Limitations — What It Does *Not* Do

Understanding the edges of the model is as important as understanding its features. RetireRange is a model, not a crystal ball — every result is a projection built from the assumptions you provide, and modeling is a judgment call, not a prediction. Small changes in your inputs can produce meaningfully different outcomes. We’d rather be upfront about the limits than imply a precision the math can’t deliver.

Markets and returns

• "Normal" randomness understates extremes. In standard mode, returns are drawn from a bell curve. Real markets have "fat tails" — crashes and booms happen more often than that curve predicts. Use bootstrap mode and the Historical backtest, which draw on actual market history, as a cross-check.
• Your asset mix is fixed — there’s no automatic glide path. Your stock/bond/cash allocation comes from how you build your accounts and stays as set through the simulation. RetireRange does not automatically shift you toward bonds as you age, and it does not rebalance your mix over time. To model a more conservative mix later, adjust your accounts and re-run.
• Cash-reserve recovery refill is simplified. Recovery refill (a Strategy tab option) rebuilds your cash cushion after a market rebound by selling some stocks back into cash. Three simplifications to know:
  • It only refills within the same account type. Cash is topped up by selling stocks held in the same tax bucket — Traditional, Roth, or Taxable — never by moving money between buckets, since that would be a real withdrawal or rollover with tax consequences the model doesn’t handle. So a cash account with no stocks in its own bucket (a Roth holding only cash, say) can’t be refilled — its shortfall just waits.
  • It refills all at once, not gradually. In the month a recovery is detected, it tops the cushion back to full in a single step — there’s no easing back in over several months.
  • The stock sale is tax-free in the model. Selling stocks to cash inside a Taxable account books no capital-gains tax, because the model doesn’t track Taxable cost basis (see the capital-gains note under Taxes below). Inside Traditional/Roth accounts the rebalance is genuinely tax-free anyway.
• Correlation is held constant. Stocks and bonds use a fixed relationship; in real crises, assets that normally move independently can fall together.
• Inflation is a single index (with an optional separate medical rate). It doesn’t model a sustained regime shift like the 1970s — the historical tools capture that better.

Taxes

RetireRange estimates taxes for planning direction, not filing precision. Most simplifications lean conservative (they tend to overstate your tax):

• Taxable-account withdrawals are treated as ordinary income — real long-term capital gains get lower rates, so this overstates that tax.
• Roth withdrawals are treated as tax-free; the 5-year and age-59½ rules aren’t enforced.
• Inherited-account taxes are a flat reduction, set per account. Each account’s Beneficiary setting (spouse or non-spouse) drives how any leftover balance is taxed to heirs in your after-tax legacy: a spouse inherits Traditional and HSA balances with tax-advantaged status preserved (no reduction), while a non-spouse heir takes them as ordinary income — Traditional under the SECURE 2.0 10-year rule, an HSA as immediate Pub 969 income. Roth passes tax-free and Taxable steps up either way. The simplification is that this is applied as a single multiplier on the ending balance, not a year-by-year simulation of the heir’s own drawdown — so it captures the direction of the Roth-vs-Traditional-vs-HSA difference, not the exact timing of the heir’s tax. Because it taxes the whole inherited balance at once — rather than letting the heir spread it across the SECURE 10-year window into lower brackets — it can overstate the heir’s tax (a ceiling, not a precise bill).
• Not modeled: capital-gains rates, qualified dividends, the Alternative Minimum Tax, the Net Investment Income Tax, Qualified Charitable Distributions, tax-loss harvesting, asset-location optimization, and estate tax.
• State tax covers all 50 states + DC, but state-specific pension/military-retirement exemptions aren’t deducted and county/local taxes aren’t included.
• We model current law, indexed for inflation — not future tax policy. Brackets, rates, and the standard deduction start from today’s law and inflate forward each year (as the IRS does). The engine does not predict future statutory changes — a rate change, a scheduled sunset, a new law — so, unlike the simplifications above, this one isn’t necessarily conservative; it simply assumes today’s rules continue. We keep the current-law tables current as they actually change.

Social Security

• Your SSA estimate assumes you keep working until you claim. Retire earlier and your real benefit may be lower, because the missing years drop out of your earnings record. If you’ll stop before you claim, trim the benefit estimates you enter to match — they’re your inputs, so you’re free to enter a more conservative number.
• The survivor benefit uses the SSA age-graded factor — 71.5% at age 60 rising to 100% at the survivor’s full retirement age (full 100% at or after FRA) — and the survivor keeps the larger of the two benefits. Finer survivor-rule edge cases aren’t separately modeled.
• RetireRange doesn’t predict policy changes — it projects your stated benefit forward. It doesn’t forecast reforms that haven’t been enacted. It does, though, keep the model’s current rules up to date: we maintain the tax brackets, IRMAA thresholds, RMD tables, and Social Security parameters as the law changes. See Social Security.

Costs and other items

• No investment fees, fund expense ratios, or trading costs are deducted. For low-cost index funds this is immaterial; for higher-fee or actively managed accounts, lower your return assumptions to compensate.
• Not modeled: long-term-care insurance; reverse mortgages and HELOCs; and buying a new annuity mid-plan (an existing annuity income stream is modeled). Cash-value life insurance is partial-support — the death benefit and tax-free policy-loan income are modeled, but lapse, MEC, and surrender charges are not. Real estate is modeled as an appreciating asset (with optional rental income and a sale event), not merely a rental-income source.
• A sold asset’s full proceeds become investable. When you model selling a large asset — a home, a rental — the entire net amount you enter is deposited into your portfolio and becomes available to fund retirement spending. If you’ll actually spend part of it (buying a replacement home, a big purchase, a gift), enter only the cash that will truly reach your portfolio, not the gross sale price. See downsizing your home.
• Asset classes are limited to Stocks, Bonds, Cash, and VEBA — international, small-cap, REITs, and alternatives aren’t separate categories. If you hold assets with a materially different risk/return profile and think it moves your outcome, approximate it by adjusting your stock (or bond) return assumptions — but carefully: you’re standing in for a whole asset class with a single number, and it’s easy to flatter or punish the plan by overdoing it.
• Optimizer precision: candidates evaluated in different batches use different random sequences, so a sub-1–2-point difference in success rate can be noise. Confirm close finalists on the Compare tab.

The bottom line

Results are based on modeling and assumptions and are for educational and entertainment purposes only. Past performance does not guarantee future results. Consult a qualified financial planner for advice specific to your situation.

RetireRange is built to make you a sharper, better-informed participant in your own retirement planning — a powerful way to explore the decisions that matter and to prepare for the conversation with your advisor. What it doesn’t do is give advice. It helps you see how particular decisions and strategies are likely to affect your future financial position, but it doesn’t carry the training, credentials, or hard-won experience a financial professional brings to your specific situation — the judgment about which trade-offs are right for you. Treat every result as one well-reasoned input to your thinking, never the final word.

For how to read the numbers themselves, see Understanding your results.