The US Kill Line Model
Formulas and assumptions used by the household cash-buffer calculator.
US Kill Line is an educational household cash-buffer simulator. It estimates a surplus or shortfall under chosen shock assumptions. It is not a prediction of bankruptcy or a validated financial risk score.
Inputs and base buffer
Enter annual take-home income, accessible liquid assets, monthly essential costs excluding debt, and monthly minimum debt payments. All amounts are in US dollars.
- Monthly income = annual take-home income / 12.
- Monthly essential outflow = essential costs + debt payments.
- Base buffer = one month of essential outflow.
The model does not infer costs from ZIP code or household size. ALICE county budgets, MIT Living Wage data and Altman Z-Scores are not used in the calculation.
Shock components
Unemployment
An illustrative monthly benefit is min(monthly income × 35%, $2,500). This is a model assumption, not your entitlement to state benefits.
Unemployment cost = max(0, essential outflow − illustrative benefit) × unemployment months.
Medical bill
Illustrative coverage is 60% for PPO and 70% for HMO, applied after the deductible. These presets do not represent an actual insurance contract.
- Deductible paid =
min(deductible, medical bill). - Insured out-of-pocket =
deductible paid + (medical bill − deductible paid) × (1 − coverage). - Uninsured out-of-pocket = the full medical bill.
A bill below the deductible therefore costs no more than the bill itself. The model does not account for prior deductible spending, out-of-pocket maximums, networks or excluded services. Check your policy for actual exposure.
Essential-cost increase
Additional cost = monthly essential costs excluding debt × increase percentage × duration in months.
This applies to the essential-cost input as a whole. It is not a rent-only calculation. The internal scenario key rent is retained for compatibility with existing links.
Combined scenario
The combined scenario adds all three components. A single scenario adds only its selected component. The base buffer is added in either case as an extra one-month reserve; it is not a forecast of month-by-month cash flows.
Outputs
- Required buffer = base buffer + selected shock costs.
- Distance to the line = liquid assets − required buffer. A negative value means a modelled shortfall.
- Cash-buffer coverage = liquid assets / required buffer. The display is capped at 100%; this is not a probability.
- Baseline cash runway = liquid assets / monthly essential outflow × 30 days. This assumes no income and unchanged baseline spending; it does not include the selected shocks or illustrative benefits.
- Top risk driver = the largest component among the selected shocks.
Zone rules
These are illustrative rules, not researched safety thresholds:
- Red: distance is negative, or baseline cash runway is less than one month.
- Amber: baseline runway is less than three months, or the remaining surplus is less than two months of essential outflow.
- Green: neither condition above applies.
If essential outflow is zero, the zone is shown as amber with a request to enter costs. Runway is not meaningful in that case.
Macro data is separate
The dashboard and macro cards display public series retrieved through FRED, including inflation, unemployment, wages and interest rates. Each value shows its observation date, which can differ from the retrieval date. Series may be revised.
These values provide economic context. They do not automatically alter the household formula or its assumptions.
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US Kill Line is informational and is not financial, legal, medical or investment advice.