Assumptions

How to read a projected figure

A projected figure is arithmetic on what you entered and what your institutions reported, under the assumptions below. It is hypothetical: not a prediction, a promise or a likelihood.

Where a projection depends on markets it is shown as a range, and the range is produced from stated growth assumptions. No such projection exists yet, so no range is shown anywhere today.

Buttercup is not a registered investment adviser, and nothing in Buttercup is advice concerning securities.

What today's projections assume

Each of these is stated beside the figure where it appears:

• The comfortable amount: income arrives on the pay days you entered; every commitment, debt payment and goal amount you entered leaves as entered; the reserve is kept apart; nothing you did not enter is counted.
• Debt payoff: interest accrues monthly at the annual rate you entered, the payment stays what you set, and no new charges are added. Without a rate, the service shows that a real projection needs one rather than assuming a rate.
• The calendar: commitments recur on the dates and cadence you entered; a yearly commitment is set aside evenly each month.
• Recurring charges: a charge repeats at the cadence the history shows and at its recent average amount; the annual figure multiplies that average by the cadence.
• Goal funding: the monthly amount you set goes to the goal every month from today; the months to reach the target are the remainder divided by that amount, rounded up.
• Career comparison: total compensation is salary plus the employer match at the rate you entered plus the yearly value of benefits you entered; hours a year are hours a week over 52 weeks less paid days off. Nothing is taxed, discounted or weighted.
• Retirement: returns after inflation of 2%, 4% and 6% a year (cautious, middle, more room), compounded monthly in whole cents; contributions continue as entered until the target age; once work is optional, 4% of the balance a year is withdrawn; everything is in today's dollars; no tax, Social Security, pension or market sequence is modeled. The age when work becomes optional is the first age at which 4% of the balance a year covers the monthly need you entered.
• Taxes, where a pay figure is compared as take-home: federal income tax from the published brackets and standard deduction for the tax year named on the figure, Social Security and Medicare at their published rates and limits, and a state rate you confirm; pre-tax retirement contributions reduce income and state tax, a pre-tax health premium reduces payroll tax too, and military allowances are untaxed. No credits, dependents, itemized deductions, local taxes or other income are counted.
• No other growth, inflation or market assumption is in use. Investing projections do not exist yet.

What a connected figure carries

A balance or a journal from a connected institution carries the moment it was reported. Within a day it is current; within three it is marked as possibly behind; after that it is called stale, in words. A stale figure is never shown as today's.

How the retirement range is produced

Three runs of the same arithmetic, one per return band: 2%, 4% and 6% a year after inflation. The low end of the range is the cautious run and the high end the roomy run. A band is an assumption, not a forecast; real returns vary year to year and can be negative for long stretches, and the arithmetic does not model that sequence. Taxes, Social Security and pensions are not counted, so the range is what the entered savings and contributions alone would do.