Uncovering Boldin's Hidden Assumptions

Uncovering Boldin’s Hidden Assumptions This video provides a deep dive into the Boldin retirement planning software, exploring the default assumptions and "hardcoded" logic that drive its financial models. The goal is to help users understand what’s happening "under the hood" so they can create more accurate and personalized retirement plans. Key Chapters: 1. The "Surface" Assumptions (What You Can Change) Boldin starts with "best-guess" estimates based on 30-year historical data. These should be reviewed and adjusted: General Inflation (2.54%): Based on CPI-U (1994-2024). Impacts tax brackets and deductions. Medical Inflation (3.36%): Often higher in reality (closer to 6% recently); consider stress-testing this. Social Security COLA (2.54%): Matches historical CPI-W averages. Housing Appreciation (4.40%): Guided by the S&P Case-Shiller Index. Income Growth: Defaults to 2.54% for work, but zero for pensions/passive income (meaning they lose value over time). Investment Return (8.08%): Based on a "Moderate Portfolio." Must be adjusted if your allocation is more aggressive or conservative. Medicare Health Status: Defaults to "Excellent." Lowering this to "Good" or "Fair" increases estimated premiums. Gnome Pro-Tip: Check your Excess Income Destination. By default, extra cash earns 0% interest unless you tell the software to invest it. 2. The "Hidden Logic" (What’s Hardcoded) These are the mathematical rules built into the software that you cannot change: Account Mechanics: Traditional accounts are taxed as income; Roth accounts are tax-free; HSAs are tax-free for medical use and have no RMDs. Market Modeling (Monte Carlo): Uses Average Annual Growth Rate (AAGR) to avoid "double-penalizing" for volatility. It assumes 100% asset correlation (everything moves together). New Definition of "Success": A plan is only "Successful" if the balance never hits $0 at any point. Withdrawal Hierarchy: Default order is Taxable → Tax-Deferred → Roth → HSA. It pulls from lowest-growth accounts first. Manual Requirements: Boldin does not automatically calculate 10% early withdrawal penalties; you must account for these manually. The Widow/Widower Transition: Models the switch to "Single" filing status, keeps only the higher Social Security benefit, and transfers accounts to the survivor. Event Timing: Expenses ending at "Retirement" stop before that date. Inflation is applied every January. Long-Term Care (LTC): Models 28 months of care totaling ~$117k in today's dollars. If you have a policy, it assumes a 20% co-pay.