Charting the 5-Year Path to Retirement
Case Study
The Clients: David & Susan
Ages: 56 & 57
Professions: Engineer and a Nurse.
The Situation
David and Susan had been diligent savers their entire careers, contributing consistently to their 401(k)s and various brokerage accounts. With their target retirement date about five years away, they felt a growing sense of anxiety. They thought they had enough, but their investments were scattered across multiple accounts with no single, cohesive strategy. They were worried about “doing it wrong” and making an irreversible mistake.
Their Key Questions
Are we really on track to retire in five years, or is it just a guess?
How do we turn all these different accounts into one reliable ‘paycheck’ that lasts for the rest of our lives?
We have a lot of money in traditional 401(k)s. Are we going to face a ‘tax bomb’ in retirement? Is there anything we can do about it now?
When should each of us claim Social Security to get the most benefit?
Our Process & Solution
Retirement Projection
We first built a comprehensive financial plan that aggregated all their accounts. We ran detailed projections and stress tests to confirm that, yes, they were on track to retire comfortably at 62. This immediately replaced their anxiety with a clear, achievable date.
Investment Alignment
We consolidated their scattered investments into a single, globally diversified portfolio based on our evidence-based philosophy. This simplified their financial life, reduced unnecessary costs, and aligned their investments directly with their retirement goals.
Proactive Tax Planning
We identified that their large traditional IRA and 401(k) balances would cause significant Required Minimum Distributions (RMDs) later in life, pushing them into higher tax brackets. We developed a Roth conversion strategy to “fill up” the lower tax brackets before they started RMD’s, significantly lowering their lifetime tax bill.
Social Security Optimization
We created an optimized claiming strategy, showing how Susan (the higher earner) delaying her benefit would significantly increase their total lifetime payout.
The Outcome
David and Susan now have a clear, actionable checklist for their last five working years. They know exactly what their retirement income will look like, where it will come from, and are confident that they are on the most tax-efficient path forward.