What to watch in this scenario

Power of Zero scorecard

Account balances by age

Living expenses by age

Where retirement cash comes from

Scenario comparison

What the model does and does not do

• Tax year 2026 law: seven ordinary brackets (10% to 37%), standard deduction, 0/15/20% capital gains stacking, 3.8% net investment income tax, Social Security and Medicare payroll tax including the 0.9% surtax.
• Brackets, deductions, contribution limits and IRMAA tiers grow with your inflation input. The NIIT, Medicare surtax and Social Security taxation thresholds stay fixed, as in statute.
• Contribution limits: 401(k) $24,500, catch-up $8,000 ($11,250 at 60 to 63), total additions $72,000, IRA $7,500 plus $1,100, HSA $4,400 or $8,750 plus $1,000 at 55. Catch-up is forced to Roth above $150,000 of wages.
• RMDs start at 75 for anyone born in 1960 or later (73 if born 1951 to 1959) and use the Uniform Lifetime Table. Roth accounts have no RMDs.
• Backdoor Roth applies the pro-rata rule against the traditional IRA balance. Mega backdoor contributions are capped by the total additions limit after deferrals and employer money.
• IRMAA uses income from two years earlier. Only the surcharge is counted, not the base premium.
• State tax is one flat effective rate on income excluding Social Security. Set separate rates for working years and retirement to test a move.
• Not modeled: AMT, the SALT cap and the 35% cap on itemized deduction value, the temporary senior deduction, the rule of 55, Roth five-year rules, a spouse's separate earnings or accounts, QCDs, and sequence-of-returns risk. Returns are constant.
• Pre-tax withdrawals before age 60 carry a 10% penalty. HSA medical withdrawals are tax-free and count toward spending.
• Living expenses are after tax. While working, the surplus after taxes, plan contributions and expenses is swept into the brokerage account each year, and a gap is drawn from it. Core living costs grow with inflation, healthcare lines grow at their own rate, a housing payment stays flat, and long-term care falls in the final years of the plan.
• Social Security uses the standard claiming adjustments around a full retirement age of 67: 70% at 62, 124% at 70. Benefits rise with inflation. A spouse is assumed to be your age. Not modeled: survivor benefits, the earnings test for claiming while working, and the effect of future earnings on your benefit.
• Self-employed mode treats income as Schedule C net profit. Self-employment tax is 15.3% on 92.35% of profit up to the Social Security wage base, 2.9% above it, plus the 0.9% surtax. Half is deducted. Solo 401(k) and SEP employer contributions are 20% of profit net of that deduction, inside the $72,000 limit. SIMPLE IRA uses the $18,100 limit for small employers with a 3% match. The QBI deduction assumes no employees, so it phases out to zero above the threshold range.
• Not modeled for the self-employed: S-corporation salary and distribution splits, the 6% cap on defined contribution deductions when a cash balance plan is in place, actuarial limits on cash balance contributions, state entity-level taxes, and estimated tax penalties.
• Power of Zero shift converts the pre-tax excess over a target in equal yearly slices. The ideal balance is the one whose first RMD equals the standard deduction, discounted back at your return assumption. McKnight's fuller test also keeps provisional income under the Social Security thresholds, which the scorecard reports separately.
• The LIRP is a simplified cash value policy: premiums in, growth at the crediting rate less a flat cost, tax-free loans out. Not modeled: the death benefit, first-year loads and surrender charges, caps and floors on index credits, loan interest, MEC limits, and the tax bill if the policy lapses with loans outstanding. Get an in-force illustration before relying on these numbers.
• After-tax value applies your chosen rate to pre-tax balances and 23.8% to unrealized brokerage gains.
• This is a planning estimate, not tax advice. Starting balances are placeholders until you enter your own.