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The basics
An investment account can hold a mix of stocks and bonds. You can also add explicit periods for its bond allocation—for example, 20% bonds while working and 40% after retirement.
Within each period, use Add a bond type to hold several types together. Share of bonds divides the bond portion, so a 40% bond allocation split equally between Taxable and Treasury holds 20% of the account in each. Editing a share adjusts the others to keep the mix at 100%. The allocation determines which returns the account receives; each type determines the modeled tax treatment of its share of interest in a taxable account.
Illustrative numbers
A 60/40 account
Account balance$100,000
Bond allocation40% = $40,000
Remaining allocation60% = $60,000
The two portions follow their respective return assumptions. In historical scenarios, the bond portion uses bond history rather than a quieter version of stock returns.
Calculation transparency
How it works in MoneyWhatIf
- 01
An explicit bond-allocation period overrides the bond share in the account’s growth schedule while that period applies. Outside those periods, the growth schedule applies again.
- 02
Each period can mix up to four bond types. All types use the plan’s bond return assumption. Periods without their own mix and bonds held outside the periods use the account’s default bond type. A new period copies the preceding period’s mix.
- 03
Taxable bonds have federal and state taxable interest. Treasury interest is federal-only; own-state municipal interest is exempt from both; national municipal interest is federal-exempt but state-taxable in this model.
- 04
Exempt interest still enters the modeled Social Security provisional-income, IRMAA, and marketplace-income calculations. Its federal exemption keeps it outside NIIT.
- 05
A bond type does not automatically lower its yield. Enter a suitable return assumption. If a year straddles allocation periods, the period covering the most months supplies that year’s allocation.
Keep in mind
Model limits
This is an allocation model, not an individual-bond ladder with maturity dates, duration, or default events.
The tax-type choices are simplified categories; they do not inspect the holdings or state-exempt percentage of a particular fund.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
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Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.