Pre-Retiree

Suzanne & David

Suzanne & David are 60, plan to retire at 63. Savings split between 401(k)s, IRAs, taxable brokerage account and a small Roth.

Goal

Suzanne and David wanted a plan to organize siloed finances and create a clear path to retirement with lower lifetime taxes.

They were especially focused on (1) comprehensive financial planning, (2) proactive tax planning (Roth conversions, future RMDs, and Medicare IRMAA awareness), and (3) coordinated estate planning—ideally with a financial planner who could quarterback the process.

If she could find someone to partner with her in the process of organizing, managing, and determining a course of action for her finances, she would have more peace of mind.

Challenges

  • Limited time and bandwidth due to work and family.

  • Accounts and investments scattered across different institutions, making it hard to see the full picture and next steps.

  • Uncertainty about funding college for their children while staying on track for retirement.

  • No clear plan for when and how to draw from taxable, IRA, and Roth accounts.

  • Concern about future Required Minimum Distributions (RMDs) at 73 and their tax impact.

  • Unsure about Social Security timing and how decisions affect taxes and lifetime income.

Approach

  • Consolidation & organization: Centralized accounts and created a single dashboard for holdings, cash flow, and goals.

  • Roth conversion plan (gap years, 63–67): Modeled annual conversions up to the top of a targeted tax bracket (e.g., 22%/24%) to shrink future RMDs and build a larger tax-free Roth bucket.

  • IRMAA awareness: Planned conversions and capital gains with the two-year Medicare IRMAA lookback in mind to manage premiums.

  • Withdrawal order: Prioritized taxable → IRA → Roth to control AGI, taxes, and portfolio longevity.

  • Asset location: Placed tax-inefficient income (bonds/REITs) in IRA/Roth; used more tax-efficient holdings in taxable.

  • 401(k) → IRA rollover & NUA check: Evaluated employer stock for potential NUA treatment; otherwise rolled to IRA to simplify conversions.

  • Social Security coordination: Modeled claiming at age 67 to extend the conversion window while stabilizing cash flow.

  • Estate coordination: Updated titling/beneficiaries and aligned the plan with their estate attorney.

Results

  • Projected lower first-year RMD at 73 versus a no-conversion baseline.

  • Reduced estimated lifetime taxes with steadier, after-tax retirement income.

  • Fewer projected years in higher IRMAA tiers due to paced conversions and withdrawal sequencing.

  • Potentially more tax-efficient assets passed to beneficiaries (larger Roth balances; taxable assets may receive a step-up in basis under current law).

  • Clear funding plan for college alongside retirement goals—and greater peace of mind from having an organized, actionable roadmap.

Overall, Suzanne feels like a weight has lifted off her shoulders. She has more peace of mind around her financial well-being.

 

Note: The above case study is hypothetical and does not involve an actual Milestone client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Milestone is engaged to provide investment advisory services.