Happy Friday Reader ☀️
Most people approaching retirement ask:
“Do we have enough?”
But this couple asked something better:
“Can we retire comfortably… and still help our son get started in life?”
That’s the kind of question that leads to a real plan.
Meet Mark & Linda
- Both age 60, retiring at 65
- $1.8M saved today ($1.2M in the market)
- Maxing out 401(k)s + Backdoor Roth IRAs
Goals:
- $17,000/month retirement income
- $50,000 gift at 65
- ~$15,000/year ongoing gifting
Step 1: Build the Income Floor First
Before investing…
We focused on income.
At age 65:
- Social Security: ~$5,800/month
- Annuity #1: $4,352/month (purchased with $350k inheritance)
- Annuity #2: $5,206/month (purchased with $600k 401k transfer)
👉 Total: ~$15,000/month guaranteed
That’s ~90% of their income goal covered by income that:
✔ Doesn’t depend on the market
✔ Doesn’t fluctuate
✔ Doesn’t require withdrawals
When your income is secure, everything else becomes flexible.
Step 2: Let the Portfolio Do Its Real Job
Projected portfolio at 65: ~$2.4M ($1.2M now + contributions)
Instead of using it for survival…
We use it for:
- Flexibility
- Growth
- Gifting
Initial withdrawal at retirement: ~$11,000/month (~5.5%)
That might sound high—but here’s the key:
They don’t actually need it to live.
The Guardrail Strategy
- ✅ Markets up → Spend more, gift more
- ✅ Markets down → Temporarily reduce withdrawals
- ✅ Always protect long-term sustainability
Because their income is already covered:
👉 They avoid locking in losses
👉 They stay in control
👉 They can adjust without stress
The Hidden Advantage
👉 ~72% of their portfolio stays invested in equities
That creates a powerful mix:
- Income = Stability
- Portfolio = Growth
Step 3: Fix the Tax Problem Early
This is where most plans break down.
From ages 60–65:
- Convert ~$200K/year of pre-tax retirement accounts to Roth
- Stay within the 24% bracket
What This Solves
✔ Builds tax-free income
✔ Reduces future RMDs
✔ Minimizes IRMAA
✔ Avoids the 10-year inherited IRA tax hit
Taxes are one of the biggest risks in retirement… just less obvious.
The Outcome
Income
- ~$26,000/month total
- ~$15,000/month guaranteed for life
Gifting
- $50K immediately
- ~$15K/year ongoing
- ~$500K total over time
Legacy
- ~$3.5M at age 95
- Passed on largely tax-free
The Bigger Lesson
This isn’t just a retirement plan.
It’s a retirement system:
- Security → Guaranteed income
- Flexibility → Portfolio + guardrails
- Efficiency → Tax strategy
A portfolio alone doesn’t create confidence Structure does
Final Thought
If you’re within 5–10 years of retirement, start asking better questions:
- How much income can this produce?
- How much of it is reliable?
- What happens in a bad market early on?
- Am I paying more in taxes than I need to?
Because the difference between a stressful retirement and a confident one…
Isn’t how much you have
It’s how well it’s structured
🔗 Want to Go Deeper?
I also broke this down in a short video walkthrough of the case study.
And if you want to see what your own “income picture” looks like…
You can explore your numbers here:
👉 Retirement Income Review
Matt