Household Modeling: Two Lives, One Plan (Beta)

New opt-in household modeling runs two incomes, two Social Security claims, and a survivor scenario as one plan, not a single life with a spouse attached.

For a long time our plan modeled one life, mine, with Mayur's income folded in as a number rather than a person. It worked fine right up until we asked the question neither of us wanted to ask out loud: what happens to the plan if one of us dies first? Filing status changes, tax brackets change, one Social Security check becomes a survivor benefit instead of two checks, and the whole shape of the household shifts in a single year. A single-life plan cannot see any of that, because it was never built to notice that a household is two people, not one income stream with a spouse attached.

What "household" means here

Household modeling is opt-in and labeled Beta, with its simplifications disclosed right in the UI — worth saying up front, because this is genuinely new machinery, not a settings toggle on old math.

Turn it on and you enter a real spouse profile: age, income, their own Social Security claim age, their own life expectancy. From there the spouse's employment drives its own side of accumulation — payroll tax is computed per earner, retirement-contribution caps apply per person at each person's own age, and the two of you can retire on different dates instead of the model forcing a single retirement year on both incomes.

The part single-life plans never see

Each spouse gets their own Social Security stream, plus a real survivor benefit: when the first spouse dies, the survivor keeps the larger of their own benefit or the survivor benefit, not both stacked together. And this is where the household actually changes, not gradually but all at once, at the moment of that first death: filing status flips from joint to single, which moves the tax brackets, the standard deduction, the IRMAA thresholds, and how much of Social Security gets taxed. Most single-life plans never model this transition because they never had two lives to lose one of. Planners call it the widow's penalty, and it is exactly the kind of one-year cliff that only shows up when the household is honestly two people.

Spending steps down too, to a survivor percentage you choose yourself (75 percent by default, because a household of one does not spend like a household of two, but it does not spend at half, either). RMDs are computed per person against whoever actually owns each account. And the plan horizon extends all the way to the last survivor, not to whichever spouse the old model happened to anchor on.

Longevity is not one number either

There is an optional stochastic layer on top of all this: turn on joint longevity uncertainty and the life expectancies you entered become medians rather than fixed endpoints, and every simulated path draws its own two lifespans instead of assuming you both live to exactly the age you typed in.

If you want to check this quickly without wading through every setting, the Household Continuity summary in the Plan Report is built for exactly that — one glance to confirm the survivor mechanics are doing what you expect before you trust the number underneath them.

Key takeaways

• Household modeling is opt-in, Beta, and models two real people: separate incomes, contribution caps, Social Security claims, and retirement dates.
• At the first spouse's death, the survivor keeps the larger of their own or the survivor Social Security benefit, filing status flips to single, and taxes change immediately.
• Spending steps down to a chosen survivor percentage (default 75%), and RMDs are computed per person by account ownership.
• Optional stochastic joint longevity draws two lifespans per simulated path instead of fixing both ages.

If your plan still treats your household as one life with a spouse attached, turn on household modeling and see what changes at the moment it matters most.