Q: What return should I use?

For an HYSA, 4-5% is typical in 2026. For a diversified stock/bond portfolio, 5-7% is a reasonable long-run assumption — but expect year-to-year swings. If in doubt, use a more conservative return (like 5%) and treat any outperformance as a bonus.

Q: Does this factor in taxes?

No. Interest on HYSA is taxed as ordinary income, and taxable brokerage returns are taxed on dividends and eventual capital gains. Effective return may be 15-30% lower than the gross number depending on your bracket. This tool models the gross return; adjust downward if you want an after-tax picture.

Q: Should I include closing costs in my target?

The 'down payment' line item in this tool is strictly the down payment. Closing costs typically add another 2-4% of the home price. Consider padding your target by that amount so you don't arrive at closing short on cash for taxes, title fees, and inspections.

Q: Is this financial advice?

No — it's a modeling tool. Consult a licensed financial advisor for advice tailored to your situation, tax bracket, risk tolerance, and time horizon.

Question 1

Cash vs invested — which should I pick?

Accepted Answer

For short horizons (< 2-3 years), most planners recommend cash in a high-yield savings account: it's stable, insured, and immediately available. For longer horizons, a taxable brokerage or robo-advisor invested in low-cost index funds tends to outpace cash — but comes with market volatility, so you can arrive at year 5 with less than expected. Split the difference by holding your short-term chunk in HYSA and the long-tail portion invested.

Question 2

What return should I use?

Accepted Answer

For an HYSA, 4-5% is typical in 2026. For a diversified stock/bond portfolio, 5-7% is a reasonable long-run assumption — but expect year-to-year swings. If in doubt, use a more conservative return (like 5%) and treat any outperformance as a bonus.

Question 3

Does this factor in taxes?

Accepted Answer

No. Interest on HYSA is taxed as ordinary income, and taxable brokerage returns are taxed on dividends and eventual capital gains. Effective return may be 15-30% lower than the gross number depending on your bracket. This tool models the gross return; adjust downward if you want an after-tax picture.

Question 4

Should I include closing costs in my target?

Accepted Answer

The 'down payment' line item in this tool is strictly the down payment. Closing costs typically add another 2-4% of the home price. Consider padding your target by that amount so you don't arrive at closing short on cash for taxes, title fees, and inspections.

Question 5

Is this financial advice?

Accepted Answer

No — it's a modeling tool. Consult a licensed financial advisor for advice tailored to your situation, tax bracket, risk tolerance, and time horizon.

When will you hit your down-payment goal?

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