Tax is charged inside the simulation, not added afterwards
Most planners that handle tax at all apply a flat rate to withdrawals once the projection is finished. That misses how tax actually moves a plan: a year with a large required distribution owes more, the money to pay it has to come from somewhere, and what is left grows or shrinks from there.
Killion charges the estimated tax as each simulated year closes, in every one of the 1,000 market lifetimes, and pays it from the portfolio. A plan that looks comfortable before tax can look different after it, and the success rate you see already includes the bill.
- Federal income tax. The 2026 brackets and standard deduction, the extra deduction at 65, and itemized deductions where they come to more.
- State income tax. Modeled from each state’s 2026 rules, including how it treats Social Security and retirement income.
- Capital gains and dividends. Gains in a taxable account are measured against the cost basis of your holdings and taxed at the long-term rates, with the 3.8% net investment income tax above its threshold.
- Required minimum distributions. Drawn from pre-tax accounts from your RMD age and taxed as ordinary income, whether or not you needed the money.
- Medicare IRMAA and the premium credit. The IRMAA surcharge looks back two years at your income. Before 65, if you enter a marketplace premium, the premium credit is estimated and reconciled each year.
Which account the money comes from
The same spending can owe very different amounts depending on where it is drawn from. A withdrawal from a brokerage account owes tax only on the gain; the same amount from a 401(k) is ordinary income; from a Roth IRA it usually owes nothing.
A plan can set its withdrawal order, from the usual taxable, then pre-tax, then Roth, to drawing from every account in proportion. Each option is named for what it does. Killion shows the estimated lifetime tax for the order you pick and leaves the choice with you.
Roth conversions get the same treatment. The projection lists the estimated lifetime tax if each year’s conversions fill the 12%, 22%, 24% or 32% bracket, next to converting nothing, and a plan can adopt any of those rules.
Reading the Tax section
The chart above is a projection’s Tax section for a sample household: a married couple of 60 who have just left tech jobs in California, with most of their money in 401(k)s, a brokerage account built from vested RSUs, and Roth IRAs. They spend $13,500 a month, draw from every account in proportion and claim Social Security at 67, so their tax steps up when required distributions begin at 75 and keeps climbing as those grow. Each bar is the median world in that year, split by type of tax, in today’s dollars. The Brackets view puts the same years against the federal brackets, and the IRMAA view against the Medicare surcharge tiers.
The header gives only medians, the estimated lifetime tax and the effective rate, because the chart is the median world. The Backtest tab can estimate tax the same way across every historical start year.
What it does not do
Tax figures are estimates for planning, not tax advice. Killion does not prepare or file returns, and it does not tell you which withdrawal order or conversion to choose.
The rules are US federal and state rules only. Local income taxes are not modeled, and stock dividends in a taxable account are estimated at a 1.5% yield rather than each holding’s own.
Related features
- Withdrawal strategies: Pick a spending rule (the 4% rule, guardrails, a fixed percentage) and watch the projection follow it.
- Backtesting: Run your portfolio and withdrawal rule through every real market start year since 1928 and get a survival rate for each.