Your financial goals are allocated at their minimum required amounts.
| Debt | Balance | Rate | Monthly Payment | Total Interest |
|---|---|---|---|---|
| Credit Card | $5,000 | 18.0% | $181 | $1,507 |
At a feasible savings rate, the projection reaches $10,000/mo of retirement income.
| Retirement Income Source | Annual Amount |
|---|---|
| Target Retirement Income | $120,000 |
| Social Security (est.) | $70,888/yr |
| Gap (from savings) | $49,112/yr |
Based on retiring at age 67 with 25 years to save, targeting 80% income replacement. Using 4% return for your time horizon.
| Child | Age | Years Until College | Target | Gap | Monthly Needed |
|---|---|---|---|---|---|
| Child 1 | 8 | 10 | $140,000 | $121,885 | $924 |
| Child 2 | 12 | 6 | $140,000 | $123,202 | $1,617 |
Child 1 (age 8): $140,000 needed in 10 years | Child 2 (age 12): $140,000 needed in 6 years
| Capitalized Obligation | Gross PV | Funded | Funded Ratio |
|---|---|---|---|
| Retirement income (gross PV, net of SS/pension need) | $195,624 | $250,000 | 127.8% |
| College funding (gross PV, today-dollar cost) | $168,803 | $30,000 | 17.8% |
| Total obligation PV | $364,428 | $280,000 | 76.8% |
| Contingent (NOT in net worth) | PV if it occurs | Earmarked |
|---|---|---|
| Long-term care (contingent) — 3-year assisted-living event beginning ~age 84 | $147,911 | $0 |
CONTINGENT — may never occur; incidence/duration/cost are population-variable. Shown as a separate planning figure and DELIBERATELY excluded from economic net worth so a maybe-never event does not understate your number. Present-valued at the 5% real anchor.
Your economic net worth is below your conventional net worth. This does NOT mean trouble — most working-age households are here. The economic view capitalizes future retirement and college obligations (and an upper-bound deferred-tax estimate) that the conventional balance sheet does not. It shows the size of what you are funding toward, not a deficit you owe today.
A funded ratio below 1.0 at your age is expected — it is a static snapshot of capitalized obligations, not a trajectory. Watch the trend over time alongside the funding rate, which accounts for future contributions.
Long-term care (LTC) is shown as a SEPARATE contingent line — never folded into economic net worth. Incidence/duration/cost are population-variable, so treating it as a certain obligation would understate everyone who never needs care. Life-insurance / disability mortality-gap is NOT capitalized — same reason.
5-year cash-flow PROJECTION in today's (real) dollars. Deterministic — no market-return assumption. Figures depend on the disclosed assumptions below.
| Year | Beginning | Operating | Tax | Investing | Financing | Ending |
|---|---|---|---|---|---|---|
| 1 | $25,000 | $73,860 | -$29,845 | -$9,000 | -$10,800 | $49,215 |
| 2 | $49,215 | $73,860 | -$29,845 | -$9,000 | -$10,800 | $73,429 |
| 3 | $73,429 | $73,860 | -$29,845 | -$9,000 | -$10,800 | $97,644 |
| 4 | $97,644 | $73,860 | -$29,845 | -$9,000 | -$10,800 | $121,858 |
| 5 | $121,858 | $73,860 | -$29,845 | -$9,000 | -$10,800 | $146,073 |
| Assumption | Value | Source |
|---|---|---|
| Discount / anchor rate | 5.0% real | report anchor (pfos-report-builder metadata.discount_rates.anchor) |
| Deferred-tax method | 21.8% retirement-year rate on the RMD layer (capped at current marginal) | pre-tax balance × incremental tax of the RMD stacked on Social Security in retirement (tax(RMD+SS)−tax(SS))/RMD, capped at current marginal |
| Life expectancy | 90 | profile input |
| Retirement income replacement | 80% | profile input |
| SS / pension treatment | reduce the retirement need; never capitalized as assets | ratified design decision #3 (resolveSSMonthly, aligned with the conventional statement) |
| Projection horizon | 5 years | model assumption (MVP-1 fixed 5-yr horizon) |
| Real income growth | 0.0%/yr | model assumption — income held flat in real terms (no fabricated raises) |
| Tax brackets | held at current (2026) statute | tax-projection.ts has no bracket-inflation mechanism; real-dollar projection holds brackets current |
| Beginning cash (year 1) | checking + emergency fund | profile inputs |
| Spouse income | taxed as joint W-2 gross (simplified) | model assumption — spouse income folded into grossIncome for the tax computation |
| 401(k) tax treatment | tax computed on gross income before the 401(k) deduction | model assumption (force401kZero) — the tax bucket is therefore a conservative/simplified upper figure |
Across 262 non-dominated portfolios built from 3 asset classes (us total market, intl developed, us aggregate bonds), the lowest-volatility mix sits at 4.9% expected return and 5.3% volatility; the highest risk-adjusted (Sharpe) mix sits at 6.0% return and 6.9% volatility. These are computed points on a frontier given Research Affiliates 2026 capital-market assumptions and the inputs you provided — we are not making recommendations or telling you which point to choose.
We are not making recommendations. These are computed points on a frontier given the stated assumptions and the inputs you provided — not advice on which mix to choose.
| Portfolio | Return | Volatility | Yield | After-Tax Yield | Top Weights |
|---|---|---|---|---|---|
| Minimum Variance | 4.9% | 5.3% | 4.1% | 4.1% | us aggregate bonds 90%, us total market 10% |
| Maximum Sharpe | 6.0% | 6.9% | 3.9% | 3.9% | us aggregate bonds 67%, intl developed 33% |
We are not making recommendations. These are computed points on a frontier given the stated assumptions and the inputs you provided — not advice on which mix to choose.
Composition of the maximum-Sharpe mix: us aggregate bonds 67%, intl developed 33%. We are not making recommendations. These are computed points on a frontier given the stated assumptions and the inputs you provided — not advice on which mix to choose.
After-tax yield reflects a taxable account with the supplied marginal rates.
Capital-market assumptions: Research Affiliates Asset Allocation, as of 2026 (yield + growth + valuation, ra.com). Volatility & correlations from historical benchmark total-return series. Assumptions, not a forecast.
Correlations from historical benchmark monthly total-return series (Research Affiliates / index providers).
We are not making recommendations. These are computed points on a frontier given the stated assumptions and the inputs you provided — not advice on which mix to choose.
| Asset Class | Target % | Fund Example | Expense Ratio |
|---|---|---|---|
| US Total Market | 44% | VTI / VTSAX | 0.03% |
| International Total Market | 24% | VXUS / VTIAX | 0.07% |
| US Total Bond | 32% | BND / VBTLX | 0.03% |
| Account Type | What Goes Here | Why |
|---|---|---|
| Tax-Deferred (401k/Traditional IRA) | Bonds, REITs, High-dividend funds | Tax-inefficient assets here — defer ordinary income tax on interest/dividends |
| Taxable Brokerage | US Total Market (VTI), International (VXUS) | Tax-efficient index funds — low turnover, qualified dividends, LTCG rates |
Asset location can add 0.2-0.5% per year in after-tax returns. Tax-inefficient assets (bonds, REITs) go in tax-deferred. Tax-efficient assets (index funds) go in taxable. Highest growth goes in Roth.
$349,104 stays in YOUR account by using low-cost index funds. Rebalance annually or when any asset class drifts more than 5 percentage points from target. Rebalancing is free in tax-advantaged accounts — use new contributions to rebalance in taxable accounts to avoid triggering capital gains.
| Age | Equity % | Bond % | Risk Level |
|---|---|---|---|
| 25 | 85% | 15% | Growth |
| 35 | 75% | 25% | Growth |
| 45 ← you | 65% | 35% | Balanced |
| 55 | 55% | 45% | Balanced |
| 65 | 45% | 55% | Conservative |
| 75 | 35% | 65% | Conservative |
Based on "moderate" risk tolerance (anchor: 110 - age). Equity decreases automatically as you approach and enter retirement.
| Holding | Current Value |
|---|---|
| Cryptocurrency | $15,000 |
These are your existing holdings shown for completeness. They are NOT part of the recommended three-fund target above and we are not prescribing a target weight for them. Crypto is treated as a capital asset for net-worth purposes; it has no Research Affiliates capital-market assumption, so it is excluded from the prescriptive allocation.