This simulator shows what happens to a portfolio you describe once investment costs, taxes and withdrawals take their share. Enter your capital, annual cash needs and planning horizon, then adjust each investment assumption. The results break out remaining wealth, cash received, taxes, costs and any withdrawals the portfolio could not fund. It will not pick an allocation for you or tell you what spending rate is safe. One practical caution: the projection assumes assets can always be sold, so check the annual path against the real redemption terms of your investments.
How much you have is only one input. Spending needs, time horizon, tolerance for loss, concentrations, liabilities and investment restrictions matter at least as much, so settle those before comparing return assumptions. The simulator shows cash flows for the inputs you choose; its presets are examples, not recommendations.
Private-market eligibility and practical access depend on the investment, offering exemption, investor status, minimum commitment and provider terms. No rule opens private investments at $10 million or $25 million, so the tool keeps your chosen allocation at every wealth level. The SEC’s private-equity guidance discusses eligibility, illiquidity, fees and conflicts.
One basis point is 0.01 percentage point. Applied once to an unchanged balance, 100 basis points equal $100,000 on $10 million and $2.5 million on $250 million. The arithmetic is simple. Whether a proposal saves that much tax, and whether it is worth its fees, constraints and risks, is a separate question.
In this model, proportional results are the same at different capital levels when allocation, rates, percentage costs, horizon and withdrawal rate are identical. Nothing changes at $25 million. In real life, though, investment terms, fixed fees, tax brackets and minimum commitments can break that proportionality, so check them separately.
This simulator uses the portfolio calculation also used by the Wealth Intelligence Profile. The Portfolio Tax Drag calculator is a separate sensitivity: it includes modeled taxable rebalancing and excludes investment fees. Reconcile their assumptions before comparing results across the two tools.
Each asset class has seven numeric inputs: weight, gross return, flat investment cost, current-income share, ordinary share of income, gain-recognition share and short-term share of recognized gains. A separate access label classifies starting liquidity. Positive weights are normalized to 100%. The label does not determine which assets the projection can sell.
investment cost = opening value × fee rate
net return = opening value × (gross rate - fee rate)
current income = max(net return, 0) × income share
appreciation = net return - current income
recognized gain = max(opening value + appreciation - basis, 0)
× gain-recognition share
current tax = income × blended income rate
+ recognized gain × blended gain rate
closing basis = opening basis + income + recognized gain - current tax
Starting basis equals starting value. At each year’s target weights, the model allocates aggregate value and basis across the asset classes. It assigns return character after flat investment costs, representing an assumed net fund allocation rather than a personal fee deduction. Current tax reduces both cash available for reinvestment and the associated basis adjustment. No tax on actual rebalancing trades is calculated.
At year end, the model sells a proportional share of the portfolio to fund the cash requested. It taxes the positive embedded-gain share of those sales at the preferential rate and increases the sale amount to fund that tax. If the account cannot deliver the requested net cash, it pays the available after-tax amount and records the shortfall.
Withdrawal-sale gains are assumed to qualify for the entered preferential rate. The model does not check actual holding periods or lot selection. Withdrawals rise at the entered annual growth rate. Every displayed dollar amount remains nominal; increasing spending by 3% is not the same as discounting future values into today’s purchasing power.
Choosing a wealth preset changes starting capital and scales the cash withdrawal request by the same ratio. It preserves edited investment assumptions. Choosing an allocation preset resets the asset rows to that preset’s illustrative characteristics and weights. Age only labels age at the endpoint; it does not impose a life expectancy or silently reset the horizon.
The gross benchmark compounds the weighted gross return without costs, tax or withdrawals. The reconciliation subtracts ending wealth, actual withdrawals, investment costs and tax payments from that benchmark. The residual is signed. It includes interactions and the compounding effect of amounts removed, including withdrawals; it is not a separately measured fee, tax bill or recoverable saving.
The calculation is a constant-return sensitivity. Read the following limits alongside every balance and spending figure.
Each asset class earns its stated gross return every year. There is no market volatility, return-sequence stress test or probability distribution. Negative gross-return scenarios are outside the input range, although costs can exceed gross return. The result is not a central estimate or a probability that the plan succeeds.
The ordinary, short-term and preferential rates are user inputs. Defaults are hypothetical and do not represent a residence or tax bracket. The three-category model follows simplified US-style distinctions. Entering different rates does not make it a complete tax model for another country, trust, corporation or retirement account.
The model does not calculate capital-loss offsets, carryforwards, wash sales or loss-harvesting trades. Their value depends on the actual positions, transactions and applicable rules. Leaving them out does not make the projection conservative overall.
Return, cost and tax-character defaults are selected illustrations, not observations from a performance database. A flat annual investment-cost input does not reproduce a hedge-fund incentive waterfall, private-equity capital calls, credit losses or a distribution schedule.
The daily, quarterly and multi-year labels apply to starting weights. The projection does not enforce them. Its ratio of daily-tagged assets to the first requested withdrawal ignores tax, market changes and future spending growth. Do not read it as the number of years of spending that are safely covered.
The output illustrates the assumptions you entered. It cannot tell you whether a portfolio is suitable or safe, and it carries no professional sign-off. PPLI.com publishes educational information. See the editorial standards and review actual investments with appropriately qualified advisers.
Both examples use the Balanced preset for 30 years: 40% public equity, 20% fixed income, 10% hedge funds, 10% private credit, 8% private equity, 7% real estate and 5% cash. First-year withdrawals are 2% of capital and grow 3% annually. Ordinary and short-term rates are 40%; the preferential rate is 25%. All asset characteristics match the displayed defaults.
| Measure | $10,000,000 | $50,000,000 |
|---|---|---|
| Public equities | 40.0% | 40.0% |
| Fixed income | 20.0% | 20.0% |
| Hedge funds | 10.0% | 10.0% |
| Private credit | 10.0% | 10.0% |
| Private equity | 8.0% | 8.0% |
| Real estate and REITs | 7.0% | 7.0% |
| Cash and equivalents | 5.0% | 5.0% |
| Assumed gross return | 7.05% | 7.05% |
| Investment cost, year one | 90 bps | 90 bps |
| Investment tax, year one | 119 bps | 119 bps |
| Year-one return after tax and costs | 4.96% | 4.96% |
| Tagged daily access at start | 65% | 65% |
Allocation and percentage assumptions are identical in both columns. Gross return is 7.05%; investment costs are 90 basis points; first-year investment tax is about 119 basis points. The first-year return after those costs is 4.96%, before withdrawals. That last figure is not a constant rate used to compound every future year: tax changes with accumulated basis and gains.
The daily-access label covers 65% of either starting portfolio. That is a category total, not a promise that 65% can be liquidated at a particular date or price. Changing an access label leaves the cash projection unchanged. Assess redemption notices, gates, settlement and capital calls separately.
| Measure | $10,000,000 | $50,000,000 |
|---|---|---|
| Gross benchmark | $77,196,951 | $385,984,756 |
| Ending wealth before final sale | $19,158,211 | $95,791,057 |
| Withdrawals paid | $9,515,083 | $47,575,416 |
| Unmet withdrawal requests | $0 | $0 |
| Investment costs paid | $3,861,574 | $19,307,872 |
| Tax paid, including withdrawal sales | $7,714,131 | $38,570,655 |
| Residual versus gross benchmark | $36,947,951 | $184,739,757 |
For the $50 million example, actual modeled investment costs and tax total $57,878,527. Withdrawals paid total $47,575,416. The benchmark residual is $184,739,757. It reflects amounts removed for spending as well as fees and tax, and their interactions. Reading it as the return lost to fees and taxes alone would overstate their cost.
At $250 million with the same assumptions and a 2% starting withdrawal, dollar results are five times the $50 million case, apart from display rounding. For example, ending wealth is $478,955,283. This follows from proportional inputs at every wealth level used by the model.
Real comparisons should identify fixed charges, negotiated terms, tax brackets, pre-existing basis and implementation constraints. Those can change the percentage result. A bigger modeled tax bill does not, by itself, point to a particular ownership structure or justify a particular professional service.
Use the ending balance together with cash received and unmet requests. The first-year return after investment costs and tax describes only that year before withdrawals. It is neither a lifetime compound rate nor a sufficient spending rule. Open the annual table to see how taxes, basis and withdrawals change.
Compare the disclosed investment-cost and tax assumptions. Whichever is larger in year one is worth a closer look, but that does not make it the automatic priority. Fee terms, deductibility, taxable income and gain realization can vary. Changing one component can alter the others.
Check when each liability falls due and which assets can actually provide cash. The daily-assets ratio is a starting composition measure. The model has no four-year rule for a safe liquidity reserve, and selling every holding pro rata may be unrealistic for the investments you entered.
An ownership or insurance decision requires its own legal, investment, insurance, liquidity and cost analysis. A low tax-drag input or a financial crossover point is only one part of that decision. The PPLI Economics and Break-Even calculator examines a separate policy-cost sensitivity under its stated assumptions.
These sources support specific US tax and investment distinctions. The calculator does not implement every rule in them. Check the current rules and the actual investment before using a tax classification or liquidity assumption.
Section 1222 distinguishes capital gains by holding period. IRS Topic 409 explains the usual short-term and long-term rules and exceptions. The calculator uses an entered short-term share instead of tracking actual acquisition and sale dates.
IRS Topic 409: capital gains and holding periodsOriginal issue discount is generally included as it accrues, subject to exceptions. Taxable income can therefore arise without a contemporaneous cash payment. The current-income input is not a debt-by-debt OID accrual calculation and does not model a separate cash-distribution shortfall.
IRS Publication 550: investment income, expenses and OIDSection 1411 can impose 3.8% NIIT on the lesser of net investment income and the applicable excess over the income threshold. Include any applicable effect once in the relevant combined rate. This calculator does not determine filing status, thresholds or which income is subject to NIIT.
IRS: net investment income taxPublication 550 explains investment income, basis, expenses, distributions and capital gains and losses for individual taxpayers. Its distinctions do not make every investment distribution ordinary income or every gain eligible for a preferential rate.
IRS Publication 550: investment income, expenses and OIDThe SEC discusses eligibility, illiquidity and offering terms for private equity. Its allocation guidance also separates time horizon, tolerance for loss, diversification and rebalancing. The simulator’s four presets do not assess those factors for an individual.
SEC: private equity access, liquidity and costsPublished by PPLI.com. Calculation checks completed 17 September 2026. The worked examples use the displayed inputs. Validation included 48 preset, wealth and horizon cases, 80 independent growing-withdrawal calculations, and checks for input errors, depletion and retained custom allocations. These verify arithmetic under the method described here. See the editorial standards and Privacy Policy.
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