Scenario models, not forecasts
Calculator outputs show what happens under the assumptions entered. They are not promises about future returns, taxes or investor behavior.
Methodology
How Terra handles the numbers.
Every useful model has limits. Terra tries to make those limits visible instead of burying them.
Reviewed · Sep 8, 2026
Beginner-course methodology
Money & Investing Basics is a guided educational layer around Terra's existing tools. It does not recommend a brokerage, stock or fund, and course progress remains browser-local.
Advisor cost model
The calculator can model percentage or flat fees, fund expenses, optional tax drag, dividends, withdrawals and compounding. The return hurdle is the extra modeled annual return needed for the higher-cost side to catch up.
401(k) research
The Reality Check uses total-return history with distributions reinvested for its historical comparison. Current expense ratios are shown for context and are not subtracted again from historical total returns.
Different funds have different jobs
A stock benchmark is useful context, but a bond fund, balanced fund and target-date fund may intentionally take less equity risk. Terra avoids treating every lower return as automatic failure.
Tax Drag Reality Check
The tax estimator uses user-entered 1099-DIV amounts, realized-gain figures and user-entered tax-rate assumptions. It is deliberately not a tax-return engine and does not determine tax brackets, deductions, loss carryovers, state-specific rules or every federal tax interaction.
Original Terra research
Published Terra studies state their scenario assumptions, calculation convention, review date and important exclusions. When practical, the underlying data is downloadable so a reader can reproduce the published result instead of relying on a black-box conclusion.
Quick financial calculators
The quick financial calculators use deterministic user-entered assumptions and shared calculation/visualization code. Compound Interest treats the entered return as an effective annual return, converts it to an equivalent monthly rate, and models month-end contributions. For percentage-cost comparisons, Terra models the stated annual cost as a percentage removed from the invested balance rather than simply subtracting the cost percentage from the stated return. Investment Growth, Investment Fee, the homepage fee illustration, and the Retirement Reality Check use that same annual-cost convention. The 401(k) Match tool uses the employer formula entered by the visitor and does not enforce plan or IRS limits. The Credit Card Payoff Planner uses APR ÷ 12 as a transparent monthly interest approximation, assumes no new purchases, treats entered card payments as monthly floors, and keeps the total debt-payment budget constant as cards are eliminated. Actual issuers may calculate interest daily and use different minimum-payment formulas.
My Terra checkups
The checkup is a deterministic routing checklist, not a financial-health score. It records only the visitor's explicit “changed / no change / not sure” selections and optional note, then points back to relevant Terra tools. The 90-day cadence is a product reminder, not a financial rule.
Sources & review dates
Time-sensitive rules should favor official or primary sources such as the IRS, SEC/Investor.gov, Department of Labor, regulators, fund sponsors and original research. Articles should distinguish sourced facts from Terra-modeled illustrations and show when time-sensitive sources were last checked.
Knowledge Library editorial standard
Terra articles answer the question early, explain the math and assumptions, include a fair “what this does not say” section, cite primary sources where practical, and connect the reader to the relevant calculator. Terra does not invent author credentials or pad articles to reach a target word count.
Revenue & modeled results
Advertising or affiliate compensation does not change a calculator formula, modeled output or break-even point. When a paid relationship could matter to a visitor, Terra's policy is to disclose it rather than let the incentive remain hidden. Read the revenue policy →
Update principle: change a page when its data, rule or explanation genuinely changes. Terra is designed for useful updates rather than publishing filler solely to appear active.
Original Terra research
Controlled scenarios should be reproducible.
Terra Research uses the same principle as the calculators: publish the important assumptions, hold unrelated variables steady when isolating one question, and label modeled returns as scenarios rather than forecasts. When practical, Terra provides downloadable tables or workbooks so readers can inspect the calculations.
- Modeled studies: fixed assumptions are disclosed and the calculation convention is identified.
- Historical studies: the period, source and benchmark are stated so a trailing return is not silently mixed with a fixed calendar window.
- Cost vs. value: a mathematical cost study does not by itself determine whether a service or product is worth the price.
- Versioning: substantive changes update the study version or review trail; cosmetic edits do not create a fake research update.
Retirement cash-flow convention
How the Retirement Income & Cash Flow Planner works.
Pre-retirement assets
Traditional, Roth and taxable balances grow using the user-entered gross return and annual investment-cost assumption. Contributions are added at year-end until the selected retirement cash-flow start age.
Retirement cash flow
Pension, Social Security and other recurring income are applied to spending first. Any remaining gap is withdrawn from the portfolio using the user's selected illustrative withdrawal order.
Spending and income
Spending and an optional tax budget are entered in today's dollars and inflate from the current age. Pension amounts are entered as expected starting amounts. Social Security estimates can be identified as today's dollars or future dollars; any entered COLA then applies after benefits start.
Known limits
The base cash-flow view does not calculate federal income tax, RMDs or survivor changes; those are optional deeper layers. Even with those layers enabled, Terra does not model Medicare IRMAA, NIIT, every deduction or credit, state-specific tax law, QCDs, detailed tax lots, long-term-care costs or sequence-of-return risk. It remains a deterministic planning illustration, not a retirement or tax recommendation.
Retirement planner
Layered retirement intelligence
The deeper retirement layers are optional so the base cash-flow tool remains understandable.
Tax & RMD layer
Uses 2026 federal ordinary-income brackets, standard deductions, long-term capital-gain thresholds, Social Security taxation thresholds and IRS Uniform Lifetime RMD factors. Permanent thresholds are projected forward using the visitor's inflation assumption; the temporary enhanced senior deduction is modeled only through its current 2028 sunset. The model does not use the special Joint Life RMD table, does not model first-RMD deferral to the following April, and excludes many individual tax items. It is not tax preparation.
Survivor layer
Uses visitor-entered spending and pension-survivor percentages, a simplified higher-Social-Security-stream option, and a simplified spousal-rollover assumption for traditional assets beginning the year after the first modeled death. Actual SSA, pension, inherited-account and filing-status rules can differ.
Strategy Comparison layer
Uses the Tax & RMD household projection as the no-conversion baseline, then reruns the same assumptions with either a fixed annual Roth-conversion target or a rule that fills a selected 2026 ordinary federal bracket after deductions. RMDs are removed first, conversions transfer assets from Traditional to Roth without counting as spending cash, and conversion-related federal tax is funded through the modeled cash-flow/portfolio withdrawal process. The layer assumes converted Traditional dollars are fully taxable and does not model nondeductible IRA basis, Roth five-year rules, early-distribution penalties, plan-specific conversion availability, IRMAA, ACA subsidies, NIIT or future law changes. A separate table compares the three withdrawal orders with Roth conversions turned off; Terra does not label one order or conversion approach “optimal.”
Focused decision calculators
Terra expands by financial question — not by calculator count.
Terra's calculator roadmap favors tools that help a visitor understand a meaningful tradeoff: purchasing power, how much to save, current tax savings versus future tax treatment, when delayed Social Security catches up, what recurring fees cost, or how expensive debt changes a payoff path. The goal is not to become a generic calculator warehouse.
- Inflation & Purchasing Power: annual compounding of the visitor's inflation assumption in both directions — future dollars needed and purchasing power of a fixed nominal amount.
- Savings Goal: deterministic monthly compounding using Terra's effective-annual-return convention and end-of-month contributions; solves for the monthly contribution required to reach a target.
- Roth vs. Traditional: equal pre-tax saving budget. Traditional receives the full modeled pre-tax amount; Roth receives the amount remaining after the current marginal-tax assumption. Traditional spendable value is reduced by the entered retirement marginal-tax assumption. Under this simplified same-budget framework, the break-even retirement tax rate is approximately the current marginal rate; return and years mainly change the size of the dollar difference. Eligibility, limits, basis, qualified-distribution rules and future tax law are not modeled. Read the plain-English tax-timing guide →
- Social Security Claiming Comparison: uses the visitor's own SSA monthly estimates and compares cumulative benefits in today's dollars. Terra does not estimate the visitor's primary insurance amount or recreate SSA's earnings-history formula.