Our Methodology
Transparency is core to our mission. Here's exactly how we calculate your financial scenarios, the data sources we use, and the assumptions we make.
Calculation Overview
The MomWorth Calculator compares three work scenarios: Full-Time, Part-Time, and Stay-at-Home. For each scenario, we calculate:
Net Monthly Income
Income after taxes, childcare, and work expenses
Effective Hourly Rate
What you actually earn per hour worked
5-Year Projection
Long-term financial impact including retirement
Tax Calculations
Federal Income Tax (2024-2025 Brackets)
We use the current IRS federal income tax brackets for married filing jointly and single filers. Our calculator applies marginal tax rates progressively:
| Tax Rate | Single Filer | Married Filing Jointly |
|---|---|---|
| 10% | $0 – $11,600 | $0 – $23,200 |
| 12% | $11,601 – $47,150 | $23,201 – $94,300 |
| 22% | $47,151 – $100,525 | $94,301 – $201,050 |
| 24% | $100,526 – $191,950 | $201,051 – $383,900 |
| 32% | $191,951 – $243,725 | $383,901 – $487,450 |
| 35% | $243,726 – $609,350 | $487,451 – $731,200 |
| 37% | Over $609,350 | Over $731,200 |
FICA Taxes (Social Security & Medicare)
We calculate FICA taxes as required by law:
- Social Security: 6.2% on income up to $168,600 (2024 wage base limit)
- Medicare: 1.45% on all income, plus 0.9% additional Medicare tax on income over $200,000 (single) or $250,000 (married)
State Income Tax
State tax calculations vary significantly. Our calculator:
- Uses state-specific tax rates when you select your state
- Recognizes the 9 states with no income tax (AK, FL, NV, NH, SD, TN, TX, WA, WY)
- Applies flat or progressive rates based on your state's tax structure
Effective Hourly Rate Calculation
Your effective hourly rate represents what you actually earn per hour after accounting for all work-related costs and time. This is the most honest measure of whether working "pays off."
The Formula
Effective Hourly Rate = (Monthly Net Income) ÷ (Total Monthly Hours)
Monthly Net Income Includes:
- +Gross monthly salary
- −Federal income tax
- −State income tax
- −FICA taxes (Social Security + Medicare)
- −Childcare costs
- −Commute costs (gas, parking, tolls, transit)
- −Work meals and convenience expenses
- −Professional wardrobe and grooming
Total Monthly Hours Includes:
- Paid work hours: Standard 40 hours/week for full-time, adjusted for part-time
- Commute time: Round-trip daily commute × working days
- Getting ready time: Morning routine, drop-offs, pick-ups (estimated 30-60 min/day)
Retirement Impact Projections
Taking time off work has long-term implications for retirement savings. Here's how we calculate this impact:
401(k) Contributions
We calculate retirement impact based on:
- Employee contribution: Your specified percentage of gross salary
- Employer match: Common structures like 50% match up to 6% or dollar-for-dollar up to 3%
Compound Interest Assumptions
Our 5-year projections use compound interest to show the future value of retirement contributions:
- Default annual return: 7% (historical average for diversified stock portfolios, adjusted for inflation)
- Compounding frequency: Annual
- Formula: FV = PV × (1 + r)^n + PMT × [((1 + r)^n - 1) / r]
Social Security Impact
Years out of the workforce can affect Social Security benefits. While we don't calculate exact Social Security projections (which require your full earnings history), we note that:
- Social Security is calculated from your highest 35 earning years
- Years with zero or low earnings can reduce your average
- This impact is most significant for those with fewer than 35 years of work history
5-Year Financial Projections
Our 5-year projections help you see the cumulative impact of your decision over time.
Salary Growth Assumptions
- Full-time scenario: 3% annual salary increase (based on Bureau of Labor Statistics average wage growth)
- Part-time scenario: 2% annual increase (reduced advancement opportunities)
- Stay-at-home scenario: No salary, but spouse income may be factored if provided
Cost Inflation
- Childcare costs: 4-5% annual increase (historically higher than general inflation)
- Other work expenses: 3% annual increase (aligned with inflation)
Important Limitations
While we strive for accuracy, our calculator has limitations you should understand:
- 1.General Estimates: Tax calculations use standard deductions and don't account for itemized deductions, tax credits (like Child Tax Credit), or complex tax situations.
- 2.Regional Variations: Childcare costs, cost of living, and local taxes vary significantly by region. Our defaults are national averages.
- 3.Future Uncertainty: Tax laws change, markets fluctuate, and personal circumstances evolve. Our projections are estimates, not predictions.
- 4.Not Financial Advice: This tool is for educational purposes. Consult qualified professionals before making major financial decisions.
- 5.Benefits Not Fully Valued: Health insurance, HSA contributions, life insurance, and other benefits are mentioned but not fully quantified in every scenario.
Data Sources
Our calculator uses data from authoritative sources:
- IRS (Internal Revenue Service): Federal tax brackets, standard deductions, FICA rates
- State Tax Agencies: State-specific income tax rates and brackets
- Bureau of Labor Statistics (BLS): Average wage growth, employment statistics
- Care.com Cost of Care Survey: National childcare cost averages
- AAA (American Automobile Association): Driving cost estimates
Ready to Calculate Your Scenarios?
Now that you understand how our calculations work, try the calculator with your own numbers.
Start Calculator