Understanding the assumptions behind your Boldin plan

In this article:

Default Rates

Withdrawal Order

Start Dates and Stop Dates

Today's Dollars or Future Dollars

Depreciation of Assets

Accounts

Deductible Contributions

Excess Income

Taxes

Social Security

Medicare Expenses

Long-Term Care Expenses

The Boldin Planner is designed to help you build a long-term retirement plan, understand how different parts of your plan interact, and make informed decisions over time.

Every plan is built on a set of assumptions, including asset growth rates, inflation, and tax rules. Because of this, your projected estate value, account balances, withdrawals and taxes will naturally change over time. At times, you may notice differences between projections for income, expenses, or charts. The sections below explain why this happens and how to interpret what you're seeing.

The Boldin Planner is a forward-looking projection engine. Your plan is recalculated each month as time progresses. For current-year tax planning or filing, we recommend using tax software or working with a tax professional.

Your goal is to fund retirement through your (and your spouse's) projected longevity across a range of scenarios. Longevity is initially based on average life expectancy for your age, but can be adjusted. You can view and update this in My Plan > Summary.

Default assumptions are based on long-term economic data. You can adjust these values based upon your own research and rationale, but even small changes can have a meaningful impact on your results. You can modify assumptions such as inflation, Social Security COLA, housing appreciation, and medical inflation in My Plan > Rate Assumptions.

The "Average" inflation and returns setting computes the linear average of the Optimistic and Pessimistic assumptions. Switching between Optimistic, Pessimistic, and Average assumptions lets you see how your plan performs under different conditions.

Inflation and non-Social Security income increases are applied in January, beginning the year after the current year.

Annual return assumptions are converted into a monthly growth rate using:

(1 + growth rate)^(1/12) − 1.

Housing appreciation is applied monthly.

The Boldin Planner automatically funds the expenses in your plan. Income sources (work income, Social Security, pensions, etc.) are used first.

If income doesn't fully cover your expenses, the Boldin Planner uses withdrawals based on your selected strategy and the following default order:

Within each category, accounts with the lowest growth rate are used first, allowing higher-growth accounts more time to compound.

529 accounts are not included in the withdrawal sequence and must be distributed manually. You can add manual distributions by creating transfers from retirement accounts to taxable accounts (such as checking, savings, or brokerage accounts).

Does the Boldin Planner apply early withdrawal penalties?

No. The Boldin Planner allows withdrawals prior to age 59 1/2 and does not apply early withdrawal penalties to projections.

Start Dates take effect in the month you reach the selected age. Stop Dates remain in effect through the selected age.

If you select "Retirement Date" as an end date, the expense or income ends immediately prior to the retirement date.

Projections run through December in the year that the longevity age is reached for both the primary user and partner to ensure 12 months of data for reporting. The surviving spouse switches from married to single in the first year in which their spouse has been deceased for the entire year.

You can view your plan projections in either Today's Dollars or Future Dollars using the Assumptions toggle:

These are two ways of viewing the same projections over time. You can learn more about this feature in this article.

These are two different ways of viewing the same underlying projections:

If your income appears flat or lower over time in Today's Dollars view, switching to Future Dollars will often clarify the underlying growth.

You can model depreciation for "Other Assets" within the Boldin Planner.

The Boldin Planner models your plan based on overall assumptions rather than individual investment performance. The default rates of return are listed in the Default rates section above. PlannerPlus subscribers have the ability to change the rates of return. You should enter nominal rates of return that reflect your expectations.

If rates appear inconsistent, check whether your plan is set to "Optimistic" or "Pessimistic" assumptions.

Contributions reduce your taxable income, returns are not taxed, and all distributions are taxed as income. These accounts are also subject to Required Minimum Distributions (RMDs).

Starting at age 72 or later, the Boldin Planner estimates required minimum distributions based on IRS Publication 590-B. Excess withdrawals not used to cover monthly expenses are assumed to be added to your Excess Income.

Contributions do not reduce your taxable income since these accounts are funded with after-tax dollars. The Boldin Planner assumes no taxes on the growth or distributions from these accounts.

Contributions are treated as pre-tax and will reduce your taxable income for federal taxes and all states except California and New Jersey. Returns are not taxed except in California and New Jersey. All distributions are assumed to be used on healthcare expenses and are therefore not taxed. HSA accounts are not subject to RMDs.

Contributions are treated as post-tax for federal taxes but as pre-tax and will reduce your taxable income in all states except California, Delaware, Hawaii, Kentucky, Maine, New Jersey, and North Carolina. Indiana, Utah, and Vermont offer tax credits for contributions rather than tax deductions and are treated as such. Returns are not taxed. All distributions are assumed to be used on education expenses, and are not taxed. 529 accounts are not subject to RMDs.

The amount being converted is treated as taxable income at the age selected for conversion. Simulated new Roth accounts grow at specified rates of return and withdrawals are tax-free.

You have the ability to view your deductible contributions in the Insight > Taxes > Federal Tax Deductions chart.

Excess income is any income not allocated to spending or saving in your plan. It is the amount left over each month after all expenses are covered and can be accessed through My Plan > Money Flows > Excess Income.

You'll have "Excess Income" any time your monthly income from all sources – including Required Minimum Distributions – is higher than what you have specified for your total monthly expenses. Some years, you may earn more than you've designated in your budget, so you'll need to tell the Boldin Planner what to do with the difference.

Note: The Boldin Planner defaults to "Cash (Default Account)" for your excess income. If you set up a taxable investment account (such as a Checking, Savings, or Investment account) in My Plan > Assets and Debts > Savings, you will be able to designate one of these accounts for your Excess Income. We suggest that you do this, as rates of return can have a significant impact on your plan results

You can view your Excess Income in the Insights > Surplus-Gap chart.

Double counting can occur if you connect a credit card while also manually entering recurring expenses (e.g., rent, utilities). To fix this, either disconnect the credit card or remove the duplicate recurring expense entries. Alternatively, calculate your average monthly payment toward your credit card and enter it as a single recurring expense. This approach simplifies tracking and avoids inflated expense totals.

The Boldin Planner uses proprietary methods to estimate taxes. Tax estimates should be considered directly: useful for planning purposes, but not a substitute for precise tax filing or payment calculations. For more exact values, consult a tax professional.

The Boldin Planner calculates:

The Boldin Planner does not calculate:

For Boldin PlannerPlus users, income taxes are estimated using all currently available state and federal tax rates and tax brackets through longevity.

Itemized deductions include mortgage interest, state income tax, and all deductions listed in My Plan > Expenses, including property tax; for Federal income taxes, the $40,000 cap on State and Local Taxes (SALT) is enforced.

The Boldin model uses each state’s standard deduction when estimating taxes at the state level.

Tax brackets and standard deduction amounts are indexed each year for inflation.

Taxes shown in the Insights > Taxes > Estimated Taxes chart represent your tax liability for the year.

Taxes shown in the Insights > Income & Expenses > Estimated Expenses chart represent your tax expense for the year.

The Boldin Planner computes the Full Retirement Age (FRA) for both you and your spouse (if applicable). You can input your Primary Insurance Amount (PIA), or rely on Boldin's Social Security estimator to estimate your benefit based on your current income. The Boldin Planner applies early retirement reductions or delayed retirement credits to your PIA to determine your benefit at your selected claiming age.

The Boldin Planner also automatically calculates spousal benefits. For you and your spouse, it uses your own benefit or your spousal benefit, whichever is greater.

At the longevity age of the first spouse, the model assumes the surviving spouse will receive 100% of the deceased’s benefit, if greater.

Future Social Security estimates are subject to wage offsets as described here.

The amount of Social Security income considered taxable is based on publication 915 for federal income tax and state-specific rules for state income tax.

For Boldin Basic (free) plan users, a blended federal-state income tax table is used with 2022 standard deduction amounts to approximate US national averages.

Medicare expense estimates in the Boldin Planner include premiums, deductibles, prescriptions, and out-of-pocket expenses costs such as dental and vision assuming “Excellent” health. If your healthcare needs exceed the national average, consider adding recurring expenses to your plan.

Because future healthcare costs are difficult to estimate, Boldin relies on average cost-by-state data from Medicare.gov for projections. Boldin PlannerPlus subscriber Medicare estimates are state-specific. PlannerPlus users can model different policy, health, and premium level options to more accurately estimate Medicare expenses. Estimates used are based upon assumptions for:

All values are adjusted from today using the medical inflation rate in your plan.

PRO TIP: Set your medical inflation rate to zero in your Assumptions and go to your Insights > Income & Expenses > Estimated Expenses chart to view your projected medical costs in today's dollars.

By default, the Boldin Planner models long-term care expenses during the last 28 months of your life (and your spouse's, if applicable). This default applies unless you indicate one of the following in My Plan > Expenses and Healthcare > Long-Term Care:

You may want to research costs in your area and adjust your assumptions accordingly. See this article for further details.

You can view long-term care expenses in the Insights > Income & Expenses > Estimated Expenses chart:

You have the ability to change your long-term care assumptions in My Plan > Expenses and Healthcare > Long-Term Care.

Note that long-term care expenses are subject to the medical inflation rates in your plan assumptions.

PRO TIP: Set your medical inflation rate to zero in your Assumptions and go to the Insights > Income & Expenses > Estimated Expenses chart to view your projected long-term care costs in today's dollars.

Want to put these assumptions to work? Start your free Boldin plan and see where you stand.