About
How Our Calculators Work
Every WealthPlanner calculator uses published government formulas, transparent assumptions, and testable logic. This page explains the data sources, default values, and limitations that apply across all of our tools.
Our Approach to Financial Calculations
WealthPlanner calculators are designed to help you understand your financial situation — not to replace professional financial advice. Every calculator converts vague financial questions into specific, quantified numbers: your retirement gap, your fee drag, your retirement date, your Social Security claiming age.
The underlying logic for every calculator is extracted into pure, testable functions. These functions take your inputs and return outputs using published formulas — no proprietary black-box models, no hidden assumptions. Our test suite (over 2,000 unit tests) checks each calculator against known inputs and expected outputs taken from primary sources.
Each calculator also has an API endpoint (/api/calculators/[type]) that runs the same engine, so the page and the endpoint calculate the same way. It is not yet a documented public API.
Data Sources
Social Security Administration (SSA)
Our Social Security calculators use the official SSA benefit formulas, including: Primary Insurance Amount (PIA) calculation with current bend points, full retirement age tables by birth year, delayed retirement credits (8% per year after FRA), early retirement reduction factors, spousal benefit formulas (50% of worker's PIA), and divorced spouse eligibility rules (married 10+ years). The Social Security Fairness Act ended the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), so our calculators do not apply them. These formulas are published at ssa.gov/oact/cola/piaformula.html and updated annually by SSA.
Internal Revenue Service (IRS)
Tax-related calculations use IRS-published figures for the current tax year: federal income tax brackets, standard deductions, 401(k) and IRA contribution limits, Roth IRA income phase-outs, IRMAA (Income-Related Monthly Adjustment Amount) surcharge thresholds for Medicare Parts B and D, required minimum distribution (RMD) tables under the SECURE Act 2.0, and inherited IRA 10-year rule requirements. Source: IRS Rev. Proc. 2025-32 (updated annually).
Federal Reserve Economic Data (FRED)
Historical inflation data comes from the FRED CPI-U (Consumer Price Index for All Urban Consumers) series. We use this to calibrate our default inflation assumption and to provide context for inflation-adjusted (real) projections. Historical stock and bond returns come from Robert Shiller's US market data (shillerdata.com). Source: FRED CPI-U series.
Federal Reserve Survey of Consumer Finances (SCF)
Our Net Worth Calculator uses percentile data from the 2022 Survey of Consumer Finances — the most recent edition available — to show you where your net worth falls relative to other households in your age group. The SCF is conducted every three years by the Federal Reserve Board. Source: Federal Reserve SCF.
Bureau of Labor Statistics (BLS)
The Budget Calculator and Emergency Fund Calculator reference Consumer Expenditure Survey data for spending category benchmarks by income level and geographic region.Source: BLS Consumer Expenditure Survey.
Kaiser Family Foundation (KFF)
Healthcare cost estimates used in retirement expense projections are benchmarked against KFF's annual Employer Health Benefits Survey. The average annual premium for employer-sponsored family coverage was $26,993 in 2025 (KFF, 2025). These benchmarks inform default healthcare cost assumptions in our Retirement Calculator. Source: KFF Employer Health Benefits Survey.
Academic Research
The 4% withdrawal rate our calculators use by default comes from Bengen (1994) and the Trinity Study (Cooley, Hubbard & Walz, 1998), with later work by researchers including Wade Pfau and Michael Kitces.
Default Assumptions
Every calculator uses a set of default assumptions that you can override with your own values. These defaults are chosen to be reasonable starting points — not predictions.
| Assumption | Default Value | Basis |
|---|---|---|
| Inflation rate | 2.5% | Long-run CPI-U average is ~3%. The Federal Reserve targets 2%. We use 2.5% as a balanced estimate for long-term projections. |
| Nominal investment return | 7% | Historical S&P 500 nominal return: ~10%. A diversified stock/bond portfolio (60/40 to 80/20) typically returns 6–8% nominal. We default to 7%. |
| Real (inflation-adjusted) return | ~4.5% | Derived: 7% nominal minus 2.5% inflation. Calculators that show both nominal and real values compute this internally. |
| Safe withdrawal rate | 4% | Trinity Study (1998): a 4% initial withdrawal rate, adjusted for inflation, has historically survived 30-year retirement periods in 95%+ of scenarios. |
| Tax brackets | Current year IRS tables | Updated annually. Calculators project current brackets forward (they do not predict future tax legislation changes). |
| Life expectancy | 90 years (retirement calcs) | SSA Period Life Tables show average life expectancy of ~78–80. We default to 90 as a planning buffer — running out of money is worse than having too much. |
| Social Security COLA | 2.5% | Historical average COLA is ~2.6%. Recent years have varied from 0% (2009, 2010 and 2015) to 8.7% (2022), using the year labels in SSA's COLA table. We use 2.5% for long-term projections. |
All defaults are user-adjustable. We encourage you to use your own values when you have specific information (e.g., your actual portfolio return over the last 10 years, your regional inflation experience, your family longevity history).
What Our Calculators Cannot Account For
Financial calculators are simplifications of complex reality. Understanding what they leave out is as important as understanding what they include.
Future tax law changes
Calculators project current tax brackets and rules forward. Congress changes tax law regularly. The July 2025 law (Public Law 119-21) made the TCJA individual tax rates permanent; any later change to brackets, capital gains rates, estate tax exemptions or retirement account rules is not modelled until it is enacted.
Sequence-of-returns risk (most calculators)
Our calculators use a fixed average annual return. In reality, the order of returns matters enormously in the years immediately before and after retirement, so a plan can fall short even when the average return is met.
Behavioural factors
Calculators assume you will follow through on the savings rate, retirement date, and spending level you input. In practice, people change plans, face unexpected expenses, and make emotional investment decisions. The calculator cannot model your future behaviour.
State and local taxes
Tax-related calculators (Roth Conversion, RMD) use federal tax brackets only. State income tax varies from 0% (Texas, Florida, Nevada) to 13.3% (California). State tax can materially change the optimal Roth conversion amount.
Healthcare cost variability
Retirement expense projections do not model specific healthcare scenarios (long-term care, major medical events, Medicare Part D coverage gaps). Healthcare costs in retirement are highly individual and can vary from $5,000 to $50,000+ annually.
Employer-specific plan rules
Some employer plans have unique vesting schedules, matching formulas, or fund options that our calculators cannot model. Use your plan's specific terms rather than generic assumptions when they differ.
International considerations
All calculators use US tax law, US Social Security formulas, and US-centric assumptions. International users should consult their country's specific rules and regulations.
These limitations are precisely why we point you to fee-only financial advisors. A calculator gives you the number. An advisor helps you build a plan that accounts for the complexity a calculator cannot model.
Individual Calculator Methodology Pages
Each calculator has its own methodology page documenting the specific formulas, inputs, assumptions, and data sources used. Click any calculator below to view its detailed methodology.
All WealthPlanner calculators are for educational purposes only and do not constitute financial, tax, or legal advice. Results are estimates based on the inputs you provide and the assumptions described above. Consult a qualified financial professional before making financial decisions. See our editorial standards for more on how we create and review content.