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Modeling Assumptions

Financial Planner applies intentional modeling conventions when projecting household finances. Understanding these assumptions helps you interpret charts, explain results to clients, and know when input changes materially affect outcomes.

This page summarizes the product assumption register. For orchestration and persistence internals, see Orchestration Internals.

Effective rate scenario

Production orchestration uses the Optimistic rate set as the effective run mode. Plan Preferences may display optimistic, average, and pessimistic fields for inflation, medical, housing, Social Security, and account returns—but the baseline calculation path applies optimistic values unless you use explorers to stress-test alternatives.

Calculation approach

Assumption	Behavior
Annual solve with in-year replay	Core math runs year-by-year; dated cash events replay inside each year
Death-year filing status	Death year remains Married Filing Jointly; the following year becomes Single
Residual funding gap tolerance	Small annual reconciliation differences are accepted within orchestration tolerance
Linked-account shortfalls	Money movements tied to linked accounts may be partially funded—this is a validation condition surfaced in the plan health panel, not a silent success
US Social Security provisional income	Qualified dividends count toward taxable Social Security provisional income
Canadian OAS clawback	Recomputed after withdrawal-sensitive income is recalculated
MAGI carryforward	MAGI stored by year for lookback consumers such as IRMAA

Expense amount mode

Plan-level Expense Amount Mode in Plan Preferences controls which expense column orchestration uses:

Must Spend (default) — Uses required spending amounts
Like to Spend — Uses aspirational spending where entered

See Plan Preferences Reference and Income and Expenses.

Known simplifications

Mid-year timing is partly convention-based rather than fully day-accurate
Some calculators use annual growth plus partial-year replay rather than transaction-level daily accrual
Survivor-year income and expense proration depends on each domain consuming household-state inputs correctly
Real-estate and asset purchase timing is sensitive to linked-account funding rules

When real-estate purchases or money flows show health-panel warnings about underfunded movements, fix source accounts or flow amounts before relying on projection charts for client delivery.

Monte Carlo vs baseline orchestration

Monte Carlo simulation uses a separate async job namespace with its own progress vocabulary. Monte Carlo success rates do not replace baseline orchestration status—run both when you need deterministic projections and probability analysis.