Retirement Financial Plan Sample
Pre-Retiree & Amanda Sample
A fiduciary, tax-centric roadmap for a $7.3 million household earning $866,000 a year, with 28% of its investable wealth in one company's stock. We stress tested the plan 1,000 times, built a three-year exit from the concentrated position, and moved $4.4 million into tax-free territory before required distributions begin.
Proposed plan funds $30,000 a month of retirement spending through age 90 in 97 of 100 simulated markets.
All figures are hypothetical and come from the sample household's inputs. Hover or tap any chart for detail.
Balance sheet and liquidity
Net worth of $7,326,000 as of the plan date. More than half of the investable assets sit in taxable accounts, which is unusual and useful: it gives us room to fund the early retirement years and the Roth conversions without touching the IRAs.
What you own
$8,456,000 in total assets
How it is taxed
$5,701,000 across three tax buckets
Emergency liquidity
Target is 6 months of expenses for a single-employer household
Cash and money market. We would keep the surplus in Treasury bills rather than a bank, and treat the $1.45M diversified brokerage account as the second line of defense.
Account by account detail
| Account | Owner | Type | Balance |
|---|---|---|---|
| Checking, savings and money market | Joint | Cash | $185,000 |
| Diversified brokerage account | Joint | Taxable | $1,450,000 |
| Employer stock, vested (TCO) | Pre-Retiree | Taxable | $1,620,000 |
| Pre-Retiree's 401(k) | Pre-Retiree | Tax deferred | $1,240,000 |
| Nonqualified deferred compensation plan | Pre-Retiree | Tax deferred | $310,000 |
| Amanda's 401(k) | Amanda | Tax deferred | $410,000 |
| Pre-Retiree's rollover IRA | Pre-Retiree | Tax deferred | $385,000 |
| Amanda's Roth IRA | Amanda | Tax free | $92,000 |
| Health savings account | Pre-Retiree | Tax free | $46,000 |
| Kelly's 529 | Amanda | Tax free | $148,000 |
| Primary home, Alexandria | Joint | Real estate | $1,850,000 |
| Rental townhouse, Arlington | Joint | Real estate | $720,000 |
| Primary mortgage (5.25%, 2053) | Joint | Liability | ($820,000) |
| Rental mortgage (4.10%, 2049) | Joint | Liability | ($310,000) |
| Net worth | $7,326,000 | ||
| Unvested RSUs, 3 tranches through 2027 | Pre-Retiree | Memo | $940,000 |
Retirement analysis
We ran your plan 1,000 times through random market sequences. The current plan already works in most markets; what it cannot survive is a bad decade for one stock. Toggle between the paths to see what changes and why.
Proposed plan
Median ending portfolio $20,845,000 at age 90
Shaded band is the 25th to 75th percentile of invested assets by age; the line is the median. Illustrative shape drawn from the plan's start, retirement and ending values.
What we changed
Eight levers, one coordinated plan
| Lever | Current | Proposed |
|---|---|---|
| Retirement age | 62 / 60 | 60 / 58 |
| Retirement spending | $28,000 / mo | $30,000 / mo |
| Employer stock | Hold | 10b5-1 sale plan, 36 months |
| Social Security claim | Age 67 | Age 70 |
| Deferred comp election | $0 | $100,000 / yr, 10-yr payout |
| Mega backdoor Roth | None | $46,000 / yr after-tax 401(k) |
| Withdrawal order | Pro rata | Taxable → deferred → Roth |
| Roth conversions | None | Fill the 24% bracket, ages 60 to 72 |
Stress test
Probability of success under nine shocks, proposed plan
The last bar is the one that matters. A 50% drop in TCO costs the current plan 19 points; after the sale plan it costs the proposed plan 2.
Retirement income is stable
$12.4M of lifetime retirement spending, zero projected shortfall
Deferred compensation pays out over the first ten years, Social Security arrives at 70, and the portfolio covers the rest. After 2047 every withdrawal comes from Roth accounts. Illustrative composition.
Company stock and RSUs
$1.62 million of vested TCO shares plus $940,000 of unvested RSUs is $2.56 million tied to one employer, which also pays the salary. Selling it all at once would trigger about $200,000 of tax. Holding it all risks the retirement date. The plan does neither.
The 36-month exit
Each year's sales, gifts and vests, with TCO's weight in invested assets under each year
The 10b5-1 plan is filed in a trading window and executes automatically each quarter, which removes insider-trading risk and the temptation to wait for a better price. Each year's sales are sized to stay under the 37% bracket.
Four ways out, and what each costs
Per $100,000 of TCO with $33,000 of basis
| Strategy | Tax today | Used for |
|---|---|---|
| Sell outright | $15,900 | The bulk: 20% + 3.8% NIIT on $67,000 gain |
| Gift to donor advised fund | −$38,000 | $31,500 a year, the household's normal giving, paid in shares instead of cash |
| Sell highest-basis lots first | $6,200 | 2024 tranche: lots vested in 2022 and 2023 |
| Exchange fund (7-year lockup) | $0 | Considered and rejected: fees and illiquidity exceed the deferral benefit |
RSU vesting calendar
Shares are taxed as ordinary income the day they vest; we sell at vest to avoid adding to the position
Supplemental withholding is only 22% on the first $1M, so every vest leaves a 15-point gap to the 37% rate. The plan funds it with quarterly estimates.
Portfolio analytics
Strip out the company stock and the household already holds a sensible 60/40 portfolio. The proposed Growth allocation re-deploys the TCO proceeds, adds international exposure the portfolio lacks, and keeps enough bonds to fund the first five years of retirement without selling equities.
Asset allocation
Current: 70% equity / 30% fixed income
Risk and return map
Where each asset class, the single stock and both portfolios sit
A single large-cap stock carries roughly twice the volatility of the index it belongs to with no higher expected return. That is the whole case for diversifying: same return, half the risk.
Allocation by asset class
Current weight vs. target weight
Range of one-year outcomes
What a good year, a typical year and a bad year look like on $5.7M
Bars span one standard deviation either side of the expected return. A 2008-style year on the current mix costs about $1.9M; on the target mix, about $1.3M, and none of it is tied to one company's earnings call.
Asset location
Which account each asset class should live in
| Asset class | Best home | Why |
|---|---|---|
| U.S. and international stock index funds | Taxable | Low turnover, qualified dividends, step-up at death |
| Bonds and REITs | 401(k) and IRA | Ordinary income sheltered until withdrawn |
| Small cap and emerging markets | Roth | Highest expected growth compounds tax free |
| Municipal bonds | Taxable, working years only | Exempt at the 35% bracket; swap to taxable bonds after retirement |
Rebalancing trades to reach the target, after the TCO sale plan completes
| Asset class | Current | Target | Action |
|---|---|---|---|
| U.S. Equities (incl. TCO) | 61.4% | 44.0% | Sell $992,000 |
| International Equities | 6.2% | 14.0% | Buy $445,000 |
| Emerging Markets | 1.1% | 4.0% | Buy $165,000 |
| Real Estate | 0.8% | 3.0% | Buy $125,000 |
| U.S. Bonds | 18.3% | 25.0% | Buy $382,000 |
| International Bonds | 0.0% | 5.0% | Buy $285,000 |
| Cash | 12.2% | 5.0% | Sell $410,000 |
Real estate
The Alexandria home was refinanced in 2023 at 5.25%, close to what the portfolio earns after tax; we hold it for now and revisit a refinance if rates fall a full point. The Arlington townhouse is an investment that returns about 4% on equity after tax, which is below what the portfolio earns. It stays for now because of the depreciation shield and because selling it today would stack a gain onto a 37% year.
Rental townhouse, Arlington
2024 operating statement
| Gross rent, $4,200 a month | $50,400 |
| Taxes, insurance, HOA, maintenance, management | ($14,400) |
| Mortgage interest | ($12,600) |
| Cash flow before principal | $23,400 |
| Depreciation, 27.5 years on $520,000 | ($18,900) |
| Taxable income, Schedule E | $4,500 |
Keep, sell or exchange
After-tax wealth from the townhouse over 15 years, three paths
Keeping it is fine. Selling in 2033, the first low-income year after retirement, nets $45,000 more than selling now because the gain lands in the 15% bracket instead of 20% plus NIIT. A 1031 exchange into a triple-net property only wins if you want to stay a landlord at 75.
Suspended losses are not an issue. With AGI over $150,000 any rental loss would be suspended, but the property is profitable, so depreciation is fully used each year.
Best year to sell. No wages, no RSUs, conversion room already planned around it. Depreciation recapture of $190,000 at 25% is unavoidable; the appreciation gain is what we can control.
Annual cash flow
Where the money comes from and where it goes, each year from 2024 through the end of the plan in 2064. Eight more working years at $866,000 and up, then a decade where deferred compensation and the brokerage account carry spending while the IRAs convert, then Social Security plus Roth withdrawals for life.
Inflows vs. outflows
Stacked income sources with total spending as the line
Year by year
41 plan years, future dollars
| Year | Ages | Earned income | Deferred comp | Social Security | Total inflows | Living expenses | Education | Savings | Roth conversion | Taxes | Total outflows | Portfolio withdrawal | Net flow |
|---|
Modeled from the plan's stated inputs: $866K household income growing 3%, 2.5% inflation, retirement in 2032, Social Security at 70, $30,000 a month of retirement spending, the deferred comp and Roth conversion schedules above, and the plan's tax assumptions. The full RightCapital engagement produces this table directly from the projection engine.
Tax strategy
At $866,000 of income the household pays a 35% federal marginal rate, 3.8% on investment income and 5.75% to Virginia. Nothing should be converted to Roth in those years. Everything should be deferred, gifted or sheltered. Then, from 60 to 72, with no wages on the return, $4.4 million converts at 24%.
Defer and gift at 35%
$100K deferred comp, $61K 401(k), $46K mega backdoor Roth, $8.3K HSA, and $31,500 of appreciated TCO to a donor advised fund in place of cash gifts.
Convert at 24%
Fill the bracket every year from 60 to 72, paying the tax from the brokerage account. $4.4M moves to Roth.
Live on Roth, stay under IRMAA
RMDs fall from a projected $320K a year to $85K. Medicare premiums stay in the base tier.
Watch the money move tax buckets
Drag the year to follow the conversion schedule
The bracket we fill
Federal brackets, married filing jointly, inflated to the selected year
Blue is ordinary income already on the return; orange is the conversion sitting on top. In working years the 35% bracket is full before any conversion, so there is nothing to do. After 2032 the only ordinary income is deferred comp and dividends, and the 24% bracket has $300,000 or more of room every year.
The conversion timeline
$4.42M moved from IRA and 401(k) to Roth across thirteen years, each sized to the top of the 24% bracket
With conversions vs. without
Tax-deferred balance by age, and the required distributions it would force at 73
Left alone, the IRAs and 401(k)s grow past $8M by 73 and force $320,000 of taxable income every year on top of Social Security, which lands the household back in the 32% bracket and the top Medicare tier for life.
Tax paid now vs. tax avoided later
Why writing a check at 24% beats being forced to write one at 32%
Tax on conversions assumes 24% federal on $4.42M converted, paid from the brokerage account so every converted dollar keeps compounding tax free for up to 30 years. Virginia tax is avoided entirely if the conversions happen after a move; see the tax report.
Conversion schedule and balances
Stacked balances by year with annual conversion amounts
Ending wealth, after tax
Age 90, proposed strategy vs. pro rata withdrawals with no conversions
What the first year looks like on the 1040
Married filing jointly, Virginia residents, one dependent. The return reflects $830,000 of W-2 pay including $220,000 of RSU vesting, the first $570,000 tranche of TCO sales, the rental, $39,400 of deductible mortgage interest, and $31,500 of charitable giving paid in appreciated shares. Every figure below is illustrative.
Form 1040 walk
From gross income to the balance due
| Income | ||
| 1a | Wages, bonus and RSU vests (after $61,000 of 401(k) and $100,000 deferred comp) | 669,000 |
| 2b | Taxable interest | 4,800 |
| 3a | Qualified dividends | 22,400 |
| 7 | Long-term capital gain (TCO sales, $570,000 proceeds, highest-basis lots) | 150,000 |
| 8 | Rental income, Schedule E | 4,500 |
| 9 | Total income | 850,700 |
| 10 | HSA contribution | (8,300) |
| 11 | Adjusted gross income | 842,400 |
| Deductions | ||
| 12 | Itemized: SALT $10,000, mortgage interest $39,400 (capped at $750K of debt), charitable $31,500 | (80,900) |
| 15 | Taxable income | 761,500 |
| Tax and credits | ||
| 16 | Tax on ordinary income ($589,100) | 146,935 |
| 16 | Tax on qualified income at 20% | 34,480 |
| 19 | Child tax credit (fully phased out above $440,000) | 0 |
| 23 | Net investment income tax (3.8% on $181,700) | 6,905 |
| 23 | Additional Medicare tax (0.9% on wages over $250K) | 5,220 |
| 24 | Total tax | 193,540 |
| Payments | ||
| 25 | Federal withholding (22% on RSU vests leaves a gap) | (118,000) |
| 26 | Estimated payments | (60,000) |
| 37 | Amount you owe | $15,540 |
Virginia income tax of roughly $47,100 is paid separately. The $15,540 balance due is the RSU withholding gap; the plan raises estimates to the safe harbor next year. Mortgage interest above the $750,000 debt cap, about $3,650, is not deductible.
Where the income came from
$842,400 of adjusted gross income
Tax owed in each bracket
Ordinary income stacked through the brackets, 2024 married filing jointly
The 35% bracket carries $35,578 and every dollar of qualified income is taxed at 20% because ordinary income already exceeds $583,750. The deferred comp election keeps $100,000 out of this bracket entirely.
Where every dollar went
$866,400 of gross income, including RSU vests and the rental
| Tax | Amount | Share of gross |
|---|---|---|
| Federal income tax | $193,540 | 22.3% |
| Virginia income tax | $47,100 | 5.4% |
| Social Security tax (6.2%, capped) | $17,273 | 2.0% |
| Medicare tax (1.45%) | $12,035 | 1.4% |
| Total taxes | $269,948 | 31.2% |
Four moves that shaped this return
Same household, same income, federal tax with and without each move
What the return tells us
Give shares, not cash. The household already gives $31,500 a year. Paying it with TCO that has $10,500 of basis avoids $5,000 of capital gains tax and still produces the full deduction, worth about $11,000 at the 35% bracket.
Deferred compensation at 35%, paid out at 24%. Each $100,000 deferred saves $37,000 now and costs $24,000 later, and the difference compounds for a decade. The risk is the employer's credit; we cap the balance at two years of spending.
RSU withholding is the trap. Supplemental withholding at 22% on $220,000 of vests leaves a $33,000 shortfall at the 35% rate, which is most of the $15,540 balance due. Quarterly estimates set to the 110% safe harbor close it with no penalty.
Mega backdoor Roth. The plan allows after-tax contributions and in-plan conversions. $46,000 a year for eight years is $368,000 of Roth principal that never touches a bracket.
Projections use 2024 brackets inflated at 2.5% per year and the plan's return assumptions. State tax, Medicare IRMAA surcharges and the 2026 bracket schedule are modeled in the full engagement.
Insurance, education and debt
A plan is only as strong as its weakest year. Here is what happens if the paycheck that carries 83% of household income disappears, what Kelly's education costs, and why both mortgages stay exactly as they are.
Life insurance need
If Pre-Retiree passes next year
Group life of $1.5M is two times salary and ends with employment. A $1M fifteen-year term policy, owned by an irrevocable trust, covers the gap and stays out of the estate. Amanda's survivor analysis shows no gap.
Kelly's education
Private university in 2029, graduate school through 2034
$12,000 a year into the 529 through 2028 plus a one-time $90,000 superfunding gift in 2025, which also moves $90,000 out of the taxable estate. Virginia allows a $4,000 deduction per account.
Debt
$1,130,000 across two mortgages
| Loan | Rate | Balance | Payment |
|---|---|---|---|
| Primary home | 5.25% | $820,000 | $4,580 |
| Rental townhouse | 4.10% | $310,000 | $1,500 |
Interest on the first $750,000 of the home loan is deductible, which brings the after-tax cost of the 5.25% mortgage to about 3.4%. The rental loan is deductible against rent. Neither gets prepaid while the portfolio is expected to earn more, but a refinance below 4.25% would be taken.
Umbrella and disability
The two policies most $7M households are missing
Umbrella liability. A rental property and a net worth of $7M make the household a target. Current coverage is $1M. A $5M umbrella costs roughly $900 a year.
Disability income. Group long-term disability covers 60% of base salary to a $15,000 monthly cap and ignores bonus and RSUs. An individual supplement of $10,000 a month closes most of the gap through 2032.
Estate plan
Documents are in place. The estate is projected to reach $22 million, under the 2024 federal exemption for a married couple but only if portability is elected at the first death, and exposed to roughly $3.4 million of tax if the exemption is ever cut in half. The plan starts moving growth out of the estate now, while the assets are smaller.
The family and where the money flows
Household members, estate sequence and the final inheritance
From gross estate to heirs
Amanda's estate at the end of the horizon
Probate is the avoidable number: $395,000 is 5% of the assets not yet titled in the living trust. Retitling the brokerage account and both properties takes an afternoon and cuts it to under $40,000.
The exemption question
Federal estate tax exposure at the end of the plan under three exemption scenarios
Congress has changed the exemption four times in twenty years. A plan that only works under today's number is not a plan. Moving $90,000 into the 529, $150,000 a year into a spousal lifetime access trust, and the term policy into an ILIT removes about $6M of future growth from the estate at no income tax cost.
Beneficiary map
Who each account goes to, and what we still need on file
| Account | Balance | Primary | Contingent |
|---|---|---|---|
| Pre-Retiree's 401(k) | $1,240,000 | Amanda | Name trust for Kelly |
| Deferred comp plan | $310,000 | Amanda | Confirm |
| Pre-Retiree's IRA | $385,000 | Amanda | Name trust for Kelly |
| Amanda's 401(k) | $410,000 | Pre-Retiree | Name trust for Kelly |
| Amanda's Roth IRA | $92,000 | Pre-Retiree | Kelly |
| HSA | $46,000 | Amanda | Confirm |
| Brokerage and TCO (joint) | $3,070,000 | Survivor | Retitle to living trust |
| Both properties | $2,570,000 | Survivor | Deed to living trust |
| Group life insurance | $1,500,000 | Amanda | Consider ILIT |
Kelly is 13. Retirement accounts should name a trust for her benefit as contingent, not her directly, so a $4M inheritance at 18 is managed, not handed over.
Document checklist
Reviewed at the plan date
Why the inheritance is mostly tax free
Kelly must empty an inherited IRA within ten years. Under the current plan she would inherit $8M of tax-deferred money and pay roughly 37% on it. Under the proposed plan almost all of it is Roth, withdrawn on the same schedule with no tax at all.
Your action plan
File the 10b5-1 plan and start giving TCO shares instead of cash
Sell $570,000 of the highest-basis lots this year under a pre-arranged schedule, and fund the family's $31,500 of annual giving with the lowest-basis shares through a donor advised fund instead of cash.
Elect $100,000 of deferred compensation for 2025
Enrollment closes in December. Choose the ten-year payout beginning at separation so the income lands in the 24% bracket years.
Turn on the mega backdoor Roth and both backdoor Roths
After-tax 401(k) contributions of $46,000 with automatic in-plan conversion, plus $7,000 each through nondeductible IRAs. Pre-Retiree's rollover IRA must be moved into the 401(k) first to avoid the pro rata rule.
Fix the withholding on RSU vests
Set quarterly estimates to the 110% safe harbor and request additional withholding on the base salary to cover the 15-point gap on every vest.
Add $1M of term life in an ILIT, a $5M umbrella, and supplemental disability
Three policies, roughly $9,000 a year combined, that protect the plan against the three things it cannot otherwise absorb.
Retitle the brokerage account and both properties to the living trust, update contingent beneficiaries, and superfund the 529
Paperwork, not strategy, but it is where most of the $395,000 of probate cost and the risk of a 13-year-old inheriting outright actually live.
See what this looks like with your numbers.
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