Assumptions and planning policy
Edit Planning Policy
Define reserve, risk, legacy, Roth, and reminder preferences used to judge and guide the plan.
Set one estate goal for the whole comparison
Choose No estate target, Leave a legacy target, or Spend down. The legacy amount is enabled only for a legacy target and is saved in nominal end-of-plan dollars rounded to cents. This goal measures results; it does not automatically change spending or gifting.
Compare Strategies uses this same goal for every candidate. With no target, balances reward wealth preservation; a legacy target caps that reward once met; spend down rewards less remaining wealth. Plans without shortfalls rank first.
Planning Policy states how the plan should be judged
These settings describe the household’s planning standards and preferences. They help YARCalc interpret reserves, allocation changes, stochastic results, legacy tradeoffs, Roth analysis, and reminders. They do not place trades, move cash, file taxes, or change legal ownership.
Leave a policy disabled when it is not part of the decision. Enabling a policy tells the related analysis to evaluate it; it is not evidence that the policy is automatically appropriate.
Cash reserve and fixed-income glide settings answer different questions
Choose Fixed dollar amount for a constant cash target, Percent of annual spending for a target that follows modeled spending, or Percent with a dollar minimum to use the larger of both. Enter 200% for 2× annual spending. Dated goals and periodic purchases do not increase this recurring-spending target. Use liquid assets that are genuinely available rather than treating every fixed-income holding as immediate cash.
The fixed-income glide path describes a gradual change from Starting safe percentage to Target safe percentage between the selected ages. Maximum annual move limits the modeled pace. Confirm that start age precedes end age and that the percentages express the intended fixed-income or safe allocation rather than the stock allocation.
Risk thresholds and preferences change interpretation, not market outcomes
Stochastic success target is the policy threshold used when describing whether a simulated result meets the household standard. Maximum drawdown tolerance expresses how much modeled decline the household is willing to rely on. A result can meet one threshold and fail the other.
Legacy preference and Roth conversion posture guide comparisons and annual suggestions. They cannot determine estate-law consequences, identify the best tax bracket with certainty, or replace current tax advice. Tax filing and estimated-tax reminder switches control reminders, not the underlying obligation.
Review recommendations against the policy that produced them
After saving, inspect Stochastic Analysis, Compare Strategies, and the Annual Action Plan for references to the changed standard. If a recommendation changes, verify that the policy—not an unrelated scenario edit—caused the difference.
Revisit policy after a meaningful change in liquidity needs, risk capacity, legacy goals, or tax strategy. Do not revise it merely to make a warning disappear; a policy is useful only when it represents the household’s actual decision rule.