--- title: Sample Financial Plan - Renew Wealth Management description: An interactive sample financial plan from Renew Wealth Management showing retirement, tax, investment and estate analysis for a hypothetical household. author: Super User --- Interactive # Sample Financial Plan Independent RIA Comprehensive 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. Prepared by **James M. Simon, CPA, CFP®** Ages **52 / 50** Planning horizon **age 90** Analytics by **RightCapital** 0% Probability of success ### Proposed plan funds every year through age 90 in 96 of 100 simulated markets. 79% today→96% proposed Net worth $1.28M $1.42M assets, $135K debt Invested assets $857K Projected $2.51M at retirement Effective federal tax 18.7% On $260K household income Roth strategy value +$3.89M More after-tax wealth vs. doing nothing All figures are hypothetical and come from the sample household's inputs. Hover or tap any chart for detail. ### 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 Monthly spend $10,375 Target $31,125 $20,000 on hand$11,125 short 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 | | | ### Proposed plan Median ending portfolio $3,771,109 at age 90 Probability 96% Retire at 67 / 67 Monthly spend $7,000 Social Security Age 70 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 | Saved to retirement $430,600 Portfolio growth $1.70M At age 67 $2.51M ### 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. Expected return 8.8% → 4.8% Current vs. target, annualized Volatility 13.1% → 5.7% Standard deviation of annual returns Diversified 79% 21% sits in two stocks Equity / fixed 72 / 28 Target 20 / 80 at retirement ### Asset allocation Current: 72% equity / 28% fixed income Expected return 8.8% Volatility 13.1% Typical 1-yr range −4% to +22% ### 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 CurrentTarget ### 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 | ### Inflows vs. outflows Stacked income sources with total spending as the line Earned incomeSocial SecurityPortfolio withdrawalsTotal outflows (line) **Working years · 2024 to 2040**Salaries of $260K growing with inflation fund living costs, $8K a year to the 529, retirement savings and the tax on each Roth conversion. Amanda works two years past Pre-Retiree. **Bridge · 2041**No paychecks and no Social Security yet. The brokerage account pays the bills while the last IRA dollars finish converting at the lowest rates of the plan. **Retirement · 2042 to 2064**Two Social Security checks claimed at 70 cover more than half of spending. The remainder comes from the Roth, so taxable income stays low for life. ### 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. Withdrawal order ### Taxable, then tax-deferred, then tax-free Spend the brokerage account first, let the Roth compound untouched the longest. Roth conversions ### 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. Terminal tax rate ### 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 Plan year2024 · ages 52 / 50 Converted $165,422 Taxable $237,297 Tax deferred $518,130 Tax free $208,906 TaxableTax deferredTax free (Roth) ### 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. Total converted $1.63M IRA empty by Age 69 RMDs owed $0 ### The conversion timeline $1.63M moved from IRA to Roth across three phases, each year sized to the top of the 24% bracket **Phase 1 · 2024 to 2033 · $1.16M**Working years. Two large conversions while the 401(k)s are rolled in, then a steady $105K to $110K a year on top of salaries. **Phase 2 · 2034 to 2038 · $178K**Smaller conversions as the deferred balance shrinks and the brokerage account builds the bridge reserve. **Phase 3 · 2039 to 2040 · $22K**Paychecks stop at 67, the last IRA dollars convert at the lowest rates of the plan, and the IRA reads zero by age 69. ### With conversions vs. without Tax-deferred balance by age, and the required distributions it would force at 75 Tax deferred, proposed planTax deferred, no conversions (modeled)Forced RMDs with no conversions 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 ≈ $390K After-tax gain +$3.89M Payback 10 : 1 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 TaxableTax deferredTax freeConverted that year (line) ### Ending wealth, after tax Age 90, proposed strategy vs. pro rata withdrawals with no conversions Advantage +$3,885,379 Tax free share 100% vs 0% Hypothetical 2024 return ## 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. 24% Marginal federal rate The rate on the next dollar of income, and the ceiling for conversions 18.8% Effective federal rate $77,662 of income tax on $412,722 of adjusted gross income 27.6% All-in tax burden Federal, Virginia and payroll taxes as a share of $425,200 gross income ### 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 $40,351 **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. $3,770 **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. $14,200 **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. $228 **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. ### Life insurance need If Pre-Retiree passes next year Coverage gap $100,000 Income shortfall $215,342 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 Goal coverage 100% Total cost $281,687 $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. Monthly debt $2,500 Mortgage paid off 2030 ### 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 Funeral $26,851 Probate $46,354 Estate tax $0 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 Document Pre-Retiree Amanda Will ✓ Created ✓ Created Power of attorney ✓ Created ✓ Created Living will ✓ Created ✓ Created Health care proxy ✓ Created ✓ Created Beneficiary designations ✓ Reviewed ✓ Reviewed Living trust ✓ Created ✓ Created ### 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. 1 #### 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. +$3.89M lifetime after-tax wealth 2 #### 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. Diversification from 79% to 100% 3 #### Pay off the 15% card and rebuild cash Redirect the $500 card payment into savings once cleared. Bring liquidity to the $31,125 target. Closes the $11,125 emergency fund gap 4 #### 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. Eliminates the $215,342 survivor shortfall 5 #### 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. Probability of success 79% to 96% Your own plan ## See what this looks like with your numbers. A complimentary consultation with a fee-only fiduciary. We serve military veterans, federal employees, executives and retirees. James M. Simon, CPA, CFP® · This email address is being protected from spambots. You need JavaScript enabled to view it. · 703-737-2220 [Schedule a call](https://calendly.com/jsimon-jhe/complimentary-consultation)