Methodology & sources
Where every number comes from, how we verify it, and the assumptions behind your projection. Our case for trusting the math.
Our approach
Drawdown Arc is a deterministic, year-by-year projection engine. It takes the numbers you enter and computes exactly what happens to them, one year at a time, with no hidden adjustments and no blended averages standing in for real tax rules.
Each projection year, the engine grows your accounts, adds Social Security and pension income, meets your spending need from your chosen withdrawal order, enforces required minimum distributions, and then grosses up each taxable withdrawal for the federal and state tax it actually triggers. The result is a full schedule you can read line by line, not a single headline number. For a walkthrough of every input and chart, see How It Works.
Three principles shape the methodology:
Federal brackets, the standard deduction, capital-gains stacking, Social Security taxability, IRMAA tiers, and 50-state income tax are each modeled from the published rule, not approximated by an effective rate.
Every figure is shown. The withdrawal, the tax on it, the AGI it produces, and the resulting balance are all visible in the projection table and exportable, so you can check the work.
The calculator runs entirely in your browser. Your inputs are never sent to a server and nothing is stored unless you create a Pro account to save scenarios.
We disclose what the engine does not model, from market volatility to local city taxes, rather than hide the simplifications behind a confident number.
Data sources
Every tax figure, claiming rule, and surcharge threshold in the engine traces to a primary source published by the IRS, the Social Security Administration, the Centers for Medicare & Medicaid Services, or a state Department of Revenue.
- Federal income tax rates and bracketsOrdinary brackets and the standard deduction used in the federal tax calculation.
- Topic No. 409, Capital Gains and LossesLong-term capital-gains rate thresholds and how gains stack on top of ordinary income.
- Required Minimum Distributions (RMDs)SECURE 2.0 start ages (73, rising to 75 for those born in 1960 or later).
- Publication 590-B, Distributions from IRAsThe Uniform Lifetime Table divisors used to size each year's RMD.
- Publication 915, Social Security BenefitsThe provisional-income formula that determines how much of your Social Security is taxable.
- Publication 575, Pension and Annuity IncomeFederal treatment of pension and tax-deferred withdrawals as ordinary income.
- Full retirement ageFRA by birth year, used to convert your entered benefit into a claiming-age-adjusted amount.
- Benefit reduction for early retirementThe early-claiming reduction factors (5/9 then 5/12 of 1% per month).
- Delayed retirement creditsThe credit for claiming after FRA, up to age 70 (2/3 of 1% per month).
- Survivors benefitsThe widow(er)'s limit (RIB-LIM) floor applied when a deceased spouse claimed early.
- Actuarial Life TableSSA period-life mortality data used for the survivor and longevity models.
- Medicare costs & Part B income-related adjustmentThe IRMAA income tiers and per-enrollee surcharge amounts, with the two-year MAGI lookback.
- All 50 states & DC, by treatmentEach state's rules (brackets, retirement-income exemptions, age gates) are modeled individually. Every state guide cites the issuing Department of Revenue for that state's figures.
- Tax Foundation, State Individual Income Tax Rates and BracketsOur independent annual cross-check against the per-state Department of Revenue data.
How we verify it
Published sources are only the starting point. Before any tax or engine change ships, it has to survive a verification process built to catch the errors that creep into financial software.
All 51 jurisdictions are re-checked each year against the issuing Department of Revenue and independently cross-checked against the Tax Foundation's published brackets. A battery of hand-computed cases, covering bracket math, retirement-income exemptions, and head-of-household treatment, must reproduce exactly before any change is accepted.
An automated test suite re-verifies the federal tax gross-up, capital-gains stacking, RMD timing, Social Security taxability, IRMAA tiers, and the survivor-benefit floor on every change, so a fix in one area cannot silently break another.
The engine periodically undergoes a structured correctness review in which each calculation module is checked against the underlying tax rules and confirmed by a separate adversarial pass. Findings are fixed and then guarded by new regression tests.
When a state's treatment is unusual, the rule is documented against a primary source rather than smoothed over. Known simplifications are disclosed below, not hidden.
Assumptions & limitations
A trustworthy tool is honest about what it does not model. These are the deliberate simplifications in the engine, and what they mean for your numbers.
Tax-year cadence
Federal data reflects tax year 2026. State data reflects tax year 2025. The gap is deliberate.
The IRS publishes the next year's brackets, deductions, and thresholds in the fall, on a predictable schedule. State Departments of Revenue publish on their own timelines, and many finalize a year's figures well after the IRS does. Rather than mix verified and unverified state numbers, we hold the entire state layer at the most recent tax year for which all 51 jurisdictions have published and verified figures, and refresh it as a set once the new year is complete and audited.
For a multi-decade retirement projection, this one-year offset in the state layer has a negligible effect on the long-run picture, and it buys a guarantee that matters more: every state figure shown has been checked against a primary source, not estimated ahead of publication.
Not financial advice
Drawdown Arc is a projection and modeling tool, not a registered investment advisor. It exists to help you think clearly about the math, not to tell you what to do.
Every projection is an estimate built from simplified models and the inputs you provide. Real results will differ with market performance, future tax-law changes, inflation, healthcare costs, and factors not modeled here. Nothing on this site is financial, tax, investment, or legal advice. Before making a major retirement, investment, or tax decision, consult a qualified, fee-only fiduciary advisor. For more on who builds Drawdown Arc and the full legal disclaimer, see About.
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