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CoastMath reads each income as an annual amount in plan-start-year dollars. Every January after the first plan year it applies that income’s growth rate, then pays the share of the year the income is active. Pay marked as earned income is taxed as wages: it’s ordinary income, and it’s subject to Social Security and Medicare tax.
Three settings decide most results: the growth rate (blank, zero or a number mean different things), the start and end milestones, and whether the income is earned.
Each income stream takes a name, an amount with a frequency, a recipient (you or your partner) and optional timing. Amount frequency can be weekly, biweekly (every two weeks), semimonthly (twice a month), monthly, quarterly or annual. CoastMath multiplies the amount by 52, 26, 24, 12, 4 or 1 and calculates with that annual amount. The frequency is saved with the income: the form reopens in it and the income list shows the amount in it, such as $2.5K/mo. Switching the frequency only changes how the amount is shown, to the cent; the annual amount changes only when you edit the amount.
Choose Hourly (rate × hours) to enter an Hourly rate ($) and Hours per week instead. The annual amount is the rate × the weekly hours × 52 paid weeks, to the cent, and the income keeps its rate and hours: the form reopens in them and the list shows them, such as $25.50/hr × 30 hrs/wk. Switching to another frequency keeps the annual amount.
The Salary income type is earned income, for wages and for business profit. Checking Self-employed under Growth and tax settings switches the income to self-employment tax. That treatment is explained in Self-employment income. The Other type asks for a tax category instead; those categories are covered in Pensions, annuities and other income.
Pay this year=Amount entered×Growth factor×Share of the year active
The growth factor is 1 in the first plan year. Each January after that, it’s multiplied by one plus that year’s rate. The factor steps by a full year’s rate even when the first plan year was partial.
- Blank Growth rate. Pay follows the plan’s wage-growth assumption at the recipient’s age. Without one, it follows each year’s inflation assumption, so the amount stays level in today’s dollars.
- 0. The amount is fixed in nominal dollars and loses purchasing power with inflation.
- Any other rate. The rate compounds every year, regardless of inflation.
A Growth cap stops growth at a dollar amount per year. With Cap rises with inflation checked, the cap is in today’s dollars and indexed with plan inflation.
- Blank growth rate
- Growth rate 0
3% inflation, no wage-growth assumption. The recipient was born in July, and a retirement milestone at 55 ends pay after June 2031.
Show data
| Year | Blank growth rate | Growth rate 0 |
|---|---|---|
| 2026 | $120,000 | $120,000 |
| 2027 | $123,600 | $120,000 |
| 2028 | $127,308 | $120,000 |
| 2029 | $131,127 | $120,000 |
| 2030 | $135,061 | $120,000 |
| 2031 | $69,556 | $60,000 |
| 2032 | $0 | $0 |
| 2033 | $0 | $0 |
Growth compounds from the plan’s start year, even for a job that begins later. That keeps a future salary entered in today’s dollars worth the same in real terms when it starts.
| Amount entered, today’s dollars | $80,000 | |
|---|---|---|
| × | Growth factor for 20303% inflation for 2026 through 2029 | 1.1255 |
| = | Pay in 2030 | $90,040.70 |
A growth schedule replaces the yearly growth step in the calendar years you choose. Each segment has a start year, an optional end year and one kind of change. Years no segment covers keep the Growth rate (or, when it’s blank, wage growth). Segments must be in year order and can’t overlap, so every segment except the last needs an end year.
| Change type | Each covered year |
|---|---|
| Percent per year | The amount changes by that percent. |
| Inflation plus or minus | The amount changes by the prior year’s inflation plus or minus the points you enter. In a Monte Carlo trial, that trial’s inflation is used. |
| Dollar change per year | The amount changes by a fixed dollar amount, in today’s or nominal dollars. |
| Set amount | The amount is the value you enter, in today’s or nominal dollars. Growth after the segment continues from it. |
| 2026, first plan year | $100,000 | |
|---|---|---|
| → | 2027, +3% | $103,000 |
| → | 2028, +3% | $106,090 |
| → | 2029, set amount | $120,000 |
| → | 2030, inflation 3% − 1 point | $122,400 |
| = | 2031, inflation 3% − 1 point | $124,848 |
3% inflation, blank Growth rate. Segments: 3% a year in 2027–2028, set to $120,000 nominal in 2029, then inflation minus 1 point from 2030.
With no milestones, an income runs from the plan start through the end of the plan. A Start milestone or End milestone limits it to the years between them. In the form, both open from the one-line timing summary, with months under Start and end months. In the year a milestone is reached, CoastMath pays whole months:
- Pay starts in the Start month you pick, or in the month the milestone is reached.
- Pay runs through the End month you pick, or through the month before the milestone is reached.
- An age milestone is reached in the plan owner’s birth month (later for a fractional age), a date milestone in its own month, and a relative milestone in the month of the milestone it follows. Milestones based on net worth or savings are reached in January.
| Amount entered | $120,000 | |
|---|---|---|
| × | Growth factor for 2031five years at 3% | 1.1593 |
| = | Full-year pay | $139,112.89 |
| × | Months paid ÷ 12January through June; the age milestone falls in July | 0.50 |
| = | Pay in 2031 | $69,556.44 |
A one-time payment such as a signing bonus works the same way: use one milestone as both the start and the end, and set Start month and End month to the same month. The amount is still annual, so one month pays one-twelfth of it. A $120,000 amount set to March of 2027 pays $10,000. A recurring bonus can be part of the salary or its own income with the same milestones; both are taxed as wages.
In a first plan year that starts partway through the year, only the remaining months count. See Your plan’s start date and first year. Income also stops when its recipient dies, as described in When a partner dies.
Wages are ordinary income for federal, state and local income tax. Employee Social Security and Medicare tax are figured for each person separately, with that person’s wages applied against the Social Security wage base; Payroll taxes, self-employment tax and AMT gives the rates. Most pre-tax paycheck deductions lower wages for income tax but not for Social Security and Medicare tax, as explained in Payroll deductions and pre-tax benefits.
Tax withholding (% of gross) sets aside that share of the pay during the year and credits it against the year’s actual tax. Leaving it blank settles the whole liability at tax time. For how the difference becomes a refund or a balance due, see Withholding, refunds and balances due.
Earned income is also the compensation that limits IRA and 401(k) contributions. Each person’s contributions are limited to that person’s wages and business profit for the year. On a joint return, IRA contributions can use the couple’s combined earnings. See Contributions, employer match and limits.