Retirement Modeling: Spending, Income and Taxes Working Together
Most initial conversations with pre-retirees start with one of two questions.
The first: When can I retire if I want to spend a certain amount each year?
The second: If I retire at a specific date, how much can I actually spend?
Both are almost always followed by a third:
What should I be doing now to prepare and maximize my position before I get there?
That third question is where our Pre-Retiree Financial Planning Guide picks up.
For retirees, the questions look different. Am I drawing income in a way that is sustainable and tax-efficient? Am I leaving money on the table? Are there things I should be doing or considering that I have not even thought about? Those questions lead to our Retiree Financial Planning Guide.
Ask a CFP® – Foundational Questions Edition: What Is Tax Diversification (and How Can It Help)?
Tax diversification is the strategy of spreading your savings across Traditional, Roth, and taxable accounts so you can better control how and when you pay taxes in retirement. By giving yourself multiple “tax buckets” to draw from, you can smooth out taxes over your lifetime, avoid costly surprises like RMD spikes or IRMAA surcharges, and create more flexibility for strategic withdrawals or Roth conversions. It’s not about predicting future tax law — it’s about preparing for it.