly, but only for contributions to New York's own 529 plans (the Direct Plan or Advisor-Guided Plan). Contributions to another state's plan get no New York deduction.

##### Do I have to use New York's 529 plan?

No — you can open any state's 529 plan. But because the state deduction only applies to New York's plans, and NY's Direct Plan has low index-fund fees, most New York residents come out ahead using the in-state plan.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

Illinois 529 Calculator
Illinois' deduction against a flat state rate.

New Jersey 529 Calculator
New Jersey's income-capped deduction.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Ohio 529 Calculator: CollegeAdvantage Goal and Tax
URL: https://planomy.net/calculators/529-ohio
Summary: Project a CollegeAdvantage 529 against four years of college costs, and see how Ohio

Free Ohio 529 calculator

### Ohio 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and Ohio savers should also
know the OH state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### Ohio 529 (CollegeAdvantage) tax deduction

Ohio taxpayers can deduct up to $4,000 per beneficiary,
per year of CollegeAdvantage 529 contributions from Ohio
taxable income, with unlimited carryforward:
contribute $10,000 in one year and you deduct $4,000 now and the
remaining $6,000 over the following years.

Because the limit is per beneficiary, a family saving for
two children can deduct up to $8,000 a year. The deduction applies
to Ohio's own plan.

529 tax benefits in other states: NY · CA · NJ · VA · IL · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### How much can I deduct for 529 contributions in Ohio?

Up to $4,000 per beneficiary per year from Ohio taxable income, with unlimited carryforward — larger contributions keep deducting $4,000 a year in future years until used up. Saving for two children doubles the annual limit to $8,000.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

Virginia 529 Calculator
Virginia's per-account deduction and carry-forward.

Florida 529 Calculator
No state income tax — what that changes.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Virginia 529 Calculator: Invest529 Goal and Deduction
URL: https://planomy.net/calculators/529-virginia
Summary: Project an Invest529 account against four years of college costs and see how Virginia

Free Virginia 529 calculator

### Virginia 529: am I saving enough for college?

College costs rise faster than almost anything else you'll save for,
so a 529 plan works best when you start early and let tax-free
growth do the heavy lifting — and Virginia savers should also
know the VA state tax rules below. This calculator projects your plan balance to
the year your child starts school, compares it to the future cost of
four years, and tells you the monthly contribution that fully funds
the goal. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when used for qualified education
expenses — tuition, fees, room and board, books, and even up to
$10,000 a year of K-12 tuition. Many states also offer a state
income-tax deduction or credit for contributions.

#### Virginia 529 (Invest529) tax deduction

Virginia taxpayers can deduct up to $4,000 per account,
per year of Invest529 contributions from Virginia taxable
income, with unlimited carryforward — contribute
more than $4,000 and the excess deducts in future years until
used. Account owners age 70 or older may deduct
the full contribution in one year.

The per-account wording matters: separate accounts for
separate beneficiaries (or separate portfolios) each get their own
$4,000 annual deduction. The deduction only applies to Virginia's
own plan.

529 tax benefits in other states: NY · CA · NJ · OH · IL · FL — or use
the general 529 calculator.

#### How this calculator projects your plan

It runs two projections. First it grows your current balance and
monthly contributions at your expected return until the year
college begins, giving your projected balance.
Second, it inflates today's annual cost by your college-inflation
rate to each future school year and adds them up, giving the
projected total cost. Your funding percentage is
simply the first divided by the second.

#### Why college inflation matters so much

College costs have historically risen faster than general inflation
— often 4–6% a year. A $25,000 annual cost today becomes roughly
$52,000 in fifteen years at 5% inflation, and you'll pay that for
four straight years. That's why starting early is decisive: the
same monthly contribution invested when your child is a toddler has
fifteen-plus years to compound, versus just a few if you wait.

#### You don't have to fund 100%

Fully funding college from a 529 is a stretch for many families,
and that's fine. Financial aid, scholarships, a student's own
earnings, and current income during the college years all help. A
common strategy is to target a realistic share — say half or
two-thirds — and cover the rest from cash flow and aid. Use the
required-contribution figure as your ceiling, then aim for a share
that fits your budget.

#### Frequently asked questions

##### How much can I deduct for 529 contributions in Virginia?

Up to $4,000 per account per year from Virginia taxable income, with unlimited carryforward of amounts above that — and account owners age 70+ can deduct the full contribution at once. Only Virginia's Invest529 qualifies.

##### Does the Virginia deduction apply per account or per person?

Per account. Multiple accounts — for different beneficiaries or different portfolios — each carry their own $4,000 annual deduction limit, which is a common way Virginia families deduct more than $4,000 in a year.

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### What return should I assume for a 529?

It depends on your investments and time horizon. Age-based 529
portfolios start stock-heavy and shift toward bonds as college
nears, so a long-dated account might assume 6–7% while one close
to enrollment assumes less. A moderate 5–6% is a reasonable
planning figure; lower it as college approaches.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

529 College Savings Calculator
The national version, without the state tax break.

Florida 529 Calculator
No state income tax — what that changes.

California 529 Calculator
The CA deduction question, answered.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

Savings Rate & FI Calculator
Balance college saving against your own goals.

401(k) vs IRA vs Roth vs HSA
How tax-free growth compares across every account type.

#### Fit college into your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Annuity Calculator: How Much Does an Annuity Pay a Month?
URL: https://planomy.net/calculators/annuity-payout
Summary: Free annuity payout calculator, no sign-up. Enter a premium, rate and term for the monthly income an immediate annuity buys — a fixed term, or for life.

Free annuity payout calculator

### How much does an annuity pay each month?

A $250,000 premium at 5% over 20 years pays about $1,650 a
month. Enter your own premium, rate and term below for the
monthly income it buys — guaranteed for a fixed period, or a
lifetime-income scenario stretched to the age you expect to reach.
Runs in your browser; nothing is uploaded.

##### How the payout is calculated

- Income comes from the standard annuity payment formula: the premium is spread across every payment so that the balance, growing at the rate you enter, is exactly exhausted at the end of the period. Payment = P × i ÷ (1 − (1 + i)−N), where i is the per-period rate and N the number of payments.

- The fixed-term scenario runs for your chosen number of years and is guaranteed for that many years whether or not you're living. The life-expectancy scenario runs for the years from your current age to the life-expectancy age you enter.

- A single, level interest rate is applied throughout — no annual inflation adjustment. If the rate is 0%, income is simply the premium divided evenly across the payments.

- This models a self-funded schedule. A real life annuity pools mortality risk, so an insurer's lifetime quote can differ — it may pay more if you live long and stops if you don't.

An estimate for planning, not an insurance quote or financial
advice. Actual annuity payouts depend on the insurer, product
type, your age and gender, riders, and current rates. It ignores
fees and taxes — annuity income is often partly taxable. Compare
quotes from several highly rated insurers before you buy.

#### What is an annuity payout?

An annuity payout is the regular income an insurer pays you in
exchange for a lump-sum premium. With an immediate annuity, income
starts right away; with a deferred annuity, it starts later. The
size of each check depends on how much you put in, the interest
rate credited, how often you're paid, and how long the payments are
meant to last — a fixed number of years or the rest of your life.

#### Lifetime income annuity vs. fixed-term annuity

A lifetime income annuity — also sold as a
single-premium immediate annuity, or SPIA — pays for as long as
you live and stops at death. A fixed-term (or
period-certain) annuity pays for a set number of years and passes
anything left to your beneficiary. Set the term above to the
number of years you want covered, or to the gap between your age
now and the age you expect to reach, and the calculator will
price either one.

- Fixed-term payments last for a set number of years — say 10, 20, or 30. If you die before it ends, the remaining payments go to your beneficiary. The trade-off is that a fixed term can't protect you from outliving your money if you live longer than the term.

- Life annuity pays as long as you live, however long that is. It's true longevity insurance, but payments stop at death (unless you add an extra guarantee for a set period or a refund option), so an early death means a smaller total.

This calculator models both as self-funded schedules so you can
compare the income each one implies. A real life annuity pools
many people's mortality risk, which is why an insurer can sometimes
quote a higher lifetime payment than a pure do-it-yourself withdrawal
would support.

#### What drives the size of your check

- Premium: more money in means a larger check, proportionally.

- Interest rate: a higher credited rate lets each dollar stretch further, raising the payment.

- Length: the longer the payout period, the smaller each individual check, because the same premium is spread thinner.

- Frequency: monthly checks are smaller than annual ones, but you get twelve of them a year.

#### Estimated monthly annuity payouts by premium and term

At a level 5% credited rate, the standard payout formula produces
these pre-tax monthly amounts. The 25-year column is the
self-funded equivalent of stretching income from age 65 to 90:

| Premium
| 10-year term
| 20-year term
| 25-year term

| $100,000
| $1,061/month
| $660/month
| $585/month

| $250,000
| $2,652/month
| $1,650/month
| $1,461/month

| $500,000
| $5,303/month
| $3,300/month
| $2,923/month

These are formula estimates, not insurer quotes. A true life-only
immediate annuity pools mortality risk and may quote a different
payment; joint-life, period-certain, refund, and inflation riders
generally reduce the starting check.

#### A worked example: $250,000 over 20 years

Run the numbers this page loads with — a $250,000 premium, a 5%
credited rate, monthly payments, a 20-year term:

- The monthly payment works out to about $1,652, or $19,825 a year.

- Over the full 240 payments that is roughly $396,500 — about $146,500 of it credited interest, and the rest your own $250,000 handed back a slice at a time.

- The annual income is 7.9% of the premium, even though the annuity only credits 5%. That gap is not extra return; it is your principal being consumed.

That last point is the single most misread number in annuity
marketing. A "7.9% payout rate" is not a 7.9% yield, and comparing
it against a 4% portfolio withdrawal rate is comparing two
different things — the annuity is deliberately spending itself to
zero, while a 4% rule is designed to leave the principal standing.

#### Payout options, and what each one costs you

When you annuitise, you pick a payout shape. Each layer of
protection lowers the monthly check, because the insurer is taking
on more:

- Life only — the largest payment. Income stops the day you die, even if that's the month after you buy.

- Life with period certain (commonly 10 or 20 years) — pays for life, but if you die inside the guaranteed period the remaining payments go to your beneficiary.

- Cash or installment refund — pays for life and guarantees your beneficiary receives at least the unpaid balance of your premium.

- Joint and survivor — pays while either spouse lives, usually with the survivor's benefit set at 100%, 75%, or 50%. A joint quote is meaningfully lower than a single-life one because it covers two lifetimes.

- Period certain only — the fixed-term scenario this calculator models. It pays a set number of years to you or your beneficiary, and provides no protection at all against outliving it.

#### How annuity income is taxed

- Bought with after-tax money (a non-qualified annuity), each payment is split by an exclusion ratio: the share representing your original premium comes back tax-free, and the rest is taxable interest. Once you've recovered the whole premium — typically around your life expectancy — every later payment is fully taxable.

- Bought inside an IRA or 401(k), the whole payment is ordinary income, exactly as any other withdrawal from that account would be.

- No capital-gains treatment. Annuity gains are always ordinary income, which is a real cost compared with holding the same money in a taxable brokerage account.

- It counts against other thresholds. Taxable annuity income raises the provisional income that determines how much of your Social Security is taxed, and the MAGI that sets your Medicare IRMAA surcharge two years later.

- Before 59½, the taxable portion of a withdrawal from a deferred annuity generally carries a 10% penalty on top of income tax.

#### What to check before you buy

- Shop at least three insurers. Quotes for identical single-premium immediate annuities routinely differ by 5–10% for the same money — that difference is permanent and compounds over every payment.

- Check the insurer's financial strength rating. An annuity is a promise, and it is only as good as the company making it.

- Know your state guaranty association limit. Coverage exists if an insurer fails, but it is capped — commonly around $250,000 of present value of annuity benefits, varying by state. Splitting a large premium across two insurers is a standard response.

- Ask about surrender charges on deferred products. They typically start high and decline over 5 to 10 years, with a free-withdrawal allowance of around 10% a year.

- Decide about inflation up front. A cost-of-living-adjusted annuity starts with a visibly smaller check and catches up later. A level check loses roughly a third of its purchasing power over 20 years at 2% inflation.

- Consider a QLAC if RMDs are the problem. A qualified longevity annuity contract bought inside an IRA can defer income to as late as age 85, and the premium is excluded from the balance used to compute your required minimum distributions. SECURE 2.0 caps the premium at $200,000, indexed for inflation.

#### The mistakes that cost the most

- Reading the payout rate as a return. See the worked example — most of an annuity check is your own money coming back.

- Annuitising everything. Once the premium is handed over it is generally irreversible and illiquid. Covering essential expenses and keeping the rest invested is the common compromise.

- Buying level income and forgetting inflation. The check that felt comfortable at 65 buys noticeably less at 85.

- Ignoring Social Security first. Delaying Social Security to 70 buys inflation-adjusted, government-backed lifetime income at a rate no commercial annuity matches. It is usually the cheapest longevity insurance available.

- Not naming a beneficiary structure. A life-only payout that ends in year two is a real outcome; period-certain or refund options exist precisely for that.

#### Is an annuity right for you?

Annuities can be a good fit if you want predictable income you
can't outlive and you value that certainty over liquidity and
growth. They're less compelling if you need access to the lump sum,
want to leave it to heirs, or can cover your essential expenses
from Social Security and a pension already. Many planners suggest
buying an annuity with only the portion of savings needed to cover essential
costs, and keeping the rest invested. Weigh it against a systematic
withdrawal plan using our
retirement drawdown calculator.

#### Frequently asked questions

##### How much do annuities pay out per month?

As a rule of thumb, an immediate annuity bought at 65 pays out
roughly 6% to 7% of the premium each year for life — about $500
to $580 a month per $100,000, or $5,000 to $5,800 a month on a
$1 million premium. Buying older raises the payout rate because
the insurer expects to pay for fewer years; buying younger, or
adding a survivor or inflation rider, lowers it. Enter your own
premium, rate and term above for the figure that matches your
situation rather than the average.

##### What is a lifetime income annuity?

It is an annuity that pays a guaranteed income for as long as
you live, however long that turns out to be — the reason it is
sometimes called longevity insurance. You hand over a lump sum
and the insurer takes on the risk that you outlive your money.
The trade-off is liquidity: the premium is generally not
yours to take back, and with a life-only payout the income
stops at death unless you pay for a period-certain or refund
option. To model one here, set the term to the number of years
between your age now and the age you expect to reach.

##### How much does a $250,000 annuity pay per month?

It depends on the rate and length. Spread over a 20-year
fixed-term payment period at a 5% credited rate, a $250,000 premium
supports roughly $1,650 a month. A shorter term or higher rate
pays more per check; a longer term pays less. Use the calculator
to match your own numbers.

##### How much does a $500,000 annuity pay per month?

Roughly double the $250,000 figure, because payments scale with
the premium: about $3,300 a month over a 20-year term at a 5%
credited rate, or about $2,900 a month if the same premium has
to stretch from 65 to 90. A real life-only quote from an insurer
can be higher, because it pools mortality risk across many
buyers. Enter $500,000 above to see it against your own age and
rate.

##### What is the difference between the interest rate and the payout rate?

The interest rate is what the annuity credits to the unpaid
balance each year. The payout rate is the annual income as a
percentage of your premium, and it's always higher than the
interest rate because each check also returns part of your
principal. This tool takes the interest rate and derives the
payout for you.

##### Will my annuity income keep up with inflation?

Not unless you buy an inflation-adjusted annuity, which
starts with smaller payments that rise over time. This calculator
models level payments, so remember that a fixed check loses
purchasing power each year. Our
inflation impact calculator
shows how much.

##### Is annuity income taxable?

Usually, in part. If you bought the annuity with after-tax money,
each payment is split into a tax-free return of the money you originally put in and
taxable interest. Annuities held inside an IRA or 401(k) are
generally fully taxable as ordinary income. This calculator shows
pre-tax income.

##### What happens to the money if I die early?

With a fixed-term annuity, any remaining guaranteed payments
pass to your beneficiary. With a straight life annuity, payments
normally stop at death unless you added a refund or
fixed-period option, which lowers the monthly amount in exchange
for that protection.

Retirement Drawdown Calculator
Compare an annuity with drawing down your own savings.

Social Security Claiming Age Calculator
The cheapest inflation-adjusted lifetime income there is.

Pension: Lump Sum or Monthly?
The same annuitise-or-invest decision, on your pension.

Inflation Impact Calculator
See how a level payout loses purchasing power over time.

The Bucket Strategy for Retirement Income
How guaranteed income fits a three-bucket retirement.

How Much Does a $500k Annuity Pay?
The payout table from $50,000 to $2 million, by term and rate.

What Is a Safe Withdrawal Rate?
The alternative to annuitising: spending a portfolio safely.

#### Find out how much income you actually need first

The right annuity size is whatever covers the spending Social
Security doesn't. Planomy builds the full picture — spending,
Social Security timing, taxes, and what's left for the portfolio to
carry — so you can size the premium against a real gap instead of
guessing. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Long-Term Capital Gains Tax Calculator: Free, 2026
URL: https://planomy.net/calculators/capital-gains-tax
Summary: Free capital gains tax estimator, no sign-up: the 2026 long-term 0%, 15% and 20% brackets stacked on your income, short-term rates, and the 3.8% NIIT.

Free 2026 capital gains tax calculator

### How much capital gains tax will I pay?

Federal tax on a sale depends on two things: how long you held the
asset, and how much other income you already have. Enter your filing
status, taxable income, gain, and holding period to see the 2026
federal tax on that gain — with the long-term 0%, 15%, and 20%
brackets stacked on top of your income so you can see exactly which
slice falls at which rate, plus the 3.8% net investment income
surtax where it applies. Everything runs in your browser; nothing is
uploaded.

A simplified estimate of federal tax only, not
tax advice. It uses 2026 bracket thresholds and treats your entry
as taxable income after deductions. It does not include state or
local taxes, the alternative minimum tax, the qualified small
business stock exclusion, collectibles (28%) or unrecaptured
§1250 (25%) rates, capital-loss carryovers, the interaction with
credits and phase-outs, or how the gain itself can change other
parts of your return. Confirm with a tax professional before
acting.

#### How capital gains tax works

A capital gain is the profit when you sell an asset — stock, a
fund, crypto, or property — for more than you paid. The federal
tax on that gain depends on two things: how long you held
the asset and how much total income you
have.

- Short-term gains (assets held one year or less) are taxed as ordinary income — the same brackets as your wages, stacked on top of your other income.

- Long-term gains (held more than one year) get preferential rates of 0%, 15%, or 20%, depending on where your total taxable income lands.

#### Start with the correct gain, not the sale price

The gain input is net sale proceeds minus adjusted cost
basis. Net proceeds are what remains after selling costs.
Adjusted basis starts with what you paid and adds purchase fees,
reinvested distributions, and qualifying improvements. A stock
sale could look like this:

| Step
| Amount
| Running figure

| Sale price
| $85,000
| $85,000 proceeds

| Less selling commission
| −$500
| $84,500 net proceeds

| Original purchase
| $50,000
| $50,000 basis

| Purchase fee + reinvested distributions
| +$4,500
| $54,500 adjusted basis

| Capital gain
| $84,500 − $54,500
| $30,000

Enter $30,000 — not the $85,000 sale price — in the calculator.
First net all realised gains and losses for the tax year and apply
any capital-loss carryover. Tax year matters: this
tool uses 2026 thresholds and should not be used to calculate a
sale reported on a 2024 or 2025 return.

#### 2026 long-term capital gains brackets

The thresholds below are on your total taxable
income — ordinary income plus the gain — not on the gain
alone. These are the figures this calculator uses.

| Filing status
| 0% rate
| 15% rate
| 20% rate

| Single
| Up to $49,450
| $49,450 – $545,500
| Over $545,500

| Married filing jointly
| Up to $98,900
| $98,900 – $613,700
| Over $613,700

| Head of household
| Up to $66,200
| $66,200 – $579,600
| Over $579,600

A short-term gain gets none of this. It is taxed
at your ordinary rate — 10%, 12%, 22%, 24%, 32%, 35%, or 37% in
2026 — which is why the single most valuable move available on a
profitable position is often simply waiting until the one-year
mark passes.

#### The "stacking" rule

Long-term gains sit on top of your ordinary income when
deciding which capital-gains rate applies. Your ordinary income
fills the bottom brackets first; the gain is then layered above
it. That's why the same $20,000 gain can be taxed at 0% for a
low-income seller and 15% or 20% for a higher earner — and why a
single gain can be split across two rates if it straddles a
threshold. This calculator shows exactly how much of your gain
falls in each bracket.

#### Three worked examples

All three are single filers selling in 2026, with taxable income
measured after deductions:

- $80,000 income, $20,000 long-term gain. Total taxable income is $100,000 — above the $49,450 0% cap, below the 15% ceiling. The whole gain is taxed at 15%: $3,000. MAGI is under $200,000, so no NIIT.

- $30,000 income, $30,000 long-term gain. The gain stacks from $30,000 to $60,000. The first $19,450 of it fits under the $49,450 cap and is taxed at 0%; the remaining $10,550 is taxed at 15%, for $1,583 total — an effective rate of just 5.3% on the gain.

- $250,000 income, $100,000 long-term gain. All $100,000 sits in the 15% band: $15,000. But MAGI of $350,000 is $150,000 over the NIIT threshold, so the full gain also attracts the 3.8% surtax: $3,800. Total $18,800, an effective 18.8%.

The middle case is the one worth internalising. Two people with the
same $30,000 gain can pay $0 or $6,000 depending purely on what
else was on their return that year — which is why realising gains
is a timing decision, not just a market one. If you want the whole
method rather than the answer, our guide to
how capital gains tax is calculated
walks the four steps — basis, holding period, stacking, rate — with
the 2026 bracket tables.

#### Rates that aren't 0/15/20

A few asset classes are carved out of the standard long-term rates.
This calculator doesn't model them, so check whether one applies
before relying on the number above:

- Collectibles — art, coins, precious metals, and most physically-backed metal ETFs — are capped at 28% rather than 20%.

- Unrecaptured Section 1250 gain on depreciated real estate is taxed at up to 25%, covering the depreciation you previously deducted.

- Qualified small business stock under Section 1202 can be partly or wholly excluded from tax if the holding-period and issuer tests are met.

- Your primary residence qualifies for an exclusion of up to $250,000 of gain (single) or $500,000 (married filing jointly) if you owned and lived in it for two of the last five years. Only the gain above the exclusion is taxable — enter that figure, not the whole profit.

#### The 3.8% Net Investment Income Tax (NIIT)

On top of the regular capital-gains tax, a 3.8%
surtax applies to investment income — including capital
gains — once your modified adjusted gross income (MAGI) exceeds
$200,000 (single or head of household) or
$250,000 (married filing jointly). The 3.8%
applies to the smaller of your net investment income or the amount
of MAGI above the threshold. These thresholds are set by statute
and are not adjusted for inflation, so more taxpayers
cross them over time.

#### Methodology

This tool hardcodes the 2026 federal bracket
thresholds for ordinary income, long-term capital gains, and the
NIIT (see the clearly-labeled data object in the page source). For
a short-term gain it computes ordinary tax on
your income with and without the gain and takes the difference —
the true marginal cost of the gain. For a long-term
gain it stacks the gain above your ordinary income and applies the
0/15/20% rate to each slice that falls in each bracket. NIIT is
then added where applicable. We treat your entered income as
taxable income (after deductions) and use total taxable income as
a proxy for MAGI — a reasonable approximation for most people, but
not identical to a full return.

#### Ways to manage the tax

- Hold for more than a year when you can. The clock starts the day after you acquire the asset, and crossing it can move the same gain from 24% to 15%.

- Harvest gains in low-income years — the gap between retiring and claiming Social Security is the classic window, because it can put a slice of gain in the 0% bracket permanently.

- Tax-loss harvesting — realised losses offset realised gains dollar-for-dollar, and up to $3,000 of net loss can offset ordinary income each year. Anything beyond that carries forward indefinitely, with no expiry.

- Watch the wash-sale rule. Buy a "substantially identical" security within 30 days before or after selling at a loss and the loss is disallowed — it's added to the basis of the replacement instead. It applies across your accounts, including an IRA, and to a spouse's purchases.

- Pick your cost basis method. Selling specific lots you identify at the time of the trade usually beats the broker's default of first-in, first-out — it lets you sell high-basis shares and realise a smaller gain.

- Donate appreciated shares held over a year instead of cash: you generally deduct the full market value and never realise the gain at all.

- Hold to death for the step-up. Inherited assets generally take a basis equal to their value at the date of death, which erases the unrealised gain entirely.

- Mind the cliffs. A large gain can trip the 3.8% NIIT, push you over an IRMAA threshold that raises Medicare premiums two years later, and phase out credits — none of which show up in the headline capital-gains rate.

#### The mistakes that cost the most

- Selling in December instead of January. A gain realised on 31 December lands in this year's income; one day later it lands in next year's — often at a different rate and with a full year to plan around it.

- Forgetting reinvested dividends. Every reinvested distribution bought shares and added to your basis. Ignoring them means paying tax twice on the same money.

- Treating the marginal rate as the whole answer. A gain that pushes you over a NIIT or IRMAA threshold can cost far more than 15% at the margin.

- Triggering a wash sale by accident — most often via automatic dividend reinvestment in the same fund, or by buying the replacement in an IRA where the loss is lost for good.

- Assuming the state follows federal. Most states tax capital gains as ordinary income with no preferential rate, so a 15% federal bill can be 20%+ all in.

#### Frequently asked questions

##### What's the difference between short- and long-term capital gains?

Holding period. If you owned the asset one year or less, the gain
is short-term and taxed at your ordinary income rate. If you held
it more than a year, it's long-term and taxed at the lower
0%/15%/20% rates. The one-year clock starts the day after you
acquire the asset.

##### How do I calculate my capital gain before estimating the tax?

Subtract adjusted cost basis from net sale proceeds. Net proceeds
are the sale price after selling costs; adjusted basis is usually
what you paid plus purchase fees, reinvested distributions, and
qualifying improvements. Then net realised gains against realised
losses and any loss carryover. Enter the remaining gain here, not
the sale price.

##### Can my long-term capital gains really be taxed at 0%?

Yes. If your total taxable income (including the gain) stays
below the 0% threshold for your filing status, that portion of
the gain is taxed at 0% federally. Because gains stack on top of
ordinary income, only the slice that fits under the threshold
qualifies — anything above it moves to 15%.

##### What is the 3.8% NIIT and when does it apply?

The Net Investment Income Tax is a 3.8% surtax on investment
income once your MAGI exceeds $200,000 (single/head of household)
or $250,000 (married filing jointly). It applies to the lesser of
your net investment income or the amount of income above the
threshold, and it stacks on top of the regular capital-gains tax.

##### Does this include state taxes?

No. This calculator estimates federal tax only. Most states tax
capital gains as ordinary income, and a few have no income tax at
all, so your total bill can be meaningfully higher depending on
where you live.

##### What is the capital gains tax rate for 2026?

For long-term gains, 0%, 15%, or 20% federally, decided by your
total taxable income including the gain. In 2026 a single filer
pays 0% up to $49,450, 15% from there to $545,500, and 20% above
that; for married filing jointly the breakpoints are $98,900 and
$613,700. Short-term gains have no preferential rate — they're
taxed at your ordinary bracket, up to 37%.

##### Is selling a home taxed the same way?

Not quite. A primary residence qualifies for a capital-gains
exclusion of up to $250,000 (single) or $500,000 (married filing
jointly) if you meet the ownership and use tests, so only the gain
above the exclusion is taxable. This tool doesn't model that
exclusion — enter only the taxable portion of a home sale.

Withdrawal Order Calculator
Which account to sell from first to keep the tax bill down.

The Roth Conversion Ladder, Explained
Conversion income stacks under your gains and can push them out of the 0% bracket.

Roth Conversion Calculator
Compare the tax on a conversion with the tax on a gain.

Medicare IRMAA Calculator
Check whether the gain pushes you into a premium surcharge.

Take-Home Pay Calculator
See the ordinary income the gain stacks on top of.

Which Accounts to Draw Down First
The order that keeps lifetime capital-gains tax low.

#### Find the years where this gain is free

A gain costs 0% or 20% depending entirely on what year you realise
it in. Planomy projects your taxable income year by year — through
retirement, Roth conversions, Social Security, and RMDs — so you
can see which years have room under the 0% bracket before you
sell. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## CD Ladder Calculator: Free Rung, APY and Maturity Table
URL: https://planomy.net/calculators/cd-ladder
Summary: Free CD ladder calculator, no sign-up. $25,000 in a 5-rung ladder at 4.25% APY earns $3,374 of interest — get every maturity date and what each rung pays.

Free certificate-of-deposit ladder calculator

### CD ladder calculator: interest, rungs and maturity dates

$25,000 split into five rungs a year apart at 4.25% APY earns
$3,374 of interest and grows to $28,374, with a certificate
maturing every twelve months. Enter your own total, number of rungs,
spacing and APY below to get the whole schedule — the amount per
rung, every maturity date, and exactly what each certificate pays.
Everything runs in your browser; nothing is uploaded.

##### How the ladder is built

- The total is divided equally across the rungs. Rung 1 matures after one spacing period, rung 2 after two, and so on, so the longest rung's term is rungs × spacing.

- Interest uses the annual percentage yield (APY) you enter, compounded once per year to maturity: value = amount invested × (1 + APY)years. APY already includes compounding.

- A single APY is applied to every certificate. In practice, longer terms may pay a different rate — check current offers for each term.

- Maturity dates count forward in whole months from today; interest assumes you hold each CD to maturity without early withdrawal.

An estimate for planning, not a rate quote or financial advice. It
ignores early-withdrawal penalties, taxes on interest (CD interest
is taxable the year it's credited), and rate changes when you
reinvest a matured rung. Confirm each term's APY with your bank or
credit union.

#### What is a CD ladder?

A CD ladder is a set of certificates of deposit with staggered
maturity dates. Instead of locking your entire balance into one
term, you divide it into equal "rungs" — say five CDs maturing one
year apart. Each year a rung matures and you can either spend the
cash or reinvest it into a new long-term CD at the top of the
ladder. The ladder blends the higher yields of long CDs with the
regular access of short ones.

#### How to build a CD ladder, step by step

Laddering CDs takes five decisions, and the calculator above
turns them into a dated schedule:

- Decide how much to ladder. Use money you will not need at a moment's notice — a CD ladder is for known future spending, not your emergency fund.

- Choose the number of rungs. Five is the common default. More rungs mean a maturity comes round more often; fewer rungs mean each one is larger.

- Choose the spacing. Twelve months between rungs gives you one maturity a year; three or six months gives you access far more often at a slightly lower average yield.

- Split the money evenly and buy the terms. With five rungs a year apart you buy a 1-year, 2-year, 3-year, 4-year and 5-year CD on day one, each holding a fifth of the total.

- Roll each maturing rung into a new longest-term CD. After one full cycle every rung is a 5-year CD earning the longest-term rate, but one still matures every year.

Enter your total, rungs, spacing and APY above to see the amount
per rung, every maturity date, and what each certificate pays.

#### How much interest does a CD ladder earn?

More than a single short CD and less than a single long one —
because the rungs sit at every term in between. Take the default
$25,000 across five rungs a year apart at 4.25% APY. Each rung holds
$5,000 and compounds to its own maturity:

- Rung 1, 1 year — $212.50 of interest, $5,212.50 at maturity

- Rung 2, 2 years — $434.03, $5,434.03

- Rung 3, 3 years — $664.98, $5,664.98

- Rung 4, 4 years — $905.74, $5,905.74

- Rung 5, 5 years — $1,156.73, $6,156.73

Total interest: $3,373.98, or 13.5% of the original
$25,000 across the whole five-year cycle. Rung 5 alone earns more
than five times what rung 1 does, which is the entire argument for
having long rungs at all — and the reason the standard move is to
roll every maturing rung back into a new longest-term CD.

The rate does the rest of the work. The same ladder at 4.00% APY
earns $3,164.88 and at 5.00% earns $4,009.56 — a single percentage
point is worth $845 over the cycle, which is why it
is worth shopping each term rather than taking one bank's whole
menu.

#### Building a 10-year CD ladder

A ten-rung, one-year-spacing ladder is the long version of the same
idea: a certificate matures every year for a decade, and once the
cycle completes every rung is a ten-year CD earning the top of the
curve. $50,000 across ten rungs at 4.25% APY earns
$13,312 in total and grows to $63,312 — 26.6% of
the original amount, roughly double the five-rung return on the same
per-rung amounts, because the later rungs compound for twice as long.

The trade is commitment. Rung 10 is locked for a decade, and
ten-year CDs are not always offered or competitively priced. In
practice many savers cap the ladder at five to seven years and treat
anything longer as a bond allocation instead. Set the rungs to 10 and
the spacing to 12 above to see the full ten-year schedule.

#### A short ladder for cash you might actually need

Spacing does not have to be annual. Four rungs three months apart
turns $20,000 into a schedule where something matures every quarter:
$52.30, $105.14, $158.54 and $212.50 of interest, $528.49 in total
over the first year. That is far less than a five-year ladder earns,
but every dollar is reachable within ninety days without a penalty —
which is what makes a short ladder a reasonable home for the back
half of an
emergency
fund.

#### Why build a ladder instead of one big CD?

- Liquidity without penalty. A rung matures on a predictable schedule, so you reach some of your money regularly without paying an early-withdrawal penalty.

- Rate protection. Because you're always reinvesting a rung, you're never fully locked in when rates rise — and you keep some long-term yield when rates fall.

- Steady income. Retirees often ladder CDs so a chunk matures each year to cover expenses.

#### How to reinvest a maturing rung

The classic move is to reinvest each maturing rung into a new CD at
the longest rung of your ladder. After a full cycle, every
rung is a long-term CD (capturing the best rate), yet one still
matures every spacing period. If you'd rather keep the ladder short
— for an emergency reserve, say — just choose a shorter spacing and
fewer rungs.

#### CD ladder vs. a high-yield savings account

A high-yield savings account keeps every dollar liquid but its rate
can change any day. A CD locks your rate for the term, which is
valuable when you expect rates to fall, but ties the money up. A
ladder is the middle path: most of your balance earns locked CD
rates while a portion frees up on schedule. Many savers pair a
small savings buffer with a CD ladder for the rest.

#### Frequently asked questions

##### How much interest does a CD ladder earn?

It depends on the amount, the rates and how long the rungs run.
$25,000 in five rungs a year apart at 4.25% APY earns $3,373.98
over the full five-year cycle — $212.50 from the one-year rung up
to $1,156.73 from the five-year one. A ten-rung version of the same
per-rung amount, $50,000 total, earns $13,312 because the later
rungs compound for twice as long.

##### Do I need a CD ladder spreadsheet?

No. A spreadsheet is only tracking four things per rung — amount,
term, maturity date and interest — and this page generates all of
them, including the dates, from the amount and APY you enter. Copy
the schedule into a sheet if you want a permanent record, but the
arithmetic does not need one.

##### How does a CD ladder work?

You split your money into equal amounts and buy CDs with
staggered terms — for example five CDs maturing one, two, three,
four, and five years out. As each shorter CD matures you reinvest
it into a new longest-term CD, so you always have one maturing
soon while the rest earn higher long-term rates.

##### How many rungs should a CD ladder have?

It depends on your goal. A common setup is five rungs spaced a
year apart, but you can build anywhere from two to ten. More
rungs smooth out access and rate changes; fewer rungs are simpler
to manage. Shorter spacing (such as three or six months) gives you
access more often but usually at lower rates.

##### Is CD interest taxable?

Yes. Interest credited on a CD is taxable as ordinary income in
the year it's earned, even if you don't withdraw it, and your bank
reports it on a 1099-INT. Holding CDs inside an IRA can defer or
avoid that tax. This calculator shows pre-tax interest.

##### What happens if I withdraw from a CD early?

Most CDs charge an early-withdrawal penalty — commonly a few
months to a year of interest — if you cash out before maturity.
That's the whole point of a ladder: with a rung maturing on
schedule, you rarely need to break a CD early to reach cash.

Emergency Fund Calculator
Size the cash reserve a CD ladder can help hold.

Compound Growth Calculator
See how reinvested interest compounds over time.

Inflation Impact Calculator
Check whether your CD yield keeps up with inflation.

The Bucket Strategy for Retirement Income
Why a cash bucket exists and how many years it should hold.

Sequence of Returns Risk
Why the first few years of withdrawals decide the rest.

#### Fit your cash plan into the bigger picture

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## 529 College Savings Calculator: Free Growth Projection
URL: https://planomy.net/calculators/college-savings-529
Summary: Free 529 plan calculator, no sign-up: four-year college costs the year your child enrolls, what your 529 grows to by then, and the monthly gap to close.

Free 529 plan calculator

### How much should I save in a 529 plan?

The honest answer is a number, not a rule of thumb — and it depends
on when your child enrolls, because the sticker price you see today
is not the price you will pay. Enter your child's age, what you have
saved, and what you add each month: this calculator inflates today's
annual cost to each future school year, projects your 529 balance to
the year college starts, and tells you the percentage you are on
track to cover and the monthly contribution that would fully fund
it. Everything runs in your browser — nothing is uploaded.

##### Assumptions

- Your balance grows at the return you enter, compounded monthly, and contributions continue until college starts, then stop.

- Projected cost is your current annual cost grown by the college-inflation rate to each future year, summed across the years you fund.

- Conservative timing: we compare your balance at college start to the full future cost, without crediting growth on the balance during the college years — so real-world funding is usually a bit easier than shown.

- Figures are in future (nominal) dollars. This tool doesn't model financial aid, scholarships, state tax deductions, or taxes/penalties on non-qualified withdrawals.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and college costs vary enormously between a
public in-state school and a private university. Treat the funding
percentage as a directional target, not a promise.

#### What is a 529 plan?

A 529 plan is a state-sponsored, tax-advantaged
account for education savings. You contribute after-tax dollars,
the money grows tax-free, and withdrawals are
tax-free when spent on qualified education
expenses. Roughly two-thirds of states with an income tax add a
deduction or credit for contributions on top of that.

#### A worked example: the gap most families don't see

Take the numbers this page loads with — a three-year-old, $10,000
already saved, $300 a month going in, a 6% return, a college that
costs $25,000 a year today, and 5% college inflation:

- Fifteen years of compounding turns $10,000 plus $300 a month into roughly $110,000 by the fall your child enrolls.

- But $25,000 a year inflated at 5% for fifteen years is about $52,000 for freshman year alone — and four years, each one more expensive than the last, totals roughly $224,000.

- That's about 49% funded. Closing the whole gap from here would take about $696 a month, not $300.

Nothing in that example is unusual, and that is the point. The
trap is anchoring on today's sticker price: a family that saves
"enough for $25,000 a year" is saving for less than half the bill.
Run your own numbers above before you decide what to contribute.

#### Monthly 529 savings by the child's age

Starting earlier matters more than finding a perfect fund. The
table holds every other input constant — no starting balance,
college begins at 18, $25,000 of annual cost today, four years to
fund, 5% college inflation, and a 6% annual return — and changes
only the child's current age:

| Child's age now
| Years to save
| Projected 4-year cost
| Monthly to fully fund

| Newborn
| 18
| $259,000
| $681

| 5
| 13
| $203,000
| $873

| 10
| 8
| $159,000
| $1,305

| 15
| 3
| $125,000
| $3,179

These are full-funding benchmarks, not recommended minimums. With
no starting balance, a 50% funding target is roughly half the
monthly figure; money already in the 529 reduces it further. Use
the calculator for your actual starting balance, school cost, and
target instead of treating the table as a universal answer.

#### What counts as a qualified expense

Tax-free withdrawals have to match qualified costs in the same
calendar year. Those include:

- Tuition and mandatory fees at any eligible college, university, community college, or vocational school — including many schools abroad.

- Room and board, capped at the school's published cost-of-attendance allowance, if the student is enrolled at least half-time. Off-campus rent qualifies up to that same allowance.

- Books, supplies, and required equipment, plus a computer, internet access, and software used primarily by the student while enrolled.

- Registered apprenticeship fees, books, supplies, and equipment.

- Student loan repayment — a lifetime cap of $10,000 per beneficiary, and a separate $10,000 for each of the beneficiary's siblings.

- K-12 tuition, subject to a federal annual cap per beneficiary (long set at $10,000; 2025 legislation raises that cap and widens the eligible K-12 costs starting in 2026 — confirm the current figure with your plan before withdrawing).

Transportation, health insurance, and student activity fees that
aren't required for enrollment do not qualify — a common
and expensive surprise in the first semester.

#### How much can you put in?

There is no federal annual contribution limit on a 529. Two other
limits do the work instead:

- The gift tax annual exclusion. Contributions are gifts to the beneficiary. In 2026 you can give $19,000 per beneficiary ($38,000 for a married couple splitting gifts) with no gift-tax filing.

- The five-year election. You can front-load five years of exclusions in one go — $95,000 per donor, or $190,000 for a couple, in 2026 — by electing to spread the gift over five years on a gift-tax return. Contributing early is what buys the compounding, so this is the single biggest lever grandparents have.

- The state aggregate limit. Each state caps the total balance per beneficiary, typically somewhere between about $235,000 and $600,000. Once you hit it, growth can continue but new contributions stop.

#### How the state tax deduction actually works

This is the part that varies most and gets described worst. The
mechanics:

- It's a state break, never federal. There is no federal deduction for 529 contributions.

- Most states require their own plan. A handful of "tax parity" states give the deduction for contributions to any state's 529; in the rest, contributing to an out-of-state plan forfeits the break entirely.

- It is usually capped per year, often somewhere between $2,000 and $10,000 of contributions per return, and a few states allow the full amount. Some states offer a credit rather than a deduction, which is worth the same dollars to every taxpayer instead of scaling with your bracket.

- What it's worth is the deductible contribution multiplied by your state marginal rate. A $10,000 deduction in a state with a 5% income tax saves $500 — real money, but an order of magnitude smaller than the tax-free growth on a plan funded early.

- Some states claw it back if you later take a non-qualified withdrawal or roll the account to another state's plan.

Nine states have no income tax at all, so there is nothing to
deduct — pick the plan with the lowest fees and best investment
lineup instead. See the state pages for
New York,
California,
New Jersey,
Virginia,
Ohio,
Illinois, and
Florida.

#### What happens if the money isn't needed

Over-funding used to be the main argument against a 529. It is much
weaker now:

- Change the beneficiary to a sibling, cousin, niece, nephew, grandchild — or yourself — with no tax consequence.

- Roll it to a Roth IRA for the beneficiary. Under SECURE 2.0 the lifetime cap is $35,000, the 529 must have been open at least 15 years, contributions made in the last 5 years (and their earnings) are ineligible, the beneficiary needs earned income, and each year's rollover counts against their annual IRA limit ($7,500 in 2026) — so it takes several years to move the full amount.

- Take a non-qualified withdrawal. Only the earnings portion is taxed, at the recipient's ordinary rate, plus a 10% penalty. If the student wins a scholarship, you can withdraw up to the scholarship amount with the penalty waived — the earnings are still taxed.

#### The mistakes that cost the most

- Saving against today's price. See the worked example above — at 5% inflation over fifteen years, the real bill is roughly double.

- Waiting for a "spare" budget. A dollar contributed at age two has sixteen years to compound; the same dollar at age fourteen has four. Starting small beats starting later.

- Staying stock-heavy into senior year of high school. Age-based portfolios glide toward bonds and cash for a reason — a 30% drawdown the spring before tuition is due cannot be recovered in time.

- Contributing to an out-of-state plan in a state that only rewards its own — you give up the deduction for nothing unless the fee difference is large.

- Funding college before retirement. Your child can borrow for tuition; nobody lends for retirement. If the two compete, the retirement plan usually has to win.

- Aiming at 100%. Aid, scholarships, the student's own earnings, and cash flow during the college years all count. Many families deliberately target a third to two-thirds and treat the rest as a live budget item.

#### Frequently asked questions

##### How much should I save in a 529 plan?

Enough that your projected balance covers the share of future
college costs you want to fund — many families aim for a third to
two-thirds, with aid and current income covering the rest. This
calculator shows the monthly contribution that would fully fund
your chosen number of years, which you can scale down to a target
you're comfortable with.

##### How much should I put in a 529 each month?

It depends on the child's age, what is already saved, the share
of college you want to cover, and the future cost. With no
starting balance, a newborn and a $25,000 annual cost today,
saving about $681 a month would fully fund four projected years
at the 5% inflation and 6% return assumptions used above. A
five-year-old needs about $873; use the calculator for your own
inputs rather than adopting either figure as a rule.

##### How much can I contribute to a 529 each year?

There is no federal annual limit. In practice you're bounded by
the gift tax annual exclusion — $19,000 per beneficiary in 2026,
or $38,000 for a married couple — and by your state's aggregate
balance cap, typically somewhere between about $235,000 and
$600,000 per beneficiary. The five-year election lets you
front-load five exclusions at once, $95,000 per donor in 2026.

##### Can I roll unused 529 money into a Roth IRA?

Yes, within limits set by SECURE 2.0: a $35,000 lifetime cap per
beneficiary, the 529 must have been open at least 15 years,
contributions from the last 5 years and their earnings are
ineligible, the beneficiary needs earned income, and each year's
rollover counts against their annual IRA contribution limit
($7,500 in 2026). So it works, but it takes several years to move
the full amount.

##### What college cost inflation rate should I use?

College costs have historically risen faster than general
inflation — commonly 4% to 6% a year, though recent increases
have moderated at many schools. Using around 5% is a sensible
middle-ground assumption; a pricey private school may warrant a
higher rate.

##### What happens to leftover 529 money?

Unused funds can be kept for graduate school, changed to another
eligible family member as beneficiary, or, under current rules,
rolled over to a Roth IRA for the beneficiary up to a lifetime
limit (subject to conditions). Non-qualified withdrawals are taxed
on the earnings and hit with a 10% penalty, so it pays not to
dramatically over-fund.

##### Does a 529 hurt financial aid?

A parent-owned 529 is treated as a parental asset on the FAFSA,
which counts at a low rate (up to about 5.64%), so its impact on
aid is modest — far smaller than the benefit of the tax-free
growth for most families. Qualified withdrawals no longer count as
student income under current rules.

Compound Growth Calculator
See how contributions compound before college.

Inflation Impact Calculator
Watch how rising costs erode a fixed savings target.

CD Ladder Calculator
Ladder the tuition money you need within the next few years.

Savings Rate & FI Calculator
Balance college saving against your own goals.

Investment Fee Impact Calculator
What your 529's expense ratio costs over fifteen years.

How Much Will a 529 Grow?
Balances after 10, 15 and 18 years, by contribution and return.

401(k) vs IRA vs Roth vs HSA
Where college savings sits among your tax-advantaged accounts.

How Much Do You Need to Retire?
The goal that has to come first if the two compete.

#### See what college costs your retirement

College saving competes with the one goal you can't borrow for.
Planomy carries this contribution into a full retirement
projection — with taxes, Social Security, and side-by-side
scenarios — so you can see what four years of tuition does to your
own finish line before you commit to the number. Free, private,
and running in your browser.

Open the planner

Browse all calculators

---

## Compound Interest Calculator: Growth Year by Year
URL: https://planomy.net/calculators/compound-growth
Summary: See what a starting balance plus monthly contributions becomes, and how much of the final total is money you put in versus money compounding made for you.

Free calculator

### Compound Growth Calculator

See how an initial investment plus steady monthly contributions grow
over time — and how much of your ending balance is money you put in
versus money the market made for you. Everything runs in your
browser; nothing is uploaded.

Ending balance

$0

Total contributed

$0

Investment growth

$0

Contributions
Growth

Balance over time

A simplified approximation for planning intuition, not financial
advice. Assumes a constant annual return every year, which real
markets do not provide.

Open the full planner

| Year
| Contributed
| Growth
| Balance

#### How compound growth works

Compound growth is the reason a modest, consistent investing habit
can turn into a substantial nest egg. When your money earns a return,
that return is added to your balance — and in the next period, you
earn a return on the larger balance, including on the gains you
already made. Growth builds on growth. Given enough time, the curve
stops looking like a gentle slope and starts to bend sharply upward.

The engine behind it is simple. If you invest an amount and it earns
an annual return, after one year you have your original amount plus
that year's gain. Leave it invested and the second year's gain is
calculated on that new, higher total. Repeat this over decades and
the effect is dramatic: the majority of a long-term portfolio's final
value is typically growth, not the contributions themselves.
This calculator makes that split explicit so you can see exactly how
much of your ending balance you contributed versus how much the market
compounded on your behalf.

Three levers drive the outcome, and it helps to understand how each
one behaves:

-
Time is the most powerful input. Because
compounding is exponential, the last ten years of a long horizon
usually add far more dollars than the first ten. Starting earlier
beats contributing more later.

-
Rate of return compounds too. A seemingly small
difference — say 6% versus 8% — produces a large gap over 30 years.
A broad stock-market index has historically returned roughly 7% per
year after inflation, which is why 7% is a common planning default.

-
Contributions keep feeding the machine. Regular
monthly investing, sometimes called dollar-cost averaging, adds new
new money that then has its own runway to compound.

This tool uses an effective monthly rate derived from your annual
return, so contributions made partway through a year still earn a
fair share of that year's growth. With contributions turned off, the
math reduces to standard annual compounding — for example, $10,000
growing at 7% for 10 years reaches about $19,671. That is the plain
power of leaving money invested and letting it work.

#### Tips for getting the most from compounding

The biggest mistakes investors make are starting late, interrupting
their contributions, and reacting to short-term market swings by
selling. Compounding rewards patience and consistency. Automate your
monthly contribution so it happens without a decision, keep costs low
because fees compound against you the same way returns compound for
you, and give the plan enough time to let the exponential part of the
curve do its work.

#### Frequently asked questions

##### What return rate should I assume?

A diversified stock portfolio has historically returned around 7%
per year after inflation, or roughly 10% before inflation. Many
planners use 6–7% as a conservative long-term assumption. Bonds and
cash return less. Because future returns are uncertain, it is wise to
test a range rather than rely on a single optimistic figure.

##### Does it matter whether returns compound monthly or annually?

For long horizons the difference is small. This calculator applies
an effective monthly rate that compounds to exactly your stated
annual return over twelve months, which keeps contributions fair
without overstating the total.

##### Is this adjusted for inflation?

The result is in nominal dollars. If you enter a real (after-inflation)
return such as 5%, the ending balance is expressed in today's
purchasing power instead. Planomy's full app models inflation
explicitly across every year of your plan.

##### Are taxes included?

No — this is a pre-tax growth estimate. In a tax-advantaged account
like a 401(k) or IRA, growth compounds untaxed until withdrawal. In a
taxable brokerage account, dividends and realized gains are taxed
along the way, which slightly reduces compounding. Planomy accounts
for account types and taxes in its projections — see the
tax-aware withdrawal calculator.

#### Want the full picture?

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

See what's inside

#### Related calculators and guides

How Much Will a 529 Grow?
The same compounding, applied to a college account over 18 years.

Savings Rate & FI
Your savings rate and years to financial independence.

FIRE Number
The nest egg you need to retire early on the 4% rule.

Mortgage Payoff
How extra payments cut your mortgage term and interest.

Retirement Drawdown
How long your savings last at your planned spending.

How Much Do You Need to Retire?
Turn a projected balance into a real retirement target.

What Is a Safe Withdrawal Rate?
What that balance can safely pay you each year.

See all 37 calculators

---

## Debt Payoff Calculator: Snowball vs Avalanche Dates
URL: https://planomy.net/calculators/debt-payoff
Summary: Enter every debt once and get both payoff dates side by side, the total interest each method costs, and what an extra monthly payment takes off the finish line.

Free debt payoff calculator

### Snowball vs. avalanche: which pays off debt faster?

Two proven strategies attack debt in opposite orders. The
avalanche targets your highest interest rate first
to minimize interest paid; the snowball knocks out
your smallest balance first for quick, motivating wins. Enter your
debts and any extra monthly payment to see the payoff date and total
interest for each — and exactly what the difference costs. Everything
runs in your browser — nothing is uploaded.

A simplified projection, not financial advice. It assumes fixed
balances, fixed APRs, level minimum payments, and that your total
monthly payment (all minimums plus the extra) stays constant — so
as each debt is cleared, its payment rolls onto the next. It does
not model new charges, fees, promotional 0% periods that expire,
or minimum payments that change with the balance.

#### Debt snowball vs. debt avalanche

Both methods pay every debt's minimum each month and throw all
spare cash at one target debt. When that debt is gone, its payment
"rolls over" to the next target, so your payoff accelerates. The
only difference is which debt you target first:

- Avalanche: highest interest rate first. This mathematically minimizes total interest and usually clears all debt soonest.

- Snowball: smallest balance first. You eliminate individual debts quickly, which builds momentum and motivation even if it costs a little more interest.

#### Which method should you choose?

If your debts have wildly different interest rates — say a 24%
credit card next to a 6% student loan — the avalanche can save
real money and is the clear pick. If your balances and rates are
similar, the two methods finish close together, and the snowball's
psychological wins can be worth more than the small interest
difference. The best method is the one you'll actually stick with.

#### Why an extra payment matters so much

Minimum payments are designed to keep you in debt for years. Even
a modest extra amount each month — applied consistently to one
debt at a time — can cut your payoff timeline dramatically and
save thousands in interest, because every extra dollar goes
straight at principal instead of feeding next month's interest.
Try changing the extra payment above and watch both the payoff
date and total interest move.

#### Tips to pay off debt faster

- List every debt with its balance, APR, and minimum so nothing hides.

- Always pay at least the minimum on every debt to protect your credit.

- Send every spare dollar to a single target debt, not spread thin.

- Roll each cleared payment onto the next debt — don't absorb it back into spending.

- Consider pausing investing beyond any employer match while attacking very high-interest debt.

#### Frequently asked questions

##### Does the avalanche always save the most money?

In pure interest terms, yes — targeting the highest APR first
minimizes the interest you pay and usually clears all debt at
least as fast as the snowball. The snowball can tie or come very
close when balances are similar, and it wins on motivation by
eliminating whole debts sooner.

##### How does the payoff date get calculated?

The calculator simulates your debts month by month. Each month
it adds interest, pays every minimum, then applies all remaining
money to the target debt for that strategy. It counts the months
until every balance reaches zero and projects that onto a
calendar date from today.

##### Why might my debt never pay off?

If a debt's minimum payment is smaller than its monthly interest
and you add no extra, the balance can grow instead of shrink.
The calculator flags this. Adding an extra payment, or raising
the minimum above the monthly interest, is the way out.

##### Should I pay off debt or invest?

A common rule of thumb: capture any employer 401(k) match first,
then aggressively pay debt whose interest rate is higher than
your expected investment return — high-interest debt is a
guaranteed "return" you can't beat reliably. Planomy's full
app can weigh debt payoff against investing inside one plan.

Mortgage Payoff Calculator
See how extra payments shrink your mortgage.

Emergency Fund Calculator
Build the buffer that keeps you out of new debt.

Savings Rate & FI Calculator
Turn freed-up payments into long-term wealth.

401(k) vs IRA vs Roth vs HSA
Where the freed-up payment should go once the debt is clear.

Pay Off the Mortgage Before Retiring?
Whether clearing the loan beats investing the same money.

#### See debt payoff inside your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Emergency Fund Calculator: 3, 6 or 12 Months of Expenses
URL: https://planomy.net/calculators/emergency-fund
Summary: Free emergency fund calculator, no sign-up: a 3 to 12 month target sized to your income stability and dependents, your gap today, and months to close it.

Free emergency fund calculator

### How much should I have in an emergency fund?

"Three to six months of expenses" is the classic rule, and for most
people it's either too much or not enough. The right number depends
on how predictable your income is and how many people depend on it.
Enter your essential monthly costs and this calculator turns them
into a dollar target, shows how many months you're actually covered
for today, and tells you the date your current saving rate closes
the gap. Everything runs in your browser — nothing is uploaded.

A simplified guideline, not financial advice. The recommended
months of coverage are a rule-of-thumb blend of income stability
and dependents; your own risk tolerance, job market, health, and
access to other resources should adjust it. Base the fund on
essential expenses you couldn't easily cut, not your full budget.

#### What is an emergency fund?

An emergency fund is cash set aside for genuine emergencies — a
job loss, a medical bill, an urgent car or home repair — so a
surprise doesn't force you into high-interest debt or derail your
long-term plans. It's kept somewhere safe and instantly
accessible, like a high-yield savings account, not invested in the
stock market where its value could drop right when you need it.

#### How many months should you save?

The common range is 3 to 6 months of essential
expenses, but the right target shifts with your circumstances:

- Toward 3 months if you have very stable income, dual earners, no dependents, and low fixed costs.

- Toward 6 months for a single steady income or a couple of dependents.

- 9 to 12 months if your income is variable (commission, freelance, self-employed), you're the sole earner, or you support several dependents.

This calculator blends your income stability and number of
dependents into a recommendation, then sizes it against your
essential monthly expenses.

#### Emergency fund targets by monthly expenses

Multiply essential monthly expenses by the months of coverage you
choose. This quick table gives the dollar target before subtracting
emergency savings you already have:

| Essential expenses
| 3 months
| 6 months
| 9 months
| 12 months

| $2,000/month
| $6,000
| $12,000
| $18,000
| $24,000

| $3,500/month
| $10,500
| $21,000
| $31,500
| $42,000

| $5,000/month
| $15,000
| $30,000
| $45,000
| $60,000

| $7,500/month
| $22,500
| $45,000
| $67,500
| $90,000

The decision rule is as important as the multiplication: three
months fits secure dual-income households with few dependents; six
months fits a typical single steady income; nine to twelve months
fits variable income, a sole earner, or a long job-search risk.

#### A worked example

The numbers this page loads with — $3,500 of essential monthly
expenses, a single steady salary, one dependent, $6,000 already
saved, $400 a month going in:

- A single income plus one dependent puts the recommendation at 7 months, so the target is 7 × $3,500 = $24,500.

- $6,000 covers 1.7 months — about a quarter of the way there.

- The remaining $18,500 at $400 a month takes 47 months, nearly four years.

Four years is the number that changes behaviour. It is why the
standard advice is to bank a one-month starter fund fast, then
raise the monthly amount rather than stretch the timeline — and
why a windfall like a tax refund or bonus is worth far more here
than anywhere else.

#### Base it on essential expenses

Size your fund on the spending you couldn't quickly cut in a
crisis — housing, utilities, food, insurance, transportation, and
minimum debt payments — not your entire lifestyle budget. In a
real emergency you'd pause vacations, dining out, and subscriptions,
so building the fund around essentials keeps the target realistic
and reachable.

Two floors are worth checking separately, because a monthly
multiple can quietly sit below either one:

- Your insurance deductibles. If your health plan has a $6,000 out-of-pocket maximum and your car and home policies carry $1,000 deductibles each, a fund smaller than that isn't really a fund — those are the exact bills it exists to absorb.

- The gap before income resumes. Unemployment insurance replaces roughly half of prior wages in most states, is capped well below high salaries, is taxable, and typically runs 26 weeks. If your household leans on one big salary, that gap is the number that matters, not the average.

#### Where to keep it

- High-yield savings account — the default. Same-day or next-day access, and FDIC insured up to $250,000 per depositor, per insured bank, per ownership category (NCUA gives credit unions the same coverage).

- Money market deposit account at a bank — same FDIC coverage, similar access. Note that a money market fund at a brokerage is a different product: it is not FDIC insured, and SIPC covers brokerage failure, not investment losses.

- Short Treasury bills — state-income-tax-free interest and backed by the federal government, but you either hold to maturity or sell at whatever the market pays. Fine for the back half of a large fund, not for the part you might need on Tuesday.

- Series I savings bonds — inflation-linked, but locked for 12 months, and cashing out before 5 years forfeits the last 3 months of interest. The electronic purchase limit is $10,000 per person per year. A second-tier holding at best.

- Not stocks, crypto, or anything that can fall exactly when you need to withdraw. The two events correlate: layoffs cluster in the same downturns that cut portfolio values.

Interest earned is ordinary income, reported to you on a 1099-INT
and taxed at your marginal rate — so the after-tax return is lower
than the advertised APY. That's a cost worth accepting; this money
is bought for certainty, not yield.

#### Emergency fund or pay off debt first?

The arithmetic is straightforward. A high-yield savings account
might pay 4% before tax; a credit card charges 20-25%. Every dollar
you hold in cash instead of against that balance costs you the
difference. But holding no cash means the next surprise
goes straight back onto the card at 25%, which is worse still.

The widely used sequence handles both: bank a starter fund of
about one month of essentials (or $1,000), clear high-interest
debt, then build the fund out to full size. Two exceptions are
worth naming — never skip enough 401(k) contributions to capture
your employer match while doing this, and if your job is genuinely
at risk, a larger cash buffer beats a faster payoff.

#### The mistakes that cost the most

- Sizing it on gross income. The fund covers what you must spend, not what you earn.

- Leaving it in checking at 0.01%. Over a $25,000 fund, the difference between a big-bank checking rate and a high-yield savings account is several hundred dollars a year for one afternoon of paperwork.

- Investing it "so it does something". Its job is to be worth exactly what you expect on the day you need it.

- Never refilling it. After a real emergency, replenishing the fund should outrank every other savings goal until it's whole.

- Ignoring that it grows. A target set when rent was $1,400 is stale when rent is $2,100. Re-run the number annually.

- Counting a credit card or HELOC as the plan. Both can be reduced or frozen precisely when your income drops — that's a line of credit, not a reserve.

#### Frequently asked questions

##### How much should I have in an emergency fund?

Enough to cover several months of essential expenses. Most
people target 3 to 6 months, and those with variable income or
dependents lean toward 6 to 12. Multiply your essential monthly
expenses by your recommended number of months to get a dollar
target — that's exactly what this calculator does.

##### How do I calculate a 6-month emergency fund?

Add the monthly costs you could not stop in a crisis — housing,
utilities, groceries, insurance, transportation, and minimum
debt payments — then multiply by six. If those essentials total
$3,500 a month, a six-month emergency fund is $21,000. Subtract
cash already reserved for emergencies to find the remaining gap.

##### Should I build an emergency fund or pay off debt first?

A widely used approach is to save a small starter fund (about one
month, or $1,000) first, then attack high-interest debt, then
grow the fund to its full size. A basic cushion stops the next
surprise from putting you deeper into debt while you pay down
what you owe.

##### Does my emergency fund need to earn a return?

Its job is safety and access, not growth. A high-yield savings
account keeps pace with some inflation while staying liquid.
Don't chase returns by investing it — the whole point is that the
money is there, in full, the day you need it.

##### Where should I keep my emergency fund?

A high-yield savings account or a bank money market deposit
account, both FDIC insured up to $250,000 per depositor, per
bank, per ownership category. Short Treasury bills work for the
back half of a large fund. I bonds are locked for 12 months and
forfeit three months of interest if cashed before five years, so
they're a poor fit for the money you might need this week. Never
the stock market — layoffs and market falls arrive together.

##### Is 3 months of expenses enough?

Only if your income is genuinely hard to lose and easy to
replace: two secure salaries in a household, no dependents, low
fixed costs. A single income, dependents, commission or
self-employed earnings, a specialised role with a thin job
market, or a large out-of-pocket health maximum all argue for six
months or more. Three months of essentials is a floor, not a
target.

##### What counts as a real emergency?

Unexpected, necessary, and urgent — job loss, essential medical
care, a critical home or car repair. A planned expense or a
tempting sale isn't an emergency. Keeping the fund reserved for
true emergencies is what makes it work when one hits.

Debt Payoff Calculator
Balance building a fund with clearing debt.

Savings Rate & FI Calculator
See how much of your income you're keeping.

Compound Growth Calculator
Grow the money you save beyond the fund.

CD Ladder Calculator
Ladder the part of your fund you won't need this month.

401(k) Contribution Calculator
Don't skip the employer match while you build the fund.

How Much Is a 6-Month Fund?
The full table by monthly essentials, and how long it takes to build.

The Bucket Strategy for Retirement Income
The retirement version of a cash cushion, bucket by bucket.

Sequence of Returns Risk
Why a cash buffer matters most in the first retirement years.

#### See what this cushion costs you elsewhere

Money held in cash isn't compounding — and money not held in cash
is one bad month from a credit card. Planomy carries your cash
target into a full projection with taxes, Social Security, and
side-by-side scenarios, so you can see what a bigger buffer really
costs your long-term plan before you set the number. Free,
private, and running in your browser.

Open the planner

Browse all calculators

---

## FIRE Calculator: Your Number and Retire-Early Age
URL: https://planomy.net/calculators/fire-number
Summary: Turn annual spending and a withdrawal rate into the portfolio that makes work optional, then see the exact age your current savings rate gets you there.

Free financial independence calculator

### How much do I need to retire early?

Your financial independence, retire early (FIRE) number is the portfolio that lets work become optional:
enough invested that a safe withdrawal covers your annual spending
for life. Enter your spending, savings rate, and expected return to
see your target, your projected portfolio, and the age you cross
the finish line. Everything runs in your browser — nothing is
uploaded.

A simplified projection, not financial advice. It assumes a
constant real (after-inflation) return, level contributions and
spending in today's dollars, and the 4%-rule assumption that a
fixed withdrawal rate is sustainable. It does not model taxes,
sequence-of-returns risk, Social Security, healthcare before
Medicare, or market volatility. Treat the result as a target to
aim at, not a guarantee.

#### What is a FIRE number?

FIRE stands for Financial Independence, Retire Early.
Your FIRE number is the size of invested portfolio that could
fund your lifestyle indefinitely from investment returns alone.
The math behind it is simple:

- FIRE number = annual spending ÷ safe withdrawal rate

At a 4% withdrawal rate, that's just spending × 25. Spend
$60,000 a year and your FIRE number is $1.5 million. Choose a
more conservative 3.33% rate and it climbs to spending × 30
($1.8 million) — the lower the rate you trust, the bigger the
cushion you need.

#### Where the 4% rule comes from

The 4% "safe withdrawal rate" comes from the Trinity study and
William Bengen's research, which tested historical 30-year
retirements and found that withdrawing 4% of the starting
portfolio (then adjusting for inflation each year) rarely ran
out of money. It's a rule of thumb, not a law — a longer early
retirement, a weak first decade of returns, or high fees can all
argue for a lower rate. This calculator lets you dial the rate
between 2.5% and 5% so you can see the effect on your target.

#### Lean FIRE, regular FIRE, and Fat FIRE

People aim at different versions of FIRE depending on the
lifestyle they want to fund:

- Lean FIRE — a frugal early retirement, often spending under ~$40,000 a year, so the FIRE number is smaller (roughly $1 million or less at 4%). It reaches independence sooner but leaves little slack.

- Regular / traditional FIRE — a middle-class lifestyle, typically $40,000–$100,000 of annual spending, targeting roughly $1M–$2.5M.

- Fat FIRE — a comfortable, no-compromises retirement, usually $100,000+ of spending and a FIRE number well north of $2.5 million.

- Coast FIRE — you've invested enough that, without adding another dollar, growth alone will reach your FIRE number by traditional retirement age; you only need to cover current expenses until then.

#### Methodology

This tool works entirely in today's dollars. By
asking for a real (after-inflation) return, every figure
— your FIRE number, projected portfolio, and the balances in the
chart — is already inflation-adjusted, so you can compare them
directly to what money buys now. Each month we grow your balance
by the monthly-equivalent of your real return and add your
contribution, then check whether the balance has crossed your
FIRE number. The "age you reach FIRE" is the first month the
portfolio meets or exceeds the target.

#### Honest caveats

- Sequence-of-returns risk. A steady average return hides the real danger: a bad run of returns in your first few retirement years can sink a portfolio even if the long-run average is fine. Retiring early stretches your horizon and magnifies this risk — many early retirees use a lower withdrawal rate or a cash buffer as insurance.

- Everything is in today's dollars. We assume a real return and level real spending. If you enter a nominal return by mistake, the projection will look far too optimistic.

- No taxes or healthcare. Withdrawals from pre-tax accounts are taxable, and health insurance before Medicare can be a large early-retirement expense. Your true spending target may be higher than headline spending.

- Contributions and spending are held flat. Real life includes raises, career breaks, and lifestyle changes this simple model doesn't capture.

#### Frequently asked questions

##### How is the FIRE number calculated?

It's your expected annual retirement spending divided by your
safe withdrawal rate. At the classic 4% rate that equals your
spending multiplied by 25. Lowering the withdrawal rate raises
the number because you're demanding a bigger safety margin.

##### What withdrawal rate should I use for early retirement?

The 4% rule was tested on 30-year retirements. An early retiree
may need the money to last 40–50 years, so many use a more
conservative 3% to 3.5%. There's no single right answer — a
lower rate is safer but requires a larger portfolio and more
years of saving.

##### Are these figures in today's dollars or future dollars?

Today's dollars. The calculator asks for a real
(after-inflation) return and keeps contributions and spending
level in real terms, so the projected balances are already
inflation-adjusted and directly comparable to prices today.

##### Does this account for taxes and Social Security?

No. This is a simplified, single-portfolio projection.
Withdrawals from tax-deferred accounts are taxable, and Social
Security or a pension can reduce how much you need from savings.
Planomy's full app models account types, taxes, and guaranteed
income alongside your investments.

##### What is Coast FIRE?

Coast FIRE is the point where your existing investments will grow
to your FIRE number by traditional retirement age with no further
contributions. Once you "coast," you only need to earn enough to
cover current expenses while compounding does the rest.

##### Why does the crossing age matter more than the target?

Two people with the same FIRE number can reach it decades apart
depending on how much they invest and what return they earn. The
crossing age turns the abstract target into a date, which is
usually the number people actually care about.

Savings Rate Calculator
The rate that decides how many years the number takes.

Retirement Drawdown Calculator
Check whether the number actually survives your spending.

Compound Interest Calculator
Project the balance that gets you to the target.

Retirement Savings by Age
Compare your balance to the standard age benchmarks.

What Is a Safe Withdrawal Rate?
The percentage the whole FIRE number rests on.

When Can I Retire?
Turn the number into a date you can plan around.

#### Build your full FIRE plan in Planomy

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Home Affordability Calculator: 28/36 Rule Max Price
URL: https://planomy.net/calculators/home-affordability
Summary: See the maximum home price a lender

Free home affordability calculator

### How much house can you afford? The 28/36 rule

Lenders cap housing at 28% of gross monthly income and all
debt at 36%. Enter your income, existing debts, down payment
and mortgage rate below for the maximum home price those two limits
support, with the full monthly payment — principal, interest, taxes,
insurance, PMI — broken out. Runs in your browser; nothing is uploaded.

##### How affordability is estimated

- The 28/36 rule caps your housing payment at 28% of gross monthly income and your total debt payments (housing plus other debts) at 36%. The smaller of those two limits sets your maximum monthly payment.

- That payment is PITI — principal, interest, property taxes, and insurance — plus any HOA dues. Taxes, insurance, and HOA are subtracted first, and what's left funds principal and interest.

- The maximum loan is the amount whose monthly principal-and-interest payment, at your rate and term, equals that leftover. Add your down payment to get the maximum home price. Because taxes scale with price, the two are solved together.

- This does not add PMI, which usually applies below a 20% down payment, and it assumes a fixed-rate loan. Lenders also weigh credit score, reserves, and loan program.

An estimate for planning, not a loan pre-approval or financial
advice. Actual limits depend on your credit, the lender's overlays,
loan program, and current rates, and many buyers choose to spend
less than the maximum. Get a pre-approval before you shop.

#### How much house can I afford?

The honest answer is: as much as your monthly budget comfortably
supports, not as much as a lender will approve. Affordability comes
down to three levers — your income, your existing debts, and your
down payment — filtered through the interest rate and the term of
the loan. This calculator applies the 28/36 rule that most lenders
start with, then works backward from the maximum payment to a
maximum home price.

#### What is the 28/36 rule?

- The 28% front-end ratio says your total housing payment — principal, interest, taxes, and insurance — should stay at or below 28% of your gross monthly income.

- The 36% back-end ratio says all your monthly debt payments together, including the new mortgage, should stay at or below 36% of gross income. Some loan programs stretch this to 43% or higher.

Whichever limit is lower is the one that binds. If you carry a lot
of other debt, the 36% rule usually caps you first; if you're
debt-free, the 28% housing rule sets the ceiling. Paying down a car
loan or credit card before you buy can noticeably raise how much
home you qualify for.

#### The 28/36 rule, worked

Take a household earning $96,000 a year, so $8,000
a month gross, with $500 a month of car and card
minimums. Both caps are simple multiplications:

- Front-end (28%): 0.28 × $8,000 = $2,240 for the whole housing payment.

- Back-end (36%): 0.36 × $8,000 = $2,880 for all debt. Subtract the $500 already committed and $2,380 is left for housing.

- The binding cap is the smaller: $2,240. Here the 28% rule wins, so paying off the car would not raise the ceiling at all.

Now turn $2,240 into a price. Property tax and insurance might take
$400 of it, leaving $1,840 for principal and
interest. At 6.5% over 30 years, $1,840 a month supports a loan of
about $291,000 — with 20% down, roughly a
$364,000 home.

Change one input and watch the binding cap switch. Raise the other
debts to $900 a month and the back-end limit becomes
$2,880 − $900 = $1,980, which is now below the
28% figure. Housing money falls to $1,580 after taxes and insurance,
the loan drops to about $250,000, and $400 a month
of car payment has cost roughly $41,000 of buying
power. That is the single most useful thing the rule tells you: when
the 36% cap binds, clearing a loan before you apply is worth far more
than saving the same amount toward the deposit.

#### Why the down payment matters twice

A bigger down payment helps in two ways. It directly adds to the
price you can buy — every dollar down is a dollar of house on top of
your loan. And once you reach 20% down, you typically avoid private
mortgage insurance (PMI), which lowers your monthly payment and lets
more of it go toward principal and interest. Use our
savings goal calculator
to plan how to reach a target down payment.

#### Don't forget the costs beyond the mortgage

PITI is only part of the picture. Homeownership adds maintenance
(a common rule of thumb is 1% of the home's value per year),
utilities, and the occasional big repair. Buying also has closing
costs of roughly 2–5% of the price. Deciding between renting and
buying at all? Compare the full picture with our
rent vs. buy calculator,
and see how extra payments shorten the loan with the
mortgage payoff calculator.

#### Frequently asked questions

##### What is the 28/36 rule and how do I calculate it?

Multiply your gross monthly income by 0.28 for the housing cap and
by 0.36 for the all-debt cap, then subtract your existing debt
payments from the second figure. Whichever result is lower is your
maximum housing payment. On $8,000 a month with $500 of other
debts: 28% gives $2,240, and 36% gives $2,880 minus $500 = $2,380
— so $2,240 binds. Raise the other debts to $900 and the 36% cap
falls to $1,980 and binds instead.

##### How much house can I afford on a $90,000 salary?

With about $450 in other monthly debts, a $40,000 down payment,
and a 6.5% rate on a 30-year loan, the 28/36 rule supports roughly
a $320,000–$340,000 home. Less debt, a bigger down payment, or a
lower rate all raise that number. Enter your own figures above to
see your result.

##### What percentage of income should go to a mortgage?

The 28/36 rule targets no more than 28% of gross income for the
full housing payment and 36% for all debts combined. Many
financial planners suggest an even more conservative 25% of
take-home pay for housing so you keep room to save and invest.

##### Does this include property taxes and insurance?

Yes. The maximum payment is a full PITI figure — principal,
interest, taxes, and insurance — plus any HOA dues you enter.
Taxes and insurance are subtracted before the leftover funds your
loan, so the home price already accounts for them.

##### How much do I need for a down payment?

Conventional loans can go as low as 3% down, and FHA loans as low
as 3.5%, but putting 20% down lets you skip PMI and lowers your
payment. This tool uses whatever down payment you enter; a larger
one raises your maximum price and can improve your rate.

##### Should I borrow the maximum I qualify for?

Usually not. Qualifying for a payment and comfortably living with
it are different things. Leaving a cushion below your maximum
keeps room for maintenance, emergencies, and the goals you're
still saving for. Many buyers deliberately shop below their
approval amount.

Rent vs. Buy Calculator
Compare the full cost of renting against owning.

Mortgage Payoff Calculator
See how extra payments cut your term and interest.

Loan Amortization Calculator
Break your payment into principal and interest.

How Much Do You Need to Retire?
Check the housing budget against the retirement target it shares.

Pay Off the Mortgage Before Retiring?
What carrying the loan into retirement costs you.

#### Fit a home purchase into the bigger picture

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## HSA Contribution Calculator: 2026 Limits and Tax
URL: https://planomy.net/calculators/hsa-contribution
Summary: See how much 2026 HSA room you have left after your employer

Free HSA contribution calculator

### How much can I contribute to my Health Savings Account?

For 2026 you can put in $4,400 with self-only coverage or
$8,750 with family coverage, plus $1,000 more if you are 55 or
older — less anything your employer has already
contributed. A Health Savings Account is one of the most
tax-advantaged accounts in
the tax code — money goes in pre-tax, grows tax-free, and comes out tax-free
for medical costs. This calculator uses the 2026 IRS limits to show
how much room you have left after your employer's contribution and
what you've already put in, plus the tax you'd save by filling it.
Everything runs in your browser — nothing is uploaded.

##### Assumptions (2026 figures)

- Uses the IRS-announced 2026 HSA limits: self-only $4,400, family $8,750, plus an extra $1,000 if you're 55 or older by year end.

- Employer contributions (including any wellness incentives) count against the same limit, so they reduce what you can add.

- The tax savings figure is an estimate = your personal contribution × the marginal rate you enter. Payroll contributions also skip the 7.65% FICA tax; direct contributions don't.

- You must be covered by an HSA-qualified high-deductible health plan and not enrolled in Medicare to contribute.

An estimate for planning, not tax advice. It does not model the
"last-month rule," a mid-year change in coverage, married couples
splitting the family limit, or state HSA quirks (CA and NJ tax HSA
earnings). Confirm your own limit with a tax professional.

#### 2026 HSA contribution limits

For 2026 the IRS set the maximum HSA contribution at
$4,400 for self-only coverage and
$8,750 for family coverage. If you're
55 or older by the end of the year you can add a
$1,000 extra contribution on top. These are the totals from
all sources combined — your payroll contributions, anything
you deposit directly, and whatever your employer chips in.

The limit is only half of it: eligibility, the last-month rule and
what happens when your coverage changes mid-year all decide how
much you may actually put in. Our guide to
HSA contribution limits and rules
covers those cases alongside the 2026 figures.

#### Why your employer's contribution matters

A common surprise: money your employer puts into your HSA isn't
free room on top of the limit — it uses up the same bucket. If the
family limit is $8,750 and your employer contributes $1,000, you
can personally add at most $7,750. This calculator subtracts both
the employer amount and what you've already contributed to show the
real space you have left.

#### The triple tax advantage

- Deductible going in. Contributions are pre-tax (via payroll) or deductible (if made directly), lowering this year's taxable income.

- Tax-free growth. Interest and investment gains inside the account are never taxed federally.

- Tax-free coming out. Withdrawals for qualified medical expenses are tax-free — at any age, with no deadline to reimburse yourself.

After age 65 you can also withdraw for any reason and just pay
ordinary income tax, like a traditional IRA — which is why many
savers treat a maxed HSA as a stealth retirement account.

#### Is an HSA contribution tax deductible?

Yes, and it is one of the few deductions you can still take
without itemising. How you claim it depends on how the money got
in:

- Through payroll. The contribution is excluded from your taxable wages before your W-2 is printed, so there is nothing to deduct on your return — it is already gone from box 1. This route also escapes the 7.65% Social Security and Medicare tax, which a direct contribution does not.

- Directly, from your own bank account. You claim it as an above-the-line deduction on Form 8889, which flows to Schedule 1 and reduces your adjusted gross income whether you itemise or take the standard deduction.

Either way the deduction is worth your marginal rate: filling a
$8,750 family limit saves $1,925 in federal tax at 22%, or $2,905
at 32%, before any state saving. The calculator above shows that
figure for the room you have left. Two states — California and
New Jersey — do not recognise HSAs, so the state portion does not
apply there.

#### What it works out to per pay period

Payroll deductions are the cleanest way to fund an HSA, because
money routed through a cafeteria plan escapes Social Security and
Medicare tax as well as income tax — a saving a direct contribution
never gets. To convert a limit into a per-cheque figure, subtract
anything your employer puts in and divide by the pay periods left in
the year.

- Family coverage, $8,750 limit, $1,000 from the employer. $7,750 ÷ 26 biweekly cheques = $298.08 a period, or $322.92 across 24 semi-monthly ones.

- Self-only, $4,400 limit, no employer contribution. $4,400 ÷ 26 = $169.23 a period; ÷ 12 monthly = $366.67.

- Starting mid-year. Divide by the cheques that remain, not 26. Ten pay periods left on a $7,750 target means $775 each — which is why people who start in September often find they cannot reach the cap through payroll and top up directly instead.

#### HSA withdrawal rules and the 20% penalty

Money leaving an HSA falls into one of three cases, and the
difference between them is large:

- Qualified medical expenses, any age. Completely tax-free and penalty-free. There is no deadline — a receipt from 2019 can be reimbursed in 2040, provided the account existed when the expense was incurred.

- Non-qualified, before 65. Ordinary income tax plus a 20% penalty — double the 10% that applies to a retirement account. In the 22% bracket a $2,000 non-qualified withdrawal costs $440 in tax and $400 in penalty: $840, or 42%. You keep $1,160.

- Non-qualified, 65 or older. The 20% penalty disappears; you simply pay ordinary income tax, exactly as you would on a traditional IRA withdrawal. Medical withdrawals stay tax-free.

Two related rules worth knowing. An HSA has no required
minimum distribution, so unlike an IRA it can be left alone
indefinitely — see the RMD calculator
for the accounts that cannot. And an excess
contribution carries its own 6% excise tax for every year it
stays in the account; withdraw the excess and its earnings before the
tax deadline and the excise tax is avoided.

#### Should you max it out?

If you can cover current medical bills from cash flow, filling the
HSA and letting it grow invested is often the highest-return move
available: you get the deduction now and decades of tax-free
compounding. If money is tight, contribute at least enough to grab
any employer match and to build a buffer for your plan's
deductible.

#### Frequently asked questions

##### What are the 2026 HSA contribution limits?

For 2026 the IRS limits are $4,400 for self-only HDHP coverage
and $8,750 for family coverage. Account holders who are 55 or
older by the end of the year can contribute an extra $1,000.
These caps apply to the combined total from you and
your employer.

##### Is an HSA contribution tax deductible?

Yes. Payroll contributions are excluded from your taxable wages
before your W-2 is issued, so there is nothing left to deduct
on your return — and they also avoid Social Security and
Medicare tax. Contributions you make directly are an
above-the-line deduction on Form 8889, available whether you
itemise or take the standard deduction. California and New
Jersey do not recognise HSAs at the state level.

##### Do employer contributions count toward the HSA limit?

Yes. Contributions from your employer — including matching or
wellness incentives — count against the same annual maximum, so
they reduce how much you can personally add. This calculator
subtracts the employer amount from your limit automatically.

##### Who qualifies for the extra $1,000 contribution?

Anyone who is 55 or older by December 31 of the tax year can add
the extra $1,000. If both spouses are 55+, each can make an
extra $1,000 contribution, but only into their own HSA — you can't double
it up in one account.

##### What is the penalty for a non-qualified HSA withdrawal?

Before 65, a withdrawal not spent on qualified medical expenses is
taxed as ordinary income plus a 20% penalty — double the 10% that
applies to an early retirement-account withdrawal. In the 22%
bracket, taking $2,000 out for a non-medical reason costs $440 in
tax and $400 in penalty, so you keep $1,160. From 65 onward the
20% penalty no longer applies and you owe only ordinary income
tax; medical withdrawals stay tax-free at every age.

##### How much tax does an HSA contribution save?

A rough estimate is your contribution multiplied by your marginal
tax rate. Contributing $4,000 at a 24% rate saves about $960 in
federal income tax. Contributions made through payroll also avoid
the 7.65% Social Security and Medicare (FICA) tax, adding to the
savings.

##### When is the deadline to contribute for a tax year?

You can contribute for a given tax year up until the federal tax
filing deadline the following April, not just December 31. That
gives you a few extra months to top up an HSA and still claim the
deduction for the prior year.

Take-Home Pay Calculator
See how pre-tax HSA and 401(k) money changes your paycheck.

401(k) Contribution Calculator
Capture your full employer match and pre-tax savings.

Compound Growth Calculator
Project what an invested HSA balance grows into.

401(k) vs IRA vs Roth vs HSA
Why the HSA is the only triple-tax-free account you have.

Which Accounts to Draw Down First
Why HSA dollars are usually the last ones you spend.

#### See your HSA inside your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Inflation Impact Calculator: What Your Money Buys Later
URL: https://planomy.net/calculators/inflation-impact
Summary: Free inflation impact calculator, no sign-up. Enter an amount, a horizon and a rate to see the purchasing power it keeps and the income you would need later.

Free inflation calculator

### What will your money be worth in the future?

Inflation quietly shrinks what a dollar buys. A sum that feels
comfortable today can lose a third or more of its purchasing power
over a couple of decades. Enter an amount, a time horizon, and an
inflation rate to see how much buying power it keeps — and how much
future income you'd need to maintain the same lifestyle. Everything
runs in your browser — nothing is uploaded.

A simplified projection, not financial advice. It assumes a
constant annual inflation rate compounding over your chosen
horizon. Real inflation varies year to year and differs by
spending category — housing, healthcare, and education have often
outpaced the headline rate. Use it to understand the direction and
rough scale of inflation's effect, not as a precise forecast.

#### How inflation erodes purchasing power

Inflation is the gradual rise in prices over time, which means each
dollar buys a little less than it did before. The effect compounds:
at 3% inflation, prices roughly double every 24
years, so the same money buys about half as much. Put
differently, $50,000 of spending power today needs to grow to over
$100,000 in future dollars just to stay even.

#### Two ways to read the result

- Future purchasing power — what today's amount will feel like in the future. We discount it by inflation: amount ÷ (1 + rate)^years. This is the shrinking number.

- Required future income — how many future dollars you'd need to buy the same basket of goods: amount × (1 + rate)^years. This is the growing number retirees especially need to plan for.

#### Why this matters for retirement

A retirement that lasts 30 years faces decades of compounding
inflation. Income that covers your lifestyle at 65 may fall far
short at 85 if it doesn't grow. That's why sound retirement plans
build in rising income — through cost-of-living adjustments, a
diversified portfolio expected to outpace inflation, and inflation
protection like Social Security's annual cost-of-living adjustment
(COLA) or Treasury inflation-protected securities (TIPS). Planning in
"today's dollars" with a real (after-inflation) return is another
way to keep the math honest.

#### How to protect against inflation

- Invest for growth. Over long horizons, stocks have historically outpaced inflation, unlike cash sitting idle.

- Don't over-hold cash. Money beyond your emergency fund loses real value every year it isn't invested.

- Use inflation-protected assets. TIPS and I-bonds adjust with inflation; Social Security includes an annual cost-of-living adjustment.

- Plan for rising expenses. Budget for healthcare and housing costs that often grow faster than the average.

#### Frequently asked questions

##### What inflation rate should I use?

A long-run average of about 2% to 3% is a reasonable default —
the U.S. Federal Reserve targets 2% and the historical average
has hovered near 3%. Using 3% or 4% builds in a margin of safety
for planning. The table above shows all three side by side so you
can compare.

##### What does "purchasing power" actually mean?

Purchasing power is how much stuff your money can buy. Inflation
reduces it: if prices rise 3% a year, a dollar buys 3% less each
year. So $100 today might have the purchasing power of only about
$55 after 20 years at 3% inflation — the number on the bills is
the same, but it stretches less far.

##### How is the "required future income" calculated?

It's today's amount grown by inflation over your time horizon:
amount × (1 + rate) raised to the number of years. It tells you
how many future dollars you'd need to maintain the same standard
of living you have with today's amount now.

##### Does investing beat inflation?

Historically, a diversified stock portfolio has grown faster than
inflation over long periods, preserving and building real wealth.
Cash and low-yield accounts usually lose ground to inflation over
time. That's the core reason to invest for long-term goals rather
than leave large sums in cash.

Compound Growth Calculator
See how investing can outrun inflation over time.

Retirement Drawdown Calculator
Test how long savings last against rising costs.

FIRE Number Calculator
Plan independence in today's-dollar terms.

What Is a Safe Withdrawal Rate?
How inflation adjustments are built into a withdrawal rate.

How Much Do You Need to Retire?
The 25x rule, in today's dollars.

#### Plan in real, inflation-adjusted dollars

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Investment Calculator With Fees: Expense Ratio Impact
URL: https://planomy.net/calculators/investment-fee-impact
Summary: Free, no sign-up: compare two expense ratios over your real horizon and see the exact dollars a higher fund fee takes off your balance — often six figures.

Free expense ratio calculator

### What is an expense ratio really costing you?

A fund's expense ratio is the annual percentage it deducts from your
money before you ever see a return. Half a percent sounds like
nothing; over a working lifetime it routinely costs six figures,
because the fee is charged on your whole balance every year and
everything it removes stops compounding. Enter a balance, a monthly
contribution, and a horizon, then compare two expense ratios to see
the ending balance under each and the exact dollars the higher fee
takes. Everything runs in your browser — nothing is uploaded.

##### How the fee drag is modeled

- Each scenario earns your gross return minus its expense ratio, compounded monthly, with contributions added at the end of each month.

- "Lost to fees" for each fund is its ending balance compared with an identical zero-fee portfolio; the headline figure is the gap between fund A and fund B.

- Expense ratios are charged on the whole balance every year — so the dollar cost grows as your portfolio grows, which is why small percentages compound into large sums.

- Real returns vary and aren't guaranteed; this isolates the effect of fees, holding the gross return identical for both funds.

A simplified projection for planning, not investment advice. It
assumes a constant gross return and level contributions, and it
ignores taxes, trading costs, load fees, and the possibility that a
pricier fund earns a different gross return. Lower cost is a strong
predictor of higher net returns, but not a guarantee.

#### Why a 0.7% fee difference matters so much

An expense ratio is the annual percentage a fund charges to run
itself. It's deducted quietly from the fund's returns, so you never
see a bill — which is exactly why it's easy to ignore. But the fee
applies to your entire balance every single year, and the
money it skims off can no longer compound. Over a 30- or 40-year
horizon, the difference between a 0.05% index fund and a 0.75%
active fund routinely runs into tens or hundreds of thousands of
dollars.

#### Fees compound against you

Compounding is usually your friend, but fees flip it around. Every
dollar a fund takes in fees is a dollar that never earns a return,
and that lost return never earns a return either. The result is a
widening gap: the two portfolios start close together and drift
further apart every year. This is the same math that makes
early investing powerful — running in reverse.

#### A worked example: 0.05% vs 0.75%

The defaults on this page — $25,000 invested today, $500 a month
added, 30 years, a 7% gross return:

- At a 0.05% expense ratio you finish with about $804,000.

- At 0.75% you finish with about $689,000.

- The seven-tenths of one percent difference costs $115,000 — roughly 14% of the entire portfolio, and more than half of everything you contributed out of pocket.

- Push the higher fee to 1%, a typical all-in advisory charge, and the gap widens to about $151,000.

Note the shape of it: total contributions are $205,000, and the
fee difference alone is over half that. Nothing about the two
portfolios differs except the percentage skimmed each year.

#### Investment fee comparison over 30 years

Holding the page defaults constant — $25,000 invested now, $500
added monthly, a 7% gross return, and 30 years — shows how the
same portfolio changes as only the annual fee changes:

| Annual fee
| Ending balance
| Lost vs. no fee
| Extra lost vs. 0.05%

| 0.05%
| $803,910
| $8,988
| —

| 0.25%
| $769,064
| $43,834
| $34,846

| 0.50%
| $727,884
| $85,014
| $76,026

| 0.75%
| $689,189
| $123,709
| $114,721

| 1.00%
| $652,822
| $160,076
| $151,088

For a one-year approximation, multiply the invested balance by the
fee rate: $100,000 × 0.75% is about $750, while 0.05% is $50. That
shortcut understates the long-run cost because it leaves out both
future contributions and the returns the removed dollars would
have earned; use the calculator for the compounded answer.

#### What counts as a "good" expense ratio?

- Broad index funds and ETFs — often 0.03% to 0.10%. Total-market and S&P 500 index funds anchor the low end, and several major providers now offer them at or near zero.

- Target-date and specialty funds — commonly 0.10% to 0.50%. Index-based target-date series sit near the bottom of that range; actively managed ones near the top.

- Actively managed funds — frequently 0.50% to 1.00% or more.

- Advisor "assets under management" fees — often around 1% per year, charged on top of the fund fees inside your portfolio.

#### The fees that don't show up in the expense ratio

The expense ratio is the headline number, not the whole bill. Add
these before you decide what you're paying:

- Sales loads. A front-end load on a class-A mutual fund can take up to about 5.75% off the top before a dollar is invested. Back-end loads charge on the way out instead, usually declining over several years.

- 12b-1 marketing fees — up to 1.00% a year, and included in the stated expense ratio. A fund charging more than 0.25% of it can't legally call itself "no-load".

- Trading costs inside the fund. High turnover generates commissions and bid-ask spreads that are paid out of fund assets and never appear in the expense ratio.

- Plan administration fees in a 401(k) — recordkeeping and custody charged per participant or as a percentage of assets. US law requires your plan to send you an annual participant fee disclosure that lists them; small plans commonly run well over 1% all-in.

- Advisory fees — a percentage of assets, a flat retainer, or hourly. Only the percentage-of-assets version compounds against you the way an expense ratio does.

#### How to cut what you pay

Check the expense ratio of every fund you own — it's in the fund's
prospectus, on any brokerage fund page, and in your 401(k)'s fee
disclosure. Where a cheaper index fund tracks the same market,
switching captures most of the savings this calculator shows.

- In a 401(k) or IRA, switching funds is free of tax. There is no reason to wait.

- In a taxable account, selling realises capital gains, so do the break-even: divide the one-off tax cost by the annual dollars of fee you'd save. A $3,000 tax bill to save $900 a year pays for itself in a little over three years, and you hold the position for decades.

- Stop the bleeding first. Redirect new contributions to the cheap fund immediately, even if you leave the existing balance in place while you work out the tax.

- Check for cheaper share classes. The same fund often has an institutional class with a materially lower ratio and a minimum you may already meet.

- If your 401(k) menu is expensive, contribute enough to capture the full employer match, then use an IRA for the rest — and roll the balance to a low-cost IRA when you leave the employer.

#### The mistakes that cost the most

- Reading 1% as small. Against a 7% gross return, a 1% fee takes roughly a seventh of your return every year, forever.

- Comparing fees without comparing what you own. A cheap bond fund isn't a substitute for an expensive stock fund. Compare like with like, then take the cheaper one.

- Paying for past performance. Cost is one of the few reliably predictive characteristics of a fund; last year's return is not.

- Forgetting the advisory fee stacks. A 1% advisor holding 0.60% funds is a 1.6% total drag, not 1%.

- Refusing to sell a taxable position at any price. Deferring tax forever can cost more than the tax itself — run the break-even instead of assuming.

- Ignoring fees on the biggest account. The dollar cost scales with the balance, so an old 401(k) you never look at may be the most expensive thing you own.

#### Frequently asked questions

##### What is an expense ratio?

An expense ratio is the annual fee a mutual fund or ETF charges,
expressed as a percentage of your invested assets. A 0.50%
expense ratio means $5 per year for every $1,000 invested,
deducted automatically from the fund's returns rather than billed
to you directly.

##### How much do investment fees really cost over time?

Far more than the headline percentage suggests, because the fee is
charged on your whole balance every year and the money it removes
stops compounding. On a portfolio built over decades, the gap
between a low-cost index fund and a fund charging 0.75%–1% often
reaches tens or hundreds of thousands of dollars, as this
calculator shows.

##### How do I calculate an investment fee from an expense ratio?

Convert the percentage to a decimal and multiply it by the
invested balance. On $100,000, a 0.75% expense ratio costs about
$750 in the first year; 0.05% costs about $50. Because the
balance changes and every fee also loses future growth, use the
calculator for a multi-year total rather than multiplying one
year's fee by the number of years.

##### What is a good expense ratio?

For a broad stock or bond index fund, anything at or below about
0.10% is good, and 0.03% to 0.05% is available from every major
provider. Index-based target-date funds usually land between
0.10% and 0.20%. Above roughly 0.50% you should be able to say
exactly what you're buying that an index fund doesn't offer —
and in a 401(k), compare against the cheapest option on your
plan's menu, not the market at large.

##### Is a low expense ratio always better?

For funds tracking the same market, yes — cost is one of the few
reliable predictors of long-run net return, and a cheaper index
fund usually wins. The nuance is that two funds may follow
different strategies or asset classes; compare like with like.
But paying more rarely buys better index performance.

##### Does this calculator include advisor fees?

You can model them. If you pay a financial advisor around 1% of
assets per year, enter that as one of the expense ratios (or add
it on top of the fund's own ratio) to see the combined drag. The
math treats every annual percentage drawn from your balance the
same way.

##### Where do I find a fund's expense ratio?

It's listed in the fund's prospectus and on the fund page at any
brokerage or on the fund company's website, usually labeled "net
expense ratio." For a 401(k), your plan's fund lineup or fee
disclosure statement lists the expense ratio for each option.

Compound Growth Calculator
See how a balance plus contributions compound over time.

Savings Rate & FI Calculator
Turn your savings rate into years until financial independence.

401(k) Contribution Calculator
Capture your full match and low-cost fund options.

Capital Gains Tax Calculator
Price the tax before switching a taxable position.

How Much Do You Need to Retire?
What the fees you save translate into as a retirement number.

What Is a Safe Withdrawal Rate?
A 1% fee comes straight out of the rate you can safely spend.

Spreadsheet vs Retirement Software
Where fee assumptions belong in a real plan.

#### See what cutting fees buys you in years

A six-figure fee gap is an abstraction until you see it as a
retirement date. Planomy turns your balance, contributions, and
return into a full projection with taxes and Social Security, and
lets you run the low-fee and high-fee versions as side-by-side
scenarios to see the difference in years rather than dollars.
Free, private, and running in your browser.

Open the planner

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---

## 401(k), IRA and 403(b) Withdrawal Tax Calculator 2026
URL: https://planomy.net/calculators/ira-withdrawal-tax
Summary: Enter a withdrawal, your age and your other income to see the federal tax, the 10% early-withdrawal penalty, and the cash you actually keep. 2026 brackets.

Free IRA, 401(k), 403(b) and 457 withdrawal tax calculator

### How much tax will I pay on a retirement withdrawal?

A withdrawal from a traditional IRA, 401(k), 403(b) or 457(b) is
ordinary income: it stacks on top of everything else
you earn, so the rate you pay is your top bracket, not an average.
Before 59½ add a 10% penalty on top. Take
$50,000 at age 45 with $80,000 of other income and you keep about
$33,836 — $11,164 in federal tax and $5,000 in
penalty. Enter your own numbers below. Everything runs in your
browser — nothing is uploaded.

##### How the tax is worked out

- The withdrawal is stacked on top of your other income. The tax attributed to it is the federal tax on (other income + withdrawal) minus the federal tax on your other income alone — which is why a withdrawal can cost more than your headline bracket suggests when it pushes you into the next one.

- Uses the 2026 federal brackets and standard deduction: $16,100 single, $32,200 married filing jointly. Itemised deductions, the extra standard deduction for age 65+, credits, and the 3.8% net investment income tax are not modelled.

- The 10% additional tax is applied to the whole withdrawal whenever your age is under 59½. If one of the IRS exceptions below applies to you, ignore that line — the income tax still applies either way.

- State tax is a flat rate you enter, applied to the withdrawal. Many states exempt some or all retirement income; a handful tax none of it.

- Mandatory withholding is shown separately because it is a prepayment, not the bill. Employer plans must withhold 20% of an eligible rollover distribution; IRA withholding defaults to 10% and can be waived.

An estimate for planning, not tax advice. It assumes the whole
withdrawal is taxable — if you have after-tax basis in the
account (non-deductible IRA contributions on Form 8606, or after-tax
401(k) money) part of it comes out tax-free under the pro-rata rule.
Confirm your own situation with a tax professional.

#### The short answer

There is no special "withdrawal tax rate." Money coming out of a
traditional retirement account is ordinary income,
taxed exactly like salary at whatever bracket it lands in. Because it
lands on top of your other income, the marginal rate on the
withdrawal is usually higher than your average rate — and a
large withdrawal can straddle two brackets, with part taxed at 22%
and part at 24%.

Before age 59½ there is a second charge: a flat
10% additional tax under section 72(t), applied to
the whole taxable amount regardless of your bracket. That is the
number that turns a 22% withdrawal into a 32% one.

#### Worked example: $50,000 at age 45

Single filer, $80,000 of wages, taking $50,000 from a traditional
401(k). The 2026 standard deduction is $16,100.

- Tax without the withdrawal. Taxable income is $80,000 − $16,100 = $63,900. That is 10% on the first $12,400 ($1,240), 12% on the next $38,000 ($4,560), and 22% on the remaining $13,500 ($2,970) — $8,770.

- Tax with the withdrawal. Taxable income becomes $130,000 − $16,100 = $113,900. Same first two bands, then 22% on $55,300 ($12,166) and 24% on $8,200 ($1,968) — $19,934.

- Federal tax caused by the withdrawal: $19,934 − $8,770 = $11,164, or 22.3% of the $50,000.

- Early-withdrawal penalty: 10% × $50,000 = $5,000.

- Total federal cost: $16,164 — 32.3%. You keep $33,836, before any state tax.

Notice what the penalty does. Ignore it and the withdrawal looks like
a 22% decision. Include it and you are handing over nearly a third of
the money — before your state takes anything.

#### Wait until 59½ and the same withdrawal costs $11,164

Identical numbers at age 62: the income tax is unchanged at $11,164,
the penalty is zero, and you keep $38,836. Five
thousand dollars is the entire price of the calendar. If the money is
not needed this quarter, the single highest-return move available is
usually to wait.

#### The 10% penalty and the exceptions that beat it

The additional tax does not apply if your distribution fits one of the
IRS exceptions. Several are commonly missed:

- The "rule of 55." If you separate from service in or after the calendar year you turn 55, distributions from that employer's plan are penalty-free. It does not apply to IRAs — rolling the 401(k) to an IRA first destroys the exception. Qualified public-safety employees get it at 50, or after 25 years of service.

- Substantially equal periodic payments (SEPP, section 72(t)). A fixed schedule of withdrawals calculated on your life expectancy, penalty-free at any age, but it must run for five years or until 59½, whichever is longer. Break it early and the penalty is applied retroactively with interest.

- Total and permanent disability, and distributions to a beneficiary after death.

- Unreimbursed medical expenses above 7.5% of your adjusted gross income — the exception covers the excess, not the whole withdrawal.

- Health insurance premiums while unemployed, qualified higher-education expenses, and up to $10,000 lifetime toward a first home — all IRA-only.

- Birth or adoption, up to $5,000 per child per parent.

- Terminal illness, domestic abuse (up to $10,000 or half the account), and one emergency personal expense of up to $1,000 a year — all added by SECURE 2.0.

- An IRS levy, a QDRO in a divorce (employer plans), and qualified disaster distributions.

Every one of these removes the 10%. None of them removes the income
tax.

#### The 20% withholding that surprises people

Ask a 401(k), 403(b) or governmental 457(b) plan for $50,000 and
$40,000 arrives. Employer plans are required to
withhold 20% federal tax on any distribution eligible to be rolled
over — you cannot opt out. That 20% is a prepayment credited on
your return, not a separate tax, so it usually undershoots what you
actually owe once the penalty is added.

IRAs work differently: withholding defaults to 10% and you can raise,
lower or waive it. Either way, if you need $50,000 of spendable cash
you have to gross the request up — and grossing up means a
bigger taxable withdrawal, which is why these decisions compound
badly.

#### 2026 federal ordinary-income brackets

These apply to taxable income — income after your standard
deduction of $16,100 (single) or $32,200 (married filing jointly).

- 10% — up to $12,400 single / $24,800 joint

- 12% — to $50,400 / $100,800

- 22% — to $105,700 / $211,400

- 24% — to $201,775 / $403,550

- 32% — to $256,225 / $512,450

- 35% — to $640,600 / $768,700

- 37% — above that

#### Five ways to pay less

- Split it across two tax years. $40,000 in December and $40,000 in January fills the lower brackets twice. A single $80,000 withdrawal may push half of it into the next band.

- Take it in a low-income year. The gap between stopping work and claiming Social Security is often the cheapest withdrawal window anyone gets — and the same window is where Roth conversions are cheapest.

- Check the exception list first. A medical or education withdrawal structured correctly saves 10% outright.

- Spend from the right account. Taxable-account money often costs far less than pre-tax money, because only the gain is taxed and long-term gains have their own lower rates. The withdrawal order calculator compares the options.

- Use a qualified charitable distribution at 70½+. Up to the annual limit goes straight from an IRA to a charity, counts toward your RMD, and never appears in your income at all.

#### Mistakes that cost the most

- Rolling to an IRA before using the rule of 55. One transfer can cost 10% of every dollar you take between 55 and 59½.

- Assuming the 20% withheld is the bill. With the penalty, the true cost is often 30%+; the shortfall shows up in April, sometimes with an underpayment charge.

- Ignoring what the extra income touches. A large withdrawal can push more of your Social Security into tax, trip a Medicare IRMAA bracket two years later, or push long-term capital gains out of the 0% band.

- Missing the 60-day window on an indirect rollover. Take the cash intending to redeposit it, miss 60 days, and the whole amount becomes a taxable distribution — including the 20% the plan withheld, which you had to replace from your own pocket to roll the full amount.

#### Frequently asked questions

##### How much tax will I pay on a 401(k) withdrawal?

A withdrawal from a traditional 401(k), 403(b), 457(b) or IRA is ordinary income, so it is taxed at your marginal rate — it stacks on top of everything else you earn that year. Take $50,000 out at age 45 with $80,000 of other income and the federal bill is about $11,164 in income tax plus a $5,000 early-withdrawal penalty: $16,164, or 32.3% of the withdrawal. You keep $33,836 before state tax.

##### When does the 10% early withdrawal penalty apply?

It applies to distributions taken before age 59 and a half from a traditional IRA, 401(k), 403(b) or 457(b) plan, on top of ordinary income tax. There is a long list of exceptions, including leaving your employer in or after the year you turn 55 (employer plans only), substantially equal periodic payments under section 72(t), total and permanent disability, unreimbursed medical expenses above 7.5% of AGI, and up to $10,000 toward a first home from an IRA.

##### Why did my 401(k) provider withhold 20%?

Employer plans must withhold 20% federal tax on any eligible rollover distribution paid to you — that is the law, not a choice, and it is a prepayment rather than the final bill. If your real rate is higher you owe the difference at filing; if it is lower you get a refund. IRA distributions are different: the default is 10% and you can change or waive it.

##### Is a Roth IRA withdrawal taxed?

Your own Roth contributions come out tax-free and penalty-free at any age, because they were already taxed. Earnings are only tax-free in a qualified distribution — you must be 59 and a half or older and the account must have been open five years. Converted amounts have their own five-year clock for the 10% penalty, counted separately for each conversion.

##### How can I reduce the tax on an IRA withdrawal?

Split the withdrawal across two tax years so less of it lands in a higher bracket, take it in a low-income year such as the gap between retiring and claiming Social Security, check whether a penalty exception fits your situation, and consider a 401(k) loan or a taxable-account withdrawal instead. If you are 70 and a half or older, a qualified charitable distribution moves money out of an IRA without adding to taxable income at all.

Withdrawal Order Calculator
Which account to spend first, and what each one costs in tax.

RMD Calculator
The withdrawal the IRS eventually makes for you.

Roth Conversion Calculator
Pay the tax deliberately, in a year you choose.

How 401(k) Withdrawals Are Taxed
The rules behind the numbers on this page.

Tax-Efficient Drawdown Order
Sequencing accounts so the tax bill stays low for decades.

#### See what the withdrawal does to the rest of the plan

One withdrawal changes your tax bracket, your Social Security
taxation, and the balance that has to last. Planomy projects all of
it year by year, so you can compare taking the money now against
taking it later. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Loan Amortization Calculator: Free Principal and Interest
URL: https://planomy.net/calculators/loan-amortization
Summary: Free, no sign-up: your monthly payment, total interest and payoff date, the full principal-and-interest schedule, and what an extra payment removes.

Free loan amortization calculator

### Loan amortization & payoff calculator

Amortization is how a fixed loan payment splits between interest and
the amount borrowed over time — heavy on interest early, heavier on the
amount borrowed late.
Enter your loan amount, rate, and term to see the monthly
payment, total interest, and payoff date, then add an optional extra
payment to watch the interest and years melt away. Everything runs in
your browser — nothing is uploaded.

##### How the schedule is built

- The monthly payment is the standard amortizing formula: payment = P × i ÷ (1 − (1 + i)−n), where i is the monthly rate (APR ÷ 12) and n is the number of months.

- Each month, interest is charged on the remaining balance and the rest of the payment reduces principal. Any extra payment goes entirely to principal, shrinking future interest.

- The schedule below is a yearly rollup — interest and principal paid each year plus the ending balance — with the extra payment applied.

- Interest and time saved compare the same loan with and without the extra payment.

An estimate for planning, not a loan offer. It assumes a fixed
rate and on-time payments, and it ignores property taxes,
insurance, PMI, escrow, and any fees or prepayment penalties.
Confirm the exact terms with your lender.

#### What is loan amortization?

Amortization is the process of paying off a loan with equal
periodic payments. Although each payment is the same size, the
split between interest and principal shifts over the life of the
loan. Early on, most of the payment covers interest on a large
balance; as the balance falls, more of each payment attacks the
principal. That's why the first years of a mortgage barely dent the
balance — and why extra principal payments early are so powerful.

#### Why extra payments save so much

An extra payment goes straight to principal, so it permanently
removes the future interest that balance would have generated.
Because interest compounds over the remaining term, even a modest
extra amount each month can cut years off the loan and save a large
chunk of total interest. The calculator above shows exactly how much
— try nudging the extra-payment field and watch the payoff date
move.

#### How the payment is calculated

A fully amortizing payment solves for the fixed amount that pays the
loan to zero over the term. The formula is
payment = P × i ÷ (1 − (1 + i)−n), where
P is the loan amount, i is the monthly interest rate (APR divided by
12), and n is the total number of monthly payments. Total interest
is simply the sum of every payment minus the amount you borrowed.

#### Reading an amortization schedule

- Interest paid — the portion of your payments that went to the lender as the cost of borrowing.

- Principal paid — the portion that actually reduced what you owe.

- Ending balance — what's left after that year's payments; watch it fall faster once you add extra principal.

#### Frequently asked questions

##### How is a monthly loan payment calculated?

A fully amortizing payment uses the formula payment = P × i ÷ (1 −
(1 + i) to the power of −n), where P is the loan amount, i is the
monthly interest rate (the APR divided by 12), and n is the number
of monthly payments. It's the fixed amount that pays the balance
down to zero over the term.

##### How much does an extra monthly payment save?

More than most people expect. Because every extra dollar goes to
principal and eliminates the future interest on it, a modest extra
payment can shorten the loan by years and save tens of thousands in
interest. Enter an amount in the extra-payment field above to see
the exact interest and time saved for your loan.

##### Why is so much of my early payment interest?

Interest is charged on the outstanding balance, which is largest at
the start. So early payments are mostly interest and only a little
principal. As the balance shrinks, the interest portion falls and
the principal portion grows, which is why the balance drops slowly
at first and then accelerates.

##### Does paying extra reduce my required monthly payment?

No. Extra principal payments shorten the loan and cut total
interest, but your required monthly payment stays the same unless
you formally recast or refinance the loan. You simply reach a zero
balance sooner. Confirm your lender applies extra amounts to
principal, not to future payments.

##### What's the difference between APR and interest rate here?

This calculator treats the rate you enter as the loan's periodic
interest rate applied monthly. A lender's APR can also fold in
certain fees, so a real-world APR may run slightly above the note
rate. For amortization math, enter the note rate used to compute
your payment.

Mortgage Payoff Calculator
Focus on a home loan and the impact of paying it down early.

Debt Payoff Calculator
Compare snowball vs. avalanche across multiple debts.

Compound Growth Calculator
Weigh paying down debt against investing the difference.

401(k) vs IRA vs Roth vs HSA
Where the payment goes once the loan is paid off.

Pay Off the Mortgage Before Retiring?
When paying a loan down early is worth the cash.

#### See your loans inside your whole plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Medicare IRMAA Calculator: 2026 Surcharge Brackets
URL: https://planomy.net/calculators/medicare-irmaa
Summary: Find your Part B and Part D surcharge tier from the income you reported two years ago, the monthly premium it adds, and how close you are to the next cliff.

Free Medicare premium surcharge calculator

### Will I pay a Medicare premium surcharge?

IRMAA (Income-Related Monthly Adjustment Amount) raises your
Medicare Part B and Part D premiums once your income crosses a
threshold — and it's a cliff, not a slope: one dollar over the
line costs you the entire tier's surcharge. Enter your filing
status and income from two years ago to see where you land.
Everything runs in your browser.

A simplified approximation using 2026 CMS-published premiums
and IRMAA thresholds, not tax or medical advice. It does not
account for future inflation indexing of thresholds, Part A
premiums, Medigap or Medicare Advantage costs, or
life-changing-event appeals. Talk to a tax professional or
Medicare counselor before making decisions based on it.

#### What is IRMAA?

IRMAA (Income-Related Monthly Adjustment Amount) is a surcharge
added to standard Medicare Part B (medical) and Part D
(prescription drug) premiums for higher earners. Everyone pays
the same base premium; IRMAA adds a extra fixed dollar amount
on top, based on your income — it isn't a percentage or a
gradual phase-in.

#### The 2-year lookback

Medicare doesn't know your current income when it sets next
year's premium, so it looks back two years: your 2026
premium is based on your 2024 tax return's Modified Adjusted
Gross Income (MAGI). This lookback is why a single
high-income year — a large Roth conversion, capital gain, or
final working year — can trigger a surcharge two years later,
even if your income has since dropped.

#### Why it's a cliff, not a slope

Each IRMAA tier applies in full once your MAGI reaches its
threshold — there's no phase-in. Earning even $1 more than a
tier's cutoff moves your entire premium (not just the
income above the line) into the higher tier, adding thousands
of dollars a year for both spouses on Medicare. This is why
planners pay close attention to MAGI in the two years before
Medicare enrollment.

#### Strategies people search for

- Timing Roth conversions — spreading conversions across years, or completing them before age 63 (two years before Medicare eligibility) to avoid tripping a future tier.

- Appealing via Form SSA-44 — if you've had a "life-changing event" (retirement, divorce, loss of income-producing property, death of a spouse), you can ask Social Security to use a more recent, lower income instead of the 2-year-old figure.

- Bracket-aware withdrawal order — coordinating which accounts you draw from in the years feeding into your Medicare lookback to avoid crossing a threshold unnecessarily.

#### Keep the plan honest

Planomy applies the same IRMAA tiers and 2-year MAGI
lookback inside your full retirement projection — so Roth
conversions and withdrawal decisions account for their effect
on future Medicare premiums, not just current-year taxes.

#### Frequently asked questions

##### What income is used for IRMAA?

IRMAA is based on modified adjusted gross income from your tax return, usually from two years earlier. For example, Medicare premiums for one year generally use income reported on the return filed two years before that year.

##### Why is IRMAA called a cliff?

IRMAA is a cliff because crossing a threshold by even one dollar can move you into the next surcharge tier. That higher tier can increase monthly Part B and Part D costs for the entire year.

##### Can an IRMAA surcharge be appealed?

Sometimes. If your income dropped because of a qualifying life-changing event such as retirement, marriage, divorce, or death of a spouse, you may be able to ask Social Security to use a more recent income year.

#### Build your full plan in Planomy

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

#### Related calculators and guides

RMD Calculator
Your Required Minimum Distribution age and yearly amounts.

Social Security Claiming Age
Compare claiming at 62, full retirement age, or 70.

Roth Conversion
Whether filling a tax bracket with conversions pays off.

Tax-Aware Withdrawal
Order account withdrawals to cut lifetime taxes.

The Roth Conversion Ladder, Explained
Convert in the gap years without tripping an IRMAA cliff.

Which Accounts to Draw Down First
Draw down in an order that keeps income under the tier.

See all 37 calculators

---

## Mortgage Payoff Calculator: Interest Saved Early
URL: https://planomy.net/calculators/mortgage-payoff
Summary: See your payoff date and lifetime interest, then add an extra monthly payment to see exactly how many years and how many interest dollars it takes off the loan.

Free calculator

### Mortgage Payoff Calculator

See when your mortgage will be paid off, how much total interest
you'll pay, and how many years and dollars of interest an extra
monthly payment could save you. Everything runs in your browser;
nothing is uploaded.

Payoff date (with extra)

—

Total interest paid

$0

Interest saved by extra

$0

Balance over time

Minimum payment
With extra

A simplified approximation for planning intuition, not financial
advice. Assumes a fixed rate and consistent payments for the life
of the loan.

Open the full planner

#### How mortgage payoff works

A mortgage is an amortizing loan, which means every monthly payment is
split between interest and principal. Interest is charged on your
remaining balance, so at the start of a loan — when the balance is
largest — the bulk of each payment goes to interest and only a little
chips away at what you owe. As the balance shrinks, the interest
portion falls and more of each payment attacks the principal. This is
why the early years of a mortgage feel like you are barely making a
dent, and why the balance falls faster and faster toward the end.

This calculator amortizes your loan month by month. It applies your
interest rate to the current balance, subtracts the interest from your
payment, and reduces the balance by whatever principal is left over.
It repeats that until the balance reaches zero, which gives you an
exact payoff date and the total interest you'll pay over the life of
the loan. Because interest compounds on the outstanding balance, the
total interest on a 30-year mortgage can rival or even exceed the
amount you originally borrowed.

#### Why extra payments are so powerful

When you add an extra amount to your monthly payment, every dollar of
it goes straight to principal — there is no interest due on it yet.
Reducing the principal early means the loan accrues less interest for
the entire remaining term, and each subsequent payment then knocks out
even more principal. The effect snowballs. A modest extra payment can
shave years off the loan and save tens of thousands of dollars in
interest, because you are attacking the balance during the years when
interest charges are highest.

The calculator above shows this directly: it runs your loan twice, once
with just the minimum payment and once with your extra payment added,
then reports the difference in payoff time and total interest. Try
nudging the extra payment up and down to see how sensitive the savings
are — you'll often find that even $100 to $200 extra per month has an
outsized impact.

#### Should you pay off your mortgage early?

Paying extra guarantees a return equal to your mortgage rate, which is
attractive when rates are high. But it isn't always the best use of a
dollar. Consider these trade-offs first:

- Match against other goals. High-interest debt and an employer 401(k) match usually beat extra mortgage payments.

- Keep an emergency fund. Money paid into a mortgage is hard to get back out; don't drain your cash cushion.

- Compare to investing. If your mortgage rate is low, long-run investment returns may exceed the guaranteed savings from prepaying.

- Confirm no prepayment penalty. Most modern mortgages have none, but check your loan terms.

#### Frequently asked questions

##### What monthly payment should I enter?

Use your principal-and-interest payment — the part that pays down the
loan — not your full bill. Escrow amounts for property taxes and
homeowners insurance don't affect the loan payoff, so leave them out
for an accurate result.

##### Why does my payment need to exceed the monthly interest?

If your payment is smaller than the interest that accrues each month,
the balance grows instead of shrinking and the loan never pays off.
The calculator flags this so you can raise the payment to a level that
actually reduces principal.

##### Is the extra payment applied to principal?

Yes. This tool assumes any extra amount goes entirely toward
principal, which is how most lenders apply it — though it's worth
confirming your servicer does the same and doesn't just advance your
next due date.

##### Does this include taxes, insurance, or PMI?

No. It models only the loan's principal and interest. Private mortgage
insurance typically drops off once you reach about 20% equity, which
is a separate saving from paying the loan down faster. Planomy's
full app can fold your mortgage into your complete net-worth plan.

#### Want the full picture?

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

See what's inside

#### Related calculators and guides

Compound Growth
How contributions and time compound into a bigger balance.

Savings Rate & FI
Your savings rate and years to financial independence.

FIRE Number
The nest egg you need to retire early on the 4% rule.

Retirement Drawdown
How long your savings last at your planned spending.

401(k) vs IRA vs Roth vs HSA
Paying the mortgage down vs investing the same dollars.

Pay Off the Mortgage Before Retiring?
Whether to clear the balance before you stop working.

See all 37 calculators

---

## Net Worth Calculator: Free, No Sign-Up, Instant Total
URL: https://planomy.net/calculators/net-worth
Summary: Free net worth calculator: list what you own and owe for your total, your liquid net worth excluding your home, and the asset-to-debt split. No sign-up.

Free net worth calculator

### Calculate your net worth

Net worth is the single clearest snapshot of your financial health:
everything you own minus everything you owe. List your assets and
debts below to see your total net worth, your liquid net worth
(excluding your home), and how your money is split between assets and
liabilities. Everything runs in your browser — nothing is uploaded.

##### How net worth is calculated

- Net worth = total assets − total liabilities. Assets are everything you own with resale value; liabilities are every balance you owe.

- Liquid net worth here excludes your home's value and its mortgage, so it reflects the money you could reach without selling or borrowing against the house.

- Use current market values, not what you paid — a home's estimate, a car's resale price, and today's investment balances. A negative net worth simply means your debts currently exceed your assets.

- This is a point-in-time snapshot. Tracking it every few months shows the trend that matters far more than any single number.

An estimate for planning, not an appraisal, statement of financial
condition, or financial advice. Asset values are approximate and
change over time; get formal valuations where precision matters.
Nothing you enter leaves your browser.

#### What is net worth?

Net worth is what you'd have left if you sold everything you own and
paid off everything you owe. It's the number that cuts through
income, spending, and account balances to answer one question: are
you building wealth or standing still? A high income with high debt
can produce a lower net worth than a modest income paired with
steady saving — which is exactly why net worth, tracked over time,
is the metric that matters.

#### Assets minus liabilities

- Assets are everything you own that has value: cash and savings, retirement and brokerage investments, your home, vehicles, business equity, and valuables.

- Liabilities are everything you owe: your mortgage, student loans, auto loans, credit card balances, and any other debt.

Subtract the second from the first and you have your net worth. If
the result is negative — common early in a career with student debt
— it isn't a failure; it's a starting line. What counts is the
direction it moves.

#### Total vs. liquid net worth

Your home is usually the biggest asset on the list, but you can't
spend a kitchen. Liquid net worth strips out your
home value and mortgage to show the wealth you could actually access
for emergencies or opportunities. Watching both numbers keeps you
from feeling wealthy on paper while cash-poor in practice. Make sure
part of that liquid figure is a real cushion — size it with our
emergency fund calculator.

#### How to grow your net worth

Net worth rises two ways: assets grow or debts shrink. Automating
investments lets compounding do the heavy lifting over decades — see
it in the
compound growth calculator
— while a payoff plan attacks the other side of the ledger. If
high-interest balances are dragging you down, the
debt payoff calculator
shows the fastest route out. Re-run this snapshot a few times a year
and the trend line becomes your scorecard.

#### Frequently asked questions

##### What should be included in net worth?

Include every asset with real resale value — cash, investments,
retirement accounts, your home, vehicles, and valuables — and
every debt you owe, from your mortgage to credit cards. Leave out
things with no resale value and recurring expenses, which are
cash flow rather than balance-sheet items.

##### Should I include my home in net worth?

Yes, at its current market value, with the mortgage counted as a
liability. That said, it helps to also track liquid net worth,
which excludes the home, because home equity isn't money you can
spend without selling or borrowing against it.

##### What is a good net worth?

There's no universal number — it depends on your age, income, and
cost of living. One common benchmark suggests aiming for net worth
equal to your annual income by 30, three times income by 40, and
growing from there. The most useful comparison is with your own
past self: is the number trending up?

##### Can net worth be negative?

Absolutely, and it's common for younger adults carrying student
loans or a new mortgage with little equity yet. Negative net worth
just means liabilities currently exceed assets. Consistent saving
and debt payoff turn it positive over time.

##### How often should I calculate my net worth?

Quarterly is plenty for most people; some prefer once a month or
once a year. The point is consistency — the same categories each
time — so the trend is meaningful. Chasing daily changes in
markets adds noise, not insight.

Retirement Savings by Age
Compare your savings to benchmarks for your age.

Compound Growth Calculator
See how your investments build wealth over time.

Debt Payoff Calculator
Shrink the liabilities side of your balance sheet.

How Much Do You Need to Retire?
Turn the net-worth number into a retirement target.

When Can I Retire?
What this balance sheet means for your FI date.

#### Turn a snapshot into a plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Rent vs Buy Calculator: Break-Even Year and Verdict
URL: https://planomy.net/calculators/rent-vs-buy
Summary: Compare the true cost of renting and buying over the years you plan to stay, including maintenance, closing costs, and the return your down payment gives up.

Free rent vs. buy calculator

### Should you rent or buy a home?

Buying isn't automatically "throwing money away" on rent — and
renting isn't automatically the smart move either. This calculator
compares the full cost of both over the years you plan to stay:
mortgage interest, property tax, maintenance, and closing costs
against home appreciation and what your down payment could have
earned if invested elsewhere. You get a verdict and the break-even
year — when buying first pulls ahead. Everything
runs in your browser — nothing is uploaded.

A simplified comparison, not financial advice. It assumes a fixed
30-year mortgage, a 3% closing cost when you buy and a 6% selling
cost when you leave, and that money not spent on a down payment is
invested at your chosen return. It does not model the mortgage
interest deduction, PMI on low down payments, rent-vs-own tax
differences, or moving costs. Treat the verdict as a starting
point for your own decision.

#### Is it cheaper to rent or buy?

The honest answer is "it depends on how long you
stay." Buying a home has large up-front costs — the down
payment, closing costs, and the transaction fees you pay again
when you sell. Those costs are spread over however many years you
own the place. Stay long enough and appreciation plus the equity
you build outweigh them; sell too soon and renting would have been
cheaper. The crossover point is your breakeven
year.

#### What "opportunity cost" means here

A down payment isn't free money — it's cash that could have stayed
invested. If you put $90,000 down instead of investing it at 6%,
you give up the growth that money would have earned. A fair rent
vs. buy comparison credits the renter with that investment growth,
which is why a big down payment and a strong stock market both tilt
the math toward renting. This calculator charges the buyer the
opportunity cost of every dollar tied up in the home.

#### The costs on each side

- Buying: mortgage interest (the part of the payment that isn't building equity), property tax, maintenance and insurance, closing costs to buy, and selling costs when you leave — offset by appreciation and the principal you pay down.

- Renting: the rent itself, rising each year — offset by keeping your down payment invested and skipping every ownership cost above.

#### When renting usually wins

- You expect to move within a few years, so transaction costs dominate.

- Prices are high relative to rents (a high price-to-rent ratio).

- You can earn a strong return investing the down payment elsewhere.

- You value flexibility and don't want to be responsible for repairs.

#### When buying usually wins

- You'll stay well past the breakeven year — often 5 to 7+ years.

- Rent in your area is high relative to purchase prices.

- You can lock a low fixed mortgage rate while rents keep climbing.

- You want a stable housing cost and a forced-savings effect.

#### Frequently asked questions

##### How does this calculator decide rent vs. buy?

It projects the total net cost of each path over the number of
years you plan to stay. For buying it adds mortgage payments,
property tax, maintenance, and closing costs, then subtracts the
equity you'd walk away with after selling. For renting it totals
the rent you'd pay. It also charges buying the opportunity cost
of the cash you tied up. Whichever path costs less over your
horizon is the verdict.

##### What is the breakeven year?

It's the first year at which owning becomes cheaper than renting
on a cumulative basis. Before that year, the up-front costs of
buying haven't been recovered and renting is ahead; after it,
buying pulls ahead. If you're likely to sell before your
breakeven year, renting is usually the better financial choice.

##### Does buying build wealth even if renting is "cheaper"?

Owning forces you to save through your mortgage principal, which
many people find easier than voluntarily investing the
difference. This tool assumes a disciplined renter who invests
the down payment. If you wouldn't actually invest that money,
buying's forced-savings effect can make it the better real-world
choice even when the pure math is close.

##### Why isn't the mortgage tax deduction included?

Most households now take the standard deduction, so the mortgage
interest deduction provides no benefit unless your itemized
deductions exceed it. Leaving it out keeps the comparison honest
for the typical buyer; if you itemize, buying looks slightly
better than shown here.

Mortgage Payoff Calculator
See how extra payments cut your term and interest.

Home Affordability Calculator
What the lender's 28/36 rule says you can actually borrow.

Compound Growth Calculator
Project what the down payment could earn invested.

Savings Rate & FI Calculator
Turn the money you free up into years of freedom.

How Much Do You Need to Retire?
How a housing decision moves the retirement number.

Pay Off the Mortgage Before Retiring?
The retirement side of carrying a mortgage.

#### See housing inside your whole financial plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Free Retirement Drawdown Calculator: Will Savings Last?
URL: https://planomy.net/calculators/retirement-drawdown
Summary: No sign-up: enter your portfolio, monthly spending, return and inflation to see the year your savings run out — or last indefinitely, with 4% rule context.

Free retirement calculator

### How long will my savings last?

Enter your starting portfolio, monthly spending, expected return and
inflation to estimate how many years your retirement savings will
last before they run out — or whether they can last indefinitely.
Everything runs in your browser; nothing is uploaded.

Your savings last

—

Withdrawal rate

0%

First-year spending

$0

Portfolio balance over time

This is a simplified approximation for planning intuition, not
financial advice. It assumes steady returns and level real
spending; real markets vary year to year.

Open the full planner

#### Understanding retirement drawdown

"Drawdown" is the phase of retirement when you stop adding to your
savings and start spending from them. The central question is whether
your portfolio can outlast you. That depends on a tug-of-war between
three forces: how much you withdraw each year, how much your remaining
balance grows through investment returns, and how fast rising prices
push your spending higher. This calculator simulates that tug-of-war
month by month and tells you the year your balance would reach zero —
or reports that it can last 50 years or more, effectively indefinitely.

The key insight is that a portfolio does not simply deplete on a
straight line. Each year your investments earn a return on whatever is
left, which partially refills the bucket you are draining. If your
return comfortably exceeds your inflation-adjusted withdrawals, the
balance can hold steady or even grow — your money is generating enough
to cover your spending. If withdrawals outpace growth, the balance
declines, slowly at first and then faster as the shrinking portfolio
produces less and less return. Inflation is the quiet accelerant: this
model raises your spending every year to preserve your purchasing
power, so the dollar amount you withdraw keeps climbing.

#### The 4% rule

The best-known rule of thumb in retirement planning is the "4% rule,"
which came out of research known as the Trinity Study. The idea is
that if you withdraw 4% of your starting portfolio in your first year
of retirement, then adjust that amount for inflation each year
afterward, a balanced stock-and-bond portfolio has historically had a
high chance of lasting at least 30 years. On a $1,000,000 portfolio,
4% is $40,000 per year, or about $3,333 per month.

The 4% rule is a helpful starting point, not a guarantee. It was based
on historical US market returns over 30-year windows and does not
promise your money will never run out — especially through a long
retirement, a period of poor early returns, or higher-than-average
inflation. Some planners now prefer a more conservative 3.5%, while
flexible spenders who cut back in down markets can often sustain more.
Use the calculator above to see how your own withdrawal rate compares
and how sensitive the outcome is to each assumption.

#### Ways to make your money last longer

- Lower your withdrawal rate. Even a small reduction in spending dramatically extends how long a portfolio lasts.

- Stay invested for growth. An all-cash portfolio loses to inflation; a diversified mix keeps compounding while you draw down.

- Be flexible. Trimming spending in years the market falls is one of the most powerful protections against running out.

- Delay Social Security. Guaranteed inflation-adjusted income reduces how much you need to pull from the portfolio.

#### Frequently asked questions

##### What return should I use in retirement?

Retirees often hold a more conservative mix than during their working
years, so a real (after-inflation) return of 3–5% is a common
assumption. If you enter a nominal return, also enter an inflation
rate so the model raises your spending accordingly.

##### Does this account for Social Security or a pension?

No — this simplified tool models a single portfolio being drawn down.
Guaranteed income like Social Security effectively lowers the spending
you need from savings. Planomy's full app models these income
streams alongside your investments.

##### What about sequence-of-returns risk?

This calculator assumes a steady average return. In reality, a run of
poor returns early in retirement can permanently damage a portfolio
even if the long-run average is fine. Planomy's Monte Carlo
simulation stress-tests thousands of return sequences to capture that
risk.

##### Are taxes included?

No. Withdrawals from tax-deferred accounts are taxable income, which
means you may need to withdraw more than you spend. Planomy models
account types and taxes to estimate the gross withdrawals you'll need
— see the withdrawal-order calculator.

#### Want the full picture?

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

See what's inside

#### Related calculators and guides

FIRE Number
The nest egg you need to retire early on the 4% rule.

Savings Rate & FI
Your savings rate and years to financial independence.

Social Security Claiming Age
Compare claiming at 62, full retirement age, or 70.

Tax-Aware Withdrawal
Order account withdrawals to cut lifetime taxes.

What Is a Safe Withdrawal Rate?
Where the 4% rule came from and when it breaks.

Sequence of Returns Risk, Explained
Why the order of returns decides whether the money lasts.

See all 37 calculators

---

## Retirement Savings by Age Calculator: Are You on Track?
URL: https://planomy.net/calculators/retirement-savings-by-age
Summary: Compare your balance to the salary-multiple benchmarks — 1x by 30, 3x by 40, 6x by 50, 10x by 67 — and see what you would need to save to catch back up.

Free retirement savings benchmark

### How much should you have saved by now?

A quick gut-check for your retirement savings: financial firms
suggest holding a growing multiple of your salary as you age —
roughly 1× by 30, 3× by 40, 6× by 50, 8× by
60, and 10× by 67. Enter your age, income, and current savings
to see the benchmark for exactly where you are, whether you're on
track, and what your balance could grow to by 67. Everything runs in
your browser — nothing is uploaded.

##### How the benchmark works

- Targets follow widely cited salary-multiple guidelines: 1× your salary saved by age 30, 3× by 40, 6× by 50, 8× by 60, and 10× by 67. Between those ages the target is interpolated smoothly.

- Your target is that multiple × your current income. "On track" means your savings meet or beat the benchmark for your age.

- The projection to 67 grows your current balance at your expected return and adds your annual contributions at year-end: future value = savings × (1 + r)years + contribution × [((1 + r)years − 1) ÷ r].

- These are rules of thumb, not a personalized plan. Your real number depends on your spending, other income like Social Security and pensions, and when you retire.

An estimate for planning, not financial advice. Salary-multiple
benchmarks are general guidelines popularized by firms such as
Fidelity and T. Rowe Price; they assume you'll also collect Social
Security and retire around 67. For a full projection built on your
own spending, use the planner or our
FIRE number calculator.

#### How much should I have saved for retirement by age?

There's no single right number, but a popular shortcut expresses
retirement savings as a multiple of your salary that grows as you
age. The idea, popularized by Fidelity and echoed by other firms,
is to have roughly one year's salary saved by 30, three times by
40, six times by 50, eight times by 60, and ten times by your full
retirement age of 67. Because the target is tied to your income, it
scales automatically whether you earn $50,000 or $250,000.

#### The salary-multiple benchmarks

- By age 30 — 1× salary. One year of pay banked as you finish your early-career growth.

- By age 40 — 3× salary. Contributions plus a decade of compounding should roughly triple your stash.

- By age 50 — 6× salary. Extra contributions for people 50 and older can help you get here.

- By age 60 — 8× salary. The home stretch, when your balance does most of the heavy lifting.

- By age 67 — 10× salary. Enough, combined with Social Security, to replace most of your income in retirement.

#### What to do if you're behind

Falling short of the benchmark is common and fixable — the earlier
you act, the more compounding does for you. Raise your savings rate
a percentage point or two a year until it stings a little, capture
every dollar of employer match, and use the extra age-50 contribution once
you turn 50. Even a few extra years of work before claiming can
close a large gap, because you save longer, spend down for fewer
years, and can delay Social Security for a bigger check.

#### Why these are only a starting point

Salary multiples are a fast sanity check, not a plan. They assume a
fairly standard retirement age and spending level and that Social
Security will cover part of your income. If you plan to retire early,
spend more than your salary implies, or won't have much Social
Security, you'll need more than 10×. A spending-based target —
like the 25×-annual-expenses rule behind the
FIRE number — is a more
precise way to size the finish line.

#### Frequently asked questions

##### How much should I have saved for retirement at 40?

A common benchmark is about three times your annual salary by age
40. On an $80,000 income that's roughly $240,000. If you're not
there, you're far from alone — focus on steadily raising your
savings rate and capturing your full employer match.

##### Is 10 times my salary really enough to retire?

For many people, 10× salary at 67 combined with Social
Security replaces enough of their pre-retirement income to
maintain their lifestyle. But it depends heavily on your spending.
If you'll spend more than your salary suggests or retire earlier,
aim higher and check the number against your actual expenses.

##### Do these benchmarks include my home equity?

No. The salary-multiple targets count money in retirement accounts
and investments you can draw on for income — 401(k)s, IRAs, and
taxable brokerage savings. Home equity, unless you plan to tap it,
and your emergency fund are usually kept separate.

##### What if I earn a lot more or less than average?

Because the benchmarks are multiples of your own salary, they
already scale to your income. Very high earners sometimes need a
higher multiple, because Social Security replaces a smaller share
of a large salary, while lower earners may need a bit less for the
opposite reason.

##### Should I count my spouse's savings too?

If you plan for retirement together, it's reasonable to compare
your combined savings against a benchmark based on your combined
income. Just be consistent — use household savings against
household income, or individual against individual, not a mix.

FIRE Number Calculator
Size your finish line from spending, not salary multiples.

Compound Growth Calculator
See how contributions and returns build your balance.

Savings Rate & FI Calculator
Find the savings rate that gets you to your target.

How Much Do You Need to Retire?
Replace the salary-multiple rule with your own number.

401(k) vs IRA vs Roth vs HSA
The account order that gets you back on the benchmark.

#### Turn the benchmark into a real plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## RMD Calculator 2026: IRA and 401(k) Minimum Distribution
URL: https://planomy.net/calculators/rmd
Summary: Free RMD calculator, no sign-up: the age yours start, your first required distribution to the dollar, the Uniform Lifetime Table divisor, and every year after.

Free required minimum distribution (RMD) calculator

### How much is my required minimum distribution?

From your RMD start age, the IRS requires an annual withdrawal from
every traditional IRA and 401(k) you own — whether you need the cash
or not, and taxed as ordinary income when it lands. Enter your birth
year and balance to see the age yours begin, this year's required
amount to the dollar, the Uniform Lifetime Table divisor behind it,
and a twelve-year projection of what comes next. Everything runs in
your browser.

A simplified approximation using the IRS Uniform Lifetime Table,
not tax advice. It assumes a single traditional balance, a
constant rate of return, and no additional contributions or
withdrawals. Most retirees should use the Uniform Lifetime
Table, but a sole beneficiary spouse more than 10 years younger
uses a different (Joint Life) table not modeled here — talk to
a tax professional about your specific situation.

#### What is a Required Minimum Distribution?

A Required Minimum Distribution (RMD) is the minimum amount the
IRS requires you to withdraw each year from retirement accounts
where taxes have been postponed — traditional IRAs, 401(k)s, 403(b)s, and
similar plans — once you reach a certain age. The government
deferred tax on this money for decades; RMDs force it back into
taxable income on a schedule, whether or not you need the cash.

Your RMD each year is calculated as:

- RMD = prior December 31 account balance ÷ the IRS life-expectancy number for your age

The life-expectancy number comes from the IRS Uniform Lifetime
Table (the table used by nearly everyone; a longer
Joint Life table applies only if your sole beneficiary is a
spouse more than 10 years younger). The divisor shrinks every
year you age, so the required percentage of your balance grows
over time — starting around 3.8% at age 73 and climbing past
10% by your late 90s.

#### Worked example: calculating an RMD amount

Take a 73-year-old with $600,000 in a traditional
IRA on December 31 of last year. The divisor at 73 is
26.5, so:

| Step
| Figure

| Balance on December 31 of the prior year | $600,000

| Age reached during this calendar year | 73

| Uniform Lifetime Table divisor | 26.5

| RMD = $600,000 ÷ 26.5 | $22,642

Three details decide the answer, and each is a common mistake.
Use the December 31 balance of the prior year, not
today's balance. Use the age you turn during the
distribution year, not your age on January 1. And run the
division for each account type separately before applying the
aggregation rules below.

#### Calculating a 401(k), 403(b), or IRA RMD

The arithmetic is identical for every account type — prior-year
balance ÷ divisor. What differs is which account the money has
to leave. Say the same 73-year-old holds three accounts:

| Account
| Dec 31 balance
| ÷ 26.5
| Where it must come from

| Traditional IRA | $400,000 | $15,094 | $22,642 total from either IRA, in any split

| SEP IRA | $200,000 | $7,547

| 401(k) | $300,000 | $11,321 | $11,321 out of the 401(k) itself

The two IRAs are calculated separately but satisfied together —
their combined $600,000 ÷ 26.5 = $22,642 can come
entirely from one of them. The 401(k)'s $11,321 cannot: plan RMDs must be taken
from that plan. A 403(b) follows the IRA-style rule but only among
other 403(b) accounts. Total required for the year:
$33,963.

#### When do RMDs start?

Current federal retirement rules set the RMD start age in stages:

- Age 73 — for those born 1951 through 1959.

- Age 75 — for those born 1960 or later.

Your very first RMD can be delayed until April 1 of the
year after you reach your start age, but every RMD
after that is due by December 31 of the same year — so if you
delay the first one, you'll take two RMDs in that second year,
which can push you into a higher tax bracket.

#### The IRS Uniform Lifetime Table

This is the table behind the projection above — the divisor for
each age, and the percentage of your balance it forces out. Nearly
every account owner uses it; the exception is an owner whose sole
beneficiary is a spouse more than 10 years younger, who uses the
Joint Life and Last Survivor table instead and gets a larger
divisor, meaning a smaller RMD.

| Age
| Divisor
| % of balance
| On $600,000

| 73 | 26.5 | 3.77% | $22,642

| 74 | 25.5 | 3.92% | $23,529

| 75 | 24.6 | 4.07% | $24,390

| 76 | 23.7 | 4.22% | $25,316

| 77 | 22.9 | 4.37% | $26,201

| 78 | 22.0 | 4.55% | $27,273

| 79 | 21.1 | 4.74% | $28,436

| 80 | 20.2 | 4.95% | $29,703

| 81 | 19.4 | 5.15% | $30,928

| 82 | 18.5 | 5.41% | $32,432

| 83 | 17.7 | 5.65% | $33,898

| 84 | 16.8 | 5.95% | $35,714

| 85 | 16.0 | 6.25% | $37,500

| 86 | 15.2 | 6.58% | $39,474

| 87 | 14.4 | 6.94% | $41,667

| 88 | 13.7 | 7.30% | $43,796

| 89 | 12.9 | 7.75% | $46,512

| 90 | 12.2 | 8.20% | $49,180

| 91 | 11.5 | 8.70% | $52,174

| 92 | 10.8 | 9.26% | $55,556

| 93 | 10.1 | 9.90% | $59,406

| 94 | 9.5 | 10.53% | $63,158

| 95 | 8.9 | 11.24% | $67,416

| 96 | 8.4 | 11.90% | $71,429

| 97 | 7.8 | 12.82% | $76,923

| 98 | 7.3 | 13.70% | $82,192

| 99 | 6.8 | 14.71% | $88,235

| 100 | 6.4 | 15.63% | $93,750

The right-hand column holds the balance at $600,000 each year
purely to show the shape: the required percentage more than
quadruples between 73 and 100. That escalation, not the first
year's amount, is what pushes retirees into higher brackets late
in life.

#### Which accounts have RMDs — and where the money must come from

The aggregation rules trip up more people than the arithmetic does:

- Traditional, SEP, and SIMPLE IRAs — calculate the RMD for each account separately, then take the total from any one of them or any combination.

- 401(k), 403(b), and 457(b) plans — each plan's RMD must come out of that plan. You cannot cover a 401(k) RMD from an IRA. (403(b) accounts may be aggregated with each other, but with nothing else.)

- Roth IRAs — no RMDs at all during the original owner's lifetime.

- Roth 401(k) and Roth 403(b) — no longer subject to lifetime RMDs under SECURE 2.0, from 2024 onward. Guidance saying otherwise is out of date.

- Inherited accounts follow separate rules entirely — most non-spouse beneficiaries must empty the account within 10 years, and where the original owner had already begun RMDs, annual withdrawals are required during those 10 years too.

One useful exception: if you're still working past your start age
and don't own more than 5% of the business, your current
employer's plan can usually delay RMDs until you actually retire.
It never applies to IRAs, or to old plans from previous employers —
which is a real argument for rolling an old 401(k) into your
current plan rather than into an IRA.

#### What happens if you miss one?

Missing an RMD — or taking less than required — triggers a
25% excise tax on the shortfall. That drops to
10% if you correct it promptly: withdraw the
missed amount and file Form 5329 within the two-year correction
window. The IRS will often waive the penalty entirely for
reasonable cause if you fix the shortfall and attach an
explanation, so a missed RMD is a problem to report rather than
hide.

#### Ways to make RMDs smaller or cheaper

- Roth conversions before your start age. The window between retiring and your first RMD is often the lowest-income stretch of your life, which makes it the cheapest time to convert pre-tax money. Every dollar converted is a dollar that never generates an RMD — our guide to building a Roth conversion ladder covers how much to convert each year without spilling into the next bracket.

- Qualified charitable distributions. From age 70½ you can send money straight from an IRA to a qualifying charity. It counts toward your RMD but is excluded from income entirely, which beats taking the RMD and claiming a deduction. There is an annual per-taxpayer limit, indexed for inflation and currently a little over $100,000.

- Withhold your tax out of the RMD itself. Withholding is treated as paid evenly across the year whenever it happens, so a December RMD with a large withholding can settle a whole year's tax without an underpayment penalty.

- A QLAC — a qualified longevity annuity contract bought inside an IRA — is excluded from the balance used to compute RMDs and can defer that income to as late as age 85. SECURE 2.0 caps the premium at $200,000, indexed for inflation. Our annuity payout calculator shows the lifetime income a premium of that size buys.

- Take it in kind, not in cash, if you don't need to spend it. Transferring securities to a taxable brokerage account satisfies the RMD, is taxed identically, and keeps you invested.

#### The mistakes that cost the most

- Delaying the first RMD to April 1 without doing the arithmetic. It's allowed, but you then take two RMDs in one calendar year — which can lift your bracket, tax more of your Social Security, and raise your Medicare IRMAA surcharge two years later.

- Covering a 401(k) RMD from an IRA. Not permitted, and the shortfall carries the excise tax.

- Using the wrong year's balance. The RMD is always based on the prior December 31 balance, not today's.

- Assuming a Roth 401(k) still has RMDs. It doesn't, from 2024 — though rolling it to a Roth IRA before your start age remains the cleanest way to be certain.

- Leaving it to late December. Custodian processing at year end is the single most common cause of a missed deadline.

- Ignoring the knock-on effects. An RMD raises taxable income, which can tax more of your Social Security, trip IRMAA, and change the rate on capital gains realised the same year.

#### Frequently asked questions

##### When do RMDs start?

Under current federal rules, RMDs generally start at age 73 for
people born from 1951 through 1959, and age 75 for people born
in 1960 or later. Anyone born in 1950 or earlier is already
under the earlier rules. Your very first RMD may be delayed to
April 1 of the following year; every one after that is due by
December 31.

##### How is an RMD calculated?

Take the account balance as of the prior December 31 and divide
it by the IRS life-expectancy divisor for the age you reach this
year. At 73 the Uniform Lifetime Table divisor is 26.5, so a
$600,000 balance produces an RMD of about $22,642 — roughly
3.8%. The divisor shrinks every year, so the required percentage
climbs as you age.

##### How do I calculate my 401(k) RMD?

Exactly as for an IRA: the plan's balance on the prior December
31 divided by your Uniform Lifetime Table divisor. A $300,000
401(k) at age 73 gives $300,000 ÷ 26.5 = about $11,321. The
difference is where the money comes from — a 401(k) RMD must be
withdrawn from that specific plan, and cannot be covered out of
an IRA or another employer plan. If you hold two 401(k)s, each
one owes its own distribution. 403(b) accounts are the exception:
they may be aggregated with other 403(b) accounts, but with
nothing else.

##### Which accounts have RMDs?

Traditional, SEP, and SIMPLE IRAs, plus most employer plans
including 401(k), 403(b), and 457(b). Roth IRAs never have
lifetime RMDs for the original owner, and Roth 401(k)s no longer
do either, from 2024. Inherited accounts follow separate rules,
usually a 10-year deadline.

##### Can I take my 401(k) RMD from my IRA instead?

No. IRA RMDs may be aggregated — calculate each, then take the
total from whichever IRAs you like — but each employer plan's
RMD has to be withdrawn from that specific plan. Getting this
wrong leaves a shortfall subject to the excise tax.

##### What is the penalty for missing an RMD?

A 25% excise tax on the amount you should have withdrawn and
didn't. It falls to 10% if you correct the shortfall and file
Form 5329 within the two-year correction window, and the IRS
will often waive it altogether for reasonable cause if you fix
it and explain.

##### Can I avoid tax on my RMD by donating it?

Largely, yes. From age 70½ a qualified charitable distribution
sends money directly from your IRA to a qualifying charity: it
counts toward your RMD and is excluded from your taxable income
altogether, which beats taking the income and claiming a
deduction. The annual limit per taxpayer is indexed for
inflation and sits a little over $100,000.

#### See every RMD you'll ever take

One year's RMD isn't the problem — the twenty after it are, as the
divisor shrinks and the required percentage climbs. Planomy
projects the whole sequence alongside Social Security, taxes,
IRMAA, and any Roth conversions you're weighing, so you can see
which years have room to convert before the RMDs arrive. Free,
private, and running in your browser.

Open the planner

#### Related calculators and guides

Medicare IRMAA
Whether your income triggers Medicare premium surcharges.

Tax-Aware Withdrawal
Order account withdrawals to cut lifetime taxes.

Roth Conversion
Whether filling a tax bracket with conversions pays off.

Social Security Claiming Age
Compare claiming at 62, full retirement age, or 70.

IRA Withdrawal Tax
The federal tax and 10% penalty on a distribution you take yourself.

RMD Rules and Deadlines
The deadlines, the 25% penalty, and the QCD workaround.

Which Accounts to Draw Down First
Spend in an order that keeps RMDs from spiking your bracket.

See all 37 calculators

---

## Roth Conversion Calculator: Tax Now vs Savings Later
URL: https://planomy.net/calculators/roth-conversion
Summary: Compare the tax you would pay converting today against the tax-free growth you keep later, and see the after-tax value of converting versus leaving it alone.

Free Roth conversion calculator

### Is a Roth conversion worth it?

Converting traditional IRA or 401(k) dollars to Roth means paying
tax on the conversion now in exchange for tax-free growth and
tax-free withdrawals later. Enter your numbers to compare the
after-tax outcome of converting vs. leaving the money alone.
Everything runs in your browser.

A simplified approximation for planning intuition, not tax
advice. It ignores IRMAA, state taxes, bracket-filling
strategies, and the fact that tax rates themselves can change —
talk to a tax professional before converting.

#### How this calculator works

A Roth conversion moves money from a traditional (pre-tax)
account to a Roth account. You pay ordinary income tax on the
converted amount this year, at your current
marginal rate. In exchange, that money — and everything it
earns — is never taxed again.

The alternative is to leave the money in the traditional
account, where it keeps growing tax-deferred and gets taxed at
your (assumed) marginal rate when you withdraw it.
We grow both paths at the same expected return and compare the
after-tax dollars you end up with:

- Tax paid now = conversion amount × current rate

- Converted (Roth) future value = (conversion amount − tax paid now) × (1 + growth)years, tax-free

- Not converted future value = conversion amount × (1 + growth)years × (1 − retirement rate)

The math boils down to a simple rule of thumb: converting wins
when your retirement tax rate is higher than
your current rate, and loses when it's lower. If the two rates
are equal, it's roughly a wash before other factors (like
avoiding future RMDs, estate planning, or bracket management)
are considered.

#### A worked conversion: $50,000 at 22% today

Convert $50,000 while your marginal rate is 22%, expect 24% in
retirement, and give the money 15 years at 6%:

- Tax paid now: 22% × $50,000 = $11,000.

- Converted path: $39,000 lands in the Roth (the tax came out of the conversion) and grows to $39,000 × 1.0615 = $93,466, all of it tax-free.

- Left alone: $50,000 grows to $119,828, then 24% comes off at withdrawal — $91,069.

- The conversion wins by $2,397, about 2.6%.

That is a thin margin for a two-point rate difference, and it flips
entirely if the later rate turns out lower: at 12% in retirement the
untouched account is worth $105,449 after tax and the conversion
loses by nearly $12,000. The rate gap is the whole decision.

One change makes it much better. Pay the $11,000 from a taxable
account instead of out of the conversion and the full $50,000 goes
into the Roth, growing to $119,828 tax-free — while the $11,000
you spent would have been generating taxable dividends and gains
anyway. Paying the tax from outside cash is the difference between a
marginal conversion and a clearly good one.

#### The pro-rata rule

If you have ever made a non-deductible contribution to a traditional
IRA, you cannot choose to convert "just the after-tax part." The IRS
aggregates every traditional, SEP and SIMPLE IRA you
own at the end of the year and taxes each conversion in proportion to
the pre-tax share of the whole.

##### Pro-rata, worked

- Traditional IRA balances across all accounts: $100,000, of which $14,000 is non-deductible basis reported on Form 8606.

- Pre-tax share = $86,000 ÷ $100,000 = 86%.

- Convert $20,000 → $17,200 is taxable and $2,800 comes across tax-free, no matter which account the money physically leaves.

- The remaining basis carries forward on Form 8606 to reduce the tax on future conversions.

Two things sit outside the aggregation: 401(k) and 403(b)
balances are not counted, which is why rolling pre-tax IRA
money into a workplace plan is the standard way to clear the
decks before a
backdoor Roth; and Roth IRAs
are never part of the calculation.

#### Conversions and RMDs

A conversion does not count toward a required minimum
distribution, and an RMD can never be converted. Once you
reach RMD age — 73, or 75 if you were born in 1960 or later
— the required amount must come out first, as a taxable
distribution, and only money above it is available to convert.

This is the strongest argument for converting early. Every
dollar moved to a Roth before RMDs begin permanently shrinks the
balance the IRS will later force out, which keeps future taxable
income lower, keeps more room under the
IRMAA thresholds, and
reduces how much of your Social Security is taxed. The
RMD calculator shows what the required
amount looks like at each age.

#### Two rules that catch people out

- Each conversion has its own five-year clock. Withdraw converted principal within five years and before 59½ and the 10% early-distribution penalty applies to it — even though the tax was already paid. That is separate from the five-year clock governing whether Roth earnings come out tax-free.

- Conversions cannot be undone. Recharacterisation of a Roth conversion was repealed for 2018 and later years, so a conversion made in a year that turns out worse than expected is permanent. Converting in several smaller tranches across the year, rather than one December decision, is how people manage that risk.

#### Keep the plan honest

Planomy models Roth conversions inside your full withdrawal
plan — filling tax brackets year by year against your real
accounts, RMDs, and Social Security — instead of a single
one-year estimate. The
Roth conversion ladder
guide covers the multi-year version of this strategy, and the
withdrawal tax
calculator shows what a distribution costs if you decide against
converting.

#### Frequently asked questions

##### When can a Roth conversion make sense?

A Roth conversion can make sense when your tax rate today is lower than the rate you expect later. Common windows include early retirement before RMDs, lower-income years, or years before large pension or Social Security income begins.

##### How much tax will I pay on a Roth conversion?

The converted amount is ordinary income, so it is taxed at your marginal rate and stacks on top of your other income. Converting $50,000 while your marginal rate is 22% costs $11,000 in federal tax — more if part of the conversion pushes you into the next bracket, which is why large conversions are usually split across several years.

##### How does the pro-rata rule affect a conversion?

The IRS aggregates every traditional, SEP and SIMPLE IRA you own and taxes each conversion in proportion to the pre-tax share of the total. With $100,000 across all IRAs of which $14,000 is non-deductible basis, 86% of any conversion is taxable: converting $20,000 makes $17,200 taxable and $2,800 tax-free. Balances inside a 401(k) are excluded from the calculation.

##### Does a Roth conversion count toward my RMD?

No. A conversion never satisfies a required minimum distribution, and an RMD can never be converted. Once you reach RMD age you must take the required amount first as a taxable distribution, and only amounts above it can be converted. Converting before RMDs begin is what shrinks those future required withdrawals.

##### Why does paying the tax from cash matter?

Paying conversion tax from outside cash keeps the full converted amount invested in the Roth account. If you withhold tax from the conversion itself, less money moves into Roth and the long-term benefit is usually smaller.

#### Build your full plan in Planomy

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

#### Related calculators and guides

Tax-Aware Withdrawal
Order account withdrawals to cut lifetime taxes.

RMD Calculator
Your Required Minimum Distribution age and yearly amounts.

Capital Gains Tax
Estimate federal tax on short- and long-term gains.

Medicare IRMAA
Whether your income triggers Medicare premium surcharges.

The Roth Conversion Ladder, Explained
Convert a slice a year instead of all at once.

The Backdoor Roth IRA, Step by Step
The version for people who earn too much to contribute directly.

See all 37 calculators

---

## Roth vs Traditional 401(k) Calculator: Instant Answer
URL: https://planomy.net/calculators/roth-vs-traditional-401k
Summary: Free, no sign-up: enter your salary, contribution rate and the tax rates you expect now and later to see which 401(k) leaves more after tax, and why.

Free Roth vs Traditional 401(k) calculator

### Roth or Traditional 401(k): which is better for you?

The choice reduces to one question — will your tax rate be higher
now or in retirement? A Traditional 401(k) skips tax today and pays
it on every withdrawal; a Roth pays tax now and comes out entirely
tax-free. Enter your salary, contribution rate, and the rates you
expect at each end, and this calculator holds your pre-tax cost
equal on both sides so the comparison is honest: the after-tax
retirement value of each, the margin between them, and which one
wins. Everything runs in your browser — nothing is uploaded.

##### How the comparison works

- Both options cost the same amount of pre-tax salary. In a Traditional 401(k) the full contribution goes in; in a Roth you pay income tax first, so a smaller after-tax amount is deposited but it grows and withdraws tax-free.

- The Traditional balance is taxed once at your retirement rate when withdrawn; the Roth is not taxed again.

- The 2026 employee contribution limit is $24,500 ($32,500 with the $8,000 catch-up at age 50+); this tool doesn't cap your entry against it.

- Contributions are modeled annually at a constant return, with no employer match, salary growth, or tax-bracket changes.

A simplified projection for planning, not tax advice. Real results
depend on future tax law, bracket changes, an employer match
(usually pre-tax regardless of your choice), and how your income
evolves. Many savers split contributions across both to hedge.

#### Roth vs Traditional 401(k): the core trade-off

Both accounts shelter your investments from tax while they grow.
The only difference is when you pay income tax on the
money:

- Traditional 401(k) — contributions are pre-tax, lowering this year's taxable income. You pay ordinary income tax on every dollar you withdraw in retirement.

- Roth 401(k) — contributions are made with after-tax dollars, so there's no deduction today. Qualified withdrawals in retirement are completely tax-free.

If your tax rate were identical in both periods, the two would
produce the exact same after-tax result. The decision therefore
hinges on whether you expect a higher or
lower tax rate in retirement than you face today.

#### When Roth usually wins

Roth tends to come out ahead when you expect to pay a higher rate
later — for example, if you're early in your career and in a low
bracket now, or if you believe tax rates will rise. Paying tax at
today's low rate and locking in tax-free growth is the winning
move. Roth also has no required minimum distributions during the
original owner's lifetime after recent rule changes, which helps
with estate planning and IRMAA management.

#### When Traditional usually wins

Traditional tends to win when your current rate is high and you
expect to drop into a lower bracket in retirement — common for
peak-earning professionals. Deducting the contribution at, say, a
32% rate and later withdrawing at 15–22% captures the spread. The
up-front deduction also frees cash you can invest elsewhere or use
to contribute more.

#### A worked example

The defaults on this page — age 35 retiring at 65, a $90,000
salary, 10% contributed ($9,000 a year), a 6% return, a 24% rate
today and 18% expected in retirement:

- Traditional: the full $9,000 goes in each year and grows to about $711,500. Taxed at 18% on the way out, that's $583,400 spendable.

- Roth: the same $9,000 of salary is taxed at 24% first, so only $6,840 is deposited. It grows to about $540,800 — and every dollar is yours.

- Traditional wins by roughly $42,700, which is exactly the 6-point rate spread applied to the whole balance.

Flip the rates — 18% now, 24% later — and the answer flips with
them by a similar margin. Nothing else in the comparison moves the
needle nearly as much, which is why guessing your future bracket
well matters more than any other input on this page.

#### 2026 contribution limits

| 2026 limit
| Amount

| Employee deferral (under 50) | $24,500

| Catch-up, age 50–59 and 64+ | +$8,000 → $32,500

| Catch-up, ages 60–63 | +$11,250 → $35,750

| Total employee + employer (excl. catch-up) | $72,000

| Compensation counted for plan purposes | $360,000

The employee limit applies to your combined Roth
and Traditional contributions — there is no separate bucket for
each. Employer matching sits on top and is almost always deposited
pre-tax, even when your own money is Roth.

Two rules worth knowing that most comparisons skip:

- High earners must make catch-up contributions as Roth. Under SECURE 2.0, if your prior-year wages from that employer exceeded $145,000 (indexed for inflation), your catch-up contributions have to go to the Roth side. For those savers the "choice" is partly made for them.

- A Roth 401(k) has no income limit. Unlike a Roth IRA, which phases out at higher incomes, anyone whose plan offers a Roth 401(k) can use it — which makes it the simplest route to tax-free money for high earners.

#### The five-year rule on the Roth side

A Roth 401(k) withdrawal is only fully tax-free if it's
qualified: you're at least 59½ (or disabled), and the
account has satisfied a five-year holding period.
Two details catch people out:

- The clock belongs to the plan, not to you. Change employers and roll into a new Roth 401(k), and the new plan generally starts its own five-year clock.

- Rolling to a Roth IRA uses the IRA's clock instead. If you've never held a Roth IRA, opening one — even with a token amount — years before you need it starts that clock running early. It costs almost nothing and can save the tax on earnings later.

Roth 401(k)s also stopped having lifetime required minimum
distributions from 2024, which removes the old reason to roll one
into a Roth IRA in your seventies.

#### Reasons to lean Roth that the calculator can't price

- RMDs stack on everything else. A large traditional balance forces taxable income in your seventies whether you want it or not, on top of Social Security and any pension.

- The survivor's bracket. When one spouse dies, the survivor files single — roughly half the bracket widths for similar income. Tax-free Roth dollars are worth noticeably more in that scenario.

- IRMAA and Social Security taxation. Roth withdrawals don't count toward the income that decides how much of your Social Security is taxed or which Medicare premium tier you land in.

- A Roth's limit is effectively larger. $24,500 of after-tax money is worth more at retirement than $24,500 of pre-tax money. If you're already maxing out, Roth quietly shelters more.

- Legal risk is symmetric but timing isn't. A Roth settles your tax bill at a rate you can see today, rather than one a future Congress sets.

#### Reasons to lean Traditional that the calculator can't price

- Your retirement effective rate is usually lower than your marginal rate today. The deduction comes off the top at 24% or 32%, but withdrawals refill from the bottom — standard deduction first, then 10%, then 12%. Comparing marginal-to-marginal overstates the Roth case.

- The gap years. Retiring before Social Security and RMDs start creates low-income years in which pre-tax money can be converted to Roth cheaply. You can't do that with money already taxed.

- Deductions and credits that phase out with income. Lowering AGI today can be worth more than the headline bracket suggests.

- You'll actually invest the tax saving. The comparison above assumes you do. If the deduction just increases spending, the Traditional case weakens.

When the two look close — and they often do — splitting
contributions is a defensible answer rather than a fudge. Having
both taxable and tax-free money in retirement is what lets you
manage your bracket year by year.

#### Frequently asked questions

##### Should I choose a Roth or Traditional 401(k)?

Choose based on your tax rate now versus in retirement. If you
expect a higher rate later, a Roth 401(k) usually wins because
you lock in today's lower rate and withdraw tax-free. If your
rate is high now and will fall in retirement, a Traditional
401(k) usually wins by capturing the deduction at the higher
rate.

##### What is the 2026 401(k) contribution limit?

$24,500 for 2026 if you're under 50, $32,500 with the $8,000
catch-up at 50 or older, and $35,750 for ages 60 to 63 where the
larger $11,250 catch-up applies. The cap covers your combined
Roth and Traditional contributions. Employer matching is
separate and doesn't count against it — it falls under the
$72,000 combined employee-plus-employer limit instead.

##### Why does the Roth deposit look smaller in the results?

Because the comparison holds your pre-tax cost equal. Putting the
full contribution into a Traditional 401(k) is untaxed, but the
same slice of salary is taxed before it can enter a Roth — so a
smaller amount lands in the Roth. That amount then grows and comes
out tax-free, which is exactly what makes the two comparable.

##### Can I contribute to both a Roth and Traditional 401(k)?

Yes. Many plans let you split your contributions between Roth and
Traditional. Doing so hedges against being wrong about future tax
rates and gives you both taxable and tax-free money to draw from
in retirement, which helps you manage your bracket year to year.

##### Does the employer match go into the Roth side?

Traditionally, employer matching went into the pre-tax
(Traditional) side even when your own money was Roth. Recent law
now allows Roth employer matches if the plan offers it, but a Roth
match is treated as taxable income to you in the year it's made.
Check how your specific plan handles it.

##### Are these figures in today's or future dollars?

Future (nominal) dollars at your chosen return. Because both
accounts grow at the same rate over the same horizon, the ratio
between them — and therefore the recommendation — is unaffected by
inflation. Use the after-tax comparison, not the raw balance, to
judge the winner.

Roth Conversion Calculator
See whether converting pre-tax savings to Roth pays off.

401(k) Contribution Calculator
Dial in the percent that captures your full employer match.

Take-Home Pay Calculator
See what a traditional or Roth 401(k) does to this month's paycheck.

Compound Growth Calculator
Project how contributions compound over the years.

Roth vs Traditional 401(k): How to Choose
The full decision, including the match and split contributions.

RMD Calculator
The forced withdrawals a large pre-tax balance creates.

401(k) vs IRA vs Roth vs HSA
How the 401(k) choice fits alongside IRA, Roth, and HSA.

Which Accounts to Draw Down First
Why holding both kinds of money is worth something later.

#### Stop guessing your retirement tax rate

This whole decision turns on one number you had to estimate above.
Planomy computes it instead — projecting your actual taxable
income year by year from Social Security, RMDs, pensions, and
withdrawals, so you can see the bracket you'll really be in before
you pick a side. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Savings Goal Calculator: Monthly Amount to Hit It
URL: https://planomy.net/calculators/savings-goal
Summary: Work backward from any goal and date to the monthly amount you need, and see how much of the target your investment returns cover instead of your paycheck.

Free savings goal calculator

### How much to save each month

Whether you're building a down payment, a wedding fund, or a new-car
reserve, the real question is: how much do I put aside every month to
get there on time? Enter your goal, what you've already saved, your
timeline, and an expected return, and this tool works backward to the
monthly amount you need — and shows how much of the goal your returns
cover. Everything runs in your browser — nothing is uploaded.

##### How the monthly amount is found

- The tool solves the future-value formula for the monthly deposit: PMT = (goal − current × (1 + i)N) ÷ (((1 + i)N − 1) ÷ i), where i is the monthly rate and N the number of months.

- Your current savings keep growing at the same return, so the more you start with, the less you need to add each month. If it already grows past the goal on its own, the required deposit is zero.

- Deposits are treated as made at the end of each month and the return is applied monthly (annual rate ÷ 12). Real returns vary; a savings account is steady, while investments swing year to year.

- Figures are in today's dollars and ignore taxes on interest or gains. For a long horizon, remember inflation raises the real cost of a fixed-dollar goal.

An estimate for planning, not financial advice. Investment returns
are never guaranteed, and a shorter timeline means a market dip
could leave you short — keep near-term goals in safer, steadier
accounts. Revisit the plan as your situation changes.

#### How much should I save each month?

Most savings advice runs forward: put away X and see what it grows
to. A goal works the other way. You know the finish line — a
$50,000 down payment, a $20,000 wedding, a $15,000 car — and the
date you need it. This calculator runs the math backward, dividing
the gap between your goal and your growing balance across the months
you have, so you get a single, concrete number to automate.

#### Why your expected return matters

The return you earn does part of the work for you. Over a short
horizon at a modest savings-account rate, that help is small and
most of the goal comes from your own deposits. Over a longer horizon
at investment-like returns, compounding can cover a meaningful slice
of the target — but with more ups and downs along the way. That's
the trade-off behind where you keep the money.

#### Match the account to the timeline

- Under ~2 years: favor a high-yield savings account or CDs, where the balance can't drop right before you need it. Size a cash buffer with our emergency fund calculator.

- 3–5 years: a conservative mix; some growth, but not so much that a bad year derails the goal.

- 5+ years: you can lean toward investments and let compounding help — see the long-run effect in the compound growth calculator.

#### Turn the number into a habit

The savers who hit their goals almost always automate the transfer —
money moves the day after payday, before it can be spent elsewhere.
If the monthly figure feels too high, you have three levers: extend
the timeline, lower the goal, or find room in your budget. Even a
partial automatic transfer started today beats a perfect plan you
never begin.

#### Frequently asked questions

##### How much do I need to save each month to reach $50,000 in 5 years?

Starting from $8,000 and earning about 4% a year, you'd need
roughly $600 a month to reach $50,000 in five years — your
existing savings and returns cover the rest. With no starting
balance it climbs to about $750 a month. Enter your own numbers
above for an exact figure.

##### What return should I assume?

Match it to where the money will sit. A high-yield savings account
or CD might earn 4–5% today; a diversified investment portfolio
has historically averaged more but with real risk of down years.
For short goals, use a conservative rate — you don't want a market
drop right before the deadline.

##### What if I already have some savings?

Enter it as your current balance. That money keeps growing at your
expected return, which lowers the monthly amount you need to add.
If your starting balance is large enough that it grows past the
goal on its own, the calculator shows a required deposit of zero.

##### Does this account for inflation?

No — it works in today's dollars. If your goal is years away and
its real cost will rise with inflation, pad the target a little.
Our inflation impact calculator
shows how much a future price grows over time.

##### What if the monthly amount is more than I can save?

You have three levers: give yourself more time, trim the goal, or
free up room in your budget. Even saving less than the ideal
amount, started now and automated, gets you most of the way — and
you can raise the contribution as your income grows.

Compound Growth Calculator
Project a known contribution forward over time.

Emergency Fund Calculator
Size the cash cushion every plan needs first.

Home Affordability Calculator
See the down payment your budget can reach.

401(k) vs IRA vs Roth vs HSA
Which account the goal should be saved in.

How Much Do You Need to Retire?
The biggest savings goal of them all.

#### Fit every goal into one plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Savings Rate Calculator: Years to Financial Freedom
URL: https://planomy.net/calculators/savings-rate
Summary: Find your true savings rate and the number of years it buys you. Uses the 25x rule to turn today

Free financial independence calculator

### When can I reach financial independence?

Financial independence is often defined as having 25× your annual
spending invested — the point where a ~4% withdrawal can cover your
life. Enter your numbers to see your savings rate and how many years
you're away. Everything runs in your browser.

A simplified approximation for planning intuition, not financial
advice. It assumes a steady real return, constant spending, and the
25×/4% rule of thumb — real paths vary.

#### How this calculator works

Your FI number is 25× your annual spending — the
nest egg that a ~4% safe withdrawal rate can sustain. Your
savings rate is the share of income you don't spend.
We then grow your current savings plus each year's contributions at
your expected real return until the balance reaches your FI number,
and report how many years that takes.

- FI number = annual spending × 25

- Annual savings = income − spending

- Savings rate = annual savings ÷ income

The single biggest lever is your savings rate: it both shrinks the
target (lower spending) and grows contributions (higher savings) at
the same time.

#### Keep the plan honest

Planomy tracks your real income and spending against this plan. After
at least three complete prior months in a category, it shows a
recalibrated comparison of your trajectory; you choose whether to
update the plan.

#### Frequently asked questions

##### How is savings rate calculated?

Savings rate is the share of income you save instead of spend. This calculator compares annual savings with income and uses your spending to estimate the portfolio target needed for financial independence.

##### Why does spending matter so much for FI?

Spending affects both sides of the equation. Lower spending lets you save more today and reduces the portfolio you need later, which is why a higher savings rate can shorten the path to financial independence dramatically.

##### What does the 25x rule mean?

The 25x rule estimates financial independence as 25 times annual spending, which is the same as a 4% withdrawal rate. It is a simple planning shortcut, not a guarantee that a portfolio will last forever.

#### Build your full plan in Planomy

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

#### Related calculators and guides

Compound Growth
How contributions and time compound into a bigger balance.

FIRE Number
The nest egg you need to retire early on the 4% rule.

Mortgage Payoff
How extra payments cut your mortgage term and interest.

Retirement Drawdown
How long your savings last at your planned spending.

What Is a Safe Withdrawal Rate?
The withdrawal rate behind the 25x target.

When Can I Retire?
Project the year your savings reach the number.

See all 37 calculators

---

## Social Security Break-Even Age Calculator: Free, 62 vs 70
URL: https://planomy.net/calculators/social-security-break-even
Summary: Free, no sign-up: compare any two claiming ages and see the exact year the delayed check overtakes the early one in cumulative benefits, year by year.

Free Social Security break-even calculator

### Find your Social Security break-even age

Claiming Social Security early gives you smaller checks sooner;
waiting gives you bigger checks later. The break-even age is where
the delayed choice finally catches up and passes the early one in
total lifetime benefits. Enter your benefit at full retirement age,
the two ages you're weighing, and this tool shows each monthly
benefit, the cumulative totals year by year, and the exact
break-even age. Everything runs in your browser — nothing is
uploaded.

##### How the comparison is built

- Monthly benefits use Social Security rules: claiming before full retirement age cuts your check by 5/9 of 1% per month for the first 36 months and 5/12 of 1% per month beyond that; claiming after full retirement age adds delayed-retirement credits of 2/3 of 1% per month (8% a year) up to age 70.

- Cumulative totals count every monthly check from each claim age forward. The break-even age is where the later claimer's running total first equals and then passes the earlier claimer's.

- Figures are shown in today's dollars, before cost-of-living adjustments and taxes. Annual cost-of-living adjustments raise both streams and shift the break-even only slightly, since they scale both.

- This compares total dollars collected, not the value of guaranteed lifetime income, a spouse's survivor benefit, or taxes on benefits — all of which can tilt the decision.

An estimate for planning, not advice or an official Social Security
benefit statement. Your actual benefit depends on your earnings record and
future cost-of-living increases. Create a my Social Security account at ssa.gov for
your personalized figures, and see our
Social Security claiming age calculator
for a full view of claiming at 62, full retirement age, or 70.

#### What is the Social Security break-even age?

Every worker eligible for Social Security can choose when to start
benefits, anywhere from age 62 to 70. Start early and your monthly
check is permanently reduced, but you collect more checks. Wait and
each check is larger, but you collect fewer of them. The
break-even age is the point where those two paths
cross: before it, the early claimer is ahead on total dollars
received; after it, the person who waited pulls ahead and stays
ahead for life.

This calculator focuses squarely on that crossover. If you'd rather
see the full picture of what each claiming age pays month to month,
use our
Social Security claiming age calculator,
which lays out 62, full retirement age, and 70 side by side.

#### How claiming early or late changes your check

- Claiming at 62 (born 1960+): a permanent reduction of about 30% versus your full benefit.

- Claiming at full retirement age (67): you receive 100% of your primary insurance amount.

- Claiming at 70: delayed-retirement credits add roughly 24% on top of your full benefit — about 8% for each year past full retirement age.

#### Why the break-even age matters

The break-even age turns an abstract "should I wait?" into a
concrete number. If you have reason to expect a longer-than-average
life — good health, a family history of longevity, or a spouse who
will rely on your survivor benefit — living past the break-even age
means waiting wins. If your health is poor or you need the income
now, claiming earlier can be the better call even though the
lifetime total is lower. Break-even is one input, not the whole
decision.

#### What the break-even math leaves out

A pure dollar-for-dollar break-even ignores several things that can
matter more than the crossover date: the survivor
benefit a higher earner locks in for a spouse by waiting,
the taxes on benefits, the return you could earn by
investing early checks, and the simple insurance value of a larger,
inflation-protected income if you live a very long time. Treat the
break-even age as a clear-eyed starting point, then weigh those
factors for your own situation.

#### Frequently asked questions

##### What is a typical Social Security break-even age?

Comparing claiming at 62 versus waiting until full retirement age
usually breaks even in the late 70s; comparing 62 versus 70 often
breaks even around age 80 to 82. Your exact number depends on your
benefit amount and the two ages you compare, which is what this
calculator works out for you.

##### Does claiming later always pay more overall?

Only if you live past the break-even age. Up to that point the
early claimer has collected more total dollars. Beyond it, the
larger delayed checks more than make up the gap and keep growing
the lead for the rest of your life.

##### How much does waiting from 62 to 70 increase my benefit?

For someone with a full retirement age of 67, claiming at 62 pays
about 70% of the full benefit while claiming at 70 pays about
124%. That means the age-70 check is roughly 77% larger than the
age-62 check — a difference that compounds over a long retirement.

##### Does a cost-of-living adjustment change the break-even age?

Only slightly. Cost-of-living adjustments raise both the early and the delayed benefit
by the same percentage each year, so they scale both cumulative
totals together and nudge the crossover a little later. This tool
compares the streams before cost-of-living adjustments so the break-even reflects the
underlying claiming decision.

##### Should the survivor benefit affect my decision?

Often, yes. If you're the higher earner in a couple, delaying
raises the benefit your surviving spouse can step up to for the
rest of their life. That survivor value isn't captured in a simple
break-even and is a strong reason many higher earners wait.

Social Security Claiming Age Calculator
See 62, full retirement age, and 70 monthly benefits side by side.

Retirement Drawdown Calculator
See how long your savings last alongside your benefits.

Tax-Aware Withdrawal Calculator
Order withdrawals to bridge the years before you claim.

How Social Security Benefits Are Taxed
How much of the delayed check the IRS takes back.

When to Take Social Security: 62, 67, or 70?
What the break-even age does and does not settle.

#### Fit Social Security into the bigger picture

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Social Security Calculator: Monthly Benefit at 62 to 70
URL: https://planomy.net/calculators/social-security-claiming-age
Summary: See your monthly benefit at every claiming age from 62 to 70, your lifetime total at each one, and which age maximizes what you collect over a lifetime.

Free claiming-age calculator

### When should I claim Social Security?

Your monthly benefit changes by roughly 5-7% for every year you
claim early or late — anywhere from age 62 to 70. Enter the
monthly benefit from your Social Security statement to see what you'd get at
every claiming age, your lifetime total to an assumed longevity,
and which age maximizes it. Everything runs in your browser.

A simplified approximation using Social Security's published
adjustment factors, not a benefit estimate or financial advice.
It ignores cost-of-living increases, continued earnings before claiming, spousal and
survivor benefits, and taxation of benefits — see ssa.gov for an
official estimate.

#### How this calculator works

Social Security first sets your primary insurance
amount (PIA) — the benefit you'd get at your full
retirement age (FRA), which is 66-67 depending on birth year. We
back into your PIA from the monthly benefit and age you enter,
then apply Social Security's adjustment to every claiming age from
62 to 70:

- Claim early (before FRA): reduced by 5/9 of 1% per month for the first 36 months, then 5/12 of 1% per month beyond that — about 6-7% per year.

- Claim at FRA: 100% of your PIA.

- Claim late (after FRA, up to 70): increased by 2/3 of 1% per month — 8% per year — in delayed retirement credits.

We then multiply each age's monthly benefit by the months
you'd collect it before your assumed longevity age, to get a
lifetime total, and flag whichever claiming age produces the
largest one. Living longer favors claiming later; a shorter
expected lifespan favors claiming earlier.

#### Keep the plan honest

Planomy factors your claiming age into your full retirement
projection alongside your other accounts, withdrawals, and
taxes — not just Social Security in isolation.

#### Frequently asked questions

##### What is the best age to claim Social Security?

The best claiming age depends on your benefit amount, health, life expectancy, spouse, and need for income. Claiming early starts checks sooner but permanently reduces the monthly benefit; delaying increases it until age 70.

##### What does the break-even age mean?

The break-even age is the age when waiting to claim has paid enough larger monthly checks to catch up with claiming earlier. It is useful, but it should not be the only factor because survivor benefits and portfolio withdrawals also matter.

##### Does this include taxes on Social Security benefits?

No. The calculator compares gross benefit amounts. Depending on your other income, part of your Social Security benefit may be taxable, and that can change the after-tax result.

#### Build your full plan in Planomy

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

#### Related calculators and guides

Retirement Drawdown
How long your savings last at your planned spending.

RMD Calculator
Your Required Minimum Distribution age and yearly amounts.

Medicare IRMAA
Whether your income triggers Medicare premium surcharges.

Tax-Aware Withdrawal
Order account withdrawals to cut lifetime taxes.

How Social Security Benefits Are Taxed
How much of the benefit is taxable once it starts.

Which Accounts to Draw Down First
Which accounts to spend while you wait to claim.

When to Take Social Security: 62, 67, or 70?
The trade-offs behind each claiming age.

See all 37 calculators

---

## Take-Home Pay Calculator: 2026 Paycheck After Taxes
URL: https://planomy.net/calculators/take-home-pay
Summary: Estimate 2026 net pay after federal tax, Social Security, Medicare, 401(k), and HSA, with per-paycheck and annual totals so you see where every dollar goes.

Free take-home pay calculator

### What's my paycheck after taxes?

Your take-home pay is your gross salary minus federal
income tax, Social Security and Medicare, any state tax, and
whatever you route into a 401(k) or HSA before tax.
Your salary and your take-home pay are two very different numbers.
This calculator estimates your 2026 net pay after federal income tax,
Social Security and Medicare, and the pre-tax money you route into a
401(k) or Health Savings Account (HSA) — with a per-paycheck and annual breakdown so you can
see exactly where each dollar goes. Everything runs in your browser
— nothing is uploaded.

##### Assumptions (2026 figures)

- Standard deduction (income not taxed): $16,100 single, $32,200 married filing jointly (2026).

- 2026 federal brackets. Single: 10% to $12,400, 12% to $50,400, 22% to $105,700, 24% to $201,775, 32% to $256,225, 35% to $640,600, then 37%. MFJ thresholds are roughly double (10% to $24,800, 12% to $100,800, 22% to $211,400, 24% to $403,550, 32% to $512,450, 35% to $768,700, then 37%).

- FICA (Social Security and Medicare payroll taxes): Social Security 6.2% on wages up to the $184,500 2026 wage base; Medicare 1.45% on all wages, plus 0.9% additional Medicare above $200,000 (single) / $250,000 (married filing jointly).

- Traditional 401(k) contributions lower income tax but not FICA. HSA is treated as lowering taxable income for income tax. State tax is a flat estimate only.

An estimate for planning, not tax or payroll advice. It ignores
other pre-tax benefits (medical, dental, FSA), tax credits, extra
withholding, the standard-deduction phase-outs at very high
incomes, and local taxes. Your actual withholding depends on your
W-4 and employer. Verify with a tax professional.

#### How take-home pay is calculated

Your net paycheck is what's left after four things come out of
gross pay: pre-tax deductions (traditional 401(k),
HSA), federal income tax, FICA
(Social Security and Medicare), and any state income
tax. The order matters — pre-tax deductions shrink the
income that gets taxed, which is exactly why they save you money.

#### Federal income tax vs. FICA

These are two separate taxes that behave differently. Federal
income tax is progressive: it applies your bracket rates
only to income above the standard deduction, so your effective rate
is well below your top bracket. FICA is flat: 6.2% for
Social Security (up to the annual wage base) and 1.45% for
Medicare, on your wages from the first dollar. A traditional 401(k)
lowers your income tax but not your FICA — Social Security and
Medicare are still charged on the deferred amount.

#### Why pre-tax contributions raise your take-home efficiency

A dollar you defer into a traditional 401(k) or HSA costs your
paycheck less than a dollar, because it would have been taxed. At a
22% federal rate, contributing $100 only reduces take-home pay by
about $78 — the other $22 was headed to the IRS anyway. That's the
core reason these accounts are so powerful: you invest pre-tax
money and defer the tax for decades.

#### How much does a 401(k) reduce your take-home pay?

Less than the amount you contribute, because a traditional 401(k)
deferral comes out of your pay before federal income tax is
calculated. In the 22% bracket, every $100 you defer costs about
$78 of take-home pay; in the 12% bracket about
$88, and in the 24% bracket about $76. The gap is the tax you no
longer owe this year.

Worked through a full salary: someone earning
$80,000 who raises their 401(k) from 0% to 10%
puts $8,000 a year into the plan but only loses
roughly $6,240 of take-home pay — about $260 a
paycheck on a biweekly schedule rather than the $308 the raw
contribution suggests. Add a typical 50%-to-6% employer match and
$2,400 of free money lands in the account on top.

Two details the arithmetic depends on. FICA is not
reduced: Social Security and Medicare still come out of the full
$80,000, so a 401(k) deferral saves income tax only — unlike an
HSA funded through payroll, which escapes both. And a
Roth 401(k) contribution gets no break at all
this year: $8,000 deferred costs the full $8,000 of take-home pay,
in exchange for tax-free withdrawals later. Set the 401(k)
percentage above to see all of this against your own salary, and
our
Roth vs. traditional 401(k) calculator
compares the two routes over a full career.

#### Marginal vs. effective tax rate

Your marginal rate is the bracket your next dollar
falls in; your effective rate is total tax divided
by total income. Because the first chunk of income is shielded by
the standard deduction and taxed at low rates, the effective rate is
always lower. This calculator reports both so you can see the gap.

#### Frequently asked questions

##### How do I calculate my take-home pay?

Start with gross salary, subtract pre-tax contributions like a
traditional 401(k) and HSA, then subtract federal income tax
(bracket rates applied above the standard deduction), Social
Security and Medicare (FICA), and any state income tax. What
remains is your annual take-home pay; divide by the number of pay
periods for each paycheck.

##### Does a 401(k) reduce my taxes?

A traditional 401(k) reduces your federal (and usually state)
income tax because contributions come out before income tax is
figured. It does not reduce Social Security or Medicare tax —
those are charged on your full wages. A Roth 401(k), by contrast,
is funded with after-tax money and gives no upfront tax break.

##### How much does a 401(k) reduce my take-home pay?

Less than the amount you contribute. In the 22% bracket, every
$100 deferred into a traditional 401(k) costs about $78 of
take-home pay; in the 12% bracket about $88. Someone earning
$80,000 who moves from 0% to 10% contributes $8,000 a year but
gives up roughly $6,240 of take-home pay. A Roth 401(k) gets no
break this year, so $8,000 deferred costs the full $8,000.

##### What is the 2026 Social Security wage base?

For 2026 the Social Security tax of 6.2% applies to wages up to
$184,500. Earnings above that cap are not subject to the Social
Security portion of FICA, though the 1.45% Medicare tax continues
on all wages, plus an extra 0.9% on wages above $200,000 (single)
or $250,000 (married filing jointly).

##### Why is my effective tax rate lower than my bracket?

Tax brackets are marginal — each rate applies only to the income
inside that band, and the standard deduction shields the first
chunk entirely. So someone in the 22% bracket pays 22% only on
their top dollars; their overall effective rate is typically far
lower, often in the low teens.

##### Does this include state income tax?

Only as a simple flat-rate estimate you enter yourself. Real state
taxes vary widely — some states have no income tax, others use
their own brackets, deductions, and credits. Use the state field
for a rough figure and check your state's rules for precision.

401(k) Contribution Calculator
Dial in the contribution that captures your full match.

HSA Contribution Calculator
See your 2026 HSA room and the tax it saves.

Capital Gains Tax Calculator
Estimate tax on your investment gains, too.

401(k) vs IRA vs Roth vs HSA
Where the pre-tax deductions on your payslip actually go.

#### Turn your paycheck into a plan

Planomy turns a single number into a whole plan: a full
retirement projection with taxes and Social Security,
side-by-side scenarios, and plan-vs-actual tracking as real life
happens. Free, private, and running in your browser.

Open the planner

Browse all calculators

---

## Retirement Withdrawal Tax Calculator: Which Account First
URL: https://planomy.net/calculators/tax-aware-withdrawal
Summary: Free retirement withdrawal tax calculator: which account to tap first across cash, taxable, 401(k), 403(b), IRA, Roth and HSA, plus the early penalties.

Free withdrawal-order calculator

### Which account should I withdraw from first?

Spend cash first, then taxable brokerage, then traditional
401(k), 403(b) and IRA money, then Roth, and the HSA last.
The account you spend first changes how much tax you pay, how much
of your Social Security is taxable, what you pay for Medicare two
years later, and how long the money lasts. Enter your balances to
see the tax-aware order Planomy's own engine uses — cash first,
tax-free Roth and HSA money last — the reason behind each step, and
the situations where the conventional order is the wrong answer.
Everything runs in your browser.

A general rule of thumb, not tax advice. The best order depends on
your bracket, required minimum withdrawals (RMDs), Social Security timing, and state taxes — talk to
a professional before large withdrawals.

#### Why this order?

The goal is to spend the least-costly dollars first and let tax-free
accounts keep compounding as long as possible:

- Cash first — already taxed, earns little, no market risk to realize.

- Taxable brokerage next — you're only taxed on gains, often at lower long-term capital-gains rates.

- Traditional (pre-tax) 401k/IRA — fully taxed as income, so drain it before Roth; doing so also shrinks future required minimum distributions.

- Roth last — tax-free growth and no RMDs, so it's the most valuable to leave untouched (and to inherit).

- HSA last of all — tax-free for medical costs; save it for later-life healthcare.

#### Where the conventional order goes wrong

Spending strictly in that order is the right default, and it is
the wrong answer for a large minority of retirees. The failure
mode is always the same: it leaves low tax brackets empty in your
sixties and then forces high ones in your seventies.

Here are the 2026 numbers that decide it. A married couple filing
jointly gets a $32,200 standard deduction, and the
10% and 12% brackets run to $100,800 of taxable
income. So they can take roughly $133,000 of
ordinary income in a year and never leave the 12% bracket. For a
single filer it's a $16,100 deduction plus $50,400 of taxable
income, about $66,500.

Now picture a couple who retire at 62 and live purely off taxable
savings until Social Security and RMDs both switch on. They pay
almost nothing for eight years — and then, from 73, RMDs plus two
Social Security checks push them permanently into the 22% or 24%
bracket. Every one of those eight years had over $100,000 of
12%-bracket room that expired unused.

The fix is not to abandon the order but to fill the
bracket each year: take enough from the traditional
account (or convert it to Roth) to reach the top of the 12% band,
and fund the rest of your spending from taxable and cash. You pay
a little tax voluntarily now to avoid a lot involuntarily later.

#### The thresholds that make withdrawals cost more than the rate

Marginal rate isn't the whole cost of a withdrawal. Four
thresholds turn an extra dollar of income into more than a dollar
of consequence:

- Social Security taxation. Once provisional income (AGI plus tax-exempt interest plus half your benefit) passes $25,000 single or $32,000 joint, 50% of your benefit becomes taxable; past $34,000 / $44,000 it's 85%. These figures have never been indexed for inflation. In the phase-in range, one extra dollar of IRA withdrawal can drag up to 85 cents of benefit into tax with it — the so-called tax torpedo, which can push an effective marginal rate well above the bracket you think you're in. Roth withdrawals aren't part of provisional income at all.

- Medicare IRMAA. Surcharges are cliffs, not ramps, and use your MAGI from two years earlier. In 2026 the first tier starts at $109,000 single / $218,000 joint. One dollar over adds the full tier's surcharge to both Part B and Part D premiums for the whole year.

- The 0% capital gains bracket. Long-term gains are taxed at 0% while total taxable income stays under $49,450 single / $98,900 joint in 2026. Ordinary withdrawals stack underneath and push gains out of that band, so a traditional IRA withdrawal can cost 12% on itself plus 15% on gains you'd otherwise have realised free.

- ACA premium subsidies if you retire before 65. Marketplace credits taper with MAGI, so the effective cost of an extra withdrawal in your early sixties can be far higher than the bracket suggests.

#### Before 59½: the 10% penalty and its exceptions

Withdrawing from tax-advantaged accounts before 59½
generally adds a 10% penalty on top of income tax,
which is why cash and taxable accounts carry the early years. The
exceptions that matter most for early retirees:

- Roth contributions come out first. Roth IRA withdrawals follow a fixed order — your own contributions, then converted amounts, then earnings — and contributions can be withdrawn at any age, tax and penalty free.

- The rule of 55. Leave your employer in or after the year you turn 55 and you can take penalty-free withdrawals from that employer's 401(k). It does not apply to IRAs — so rolling the plan to an IRA on your way out forfeits it.

- 72(t) / SEPP. A series of substantially equal periodic payments from an IRA avoids the penalty, but it must run for five years or until 59½, whichever is longer, and modifying it retroactively reinstates the penalties.

- Conversion ladder. Amounts converted to a Roth IRA can be withdrawn penalty-free five years after each conversion, which is what makes a Roth conversion ladder work for early retirement.

- Other exceptions include disability, unreimbursed medical expenses above 7.5% of AGI, up to $10,000 toward a first home from an IRA, higher-education costs from an IRA, and birth or adoption expenses.

#### Taxes on a 403(b), 457(b) or TSP withdrawal

A 403(b) withdrawal is taxed exactly like a
traditional 401(k) withdrawal: the whole amount is ordinary
income in the year you take it, at your marginal rate, plus the
10% early-withdrawal penalty before 59½ unless an exception
applies. The same is true of a 457(b), a TSP and a SIMPLE or SEP
IRA. So enter those balances in the traditional field
above — the ordering and the tax arithmetic do not change.

Two differences are worth knowing. A governmental
457(b) has no 10% early-withdrawal penalty once
you separate from service at any age, which makes it the natural
first tax-deferred account to tap in an early retirement. And the
rule of 55 applies to a 403(b) or TSP the same
way it applies to a 401(k) — leave that employer in or after the
year you turn 55 and withdrawals from that plan skip the penalty,
a break you forfeit by rolling the plan into an IRA on your way
out.

#### The HSA withdrawal penalty, and when it disappears

A non-qualified HSA withdrawal before 65 is taxed as ordinary
income and carries a 20% penalty —
double the 10% that applies to a traditional IRA, and the reason
the HSA sits last in the order. Withdrawals for qualified medical
expenses are tax-free at any age, with no deadline: keep the
receipt and you can reimburse yourself years later.

At 65 the 20% penalty disappears entirely. From that point a
non-medical HSA withdrawal is simply ordinary income, which makes
an unspent HSA no worse than a traditional IRA and considerably
better if you still have medical costs ahead. Enrolling in
Medicare stops you contributing but never stops you spending the
balance. Our
HSA contribution calculator
covers the paying-in side and the 2026 limits.

#### Two things the default order gets right and people still get wrong

- The HSA is last for a reason, and it has a trick. There is no deadline for reimbursing yourself for a qualified medical expense — keep the receipts and you can withdraw tax-free years later. After 65, non-medical withdrawals are taxed as ordinary income but carry no penalty, so a leftover HSA is simply a traditional IRA at worst.

- The taxable account gets a step-up in basis at death. Heirs generally inherit it at market value with the unrealised gain wiped out, while an inherited traditional IRA hands them a taxable 10-year drawdown. If leaving money behind is a goal, that flips part of the ordering.

#### The mistakes that cost the most

- Wasting the gap years. Between retiring and RMDs is the cheapest tax window you will ever have. Spending it entirely from taxable savings is the single most expensive default in retirement planning.

- Rolling a 401(k) to an IRA at 55. It quietly destroys the rule-of-55 exception.

- Selling taxable holdings without choosing lots. Identifying high-basis shares realises a smaller gain than the broker's default FIFO.

- Crossing an IRMAA line by a few dollars in December. The surcharge is a cliff, applies for a full year, and arrives two years later when you've forgotten why.

- Draining traditional accounts to zero and living only on Roth. That wastes the standard deduction and the 10% bracket every year — income you could have taken at almost no tax.

- Ignoring your state. Several states exempt retirement income entirely, and some tax it fully. Moving, or timing a large withdrawal around a move, can matter more than the federal ordering.

#### Frequently asked questions

##### Which account should I withdraw from first in retirement?

As a default: cash, then taxable brokerage, then traditional
401(k) and IRA, then Roth, and the HSA last. That order spends
already-taxed, low-growth money first and leaves the tax-free
accounts compounding longest. It is a starting point, not a
rule — most retirees should also take enough from traditional
accounts each year to use up their low tax brackets.

##### How much tax do I pay on a 403(b) withdrawal?

The full withdrawal is ordinary income at your marginal rate,
the same as a traditional 401(k) — there is no separate 403(b)
tax rate. Before 59½ add a 10% early-withdrawal penalty unless
an exception applies, including the rule of 55 if you left that
employer in or after the year you turned 55. Enter a 403(b)
balance in the traditional field above and the calculator
treats it correctly.

##### What is the penalty for an HSA withdrawal?

Before 65, a withdrawal that is not for a qualified medical
expense is taxed as ordinary income plus a 20% penalty. Medical
withdrawals are tax-free at any age. At 65 the 20% penalty
stops applying, so a non-medical withdrawal is then taxed like
any traditional IRA distribution.

##### Should I always spend taxable accounts before retirement accounts?

No. Taxable money is usually spent early because only the gains
are taxed, but spending only taxable money leaves the
standard deduction and the 10% and 12% brackets unused every
year. A married couple in 2026 can take about $133,000 of
ordinary income and stay within the 12% bracket. Filling that
room with traditional withdrawals or Roth conversions before
RMDs start usually beats a strict ordering.

##### What is the tax torpedo?

The range where each extra dollar of income also drags up to 85
cents of Social Security benefit into taxable income, pushing
your effective marginal rate well above your stated bracket. It
bites once provisional income passes $25,000 single or $32,000
joint — thresholds that have never been adjusted for inflation.
Roth withdrawals don't count toward provisional income, which is
what makes them useful here.

##### Can I withdraw from a 401(k) before 59½ without a penalty?

Sometimes. If you leave your employer in or after the year you
turn 55, that employer's 401(k) is available penalty-free under
the rule of 55 — but rolling it into an IRA first destroys the
exception. A 72(t) series of substantially equal periodic
payments works from an IRA, as do disability, large medical
costs, and a Roth conversion ladder after each conversion's
five-year clock.

##### Does this replace personalized tax planning?

No. This calculator gives a planning framework, not tax advice.
Real withdrawal plans shift with RMDs, Medicare IRMAA
surcharges, Social Security taxation, ACA subsidies, state
taxes, and what you intend to leave behind.

#### Find the bracket room you're leaving on the table

The order is the easy part; knowing how much to take from each
account this year is the part worth money. Planomy
projects your taxable income, Social Security, RMDs, and Medicare
surcharges year by year, so you can see exactly how much
low-bracket room each year has before it expires. Free, private,
and running in your browser.

Open the planner

#### Related calculators and guides

Roth Conversion
Whether filling a tax bracket with conversions pays off.

RMD Calculator
Your Required Minimum Distribution age and yearly amounts.

Capital Gains Tax
Estimate federal tax on short- and long-term gains.

Retirement Drawdown
How long your savings last at your planned spending.

IRA Withdrawal Tax
What one withdrawal costs in income tax and early-withdrawal penalty.

Which Accounts to Draw Down First
The reasoning behind the default order, and when to break it.

The Roth Conversion Ladder, Explained
Use low-income years to move money to the Roth bucket.

See all 37 calculators