Set cash, allocation, risk, legacy, and Roth planning policy

Planning Policy defines how the scenario behaves

Planning Policy contains assumptions and decision rules that affect how YARCalc carries the household through retirement. Inflation and return choices describe the economic environment; the cash-reserve goal and withdrawal order describe how spending is funded; spending flexibility and legacy preferences describe how the household is willing to respond when resources are abundant or strained.

These are not harmless background settings. Two scenarios with identical balances and spending can produce different taxes, withdrawals, downside outcomes, and ending resources because their policies differ. Read the policy before deciding that a result came from the household facts alone.

Change a policy only to express a real planning choice

Most households should begin with a simple, internally consistent policy. More elaborate withdrawal rules, larger reserves, stricter success targets, or stronger legacy preferences are not automatically safer. Each choice consumes resources or changes the meaning of success.

For a first plan, you can leave the starting policy in place and learn what the baseline does. Change a setting only when you can name the concern being tested—for example, higher inflation, a larger near-term reserve, a different withdrawal order, or a gradual reduction in stock exposure near retirement.

A cash reserve should represent money intentionally kept available for near-term spending, not every holding whose asset class happens to be cash. A spending guardrail should represent a reduction the household would genuinely accept. A legacy goal should reflect an actual priority rather than an arbitrary ending-balance target.

Use a What-if or Strategy Comparison when you want to evaluate another policy. Do not adjust a success target or return assumption simply to make the same plan receive a more favorable label.

Connect each setting to the decision it controls

Review return and inflation assumptions together. The gap between them influences real purchasing power; a high nominal return does not compensate for an equally high inflation assumption. Keep deterministic Projection assumptions distinct from the asset-class distributions used in Stochastic Analysis.

Choose the withdrawal approach you intend to examine and understand which accounts it favors. The policy can change taxes and the timing of account depletion, but it cannot create resources when total income and assets are insufficient.

The cash-reserve target expresses how much near-term portfolio-funded spending should remain in readily available assets. Its purpose is to reduce the chance of selling growth assets after an early market decline—sequence-of-returns risk. It may serve as the near-term portion of a bucket strategy, but YARCalc does not execute monthly bucket transfers or automatically refill a bucket. A larger reserve can provide more near-term stability while leaving less money exposed to long-term growth.

A glidepath changes stock and fixed-income exposure over time. Use it only when that transition describes a policy the household could maintain. Allocation Analysis is the better place to compare static mixes, gradual transitions, and bond tents on paired market paths before changing Home.

Set reserve, success, downside, spending-flexibility, and legacy preferences in terms you would be prepared to use in a real decision. Then save the scenario and rerun affected analyses; an older result still reflects the older policy.

Read policy tradeoffs across the whole horizon

In Projection, inspect when cash is replenished, which accounts fund spending, how taxes respond, and whether a reserve causes other assets to be sold earlier. In Stochastic Analysis, read success together with downside balances, depletion timing, and spending reductions.

A policy that improves one measure may worsen another. Preserving Roth assets can raise current tax or consume taxable liquidity; holding more defensive assets can reduce early sequence risk while lowering long-term growth; preserving a legacy can make spending appear less sustainable.

When comparing policies, keep the household facts and market assumptions the same. Confirm that the result reflects the policy change rather than a different balance date, horizon, or saved plan.

No policy setting is universally safe

YARCalc cannot know how future markets, inflation, taxes, health, or household behavior will unfold. A success target is a planning standard, not a guaranteed safety level, and a modeled spending reduction does not prove that the household could or would make it.

Use policy settings to make assumptions explicit and compare consequences. Do not treat a favorable label as validation of the assumptions used to produce it.

Set a shared estate goal

Estate goal selects No estate target, Leave a legacy target, or Spend down. Enter a nonnegative legacy target in nominal end-of-plan dollars. The amount is enabled only for a legacy target and is saved rounded to cents. The goal measures outcomes; it does not automatically adjust spending, withdrawals, or gifts.

Compare Strategies uses the same goal for all candidates and compares it with the estimated after-tax value of modeled financial accounts at plan end. Property, liabilities, trusts, insurance, estate costs, and transfer taxes are not part of that account estimate. Without a target, balance scores reward wealth preservation. A legacy target caps the reward once met; a spend-down goal rewards smaller balances. Plans without shortfalls rank ahead of plans with shortfalls.

How much cash should I keep?

Open Planning Policy and review the cash-reserve goal as near-term portfolio-funded spending that should remain readily available. Estimate it from the timing of dependable income and essential withdrawals rather than treating every cash-classified holding as a deliberate reserve. This reserve can be the near-term portion of a bucket strategy, but YARCalc does not run monthly bucket transfers or an automatic refill rule.

Compare at least two reserve choices with the same allocation and market assumptions. Look at sales after early declines, reserve replenishment, taxes, downside balances, and long-term growth. More cash may reduce forced selling while increasing inflation drag and reducing participation in later gains.

YARCalc can expose the tradeoff but cannot name one universally correct number of months or years. Choose a reserve the household can maintain and pair it with a written rule for when it may be spent or replenished.

Can I spend down more during my lifetime?

First choose an intentional estate goal in Planning Policy. Spend down tells strategy scoring that a smaller ending balance is preferred after avoiding shortfalls; Leave a legacy target defines a minimum priority; No estate target leaves wealth preservation in the comparison. “Die With Zero” is a popular name for intentionally emphasizing lifetime use, not a YARCalc target or a promise of exactly zero. The setting measures outcomes and does not increase spending by itself.

Then run an Annual spending sweep or create a spending What-if. Compare lifetime enjoyment with success probability, essential-spending protection, modeled reductions, taxes, healthcare capacity, downside balances, and the amount remaining late in the horizon. Use a range rather than aiming for exactly zero.

A large modeled remainder can indicate spending capacity, but it can also reflect incomplete expenses, an optimistic horizon, or assets such as a retained home that are not available for ordinary spending. Verify the inputs before deciding that the household is underspending.