Rate & Calculation Assumptions
Inflation Rate Assumptions
Inflation erodes purchasing power over time. Set different scenarios to accurately project your finances.
4.0%
Higher inflation scenario (typically 3-5%)
2.5%
Base assumption for most calculations (typically 2-3%)
1.0%
Lower inflation scenario (typically 1-2%)
Investment Return Assumptions
Default Investment Returns
- Pessimistic Return: 3% (used when account-specific returns not provided)
- Moderate Return: 5% (average of pessimistic and optimistic)
- Optimistic Return: 7% (used when account-specific returns not provided)
Account-Specific Returns
Monte Carlo Simulation Assumptions
- Number of Simulations: 1,000
- Volatility: Calculated as (Optimistic - Pessimistic) / 3.29
- Market Momentum: Small cyclical adjustment using sine wave
- Return Distribution: Normal distribution with calculated volatility
- Percentile Reporting: 10th (Pessimistic), 50th (Median), 90th (Optimistic)
Tax Calculation Assumptions
Progressive Tax Brackets
- 10% on first $10,000
- 12% on income between $10,000 - $40,000
- 22% on income between $40,000 - $85,000
- 24% on income between $85,000 - $165,000
- 32% on income between $165,000 - $210,000
- 35% on income between $210,000 - $520,000
- 37% on income over $520,000
Savings & Contribution Assumptions
- Default Contribution Rate: 15% of net income
- Savings calculated after taxes, expenses, and all debt payments
- Savings Rate calculated as percentage of gross income
Mortgage & Debt Assumptions
Mortgage Assumptions
- Default mortgage term: 30 years (if payoff date not specified)
- Payments calculated using actual monthly payment amounts
- Current Active Mortgages: 0
Other Debt Assumptions
- Default minimum payment: 5% of balance (if not specified)
- Payment frequencies supported: weekly, biweekly, monthly, quarterly, semiannually, annually
- Current Active Debts: 0
Projection Length Assumptions
- Default Retirement Age: 65 (if not specified)
- Default Longevity Age: 90 (if not specified)
- Projection extends 5 years beyond longevity age