Enjoying Retirement & Beyond
Michael and Jennifer's Case Study
How to better align retirement priorities with a spouse or partner
This case study illustrates a common planning situation faced by many families. The individuals described are hypothetical.
Case Study at a Glance
Clients: Michael and Jennifer
Key Question: “How can we spend confidently while managing taxes, longevity risk, and legacy goals?”
Many couples enter retirement not truly understanding how their partner will define success in retirement.
Outcome: A comprehensive financial model based on shared priorities.
Topics Discussed
Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge added to Medicare Part B and Part D premiums for high earners. Careful financial planning can help minimize the impact during retirement.
Executive Summary
Michael and Jennifer entered retirement with substantial savings after successful careers — Jennifer as a healthcare executive and Michael as an engineer.
Yet they had a question many retirees face:
How do we enjoy retirement while knowing we won’t run out of money?
Their concerns included:
- Sustainable retirement spending
- Managing taxes on large retirement accounts
- Coordinating Social Security timing
- Managing Medicare premiums
- Leaving a legacy for family and charity
Through our Master Planning process, we built a financial blueprint that integrates:
- Spending strategy
- Tax planning
- Roth conversion strategy
- Social Security timing
- Portfolio design
The result was a plan that allows them to spend confidently while maintaining long-term financial security.
The Situation
Michael (67) and Jennifer (65) had built significant retirement savings over decades of disciplined investing.
Jennifer’s leadership career in healthcare administration played a major role in building their wealth. Her income growth and retirement plan contributions created a large pool of tax-deferred assets.
While their financial foundation was strong, retirement created new decisions.
Key questions they faced
- How much can we safely spend each year?
- Should we delay Social Security?
- Should we convert money to Roth accounts?
- How do taxes affect our retirement income?
- Will Medicare premiums increase if we convert assets?
These are questions many retirees face when transitioning from saving to spending.
Clarifying What Matters Most
Before building projections or discussing investments, we begin by clarifying what clients want their money to accomplish.
With Michael and Jennifer we used two planning exercises:
- DOS Exercise (Dangers, Opportunities, Strengths)
- Success Vision Exercise
These conversations often reveal priorities that shape the entire financial plan.
The DOS Exercise
Each spouse completes the DOS exercise independently.
Jennifer
Dangers
- Outliving retirement savings
- Rising healthcare costs
- Paying unnecessary taxes on retirement accounts
Opportunities
- Travel after years of a demanding career
- Supporting healthcare charities
- Spending time with family
Strengths
- Strong saving habits
- Significant retirement assets
- Willingness to plan thoughtfully
Michael
Dangers
- Market volatility early in retirement
- Making large financial decisions without a clear framework
Opportunities
- More time with family
- Pursuing travel and hobbies
Strengths
- Diversified investments
- Disciplined spending habits
The Success Vision Exercise
We also ask clients to think about what success looks like across three time horizons:
- 3 years
- 10 years
- End of life
The question we ask is:
“If we were having this discussion three years from today, and you were looking back to today, what would need to have happened for you to feel happy about your progress?”
Jennifer’s reflections
Three years
- Feeling comfortable spending more freely
- Taking trips postponed during her career
- Having a clear tax strategy in place
She said:
“I want to feel like we’re actually enjoying the life we worked so hard to build.”
Michael’s reflections
Three years
- Knowing they had a clear spending framework
- Feeling confident market volatility would not derail the plan
He said:
“I want to know we have a plan that lets us enjoy retirement without constantly worrying.”
What We Discovered
The exercise helped Michael and Jennifer realize they were already closely aligned in their priorities.
Jennifer later reflected:
“Seeing our answers side by side helped us realize we were thinking about the same things.”
Michael added:
“The exercise gave us a framework for decisions instead of guessing.”
The planning priorities became clear:
- Establish a sustainable retirement spending level
- Reduce lifetime taxes through Roth conversion strategies
- Coordinate Social Security and tax planning
- Maintain flexibility for travel and family support
The Master Planning Process
Once priorities were defined, we built a comprehensive financial model.
We analyzed:
- Market volatility scenarios
- Longevity assumptions
- Tax law changes
- Healthcare cost projections
We also modeled how the following decisions interact:
- Social Security timing
- Roth conversions
- Tax brackets
- Medicare IRMAA thresholds
This allowed us to design a plan that balances spending confidence and tax efficiency.
Key Strategy: Delaying Social Security
After analyzing multiple scenarios, we recommended delaying Social Security benefits.
This increased:
- Guaranteed lifetime income
- Survivor benefits for the surviving spouse
It also created an important tax planning window.
Key Strategy: The Retirement Tax Window
The years between retirement and Required Minimum Distributions (RMDs) often represent a unique planning opportunity.
During this period:
- Employment income has stopped
- Social Security may not yet have started
- RMDs have not begun
This creates lower taxable income.
We used this window to implement strategic Roth conversions.
Key Strategy: Strategic Roth Conversions
Each year we evaluate how much of their traditional IRA can be converted into a Roth IRA while filling lower tax brackets.
Benefits include:
- Reducing future RMDs
- Increasing tax-free growth
- Improving tax flexibility later in retirement
- Potentially reducing lifetime taxes
Managing Medicare Premiums (IRMAA)
Roth conversions increase taxable income in the year they occur.
Higher income can trigger Income Related Monthly Adjustment Amount (IRMAA) surcharges that increase Medicare premiums.
Because of this we monitor:
- Federal tax brackets
- Capital gains exposure
- Medicare IRMAA thresholds
This allows us to implement Roth conversions while managing Medicare premium impacts.
Portfolio Design for Retirement
The investment portfolio was redesigned to support retirement spending.
The portfolio now balances:
- Income stability
- Long-term growth
- Tax efficiency
The Outcome
Michael and Jennifer left the planning process with something more valuable than projections. They gained clarity and confidence.
They now understand:
- How much they can spend
- How their tax strategy will evolve
- When Social Security fits into their plan
- How Roth conversions reduce long-term taxes
Most importantly, they know their plan will adapt over time.
Planning Insight
Many retirees have a temporary period of lower taxable income between retirement and the start of Social Security and RMDs.
This tax window often provides one of the most powerful opportunities for retirement tax planning.
Strategies like Roth conversions during this window can significantly improve tax efficiency over a lifetime.
Frequently Asked Questions
Should I do Roth conversions before Social Security?
Often yes. The period between retirement and the start of Social Security can create a window of lower taxable income, making Roth conversions more tax-efficient. Converting during this window can reduce future Required Minimum Distributions and potentially lower the overall tax burden across retirement. The right timing and amount depend on each family's full financial picture.
Do Roth conversions increase Medicare premiums?
They can. Roth conversions add to taxable income in the year they occur, which may trigger Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare Part B and Part D premiums. Because IRMAA is based on income from two years prior, careful planning around conversion amounts and timing can help manage or avoid the impact.
How do I know how much I can safely spend in retirement?
Sustainable spending depends on a combination of portfolio size, market assumptions, tax strategy, and longevity expectations. Rather than relying on a single number, dynamic retirement planning models multiple scenarios to determine a spending range that adapts as circumstances change. For Michael and Jennifer, this approach provided confidence that their income plan could support their goals over time.
Why is coordinating Social Security, taxes, and investments important?
These decisions are deeply interconnected. When Social Security begins affects taxable income. Taxable income affects which tax bracket applies to Roth conversions. Roth conversions affect future Required Minimum Distributions. And all of these factors influence Medicare premiums and long-term portfolio sustainability. A coordinated plan ensures each decision reinforces the others rather than creating unintended consequences.
Case Study Disclosure
The individuals and scenarios described in this case study are hypothetical and are intended solely for illustrative purposes. While the circumstances presented reflect situations commonly encountered by clients of Monument Group Wealth Advisors, they do not represent the experience of any specific client. Results will vary based on individual circumstances, market conditions, and other factors.
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