Year-by-Year Retirement Projections: Why Annual Snapshots Beat Simple Estimates

"You need $1.2 million to retire." It's the kind of number you see from basic retirement calculators — clean, simple, and dangerously incomplete. The truth is that retirement isn't a single number. It's 30 years of changing income, shifting tax brackets, growing RMDs, fluctuating Medicare costs, and evolving expenses. The only way to actually understand your retirement is to look at it year by year.

The Problem with Single-Number Estimates

The "multiply your expenses by 25" rule (the inverse of the 4% rule) gives you one number. But that number assumes:

• Your tax rate stays the same every year (it won't)
• You withdraw evenly from one pool (you shouldn't)
• Healthcare costs are a flat number (they're not — IRMAA changes based on income)
• Social Security doesn't interact with your other income (it does — up to 85% becomes taxable)
• RMDs don't exist (they do, and they grow every year after 73)

In reality, your retirement has distinct financial phases, and each one looks different.

The Phases of Retirement Income

Phase 1: The Gap Years (Retirement to Social Security)

If you retire before claiming Social Security, you're funding everything from savings. This is often the best time for Roth conversions because your income is lowest.

• Income sources: Portfolio withdrawals only
• Tax bracket: Potentially the lowest of your retirement
• Opportunity: Fill up low tax brackets with Roth conversions

Phase 2: Social Security Begins (67-72)

Social Security adds income, which is great — but it also changes your tax picture. Up to 85% of your Social Security benefit becomes taxable based on your "combined income."

• Income sources: Social Security + portfolio withdrawals
• Tax bracket: Jumps as SS adds to taxable income
• Watch for: The "tax torpedo" — a range where each additional dollar of income causes $1.85 of Social Security to become taxable

Phase 3: RMDs Begin (73+)

This is where many retirees get blindsided. Required Minimum Distributions force you to withdraw from traditional accounts whether you need the money or not. The percentages increase every year:

• At 73: ~3.8% of traditional IRA balance
• At 80: ~5.3%
• At 85: ~6.8%
• At 90: ~8.8%

If your traditional IRA has grown to $2 million by age 80, your RMD is $106,000 — taxed as ordinary income, potentially pushing you into a higher bracket and triggering IRMAA.

Phase 4: The Late Years (85+)

Expenses often decrease (less travel, less activity) but healthcare costs may spike. If one spouse has passed, the survivor faces higher tax brackets (single filing) and loses one Social Security check.

What Year-by-Year Projections Reveal

A comprehensive year-by-year projection shows you every line of your financial picture for every year from now through age 95:

Income Detail

• Social Security benefits (adjusted for COLA each year)
• RMD amounts (increasing percentage each year)
• Pension income
• Rental property net income
• Required portfolio withdrawals to cover expenses

Tax Detail

• Federal income tax based on actual bracket each year
• State income tax
• Taxable portion of Social Security
• Capital gains taxes on brokerage withdrawals

Healthcare Costs

• Medicare Part B premiums
• Medicare Part D premiums
• IRMAA surcharges (based on income from two years prior)
• Supplemental insurance (Medigap)
• Out-of-pocket costs

Account Balances

• Traditional IRA/401(k) balance after RMDs and withdrawals
• Roth IRA balance
• Brokerage account balance
• Total net worth trajectory

Real-World Example: Why the Single Number Fails

The couple: Bob (65) and Carol (63). $1.5M total savings, $40,000/year Social Security combined starting at 67.

Single-number estimate: "You need $1.2M at retirement. You have $1.5M. You're good!" ✔

Year-by-year projection reveals:

• Ages 65-67: Withdrawing $80K/year from traditional IRA. Low tax bracket. Great Roth conversion opportunity being missed
• Ages 67-72: SS + withdrawals push taxable income to $120K. 22% bracket. Social Security is now 85% taxable
• Age 73: RMDs begin. First-year RMD: $52K. Combined with SS: MAGI hits $160K. IRMAA triggered at age 75
• Age 78: RMDs grow to $70K. MAGI: $190K. Just below next IRMAA cliff
• Age 80: Carol passes away. Bob files as single. Same income, higher tax bracket. IRMAA Tier 2 triggered. Annual IRMAA cost: $1,200+
• Age 85: RMDs at $85K push Bob firmly into the 32% bracket

The single-number estimate said "you're good." The year-by-year projection reveals that Bob and Carol should have done Roth conversions at 65-67, managed their IRMAA exposure after 73, and planned for the survivor tax penalty.

How to Get Year-by-Year Projections

Few free tools provide true year-by-year projections with tax modeling. Here's what to look for:

1. Individual years, not decades: The projection should show each year separately, not just "age 70-80" as a block
2. Tax calculations per year: Federal and state taxes based on that year's specific income mix
3. RMD calculations: Using IRS Uniform Lifetime Table percentages, applied to your projected balance each year
4. IRMAA modeling: Medicare surcharges based on income from two years prior
5. Separate account tracking: Different balances, growth rates, and tax treatment for each account type
6. Inflation adjustment: Expenses, Social Security (COLA), and tax brackets should all adjust for inflation

Using Bullseye for Year-by-Year Projections

Bullseye is built around year-by-year projections — it's the core of the entire tool:

• Full annual detail: See income, expenses, taxes, RMDs, IRMAA, Social Security, and account balances for every year from now through age 95
• Multiple account types: Track 401(k), traditional IRA, Roth IRA, brokerage, CDs, bank accounts, and home equity with separate growth rates
• Complete tax modeling: Federal brackets, state taxes, Social Security taxation, capital gains — all calculated from your actual income mix each year
• Automatic RMDs: Calculated using IRS tables from age 73, showing exactly how they affect your taxes and IRMAA
• IRMAA visibility: See which years trigger IRMAA surcharges and how much they cost
• Scenario testing: Ask "what if?" questions and see year-by-year differences between your baseline and the scenario
• Reality Check: Each year, enter your actual account balances to track how reality compares to projections