Start here
The basics
Headline net worth values a traditional IRA dollar and a Roth dollar equally. Taxable net worth asks what might remain if taxable assets were withdrawn or sold together in that year, under the model’s rules.
Illustrative numbers
Same headline, different tax character
Plan A$1m Roth / low embedded tax
Plan B$1m traditional / ordinary income on withdrawal
Headline net worth$1m for each
The taxable-net-worth view can place Plan B lower because the hypothetical distribution creates ordinary tax. It does not claim either plan will actually liquidate that year.
Calculation transparency
How it works in MoneyWhatIf
- 01
Cash principal and already-taxed basis are not taxed again. Eligible pre-tax balances become ordinary income and brokerage gains retain capital-gains treatment.
- 02
Modeled home gain applies basis and the federal primary-residence exclusion before tax.
- 03
The worksheet recalculates connected federal, state, applicable local, state retirement-exemption, Social Security, gains, and NIIT effects for the hypothetical liquidation.
Keep in mind
Model limits
Liquidating everything in one year can create a much larger tax rate than a real multi-year withdrawal strategy.
The view excludes transaction costs, market impact, unmodeled tax lots, estate basis changes, and individual legal or tax elections.
Use it as a comparable exit-value lens, not as a recommended action or a precise estate-settlement estimate.
This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.
Where it appears
Where to use it
See this concept in context, with a guide to each page and its controls.
The words behind it
Related financial terms
Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.