Case 2. An Affluent Couple With A $2.25 Million Portfolio
In the second case, we again compare the different approaches. Compared to the conventional wisdom withdrawal strategy with account-level rebalancing, the multi-phase withdrawal strategy added $804,221 in after-tax alpha. By adding the household-level rebalancing with an asset-location strategy, we garnered another $256,886 of alpha, for a total after-tax alpha of $1,061,107.

Figure 2 shows the values added compared to the other withdrawal strategies. For example, compared with the single-phase withdrawal strategy to a single tax bracket, the multi-phase withdrawal strategy added $94,645 of after-tax alpha. By adding the household-level rebalancing with an asset-location strategy, we garnered another $256,886 of alpha, for total after-tax alpha of $351,531.

As we did in the first case, we found a lot more value by strategically changing the withdrawal sequence over time. We will significantly underperform if we apply a single threshold like an average tax rate or tax bracket to all retirement years. We consider this to be a “set it and forget it” approach for managing the decumulation years. In contrast, we consider a three-phase withdrawal strategy. In phase one, the household makes partial Roth conversions to below the second modified adjusted gross income (MAGI) threshold. In phase two, which begins in 2026, the clients withdraw funds from multiple accounts so that their average tax rate does not exceed 12%. In the third phase, which begins in 2035, they withdraw funds from their tax-deferred accounts to the top of the 10% bracket and then make tax-free Roth account withdrawals to meet the rest of their spending needs. You can see that the optimal withdrawal level approach adds hundreds of thousands more in after-tax value. This process is personalized and easy to explain as key changes in the withdrawal sequence align to key events in the client’s life.

In these two cases, the multi-phase withdrawal strategy added between $804,221 and $1,036,323 more in after-tax alpha to the clients’ accounts than the conventional wisdom withdrawal strategy. Furthermore, adding the household-level rebalancing with an asset-location strategy generated another $256,886 to $479,037 in alpha. So, in sum, the framework we advocate would allow financial advisors to add between $1,061,107 and $1,515,360 more in after-tax value to these accounts than the withdrawal strategies recommended by the leading financial planning software like eMoney and Money Guide Pro.

Our goal is to empower advisors to model and compare different retirement income approaches.

All financial advisors should consider adding dynamic withdrawal strategies to their process when delivering planning advice to households with clients over the age of 50. is available to help advisors fill in the gaps. It allows advisors to address different capital markets and tax environments, modeling the impact of sequence-of-return risk, tax changes, and other important assumptions. Additionally, dynamic withdrawal strategies can be combined with annuity purchases and strategies such as income flooring and “buckets of money.”

Finally, the software provides a list of the top dynamic withdrawal strategies and highlights the added alpha advisors can realize for clients by making recommendations in three key areas: 1) smart Social Security claiming, 2) account and household rebalancing with asset location, and 3) a dynamic withdrawal strategy. The software evaluates more than a million strategies and allows you to more efficiently find and compare strategies that are best for your clients. Given that clients are concerned about maximizing the after-tax value of their savings and making it last as long as possible, financial advisors will benefit from adding more detailed tools and resources that empower them to deliver superior specialized advice to clients in or near retirement.

For more case and strategy details, go to and

William Reichenstein and William Meyer are co-authors of the book Social Security Strategies: How to Optimize Retirement Benefits, 3rd Ed. Meyer is CEO of Social Security Solutions and managing principal of Retiree Inc., which developed Reichenstein, PhD, CFA, is head of research for Social Security Solutions and Retiree, Inc. and is a Professor Emeritus at Baylor University.

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