Plan My Retirement is a deterministic, year-by-year retirement projection. You enter your age, savings, target spending, and a few assumptions; the model then walks forward one year at a time from today until the end of your plan, solving for the withdrawal strategy that stretches your money as far as possible while covering your target income.
The model estimates your Primary Insurance Amount (PIA) from the earnings record you enter (or from a default career-earnings curve if you don't have your actual SSA statement handy), then evaluates every combination of claiming ages for you and your spouse. Each combination is scored by expected lifetime benefit — every future year's payment weighted by the probability you're alive to receive it, using SSA life tables — rather than a simple sum to an arbitrary age. That expected-value approach is what drives the "optimal" claiming age the tool recommends; it doesn't change if you adjust your plan horizon, because it's answering a different question ("what's the smartest bet given normal life expectancy uncertainty") than a fixed to-a-certain-age comparison.
In each year of retirement, the model draws from a mix of pre-tax retirement accounts, Roth accounts, and taxable savings to hit your target spendable income after tax. It generally prioritizes tax-deferred withdrawals up to favorable bracket thresholds, uses Roth conversions where they reduce lifetime tax, and can apply Section 72(t) Substantially Equal Periodic Payments (SEPP) logic for savers who need penalty-free access to retirement funds before age 59½.
Bracket smoothing refers to the model's attempt to spread taxable withdrawals evenly across years rather than lumping income into a single high-tax year — the same total lifetime withdrawal generally costs less in tax when it doesn't push you into a higher marginal bracket in any one year.
Before Medicare eligibility (age 65), the model estimates ACA marketplace premiums net of subsidy based on your income. After 65, it models Medicare Part B/D premiums including IRMAA (income-related surcharges) plus an estimate of out-of-pocket costs, both grown by a separate, faster healthcare-specific inflation rate than general inflation — reflecting the long-run trend of medical costs outpacing overall prices.
The default projection uses a constant expected annual return (set by your chosen preset or custom assumptions). The stress test instead applies a sequence of below-average or negative returns early in retirement — the scenario most likely to deplete a portfolio, since early losses combined with ongoing withdrawals leave less principal to recover when markets improve later. This is sometimes called sequence-of-returns risk.
Conservative, Average, and Lenient presets bundle a return rate, inflation rate, healthcare inflation, Medicare premium inflation, return volatility, and planning age into one click, based on long-run historical ranges for each. Choosing Custom lets you override any of these individually — the model flags your scenario as Custom automatically if you edit an underlying field directly, since at that point it's no longer one of the three named presets.