How ZBee calculates your number

Last updated: June 18, 2026 · Tax year 2025

ZBee answers one question — how much can you spend each year without running out of money in your lifetime? — and it tries to answer it honestly. This page explains every method behind that figure and cites the authoritative source for each, so you can check our work. Nothing here is advice; it's a description of how a planning estimate is computed. See the Disclaimer.

Two principles run through all of it. The effective rates and outcomes are outputs, not inputs — ZBee never asks you to guess an "average tax rate"; it computes each year's tax from your actual income mix. And the figure is stress-tested, not best-case — it is solved to survive a confidence level you choose across thousands of simulated market histories, not to work only if returns are smooth.

Federal income tax

Each year's federal tax is computed from the real progressive brackets and the standard deduction (including the additional amount for filers aged 65+), with filing status taken from whether your plan includes a spouse. Bracket thresholds and the deduction are held in today's dollars and indexed by your inflation assumption, the way the IRS re-indexes them in practice. 2025 figures are from IRS Rev. Proc. 2024-40.

Capital gains

Sales from taxable brokerage accounts are taxed at long-term capital-gains rates (0%, 15%, 20%), stacked on top of your ordinary taxable income so the gain is taxed by where it actually lands — the same breakpoints the IRS publishes (Rev. Proc. 2024-40). A portion of each taxable-account withdrawal is treated as basis rather than gain.

Social Security

You enter your benefit as a Primary Insurance Amount (the benefit at full retirement age). ZBee applies the SSA claiming adjustment for the age you actually claim — the early reduction (5/9 of 1% per month for the first 36 months, 5/12 of 1% thereafter) and delayed-retirement credits (2/3 of 1% per month to age 70), per 20 CFR §404.313 and §404.410. The benefit grows with an annual cost-of-living adjustment. Its taxability follows the provisional-income rule — up to 85% of the benefit becomes taxable above the thresholds (IRS Pub. 915, 26 U.S.C. §86); because those thresholds aren't indexed for inflation in law, more of the benefit becomes taxable over a long retirement, which ZBee reflects.

Medicare (IRMAA)

For filers 65 and older, ZBee models the income-related monthly adjustment amount — the surcharge added to Medicare Part B and Part D premiums once income crosses each tier. It models only the surcharge (the income-driven part), not the base premium, which is an ordinary living expense your spending already covers. This matters because your withdrawal strategy drives it: a large tax-deferred withdrawal, an RMD, or a one-time gain can push you over a tier. Tiers and amounts are the 2025 CMS figures. (ZBee uses the current year's income rather than modeling the actual two-year lookback.)

Required minimum distributions

Once you reach the RMD age — 73, or 75 if you were born in 1960 or later (SECURE 2.0 Act §107) — ZBee forces the minimum withdrawal from tax-deferred accounts each year, computed as the prior year-end balance divided by the IRS Uniform Lifetime Table divisor for your age (IRS Pub. 590-B). It is taxed as ordinary income; anything beyond what your spending needs is reinvested in your taxable account.

Account types and withdrawal order

Holdings are grouped into three tax treatments — taxable, tax-deferred (Traditional IRA/401(k)), and Roth (and HSA, treated as tax-free). Each year ZBee withdraws in the order you choose (taxable first is the standard, tax-efficient default), grossing each withdrawal up so the after-tax cash meets your spending. Because each bucket is taxed differently, the order changes the answer, and the year-by-year table shows the tax each year.

Inflation

Spending and Social Security grow with a single inflation assumption you can set; tax thresholds index with it. Investment returns are entered in nominal terms, so they already include the inflation premium.

Longevity (choosing an end age)

How long the money must last is itself uncertain, so rather than make you guess an end age, ZBee can turn a survival probability you can reason about — "the age I have a 1-in-10 chance of outliving" — into a planning horizon, with a separate table for each spouse. The model is a Gompertz mortality law calibrated to the SSA period life table so its upper-tail (25%/10%/5%-survival) ages line up with the published figures. It's a planning estimate; your own health and family history matter.

Market risk (sequence-of-returns)

A fixed average return understates risk, because the order of returns matters when you're drawing a portfolio down — a bad stretch early in retirement can sink a plan whose long-run average was fine. So the headline figure isn't built on one average. ZBee runs a Monte Carlo analysis of roughly a thousand simulated retirements, drawing each year's return for your actual asset mix from a realistic spread (more for stocks, almost none for cash) under a two-factor model so a diversified mix earns genuine diversification rather than moving in lockstep. The figure it reports is the highest spend that stays solvent in the share of those simulations you choose — your confidence level. Optional spending guardrails let the plan flex with markets, supporting a higher starting figure in exchange for a range of realized spending.

Survivorship

For couples, each spouse has their own end age. After the first death the survivor files as single (higher brackets, smaller standard deduction) and Social Security drops to the larger of the two benefits — the "widow's penalty" that often makes the survivor years the tightest — and spending steps down to a fraction you set, since a couple's costs don't fully halve.

Keeping the figures current

Tax brackets, the standard deduction, capital-gains breakpoints, IRMAA tiers, and the RMD rules change. ZBee ships each version with the current year's known-good values built in, and licensed users' copies refresh to the latest figures automatically through a signed update — verified cryptographically before it's trusted — so a plan never quietly runs on a stale tax year.

What ZBee does not model

Honesty about the edges matters. ZBee does not model Roth conversions, the net investment income tax (NIIT), the alternative minimum tax (AMT), tax credits, itemized deductions, or state rules beyond a single representative flat rate per state. It assumes the United States throughout. It measures the most you can sustainably spend given your current situation; it does not recommend moves to improve it.

How we verify this

Every calculation above is covered by an automated validation suite that reproduces worked examples from the cited sources — the bracket math, the capital-gains stacking, the Social Security taxability worksheet, the IRMAA tiers, the RMD divisors, and the SSA claiming factors — and checks ZBee's output against them on every build. The figure you see is the one that math produces, not an approximation of it.

ZBee is a measurement and planning tool, not financial, tax, or legal advice. Projections are hypothetical estimates that will not match actual results. See the Disclaimer and Terms of Use.