Methodology

Our calculators are designed to help individuals understand financial concepts through transparent, assumption-based simulations. This page explains the logic, formulas, and limitations behind our tools.

General Principles

All calculations are deterministic and formula-based
No predictions or guarantees of future performance
User inputs directly affect results

Inflation Assumptions

Where applicable, calculators distinguish between:

Nominal returns (before inflation)
Real returns (after adjusting for inflation)

Inflation is applied consistently to avoid double-counting and to reflect real purchasing power over time.

Investment Returns

Expected returns are based on user-defined inputs and are assumed to be:

Constant over the simulation period
Reinvested annually
Not adjusted for taxes unless explicitly stated

Withdrawal & Expense Models

For retirement and FIRE-style calculators:

Withdrawals occur at regular intervals
Expenses may grow with inflation
Portfolio depletion is tracked year by year

Limitations

Real-world investing is uncertain. Our calculators do not account for:

Market volatility or sequence-of-returns risk
Tax law changes
Behavioral factors or emotional decisions

Educational Purpose

These tools are intended to improve financial literacy and help users reason about trade-offs — not to replace professional financial advice.

Transparency

Whenever possible, formulas and assumptions are described clearly so users can understand how results are produced.