Forecasting projects your net worth and cash flow over time using your account information and assumptions. Forecasting is available in the Monarch web app. Use this checklist to review your assumptions when setting up Forecasting for the first time.

Work through each section in order. Most items take under a minute.

1. Participants

Participants are the people whose finances are modeled in your forecast. Age-based events like retirement and end of plan depend on getting this right.

• [ ] Confirm all household members are included. Open the Assumptions sidebar (Edit assumptions button in the top right).
• [ ] Verify birthdays are set for each participant. Without a birthday, Monarch can't calculate a participant's current age, so life expectancy can't be edited and no end of plan event is created for them.
• [ ] Review life expectancy. The default is 90. Adjust it if you want a longer or shorter planning horizon.
• [ ] Hide any participants who shouldn't be in this forecast. For example, if a household member has completely separate finances, you can exclude them.

2. Baseline income & expenses

Your income and expenses are the foundation of your projection. Learn more in Managing Forecasting Assumptions [insert link].

• [ ] Check your yearly take-home income. Open the Assumptions sidebar and review each income source. This is in today's dollars — what you earn after taxes and deductions like insurance and retirement contributions.
• [ ] Check your annual expenses figure. Make sure the last 12 months of expenses are clean and representative of your ongoing spending.
• [ ] Review your expense baseline. If your last 12 months of spending don't reflect what you expect going forward, turn off Use actual expenses as baseline and enter a custom amount. If your income has changed, update your income sources separately.

3. Inflation rate

• [ ] Review the inflation rate. The default is 3%. This affects how your income and recurring expenses grow over time. Adjust it if you want to model a more conservative or aggressive scenario.

Even a 1% difference can have a significant effect over 20 to 30 years.

4. Accounts

Forecast pulls in your linked Monarch accounts, unless you've excluded them. Each one has its own assumptions about how it grows or gets paid down over time.

• [ ] Check that all your accounts are included. If an account is missing, open it in the Assumptions sidebar and turn off Exclude from forecast.
• [ ] Review growth rates for investment and savings accounts. Defaults are 2% for cash and savings and 7% for taxable investments. These are reasonable starting points, but customize them per account to reflect your actual expected returns.
• [ ] Review account growth rates over time. If an account's expected return should change in future years, update its growth rate schedule from the account's settings.
• [ ] Review interest rates on liability accounts. These affect how fast your liabilities are paid down in the projection.
• [ ] Check payment amounts for all liability accounts. Confirm the monthly payment matches your actual planned payment. Make sure you're entering only principal and interest. Leave out taxes and insurance (escrow) — those are already captured in your annual expenses baseline, so including them here would double-count them.
• [ ] Exclude any accounts that shouldn't be in the forecast. Business accounts, accounts that don't reflect your personal net worth, and credit cards you pay in full each month can all be hidden. These don't carry a balance that affects your long-term net worth.
• [ ] Review your savings allocation order. This controls which accounts receive surplus cash flow. Make sure the priority order makes sense for your situation.
• [ ] Review your withdrawal order. This controls which accounts get drawn down first when your cash flow is negative (e.g. in retirement). Make sure it reflects your real priorities.
• [ ] Review withdrawal timing for key accounts. If you want to delay or prevent withdrawals from a specific account, open that account's settings and update Withdrawal timing.
• [ ] Check owners and birthdays for penalty-eligible accounts. Forecasting needs the account owner's birthday to calculate early withdrawal penalties. If a penalty-eligible account is missing an owner or birthday, Monarch flags it with "This account is missing important details that affect your forecast" and a Fix issue button. The account still grows and counts toward your net worth — only the penalty calculation is skipped.

5. Life events

Life events model future changes to your income or expenses. Learn more in Life Events in Forecasting [insert link].

• [ ] Add a retirement event. Start with an estimated retirement date. You can adjust it as your plans change.
• [ ] Map spending goals to events. Add spending goals, such as a vacation or home purchase, as expense events. Otherwise, Forecast will project the savings without accounting for the spending.
• [ ] Think through major upcoming expenses. Buying a home? Having a child? Paying for college? Each of these should be a separate event, either using one of the dedicated event options or the general expense event.
• [ ] Think through major income changes. Career change, raise, starting a business? Add these as separate events, either using one of the dedicated event options or the general income or windfall events.
• [ ] Check event timing. For each event, confirm the year it starts and ends. You can drag events directly on the chart to adjust timing and see the effects in real time.

6. Sanity-check the chart

Once everything is set up, take a step back and look at the big picture.

• [ ] Does your starting net worth look right? The chart shows projected net worth at the end of the current year, so it may differ from your current account balances. Review your included accounts and assumptions if the difference looks unexpected.
• [ ] Does the trajectory make sense? Growing much faster or slower than you'd expect? Check your growth rates or baseline assumptions.
• [ ] Does your net worth stay above $0? If it dips below zero before your end of plan, you may need to adjust your retirement age, savings rate, or spending plans.
• [ ] Does your end-of-plan net worth feel reasonable? Check the statistics bar at the top. If "Net worth at end" is extremely high or extremely low, it's worth investigating why.

You're all set!

Once you’ve reviewed your setup, experiment with your forecast. Try dragging your retirement event earlier, adding a new expense, or adjusting a growth rate and see how the picture changes.

Related articles

• Forecasting in Monarch

These forecasts show hypothetical outcomes based on your account information and the assumptions in the model, including any changes you have made. Projections do not guarantee future performance. Even small shifts in assumptions can lead to very different results over time. If you are viewing a projected retirement balance or goal outcome, it is based on assumptions such as rate of return, inflation, tax rates, and life expectancy. We show you those assumptions, and you can adjust them. If you change the inputs, the outcome will change too. This tool is for informational and educational purposes only. It is not investment, tax, legal, or financial advice, and it should not be the only basis for a major financial decision.