How the forecast works
NestCalc projects a portfolio one year at a time: money goes in while you are saving, money comes out once you are drawing, and the balance grows in between. This page explains exactly what the engine does with your inputs, so you can read the results with the right amount of trust.
Two phases: saving, then drawing
Every forecast has a horizon (say, 30 years) and, optionally, a year the drawdown starts. Before that year the forecast is in its accumulation phase: your recurring contribution is added and nothing is withdrawn. From that year on it is in the distribution phase: contributions stop and the withdrawal rule you chose is applied each year. If you never turn drawdown on, the whole horizon is accumulation.
The balance is never clamped at zero. If withdrawals outrun growth, the ending balance goes negative and the projection keeps going from there, so the schedule shows how far underwater a plan is rather than hiding it. The results panel calls out the year the money runs out.
Growth is compounded monthly, reported yearly
The annual growth rate you enter is converted to an equivalent monthly rate ((1 + annual)^(1/12) − 1) and applied twelve times a year. A monthly contribution is added at the start of its
month, before that month's growth, so money deposited in January earns almost a full year
of growth and money deposited in December earns almost none — the way a real account
behaves. Only year-end figures are shown, and only they are rounded to the cent; the
twelve intra-year steps carry full precision so no rounding drift accumulates over a long
horizon.
All money arithmetic uses exact decimal numbers rather than floating point. A forecast run twice gives the same cents both times, and the per-account figures always add up exactly to the portfolio totals.
Bear, Base and Bull
The base growth rate is the one you expect. Optionally you can set a Bear rate some points below it and a Bull rate some points above, and the calculator runs the whole forecast three times, changing nothing but the growth rate. The chart shades the range between Bear and Bull; the schedule and the headline verdict follow the Base case. These are constant-rate scenarios — they show the sensitivity of your plan to the rate assumption, not the sequence-of-returns risk of a real market.
Withdrawals: fixed amount or percent of balance
- Fixed amount withdraws the same dollar figure each year, optionally rising by an inflation rate from the second drawdown year on. This is the "I need $60,000 a year" plan; it can run the balance dry.
- Percent of balance withdraws a share of whatever the balance is that year — the "4% rule". Income falls after a bad year and rises after a good one, and the balance can never reach zero, but the income is not level.
Either way you choose whether the withdrawal comes out before that year's growth is applied or after it, which changes the result a little every year and noticeably over decades.
Tax and a spending cap
A flat tax rate, if set, is applied to each year's gross withdrawal; the schedule shows the gross draw, the tax, and the net amount actually spendable. The engine models a single rate per account rather than a full income-tax calculation, so treat it as an effective rate. An optional consumption cap limits how much of a net withdrawal is spent; anything above the cap is reinvested and shown as such.
Inflation-adjusted (real) results
The forecast itself is always in nominal dollars. If you enter an inflation rate, every
year's ending balance is additionally reported deflated to today's purchasing power —
nominal ÷ (1 + inflation)^year — so a $3,000,000 balance 25 years out can be
read as roughly $1,400,000 in today's money at 3% inflation. The nominal figures are not
changed; the real ones sit alongside them.
Target net worth
Set a target and the calculator reports the first year the Base-case ending balance reaches it, or that it is never reached within the horizon. It is a plain read of the schedule, not a solver: it will not tell you how much to save to hit the target, but you can change an input and watch the year move, since results update as you type.
Multiple accounts and withdrawal order
Besides the pooled portfolio you can add a pre-tax 401(k), a Roth 401(k), a Traditional IRA and a Roth IRA, each with its own balance, its own contribution, optionally its own growth offset from the scenario rate, and its own tax treatment on withdrawal (taxable, tax-deferred, or tax-free). The projection runs per account, and every portfolio-wide figure is the exact sum of the accounts.
In the distribution phase a year's withdrawal is sourced across accounts in withdrawal order: taxable first, then tax-deferred, then tax-free by default, so a Roth compounds untaxed for as long as possible. An account that is drained passes the remainder of the draw to the next one; balances are not clamped at zero, so an unaffordable draw drives the last account negative rather than being quietly reduced.
A 401(k) can carry an employer match — a percentage of your contribution up to some percentage of salary. You enter the salary only so the match can be sized; salary is never treated as money flowing into the portfolio, because your contribution already is. The match is deposited monthly alongside the contribution that earned it and reported separately.
Homes and mortgages
A home is projected next to the portfolio, not inside it. Its value appreciates once a year (a house is appraised at points in time, not marked to market monthly), its mortgage amortizes month by month at the rate and term you give it, and the difference is equity. Equity counts toward net worth but never toward the investable balance, so the results show both figures and the drawdown maths only ever sees the investable side. Home appreciation is a fixed rate that does not take part in the Bear/Bull sweep.
Property tax, insurance, upkeep and the mortgage payment are always reported for each year. By default they are assumed to be paid from a paycheck the calculator does not model; from a year you choose (typically retirement) they are instead withdrawn from the portfolio, taxed like any other withdrawal, and exempt from the consumption cap — a mortgage is not discretionary spending.
One-off deposits and withdrawals
An inheritance, a tuition bill, a house-sale windfall: a one-off flow lands in a named year on top of the recurring streams. It is applied before that year's growth compounds, so a deposit earns a full year of growth and a withdrawal shrinks the base it would have grown from. A withdrawal can be targeted at a specific account or sourced across the portfolio in the normal withdrawal order.
Where the numbers live
Everything runs in your browser. Scenarios exist in the open tab only, unless you turn on saving them on this device, and nothing you enter is ever sent to a server. That also means a forecast can be shared as a link that carries the inputs themselves — the worked samples open in the calculator that way.