How All Else Equal works
Every life here is simulated one year at a time from a seed, in today's dollars. The point is not to predict your future. It is to show how wide the range of outcomes is, how much of it is luck, and how much the few things you control still move the odds.
The model is deliberately simple. It is a set of plain rules and probabilities, tuned loosely to US data, written so that each one can be explained in a sentence. Everything below is the actual logic in model.js.
One year of a life
- Survival. A mortality draw decides whether the person lives through the year.
- The economy. The year is an expansion or a recession, and inflation and interest rates move. Together they set stock, bond and house returns.
- Events. Career, family, housing, health and luck each get their own draws: a layoff, a raise, a marriage, a medical bill.
- Income and taxes. Pay, a partner's pay and Social Security come in, and the household files a 2026 tax return: federal income tax with credits, payroll tax and state tax.
- Spending. Fixed costs come first (housing, kids, college, loan payments, care, retiree health), then everyday spending set by the person's saving habits.
- Settling up. What is left is saved and invested; a shortfall is borrowed on a card at 18%. Investment returns, home price changes and interest are applied.
Markets and the economy
Each year starts a recession with a 13% chance, and about a third of recessions last two years, so roughly 17% of years are recessions. Markets look ahead: stocks fall as a recession starts, begin recovering in a second recession year, and rebound the year after. All returns are real, meaning after about 2.5% inflation.
| Asset | Expansion year | Recession year |
|---|
| Stocks | mean +7.9%, sd 13%; +15.9% in the rebound year after a recession | mean −15%, sd 14% in the first year; +6%, sd 15% in a second year |
| Bonds | last year's yield, minus about 6% for every point rates rise, minus inflation: about +2% a year on average after inflation, sd about 7%, with real losses of 10% or more in the worst 1 year in 20 |
| Home prices | mean +1.2%, sd 4.5% | mean −5%, sd 6% |
| Cash | The first $10k of savings sits in the bank and earns nothing after inflation |
That works out to stocks averaging about 6% a year after inflation, or about 5% compounded, a little below US history and above several forecasts made in 2026. Your plan can assume lower or higher long-run returns, from about 3% to 7% a year, which shifts every year's stock return by the difference. Portfolios mix stocks and bonds: the glide path holds 90% stocks until 40 and eases to 40% by about 70; cautious investors hold 20% stocks.
Speculators keep 60% of their savings in an index portfolio and put 40% into concentrated bets. Those swing 1.3 times as much as the market and lose 10 points a year to trading costs, taxes and the discount on lottery-like stocks; about 1 year in 33 a bet hits and gains 80% to 250%. That follows the evidence: in Barber and Odean's study of 66,465 brokerage households from 1991 to 1996, the fifth that traded most earned 11.4% a year while the market returned 17.9%. In the model, speculators trail index investors at 65 in about three matched lives of four, while a lucky few end up far ahead.
Valuations move. Stock prices drift above and below their long-run level, the way the CAPE ratio does. Each year's surprise in returns pushes prices further from that level (by 0.6 of the surprise, in logs), and they drift back, keeping 92% of the gap a year, so a gap halves in about eight years. Every 10% that prices sit above their long-run level takes about half a point off the next year's expected return. Measured across the model's own markets, a decade that starts cheap compounds at about 6% a year after inflation, a normal start about 5%, and a rich start under 4%. Your plan sets where prices start; "expensive" is about 50% above the long-run level, roughly where US prices stood in 2026. Random lives start somewhere different each time.
Inflation and interest rates move. Inflation drifts around its average from year to year, eases about a point in recessions, falls hard in a depression, and about once in 33 years spikes by 3 to 8 points before fading over several years. Expected inflation trails what actually happens, and the 10-year bond yield is a real rate (around 1.5%) plus expected inflation plus a small premium. Measured over many simulated years, inflation averages 2.5% with a spread of about 2.3 points, tops 5% in about 1 year in 8 and reaches 12% at the extreme. Mortgage rates are set by the yield when you buy plus about 1.7 points. Years of high inflation get a warm tint on the Watch chart.
Who people start as
Random lives draw five traits at 18, each independently, which is what makes comparisons between them fair.
| Trait | Options (share of people) | What it changes |
|---|
| Education | High school (36%), trade (12%), bachelor's (38%), graduate (14%) | Years in school, loans, first pay ($31k to $74k typical), raise speed, layoff risk |
| Family | Modest (45%), middle class (42%), wealthy (13%) | Starting cash, help with tuition, chance and size of an inheritance |
| Saving | Big saver (25%), steady (45%), spender (30%) | Saves 12%, 5% or 0% of what is left after fixed costs |
| Investing | Cautious (25%), index (45%), panicky (15%), speculator (15%) | Stock share, volatility, and whether they sell in a crash |
| Where they live | Low-cost area (30%), average (45%), expensive city (25%) | Costs (0.8×, 1×, 1.35×) and pay (0.85×, 1×, 1.25×) |
Each person also draws a "drive" that nudges pay and promotions, a number of kids they would like, and a target retirement age between 60 and 69.
Life events
Roughly, per year:
- Work: layoffs (3%, or 10% in a recession, with 1 to 12 months out of work and a new job paying 78% to 105% as much). After 55, about a third of layoffs (half in a downturn) end a career for good: people with some savings retire, and those without take a job paying about a quarter less. Then promotions, switching employers for a raise, moving for work, starting a business (most close; about 1 in 10 sells), going back to school to change careers, stock payouts, and disability.
- Family: marriage (most likely in the late twenties), a partner's income and savings or debt, divorce (assets split in half plus legal fees), widowhood, children (costs scale with income), and paying for college.
- Home: buying once a down payment is saved, moving up, downsizing later in life, repairs, storm damage, and forced sales when debts pile up.
- Health and luck: medical bills, serious illness, long-term care late in life, caring for a parent, car trouble, inheritances, scams, rare lottery wins, and bankruptcy when card debt outgrows income.
Pay, taxes and spending
Pay grows fastest early in a career, flattens in the fifties and slips after 58, with random noise each year plus the events above. Every year the household files a tax return under 2026 law (details under Taxes).
Renters pay about 30% of take-home pay for housing; owners pay their mortgage plus 2% of the home's value for taxes, insurance and upkeep. Everyday spending follows the person's saving habit, and it is sticky: when income drops, spending only adjusts part of the way, which is how people slide into card debt.
Retirement and Social Security
Social Security follows the real formula: the top 35 years of earnings, the 2024 bend points (90%, 32% and 15%), and the adjustment for claiming between 62 (70% of the full benefit) and 70 (124%). A spouse gets at least half of the worker's benefit, and a widow or widower keeps the larger of the two.
Social Security starts when you retire (62 at the earliest), or in Your plan at 67 or 70 if you choose to wait. While waiting, savings stand in for the benefit that hasn't started; if savings run low first, they claim then.
In retirement, people try to keep spending about what they were used to, easing about 1.5% a year from 65 on (the "retirement spending smile"), and draw down savings at a pace that rises with age. Someone disabled before 65 keeps budgeting from what comes in, the way they did while working, and spends like a retiree from 65. If savings run nearly dry they live on what Social Security covers; Medicaid steps in for long-term care once assets are gone.
Retiring when you can afford it. In Your plan you can let retirement age float. Each year from your earliest age, a version of you retires if savings, net of debts, are at least:
(yearly spending − Social Security) ÷ withdrawal rate + spending × years until Social Security starts
Yearly spending here is current everyday spending plus housing and about $7k a person for health costs. Retiring before 55 has a second test: money outside retirement accounts, plus any 72(t) payments, must cover every year until 60. If savings never get there, they retire at your latest age anyway. At 4%, the first part is 25 times the gap: the familiar "4% rule".
Mortality
The chance of dying each year follows a Gompertz-Makeham curve fitted to the US life table: about 0.1% at 30, 1.3% at 65, 5% at 80 and 15% at 90, with a hard stop at 104. A serious illness raises it for five years; long-term care and disability raise it further; net worth above $1M lowers it by a fifth and debt raises it slightly. Life expectancy at 18 comes out to about 78.
Your plan
Your plan starts lives at your age with your balances instead of at 18. Your past pay is filled in along a typical earnings curve so that Social Security can be estimated. Three things are yours to choose:
- Savings rate: a share of take-home pay. Fixed costs come out of the rest.
- Retirement: a set age, or as soon as you can afford it (above).
- Portfolio: a fixed stock share or the glide path.
The folded sections under your choices add more: habits and costs, accounts and insurance, family and career, and assumptions about the world, each described below. Everything else stays random: raises, layoffs, marriage, children, health, markets and inheritances. Each run uses the same 100 seeds, so changing an input changes only that input; "Roll new luck" draws a fresh 100.
Habits, costs and the world
Good money decisions depend less on knowing the math than on behaving well with it over time. These levers turn that idea into rules the model can run. Each one is a choice in Your plan and a one-click comparison under Change one thing.
- Selling in a crash. After a year when the portfolio falls more than 10%, a seller moves everything to cash (8 times in 10) and waits one to three years, missing the rebound. Random lives include "panicky" investors who do this. Holding through drawdowns is the actual investing skill.
- Scarred by experience. People's investing tracks the markets they lived through, especially when young. A random life that loses more than 15% before 35 sometimes retreats to 30% stocks for a decade.
- Investment costs. A yearly fee comes straight off returns. Small fees compound into large differences over decades; the Costs dial shows how large.
- How much house. Renting for good, a modest home (about 2.5 times pay), a typical one (3 to 4.5 times), or a stretch (5 to 6 times). A house is a leveraged bet on one asset: a stretch raises the typical outcome a little and the chance of running out a lot.
- Saving that rises on its own. Defaults beat intentions. Auto-escalation raises the savings rate a point a year until it reaches 20%, the idea behind Thaler and Benartzi's Save More Tomorrow.
- Employer stock. Holding company stock ties your paycheck and your portfolio to one firm. Its stock moves with the market plus its own luck, and about 1.5% of years it fails: the stock loses 90% and the job goes with it.
- Spending guardrails. The Guyton-Klinger rules. Each year of retirement, the withdrawal is compared with savings. If that rate climbs 20% above where it started, spending drops by a tenth (until 80); if it falls 20% below, spending rises by a tenth. The second half is a rule for having too much, which savers rarely set. The model's spending rule already pulls back as savings shrink, so guardrails mostly add spending in good runs rather than preventing running out.
- Stopping once on track (coast). Each year, the model asks whether today's savings, left to grow at a cautious rate (1.5% plus 3.5% times the stock share, less fees), would fund retirement at your planned age even if you spent everything you now save. If so, saving stops; if a bad stretch puts you 10% behind, it starts again. Coasting toward a late retirement age is risky when careers can end early.
- Long-run stock returns. Returns are the one big input nobody chooses, and a flattering assumption is the most common way a plan goes wrong. The base case averages about 6% a year after inflation. J.P. Morgan's 2026 forecast of 6.7% a year for US large caps works out to about 4% after inflation; US history is closer to 7%.
- Mortgage rates. New mortgages are priced off the 10-year bond yield when you buy, plus about 1.7 points, so they average a little over 6% before inflation and move with the economy. The low and high settings put yours 1.5 points below or above that. Freddie Mac's 30-year average was 7.28% on October 1, 2026. In Your plan, higher payments mostly come out of everyday spending.
- Starting valuations. Price sets future returns. "Stock prices today" sets where prices start: cheap (about 26% below their long-run level), normal, or expensive (about 50% above it). From there they move as described under Markets. Starting expensive takes a little over a point a year off the first decade's stock returns, which matters most near retirement, when early losses hurt most.
- A rare depression. Things that have never happened before happen all the time. With this on, each year carries a 1.2% chance of a depression: stocks down about 40%, home prices down 20%, and one in four workers laid off.
Accounts and insurance
A plan can have plenty of lifetime wealth and still run short of cash in a given year, usually the years of child care, college or a home purchase. To show that, Your plan keeps separate pools: the bank and taxable investments, retirement accounts, and a 529 plan if you choose one. Random lives keep one pool, taxed like a Roth account.
- Traditional or Roth. Traditional contributions come off this year's taxable income, the refund lands in the bank, and every dollar is taxed as income when it comes out. Roth contributions are taxed now and come out tax-free. Savings you already have are treated as the same kind you choose. The model tracks each part of the balance and draws from them in proportion.
- When they open. At 59½ (60 in the model), when you leave work at 55 or later (the Rule of 55), or on disability. Before that, money taken out pays a 10% penalty on top of any income tax, except Roth contributions, which come back penalty-free.
- Required withdrawals. From 75, traditional accounts must pay out a share each year set by the IRS Uniform Lifetime Table (about 4% at 75, 6% at 85), taxed as income whether you need it or not.
- Where new savings go. Three months of spending stays in the bank, and a planned first home's down payment builds up first. After that, savings fill retirement accounts up to $32,000 a year per worker ($24,500 in a 401(k) plus $7,500 in an IRA), or about $40,000 from 50. "Half and half" sends half; "taxable only" sends none.
- Let the model choose. The model runs your 100 lives with each place new savings could go and each kind of account (six combinations), and keeps the one that leaves the typical you the most to live on and leave behind. Traditional balances left at death count after the income tax your heirs would owe on them, assumed to be 22%. It says which one it picked and why. The pick then stands in for every variation of your plan, so the other charts compare like with like.
- Running short. When cash runs out, money comes out of retirement accounts, grossed up for the tax and any penalty.
- Retiring before 55. If money outside retirement accounts can't reach 60, the plan sets up 72(t) payments: equal yearly withdrawals, penalty-free, based on life expectancy and a 5% rate, fixed until 59½ or for five years, whichever is longer.
- Disability insurance costs about 1% of pay and, together with Social Security, replaces 60% of pay (up to $15,000 a month) until 65, tax-free.
Divorce splits every pool. Not modeled: Roth conversions and the backdoor routes, 401(k) loans, a partner's own disability, and term life insurance as a choice (about 45% of partners who die were insured).
Taxes
Each year the household files a return under 2026 federal law (IRS Revenue Procedure 2025-32), jointly when married. Brackets, deductions and credits rise with inflation, so in today's dollars they stay put; thresholds the law never indexes shrink a little each year.
- Federal income tax. The 2026 brackets (10% to 37%) and standard deduction ($16,100 single, $32,200 married, more from 65). Qualified dividends and long-term gains stack on top of other income at 0%, 15% or 20%.
- Credits. The child tax credit, $2,200 per child under 17 with up to $1,700 paid even when no tax is owed, and the earned income tax credit for low pay.
- Payroll tax. 6.2% for Social Security on each earner's pay up to $184,500, 1.45% for Medicare, and 0.9% more above $200,000 ($250,000 married), a threshold the law doesn't index.
- Social Security. Up to 85% of benefits are taxable, depending on other income, using the 1983 and 1993 thresholds ($25,000 and $34,000 single, $32,000 and $44,000 married), which have never been indexed.
- State tax. A flat share of income above the standard deduction: none (like Texas or Florida), about 4% for a typical state, or about 7% for a high-tax state like California or New York. Social Security is left alone, as most states do. Random lives pay a typical state's.
- Investments. Taxable savings pay tax each year on dividends (about 1.5% of the stock holdings) and some realized gains (about 0.5% more), and on bond interest at the full nominal yield, so inflation raises the tax on bonds. Bonds sit in retirement accounts first. The model doesn't track the cost basis of each sale.
- Lifetime taxes. Everything above, plus tax on withdrawals, added up in today's dollars. Your plan shows the typical total, and Your report splits it between working years and retirement.
Not modeled: itemized deductions (the mortgage interest and state tax deductions), the temporary senior deduction through 2028, the net investment income tax, Medicare premium surcharges, and the tax on selling a home.
Family and career
Random lives meet partners, have children and change jobs by chance. Your plan can also plan for them, under Family and career:
- Children you plan to have arrive two years apart from the year you choose. Each costs a base amount scaled to where you live, plus a share of household income, plus child care before school; each one after the first costs less. "Maybe" leaves it to chance.
- College. "Help as you can" is what random lives do: a yearly amount that rises with income and savings. "Full cost" pays $31,000 a year for four years per child, the College Board's 2025-26 published cost of an in-state public four-year college with room, board and books, before grants. A 529 plan puts away a level amount each year for each child under 18, enough to cover that at 4% after inflation (up to $19,000 a year, the gift-tax exclusion), invested 60/40 and tax-free; college draws on it first. With either, whatever the family can't cover from income and savings outside retirement accounts, the student borrows. Money left in a 529 once the children are through school comes back with tax and a penalty, about 10%.
- A career break means no pay for one to five years, then a job paying about 8% less for each year away, up to 40% less. A survey of women returning to work found they had lost 18% of their earning power on average, and 37% after three or more years away (Hewlett and Luce, Harvard Business Review, 2005).
- A career switch means one or two years of school on about a third of your pay, $15,000 to $40,000 in tuition, and a new career paying anywhere from 15% less to 45% more.
- Caring for a parent means four years of about $7,200 a year out of pocket (AARP's 2021 average for family caregivers, scaled to where you live) and a fifth less time at paid work.
Each one has a matching button under Change one thing, and Your report has a section on children and college.
Cost of living
Where you live scales rent and home prices, the cost of a basic life, child care and long-term care: 0.8× in a low-cost area and 1.35× in an expensive city. Renters in expensive places also spend a larger share of income on housing. Random lives in expensive cities earn about 25% more; in Your plan your income stays what you enter, so "Live somewhere cheaper" shows the effect of the same pay going further.
Inflation
Every figure is in today's dollars, so a dollar always buys the same amount. Inflation averages about 2.5%, already built into the real returns above, but it moves every year (above). Choosing a different average in Your plan moves the whole path up or down. In any year inflation runs above 2.5%:
- Bonds lose as rates rise and inflation eats their interest, and stocks lose 0.3 points of real return for each extra point.
- Cash in the bank loses the full extra point.
- Wages trail by 0.3 points a year.
- Fixed-rate mortgages and student loans get cheaper in real terms, because the payment does not rise.
- Social Security is indexed, so it keeps pace.
The note under your results translates the typical outcome into the future dollars a statement would show, which is why long-run projections often look larger than they are.
Same luck, different choice
Randomness comes in separate streams: survival, the economy, school, career, partner, kids, housing, health, luck, debt, nerve in a crash, employer stock and late-career exits. Each stream is reseeded every year from the life's seed and age. Two lives with the same seed therefore see the same recessions, the same market returns and the same draws for marriage, illness and layoffs, even when one starting choice differs. Statisticians call this common random numbers. It is what makes the What if twin, Change one thing, the dials and Compare fair: most of the luck cancels out, so the difference you see is the choice.
Events and luck, measured
Common random numbers also make it possible to price single events and to split luck from choice.
- Life events in Compare. For each of 1,000 seeds, one life is forced through an event at a chosen age (a divorce, a layoff, an illness, a crash the year you turn 65) and its twin is spared that event at that age. Every other draw is the same, so the gap year by year is what the event costs or adds for the rest of a life. Only people the event can happen to count: a divorce at 45 counts only those married then.
- What moved their money most. When a life ends, the closing card replays it once without each of its big events, and lists the three that changed what was left at death the most. A divorce or long-term care is removed from that age on; a layoff, an illness or an inheritance only in that year.
- The same start, a hundred times. The closing card also runs 99 other people with exactly the same five starting traits and places this life among them. Their traits match, so the spread between them is luck.
- Luck or choice. Compare runs 3,000 random lives and ranks them by net worth at each age and by what they left at death. Each trait's share is the part of the variation in those ranks that lies between its groups (R²). The traits are drawn independently, so those shares add up, and they are scaled to the R² of all of them together. Drive and talent is a hidden trait that nudges pay and promotions. Everything else is luck: markets, health, marriage, layoffs, pay within a career and timing.
- Compare, for your plan. Switch Compare to Your plan and the same comparisons run on versions of you, from your age and savings: choices like renting or buying, Roth or traditional, or a 529; events at ages still ahead of you; and which kinds of luck matter for you.
- Which kinds of luck matter for you. Your choices stay fixed. Each version of you is lived once as is, then six more times, each time keeping one kind of luck (markets, career, family, health, housing, or windfalls and costs) and redrawing everything else. How much of the ranking between versions survives (a rank correlation) is that kind of luck's share of the spread: a first-order sensitivity index. What's left is luck of different kinds working together.
- What matters most. In Your plan, each lever moves one step each way, such as saving 5 points more or less, retiring 3 years earlier or later, or stock returns a point lower or higher. It replays the same 100 lives each time. The levers are ranked by how far they move the typical (or unlucky) outcome. Two choices are left out because net worth at one age is the wrong yardstick for them: when to claim Social Security (waiting draws savings down first and pays back for life) and Roth or traditional (net worth counts traditional balances before the tax still owed on them). Compare and Your report weigh those properly.
Your report
Your report gathers what the other views show about your plan into one page. It opens with the few results that stand out for you, then covers when you can retire, milestones along the way, where a lifetime of money goes, the trade-offs in saving more or less (with a slider to try any rate), living well rather than just saving, risks forced into your lives one at a time (a layoff, a disability with and without insurance, a divorce, an illness, a crash the year you retire, an inflation spike, long-term care), children and college, renting or buying, when to claim Social Security, which kinds of luck matter for you, three of your hundred lives, and taxes, including where your savings should go. Every comparison uses the same 100 seeds as Your plan, and the charts can be read by pointing at them. It rebuilds when your plan changes, and it can be copied as text or printed.
Steer a life
One random person, born into a family and a place they didn't choose. Luck plays out year by year; you make seven calls: schooling at 18, how to handle a paycheck at 22, how to invest at 23, buying or renting at 26, what to do in the first crash after that (which then holds for every crash), and, asked at 55, when to retire and how to spend once you do. Each call takes effect from that age.
The score is how well the life was lived, not how much it left. It's the steady yearly spending, per person, that would feel as good as the life's actual spending did. Each year's spending is shared across the household (divided by the square root of its size). Lean years cost more than good years earn: halving spending hurts as much as doubling it helps (log utility, the standard economist's assumption). From 65, a year counts 2% less for each year of age, down to half at 90, because spending buys less experience as health and energy fade, the argument Bill Perkins makes in Die With Zero. Money left at death doesn't count at all, so dying with a fortune unspent is the costly mistake it really is, and so is running out.
When the life ends, the same seed is replayed under every combination of the seven calls, 864 in all, with the same luck year by year, and your life is ranked against all of them. Across many lives, the best play varies: sometimes spending as you go wins, and sometimes saving hard wins, but almost only when the savings are then spent down. Today's life uses a seed made from the date, so everyone playing today gets the same person and the same luck.
Measuring a life
- Spending while working and in retirement: everything spent in a year, including housing, kids and health. Debt principal counts as saving, not spending.
- Running out of savings: a retired year where savings were nearly gone and spending fell well below the usual level.
- Left unspent: net worth at death. Some is a gift to heirs; past a point it is spending that never happened, which is the cost of oversaving.
- Living well: one number for how well a life was lived rather than how much it left. It is the steady yearly spending, per person, that would feel as good as the life's actual spending did. Each year's spending (housing, children, health and everyday life) is shared across the household, divided by the square root of its size. Lean years count for more than good ones: with log utility, halving spending hurts as much as doubling it helps. From 65, each year counts 2% less per year of age, down to half at 90, as health and energy fade. Money left at death counts for nothing, so the measure penalizes running out and dying with a fortune unspent alike. Your report uses it to weigh saving more or less and when to claim Social Security, and Steer a life uses it as its score. The weights are judgments, stated here so you can disagree with them.
- Where the money came from: every change in net worth is booked to paychecks, investment growth, home prices, windfalls, setbacks, interest or spending in retirement. These add up exactly to the estate.
Checking against real data
Run across 20,000 random lives (node calibrate.js 20000), the model lands close to the Federal Reserve's Survey of Consumer Finances at 30 and 50, a little low at 40, and high for older households:
| Measure | Model | US reference |
|---|
| Life expectancy at 18 | 78 | about 78 to 79 |
| Median net worth at 30 | $39k | $39k (under 35) |
| Median net worth at 40 | $107k | $136k (35 to 44) |
| Median net worth at 50 | $220k | $247k (45 to 54) |
| Median net worth at 60 | $400k | $365k (55 to 64) |
| Median net worth at 70 | $502k | $410k (65 to 74) |
| Ever married by 45 | 80% | about 75 to 80% |
| Ever divorced by 45 | 30% | about 30 to 40% of the ever-married |
| Owned a home by 45 | 73% | about 65 to 70% |
Part of the gap at older ages is real: the survey is a snapshot of today's older households, who earned less over their lives than today's 18-year-olds will. Part of it is the model being generous.
How the model is checked
A model's first version is usually wrong, and its errors tend to flatter. node check.js runs the checks a careful analyst would run on any long-term plan:
- Conservation. Across 4,000 lives, random and planned, every dollar is booked to a source, and the books add up to the estate to the cent.
- Hard constraints. In about 200,000 simulated years, no account goes negative, and retirement money is never spent before 59½ without the penalty, the Rule of 55, a 72(t) plan or a disability.
- Determinism and fair comparisons. The same seed gives the same life to the dollar, and twins who save different amounts live through identical recessions.
- Taxes by hand. Six tax returns worked out by hand, from a single parent on $25,000 (who gets money back, from the child and earned income credits) to a two-earner couple on $300,000 and a retired couple living on Social Security and IRA withdrawals, match the model to the dollar.
- Sensitivities. For the young family example, saving 5 points more or less moves typical net worth at 75 by about 30%. A 1% fee costs about a sixth, one point of stock return about an eighth, and inflation averaging 5% about a ninth. A point of return matters about as much as the gap between the glide path and a 40% stock portfolio.
- The return assumption, measured from the model's own markets: stocks average 6.2% a year after inflation and compound at 5.0%, with recessions in 17% of years. Inflation averages 2.5% and tops 5% in about 12% of years; bonds average 2.0% after inflation.
- Speculators against index investors. With the same luck, speculators finish ahead at 65 in about 26% of pairs.
Checks like these have caught real bugs. A forced home sale for less than the mortgage left cash below zero instead of turning the shortfall into debt. A 529 plan paying for college while the family also cut its budget for it, which quietly turned the 529 into extra saving. And a disabled household's spending frozen at its old level while insurance kept its income up, which made a disability look like a windfall. All are fixed.
Limitations
- It is a teaching model, not financial advice or a forecast. Treat the shape of the results as more reliable than any single number.
- Taxes follow 2026 federal law with a flat state rate and the standard deduction. There are no itemized deductions, Roth conversions or bracket planning, and taxable savings pay tax on yearly income rather than on the gain at each sale.
- Markets have two moods, with moving inflation, rates and valuations, but not every long boom, lost decade or regime shift of real history.
- Random lives keep one pool of savings; only Your plan separates retirement accounts. The emergency fund is fixed at three months of spending rather than a choice.
- A partner is modeled simply: the same age, retiring at 66, with no separate career events beyond layoffs and no disability.
- Children reach adulthood and leave the picture; they never come back for support.
- Fewer people have children in the model (about 74%) than in the US (80 to 85%).
Privacy
Everything you enter in Your plan stays in this browser. The simulations run here, on your device, and your plan is saved only in this browser's local storage.
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Terms
- Net worth
- Savings and investments plus home equity, minus every debt.
- Today's dollars
- Amounts adjusted for inflation, so $1 always buys what $1 buys now.
- Median
- The middle outcome: half did better, half did worse.
- 10th and 90th percentile
- Outcomes that 10% of lives fell below, and that only 10% beat. Here they stand for unlucky and lucky.
- Withdrawal rate
- The share of savings drawn each year in retirement. The "4% rule" says 25 times your yearly gap is enough for a long retirement.
- Coast FI
- The point where savings alone will grow into a full retirement at a set age, so you can stop saving. Different from full financial independence, which means you could stop working.
- Traditional and Roth
- Two kinds of retirement account. Traditional: a tax break when you put money in, income tax when it comes out. Roth: tax now, nothing later.
- Required minimum distribution
- The share of a traditional account the IRS requires you to withdraw each year from 75, taxed as income.
- 529 plan
- A college savings account whose growth is tax-free when spent on education.
- Valuation
- How richly stocks are priced relative to earnings. High prices have tended to mean lower returns over the following decade.
- Rule of 55
- Leaving your job in or after the year you turn 55 lets you draw that employer's 401(k) without the 10% penalty.
- 72(t) payments
- Equal yearly withdrawals from a retirement account that avoid the early-withdrawal penalty, as long as they continue until 59½ or for five years.
- Guardrails
- Rules that cut spending when withdrawals climb too high relative to savings, and raise it when they fall too low.
- Glide path
- A portfolio that holds more stocks when young and shifts toward bonds with age.
- Compounding
- Returns earning returns of their own, which is why the green investing area widens late in life.
- Recession
- A year when the economy shrinks: stocks fall, home prices dip and layoffs rise.
- Common random numbers
- Giving two simulations the same random draws, so the difference between them comes from what you changed.