How RetirePlanAI Works | RetirePlanAI Help

RetirePlanAI is a retirement planning tool that combines detailed financial modeling with AI-powered coaching. It is built for people who want to take an active role in planning their retirement without paying thousands of dollars for a financial advisor, but who also want more depth and rigor than a simple online calculator can provide.

This article walks through how the tool works, from entering your financial data to running advanced analysis and getting personalized guidance from the AI coach.

The Core Philosophy: Your Data, Your Control

RetirePlanAI uses manual data entry by design. There are no bank connections, no Plaid integrations, and no screen-scraping of your financial accounts. This is a deliberate choice, not a limitation.

Manual entry means your bank credentials never leave your possession. No third-party service has access to your accounts. Your financial data lives in RetirePlanAI's database and nowhere else. If a data aggregation service gets breached (and they have been), your information is not part of that breach.

There is a practical benefit too. When you manually enter your account balances, income sources, and expenses, you develop a clearer mental picture of your financial situation. Many users report that the process of gathering and entering their data is itself an eye-opening exercise, revealing forgotten accounts, overlooked income sources, or expenses they had not fully accounted for.

The tradeoff is real: you need to update your balances periodically to keep projections accurate. Most users find that updating quarterly or after significant market moves is sufficient. The tool is designed around planning accuracy over months and years, not daily account monitoring.

The Workflow: Five Steps to a Solid Plan

RetirePlanAI follows a logical progression that mirrors how professional financial planners approach retirement analysis. The workflow has five phases:

Step 1: Enter Your Data (Plan Builder)

The Plan Builder is a guided wizard with sections that walk you through every aspect of your financial picture. You do not need to complete everything in one sitting. The tool saves your progress, and you can return to any section at any time.

The sections cover:

Plan Settings and Ages: Your current age, planned retirement age, and life expectancy assumption. These define the time horizon for all projections. Default retirement age is 65, and default life expectancy is 95, but you should adjust both based on your situation and family health history.
Spouse: If you are married or have a partner, their age, retirement age, and life expectancy. Spousal data affects Social Security strategies, income timing, and how long the plan needs to last (it plans for the longer-living spouse).
Spending Goals: Your target annual spending in retirement, expressed in today's dollars. This is the single most important input in the entire plan. Getting this number reasonably close to reality matters far more than nailing your exact investment return assumption.
Withdrawal Strategy: How you plan to draw down your portfolio. RetirePlanAI supports multiple strategies including the classic 4% rule, spend-more-early approaches, and market-based dynamic withdrawal methods. Each has different risk and spending profiles.
Location: Your state of residence affects state tax calculations and cost-of-living adjustments. If you plan to relocate in retirement, you can model that too.
Market Assumptions: Expected investment returns before and during retirement, expected inflation rate, and other economic assumptions. The tool provides researched defaults, but you can adjust these to be more conservative or aggressive based on your outlook.
Accounts: All of your financial accounts, including retirement accounts (401k, 403b, 457, Traditional IRA, Roth IRA, SEP-IRA, SIMPLE-IRA, Solo 401k), savings and investment accounts (brokerage, savings, CDs, money market), health accounts (HSA), education accounts (529), and specialty accounts (annuities, pensions, trust accounts). RetirePlanAI supports over 20 account types, each with its own tax treatment, contribution rules, and withdrawal characteristics.
Income Streams: Social Security benefits, pensions, rental income, part-time work, annuity payments, and any other income you expect during retirement. Each income source can have its own start age, end age, and cost-of-living adjustment.
Contributions: Ongoing contributions to your accounts before retirement. This matters for projecting how much your portfolio will grow between now and your retirement date.
Stock Compensation: RSUs, stock options, or other equity compensation. If you receive stock-based pay, this section models the vesting schedule and expected values.
Expenses: Budget line items and one-time expenses, both before and during retirement. This includes recurring costs like healthcare premiums, property taxes, and insurance, as well as planned one-time expenses like home renovations, car purchases, or travel.

Step 2: Review Your Projections (Dashboard)

Once you have entered your data, the dashboard gives you the big picture at a glance. The key numbers shown are:

Portfolio Target: The amount you need saved by your retirement date to fund your planned spending, given your other income sources and assumptions.
Plan Success Rate: Based on Monte Carlo simulation, the probability that your plan will not run out of money before your target age. This is the single most-watched number in any retirement plan.
Projected Portfolio Value: What your savings are projected to be worth at retirement, based on current balances, ongoing contributions, and expected returns.
Income and Expense Projections: Year-by-year breakdowns of where your money will come from and where it will go throughout retirement.

The dashboard is designed to surface the most important information immediately. You should not need to dig through pages of data to understand whether your plan is on track.

Step 3: Test Your Plan (Analysis Tools)

A single projection based on average returns is useful but limited. Real markets do not deliver steady average returns. RetirePlanAI provides several analysis tools that stress-test your plan against uncertainty:

Monte Carlo Simulation: Runs 5,000 simulated retirements (configurable from 2,000 to 10,000) using randomized market returns based on historical patterns. This produces a success rate, showing what percentage of simulated futures result in your money lasting through your plan. Read the full Monte Carlo methodology article.
Sensitivity Analysis: Identifies which variables have the biggest impact on your plan's success. Should you worry more about inflation, investment returns, or spending? Sensitivity analysis tells you where to focus your attention.
Market Replay (1928-2024): Runs your exact cash flow plan against every historical market period since 1928. A decade-by-decade heatmap shows how your plan would have performed if you had retired during the Great Depression, the 1970s stagflation, the dot-com crash, the 2008 financial crisis, or the 2020 pandemic. This is not a prediction, but it provides powerful context for how your plan holds up under real-world conditions.
Find Max Safe Withdrawal Rate: Uses a binary search algorithm to find the maximum annual withdrawal amount that still achieves your target success rate. This answers the practical question: "What is the most I can safely spend each year?"

Step 4: Explore Alternatives (Scenarios and Optimization)

Once you understand your baseline plan, the natural next step is to ask "what if?" RetirePlanAI provides two categories of tools for this.

What-If Scenarios let you create up to 20 copies of your complete financial plan, each with different assumptions. Want to see the difference between retiring at 62 versus 67? Create two scenarios and compare them side by side. Each scenario is a full, independent copy of your data, so you can change anything without affecting your primary plan. Learn more about scenarios.

Optimization Tools target specific strategies:

Social Security Optimizer: Analyzes different claiming ages (62 through 70) for you and your spouse, showing the impact on lifetime benefits and plan success.
Roth Conversion Planner: Models systematic Roth conversion strategies that can reduce your future tax burden and Required Minimum Distributions. See the Roth conversion planning guide.
Withdrawal Strategy Selection: Compare different withdrawal approaches to find the one that best fits your risk tolerance and spending goals.
RMD Calculator: Projects your Required Minimum Distributions year by year, showing how they affect your taxable income and overall plan.

Step 5: Get Personalized Guidance (AI Coach)

The AI Coach is a conversational assistant that has access to your complete financial picture. Unlike generic AI chatbots, it can see your accounts, income sources, expenses, projections, and analysis results. This means it can give specific, contextual answers rather than generic retirement advice.

You might ask things like:

"Should I prioritize paying off my mortgage or investing more in my 401k?"
"How much would my success rate improve if I delayed retirement by two years?"
"What is the most tax-efficient order to withdraw from my accounts?"
"Can I afford to spend $5,000 more per year in early retirement?"

The AI Coach supports multi-turn conversations, so you can have an extended back-and-forth as you explore different aspects of your plan. Each subscription tier includes a monthly conversation allocation.

An important caveat: the AI Coach is an educational tool, not a licensed financial advisor. It can help you think through decisions and understand tradeoffs, but it cannot replace professional advice for complex tax situations, estate planning, or legal matters.

Account Types and Tax Treatment

One of the areas where RetirePlanAI provides significantly more depth than simple calculators is in its handling of different account types. Each account type has specific tax treatment that affects your projections:

Tax-Deferred Accounts (Traditional IRA, 401k, 403b, 457, SEP-IRA, SIMPLE-IRA, Solo 401k): Contributions reduce your taxable income now, but withdrawals in retirement are taxed as ordinary income. These accounts are also subject to Required Minimum Distributions starting at age 73.
Tax-Free Accounts (Roth IRA, Roth 401k): Contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free. Roth accounts are not subject to RMDs during the owner's lifetime.
Taxable Accounts (Brokerage, savings, CDs, money market): No special tax treatment. Investment gains are taxed as capital gains, and interest and dividends are taxed as ordinary income.
HSA (Health Savings Account): Triple tax advantage: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, can be used like a Traditional IRA for non-medical expenses.
529 Education Savings: Tax-free growth and withdrawals for qualified education expenses.

RetirePlanAI models the tax implications of each account type in its projections, which means your after-tax spending power is more accurately represented than in tools that treat all accounts the same.

Reports and Projections

The reporting tools translate your data into actionable visualizations:

Cash Flow Projections: Year-by-year breakdown of income sources, expenses, taxes, and net cash flow from your current age through end of plan. Shows exactly when income sources start and stop, and when portfolio withdrawals need to begin.
Portfolio Growth Chart: Visualizes how your portfolio is projected to grow before retirement and draw down during retirement, with confidence bands showing the range of likely outcomes.
Income Composition: Shows where your retirement income comes from each year, broken down by source (Social Security, pensions, withdrawals, part-time work, etc.).
Withdrawal Analysis: Details which accounts you will draw from each year, based on your chosen withdrawal strategy and tax optimization rules.

Getting Started

The recommended approach for new users:

Gather your information first. Before you sit down with the tool, collect your latest account statements, Social Security estimates (available at ssa.gov), pension summaries, and a rough monthly budget. Having this information ready makes the Plan Builder much faster.
Complete the Plan Builder. Work through each section. Do not worry about getting every number perfect on the first pass. Reasonable estimates are fine for your initial plan, and you can refine later.
Review the dashboard. Look at your portfolio target, success rate, and projected income. This tells you whether you are broadly on track, ahead, or behind.
Run Monte Carlo. Your deterministic projection assumes average returns every year. Monte Carlo shows you the range of likely outcomes and gives you a more realistic success rate.
Create scenarios. Identify the two or three biggest questions you have (retirement age, spending level, relocation) and create scenarios to compare the options.
Talk to the AI Coach. Once you have a baseline plan and some scenarios, the AI Coach can help you understand the tradeoffs and identify optimizations you might have missed.

Most users can complete their initial plan setup in 30 to 60 minutes if they have their financial information ready. Ongoing maintenance typically takes 15 to 30 minutes per quarter to update account balances and review projections.