A strong plan with a great likelihood of meeting your needs. Across decades of real market history, including the 1929 crash, the 1970s, and 2008 it came through in 105 of 112 cases, typically leaving about $2.3M at the end. The notes below are about keeping a strong plan strong.
What this means for you: Your guaranteed income, Social Security plus any pensions, covers about $45k/yr. Your savings fund the remaining $155k/yr of your $200,000/yr target, and that gap is what your plan's outcome really hinges on. Keeping your spending near that level is the main lever in your control; everything below is about keeping a strong plan strong.
The plan we tested
These are the assumptions behind every number in this report, worth a quick check.
You & spouse today60 & 60
Retirement age60 & 60
Yearly spending$200,000
Savings today$2,280,000
TaxesMFJ · state: California CA
Cash cushion0.5 yrs
Typical ending savings$2.3M
How we know
Three ways of looking at your plan, each answering a different question.
Could it survive bad markets?
94%
of tested market histories funded your retirement to the end. This is where the success rate comes from, not a single guess about the future.
What's a typical result?
$2.3M
left over in a middle-of-the-road case. Even in a poor market you'd likely have money remaining ($0–$7.6M).
What are you starting with?
$2.3M
across your accounts today. How you draw from them (explained below) is what makes the plan last.
The range of what you could have left, year by year. The dark line is the median (typical) path; the dark band spans the 25th–75th percentile of outcomes and the lighter band the 5th–95th.
Median (typical) outcome
Dark band: 25th–75th percentile
Light band: 5th–95th percentile
What you own today
Your starting savings, grouped by how each type of account is taxed.
Total · $2,280,000
Regular savings (taxable)$400,000
401(k)/IRA (taxed when withdrawn)$1,400,000
Roth (tax-free)$400,000
Cash$80,000
The large majority, about 61%, of your savings sits in tax-deferred 401(k)/IRA accounts, where every dollar is taxed as you take it out. That is exactly why the order you spend from your accounts, and any Roth conversions, are such valuable moves for you.
Taxable accounts are generally the most flexible money you own, with no withdrawal rules or early-withdrawal penalties, so they’re usually the first place to draw from.
401(k)/IRA (tax-deferred) accounts are taxed as ordinary income when you withdraw them, and eventually require minimum distributions, which is why drawing them down steadily in low-tax years matters.
Roth accounts are usually the most valuable dollars later in retirement, because qualified withdrawals are tax-free, so they’re best left to grow and spent last.
How your savings get used over time
Each colored band is one type of account. Reading left to right, you can see where your income comes from as the years pass: taxable savings are generally spent first, while your tax-free Roth is preserved for last. That order is what keeps your lifetime taxes low.
Regular savings (taxable)401(k)/IRA (taxed when withdrawn)Roth (tax-free)Cash
What to do next
Your next three years: where the money comes from
Here’s the concrete plan for funding your spending over the next three years. It draws from your accounts in the order that keeps your lifetime taxes low, and we revisit it each year as markets and balances change.
Year
Age
Social Security & pensions
From taxable
From tax-deferred
From Roth
2026
60
—
$221,600
—
—
2027
61
—
$188,034
$33,933
—
2028
62
$26,400
—
$133,000
$63,092
Your biggest opportunities to strengthen your plan
These aren’t rules of thumb. For each decision below we tested the alternatives against decades of market history and kept the one that leaves you best off. The “what we tested” box under each one shows the runner-up, so you can see why it won.
Spend your accounts in the right order
What to do Spend taxable assets first, then tax-deferred, preserving Roth for later retirement and market downturns.
Why it helps you Spending the most-taxed money first lets tax-free Roth compound the longest and draws the tax-deferred balance down gradually while the household is in the lowest brackets. In a downturn the plan shifts to cash and Roth, because a tax-free dollar requires selling only one dollar of assets: a taxable or tax-deferred dollar must also cover its tax, forcing larger sales at depressed prices.
Why we recommend it
Taxable income stays within the 12% bracket or below through age 74
40% of withdrawals are tax-free
Projected lifetime tax $371k (10.6% of lifetime income)
About $437k higher median ending portfolio and +2 pts historical success vs a naive tax-deferred-first draw order (across historical sequences)
These figures add up over your full retirement and are shown in today's dollars, not immediate or guaranteed amounts.
Worth keeping in mind: Review expected large purchases, liquidity needs, charitable giving, concentrated positions, and estate objectives before applying the default sequence.
Keep a cash cushion for downturns
What to do Hold about 1 year of spending in cash; rebuild it in strong years and draw it down later in retirement.
Why it helps you A cash reserve lets the plan spend from cash in a downturn instead of selling depressed investments; here that keeps more of market history solvent, so the size with the highest historical funding success wins.
What we tested · cash reserve
Cash held
Plans that worked
Money left in a bad market
0 yrs
89%
$0
0.5 yrs (≈$100k) your plan today
94%
$0
1 yr (≈$200k) recommended
96%
$22k
1.5 yrs (≈$300k)
95%
$10k
2 yrs (≈$400k)
94%
$0
We tested every reserve from none up to two years of spending. The “money left in a bad market” column is roughly what you’d have left if markets came in worse than about 9 out of 10 histories, the kind of downturn a cash reserve is meant to cushion. We recommend 1 year: the amount that protects you best in those bad markets without dragging down your growth in normal ones.
Why we recommend it
Your plan currently holds 0.5 years (Auto) → 94% historical funding success; the optimal 1 year reaches 96% (+3 pts)
Tested 0 to 2 years of spending: 1 year funds retirement in the largest share of historical market sequences (96%)
That is about $200k held in cash
These figures add up over your full retirement and are shown in today's dollars, not immediate or guaranteed amounts.
Worth keeping in mind: Confirm against current cash yields, near-term liquidity needs, and the client's tolerance for market swings; a larger reserve can be justified for peace of mind even at some cost to growth.
Things we checked: no change needed
These came up in the analysis. We tested them and your current setup is already the right call.
Roth conversions: not recommended for this plan
On an after-tax basis, converting reduces ending wealth by about $21k under these assumptions. Your tax-deferred dollars are already coming out in low brackets, so paying conversion tax now buys no future saving; it just moves the tax forward.
What we tested · Roth conversions
Approach
After-tax leftover
vs. best
Do nothing (no conversions) recommended
$2.0M
—
Convert to Roth
$2.0M
−$21k
We compared converting to Roth against doing nothing, measured on what you keep after the taxes owed on each account. The recommended approach is the one that leaves you the most.
Other moving parts in your plan
A few features specific to your situation that shape the numbers above.
Guaranteed annuity income
Your plan includes about $30k/yr of guaranteed annuity income for life starting at age 67. That arrives no matter how markets behave, so it steadies your plan and lowers how much you have to draw from savings. It includes a 50% survivor benefit, about $15k/yr continues to the surviving spouse.
Required withdrawals (RMDs)
Starting around age 75, the IRS requires you to take a minimum amount out of your tax-deferred accounts each year and grow to roughly $53k/yr at their peak. Those withdrawals are taxable, which is why drawing those accounts down earlier, and any Roth conversions, can keep your lifetime taxes lower.
When to check back in
Your plan is on track today. Revisit it if any of these happen, roughly in order of impact.
1Your spending settles well above $200,000/yr for the long haul.
2A major change in your health or how long you expect to live.
3A big change in tax law: brackets, required-withdrawal age, or Medicare surcharges.
4A large inheritance or windfall.
5A long market slump early in your retirement.
Personal decisions the model can't answer
Personal factors the numbers can't see
This plan can work out the smartest financial moves: the taxes, the timing, and the order you draw from. How you want to live is yours to decide. These choices are personal, and only you can weigh them:
Whether $200,000/yr truly reflects the life you want.
Your health and how long people in your family tend to live, which can change when it's best to start Social Security.
Any large planned purchases, gifts to family, or charitable giving.
What you'd like to leave behind, and to whom.
How the plan changes for whoever outlives the other, worth thinking through carefully.
This report is an educational projection based on the assumptions shown and today's tax law, not a guarantee, and not tax or investment advice. Real markets, taxes, and life will differ from any projection. For complicated tax questions a professional can help, but the plan itself is yours to run. Figures are shown in today's dollars.
Generated by ModelRetirement · modelretirement.com