Sample Financial Plan
Pre-Retiree & Amanda Sample
A fiduciary, tax-centric roadmap from age 52 to 90. We stress tested the plan 1,000 times, rebuilt the withdrawal order, and moved $1.6 million into tax-free territory before required distributions begin.
Proposed plan funds every year through age 90 in 96 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
Your personal balance sheet is run like a business. Assets minus liabilities equals a net worth of $1,282,018 as of the plan date, with 68% of invested assets still sitting in tax-deferred accounts.
What you own
$1,417,018 in total assets
How it is taxed
$867,018 across three tax buckets
Emergency liquidity
Target is 3 months of expenses
Joint checking plus the cash sleeve of the brokerage account. The 15% credit card balance is the first thing we retire.
Account by account detail
| Account | Owner | Type | Balance |
|---|---|---|---|
| Joint Checking | Joint | Cash | $10,000 |
| Brokerage Account | Joint | Taxable | $220,000 |
| Pre-Retiree's 401(k) | Pre-Retiree | Tax deferred | $160,000 |
| Amanda's 401(k) | Amanda | Tax deferred | $155,000 |
| Pre-Retiree's IRA | Pre-Retiree | Tax deferred | $99,350 |
| Amanda's IRA | Amanda | Tax deferred | $190,668 |
| Kelly's 529 | Amanda | Tax free | $32,000 |
| Primary Home | Joint | Real estate | $550,000 |
| Primary Home Mortgage (4%) | Joint | Liability | ($125,000) |
| Pre-Retiree's Card (15%) | Pre-Retiree | Liability | ($10,000) |
| Net worth | $1,282,018 | ||
Retirement analysis
We ran your plan 1,000 times through random market sequences. Toggle between the current path and our proposed path to see what changes and why the odds improve.
Proposed plan
Median ending portfolio $3,771,109 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
Seven levers, one coordinated plan
| Lever | Current | Proposed |
|---|---|---|
| Retirement age (both) | 65 | 67 |
| Retirement spending | $8,000 / mo | $7,000 / mo |
| Social Security claim | Age 62 | Age 70 |
| Taxable savings | $0 / yr | $10,000 / yr |
| Retirement allocation | Current (72/28) | Balanced |
| Withdrawal order | Pro rata | Taxable → deferred → Roth |
| Roth conversions | None | Fill the 24% bracket |
Stress test
Probability of success under eight shocks, proposed plan
Longevity is the real risk: living five more years costs 11 points. That is why Social Security is deferred to 70 and the Roth bucket is built early.
Retirement income is stable
$3.76M of lifetime retirement spending, zero projected shortfall
Guaranteed sources cover 57.9% of spending. Portfolio withdrawals fill the rest, all of it from tax-free accounts after age 72. Illustrative composition.
Portfolio analytics
The current portfolio is 72% equity with two stocks making up one fifth of everything. The target preservation mix drops volatility by more than half while the Roth conversions do the heavy lifting on growth.
Asset allocation
Current: 72% equity / 28% fixed income
Risk and return map
Where each asset class and both portfolios sit on the long-run risk/return spectrum
Historical index returns and volatility from the plan's assumption set. Moving from the current mix to the target gives up about 4 points of return to cut the swings by more than half, which the plan can afford once the Roth bucket is funded.
Allocation by asset class
Current weight vs. target weight, 14 classes
Range of one-year outcomes
What a good year, a typical year and a bad year look like on $857K
Bars span one standard deviation either side of the expected return (about two years in three). A 2008-style year on the current mix would cost roughly $300K; on the target mix, under $100K.
Equity sector tilt
Your equity sleeve vs. the broad market index, percentage points
Most overweight Health Care, most underweight Communication Services. Illustrative magnitudes consistent with the Morningstar sector report.
Concentrated positions
Any single stock above 5% of the portfolio is flagged
| Ticker | Value | Weight | Trim to 5% |
|---|---|---|---|
| AMGN | $98,175 | 11.3% | Sell $54,824 |
| MSFT | $87,209 | 10.1% | Sell $43,858 |
Both positions sit inside IRAs, so trimming them creates no capital gains tax.
Equity style
Your equity sleeve vs. the broad market index (Morningstar)
Most overweight Large Value, most underweight Mid Blend. The target allocation rebalances the large-cap sleeve to an even value/growth split.
Rebalancing trades to reach the target
| Asset class | Current | Target | Action |
|---|---|---|---|
| U.S. Equities | 69.6% | 13.6% | Sell $485,530 |
| International Equities | 2.3% | 5.0% | Buy $23,409 |
| Emerging Markets | 0.0% | 1.0% | Buy $8,670 |
| Real Estate | 0.0% | 0.5% | Buy $4,335 |
| U.S. Bonds | 23.8% | 49.4% | Buy $221,957 |
| International Bonds | 0.0% | 5.5% | Buy $47,686 |
| Cash | 4.3% | 25.0% | Buy $179,473 |
Annual cash flow
Where the money comes from and where it goes, each year from 2024 through the end of the plan in 2064. Paychecks carry the first 17 years, brokerage withdrawals bridge the gap between the last paycheck and the first Social Security check at 70, and Social Security plus Roth withdrawals fund the rest with no taxable income from the IRA.
Inflows vs. outflows
Stacked income sources with total spending as the line
Year by year
41 plan years, future dollars
| Year | Ages | Earned income | Social Security | Total inflows | Living expenses | Education | Savings | Roth conversion | Taxes | Total outflows | Portfolio withdrawal | Net flow |
|---|
Modeled from the plan's stated inputs: $260K household income, 2.5% inflation, retirement at 67, Social Security at 70, $7,000 a month of retirement spending, the Roth conversion schedule above and the plan's tax assumptions. The full RightCapital engagement produces this table directly from the projection engine.
Tax strategy
Taxes are the largest expense most retirees will ever pay, and the only one we can plan around decades in advance. This plan converts $1.6 million from tax-deferred to Roth over 17 years, every dollar at or below the 24% bracket, and empties the IRA before required distributions start.
Taxable, then tax-deferred, then tax-free
Spend the brokerage account first, let the Roth compound untouched the longest.
Fill up to the top of the 24% bracket each year
Pay tax now at a known rate instead of later at an unknown one.
0% on the ending portfolio
Heirs inherit $13.9M of Roth assets with no income tax owed.
Watch the money move tax buckets
Drag the year to follow the conversion schedule
The bracket we fill
2024 federal brackets, married filing jointly
Orange is the conversion sitting on top of ordinary income in the selected year. In working years the bracket fills quickly, so conversions stay around $108K. Once wages stop at 67, there is room to convert the remaining IRA at lower rates until it is gone at 69.
The conversion timeline
$1.63M moved from IRA to Roth across three phases, each year 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 75
Left alone, the IRAs grow to roughly $1.7M by 75 and force six-figure taxable distributions every year, on top of Social Security, for the rest of the plan. The dotted line is modeled from the plan's return assumptions.
Tax paid now vs. tax avoided later
Why writing a check to the IRS today is the best investment in this plan
Tax on conversions assumes a blended 24% rate on $1.63M converted, paid from the brokerage account so every converted dollar keeps compounding tax free for up to 40 years.
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 $260,000 of wages, the brokerage account's dividends, and the first $165,422 Roth conversion sized to land just under the top of the 24% bracket. Every figure below is illustrative.
Form 1040 walk
From gross income to the balance due
| Income | ||
| 1a | Wages (after $18,700 of 401(k) deferrals) | 241,300 |
| 2b | Taxable interest | 800 |
| 3a | Qualified dividends | 5,200 |
| 4b | Taxable IRA distributions (Roth conversion) | 165,422 |
| 9 | Total income | 412,722 |
| 11 | Adjusted gross income | 412,722 |
| Deductions | ||
| 12 | Standard deduction (beats $15,000 itemized) | (29,200) |
| 15 | Taxable income | 383,522 |
| Tax and credits | ||
| 16 | Tax on ordinary income ($378,322) | 76,882 |
| 16 | Tax on qualified dividends at 15% | 780 |
| 19 | Child tax credit (reduced $650 by AGI over $400K) | (1,350) |
| 23 | Net investment income tax (3.8% on $6,000) | 228 |
| 23 | Additional Medicare tax (0.9% on wages over $250K) | 90 |
| 24 | Total tax | 76,630 |
| Payments | ||
| 25 | Federal withholding | (52,000) |
| 26 | Estimated payments for the conversion | (24,000) |
| 37 | Amount you owe | $630 |
Estimated payments were set in April so the conversion created no underpayment penalty. Virginia income tax of roughly $22,400 is paid separately through withholding and estimates.
Where the income came from
$412,722 of adjusted gross income
Tax owed in each bracket
Ordinary income stacked through the brackets, 2024 married filing jointly
The 24% bracket alone carries $42,545 of the bill because the conversion fills it almost exactly. $378 of room remained before the 32% bracket.
Where every dollar went
$425,200 of gross income, including the conversion
| Tax | Amount | Share of gross |
|---|---|---|
| Federal income tax | $76,630 | 18.0% |
| Virginia income tax | $22,400 | 5.3% |
| Social Security tax (6.2%, capped) | $14,793 | 3.5% |
| Medicare tax (1.45%) | $3,770 | 0.9% |
| Total taxes | $117,593 | 27.6% |
The conversion, in isolation
Same return with and without the $165,422 conversion
What the return tells us
True cost of this year's conversion. 24% on the converted amount plus $650 of child tax credit lost to the AGI phaseout, an effective 24.4%. Paid from the brokerage account, so every converted dollar stays invested.
Raise 401(k) deferrals by $13,000. Pre-Retiree can defer up to $30,500 with the catch-up. That pulls AGI under $400K, restores the full child tax credit and lets us convert the same $13,000 more next year at no extra cost.
Standard deduction wins. Mortgage interest of $5,000 plus the $10,000 SALT cap is far below $29,200. Bunching two years of charitable gifts into a donor advised fund would be the only way to itemize.
Net investment income tax is small for now. It grows as the brokerage account does, one more reason the withdrawal order spends taxable assets first in retirement.
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 a paycheck disappears, what Kelly's education costs, and how the two debts get paid.
Life insurance need
If Pre-Retiree passes next year
Amanda's survivor analysis shows no gap; the plan stays fully funded if she passes first.
Kelly's education
College in 2029, graduate school through 2034
$8,000 a year into the 529 until 2033, then the brokerage account covers the balance.
Debt
$135,000 across two loans
| Loan | Rate | Balance | Payment |
|---|---|---|---|
| Mortgage | 4% | $125,000 | $2,000 |
| Credit card | 15% | $10,000 | $500 |
At 4% the mortgage is cheaper than expected portfolio returns, so we keep paying on schedule. The card goes first.
Estate plan
Documents are in place. Because the entire portfolio ends up in Roth accounts, Kelly inherits $14.75 million with no income tax and no federal estate tax under current law.
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
Federal estate tax is zero because the combined estate stays under the exemption and all of it passes to a spouse first. Titling the brokerage account in the living trust would remove most of the probate cost.
Beneficiary map
Who each account goes to, and what we still need on file
| Account | Balance | Primary | Contingent |
|---|---|---|---|
| Pre-Retiree's 401(k) | $160,000 | Amanda | Confirm |
| Pre-Retiree's IRA | $99,350 | Amanda | Confirm |
| Amanda's 401(k) | $155,000 | Pre-Retiree | Confirm |
| Amanda's IRA | $190,668 | Pre-Retiree | Confirm |
| Kelly's 529 | $32,000 | Kelly (beneficiary) | Successor owner |
| Brokerage (joint) | $220,000 | Survivor | Add TOD or trust |
| Group life insurance | $150,000 | Amanda | Confirm |
Document checklist
Reviewed at the plan date
Why the inheritance is tax free
The estate and the Roth strategy are the same strategy
Kelly must empty an inherited IRA within ten years. If the money were still tax deferred, that would mean roughly $1.4M a year of taxable income on top of her own salary. An inherited Roth is withdrawn on the same schedule with no tax at all.
Your action plan
Begin Roth conversions this year
Convert $165,422 from the IRAs, filling the 24% bracket. Pay the tax from the brokerage account, never from the IRA.
Trim AMGN and MSFT inside the IRAs
Sell $98,682 across the two positions to bring each under 5%. No capital gains tax inside the IRA.
Pay off the 15% card and rebuild cash
Redirect the $500 card payment into savings once cleared. Bring liquidity to the $31,125 target.
Add $100,000 of term life on Pre-Retiree
A 15-year term policy covers the survivor income shortfall through Kelly's education and the mortgage payoff.
Shift the retirement allocation to Balanced at 67
Glide from 72/28 toward the preservation target as paychecks end, and file for Social Security at 70.
See what this looks like with your numbers.
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James M. Simon, CPA, CFP® ·