Assumptions & method
A projection is only as good as what goes into it. This page lists every rate the calculators use, the conventions the engine follows, and — just as importantly — what the model deliberately leaves out.
Timing
How each year is simulated
The engine runs in nominal dollars year by year, then converts back to today’s purchasing power for display. Running nominally matters because tax brackets, contribution caps and wage growth all behave differently from a simple real-return model.
While you are working: balances grow for the year, then the year’s savings are added at the end. This is the conservative convention and matches the formula used by most public FIRE calculators.
Once you are retired: the year’s spending comes out at the start of the year, then whatever is left grows. Again conservative, and it avoids flattering a plan that is only just surviving.
The preservation-age rule: before your retirement accounts unlock, spending can only be drawn from accessible investments. After that age, withdrawals are taken pro-rata across both pools. A retirement age only counts as feasible if spending is fully funded in every single year through to your planning horizon.
Australia · 2026-27
Australian rates and caps
| Taxable income | Rate |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 15% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
- Medicare levy of 2%, with the low-income shade-in applied.
- Superannuation Guarantee of 12%, levied up to a maximum contribution base of $270,830.
- Concessional contributions cap of $32,500, inclusive of employer contributions. Salary sacrifice above the cap is returned to take-home pay.
- Contributions tax of 15%, plus Division 293’s additional 15% once income plus concessional contributions exceeds $250,000.
- Preservation age of 60, which applies to everyone born on or after 1 July 1964.
- Withdrawals default to a 0% tax rate: super drawn as a pension after 60 is tax free, and pre-60 drawdowns from outside super are largely sheltered by the tax-free threshold and the 50% CGT discount.
United States · 2026
US rates and limits
| Taxable income (single) | Rate |
|---|---|
| $0 – $12,400 | 10% |
| $12,401 – $50,400 | 12% |
| $50,401 – $105,700 | 22% |
| $105,701 – $201,775 | 24% |
| $201,776 – $256,225 | 32% |
| $256,226 – $640,600 | 35% |
| $640,601+ | 37% |
- Standard deduction of $16,100 single and $32,200 married filing jointly. Itemising is not modelled.
- 401(k) elective deferral limit of $24,500, plus a $8,000 catch-up from age 50 and $11,250 for ages 60 to 63. The IRA limit is $7,500.
- FICA at 6.2% up to the Social Security wage base plus 1.45% Medicare, with the additional 0.9% above $200,000 single and $250,000 joint. Deferrals reduce income tax but not FICA.
- Employer matching defaults to 50 cents per dollar on the first 6% of salary, and is adjustable.
- Penalty-free access at 59½. The Rule of 55 and 72(t) SEPP are flagged in the bridge panel but are not modelled as automatic access.
- State income tax is a flat, optional rate — set it to match your state, or leave it at zero.
The drawdown simulator
How the Monte Carlo model works
Each simulated year draws a return for shares, bonds and cash from a normal distribution around the mean and volatility you set, with a configurable correlation between shares and bonds. The portfolio return is the allocation-weighted blend, less fees.
Everything is in real terms, so results are directly comparable to the Trinity study and similar published research. The random seed is fixed, which means the same inputs always produce the same answer — change an input and any movement you see is real, not noise.
The “safe spend” figure is solved by bisection: the simulator repeatedly re-runs at different spending levels to find the highest one that still meets your target success rate.
Honesty
What this model does not do
It does not model the Age Pension or Social Security means tests, only a flat amount you can switch on. It does not handle capital gains cost bases, franking credits in detail, property, private businesses, defined benefit schemes, unequal partner ages or individual contribution caps within a couple.
Tax brackets and caps are indexed forward with inflation, which is a reasonable assumption but not what actually happens — real indexation is lumpy and political. Long-dated projections are directional, not predictive.
Returns in the accumulation projection are a fixed rate, not a sequence. That is deliberate: it keeps the accumulation answer stable and readable. Sequence risk is where it actually bites, in the drawdown simulator.
Not financial advice