Retirement income planning coordinates withdrawal order, Social Security timing, Roth conversions, tax bracket management, and Medicare premiums into one income strategy, rather than five separate decisions.
Retirement income planning is a different discipline than the one that built the portfolio. Growing a 401(k) rewards a good asset allocation and patience. Spending it down well rewards sequencing: which account funds this year’s spending, what that does to next year’s tax bracket, and how a Roth conversion made today changes a required minimum distribution eight years from now. In the words of Robert Boeck: building wealth and distributing it are two different jobs.
Why this matters two to eight years from retirement
This window is where the leverage sits. Your last paycheck stops or is about to stop. RMDs have not started, since the IRS does not require withdrawals from traditional accounts until 73, or 75 if you were born in 1960 or later. Social Security has not been claimed. Every one of those decisions is still open, and each one changes the others. Claim Social Security early and you lock in less room for Roth conversions later. Convert too much in one year and you push yourself into an IRMAA surcharge two years out. A plan has to hold all of it at once, which is why solving each one in isolation tends to leave money on the table in the other four.
What this looks like for one couple
Consider a couple, 59 and 61, with $1.4M in traditional 401(k) and IRA accounts, $400K in a taxable brokerage account, and $150K in Roth. Both were born after 1959, so their RMDs start at 75. Left alone, their pre-tax balance keeps compounding until then, when the IRS formula forces a distribution based on that balance and a life expectancy factor. The larger the balance gets, the larger that forced number becomes. A coordinated plan treats the years between their last paychecks and 75 as a withdrawal and conversion window: draw some spending from the brokerage account, convert part of the 401(k) to Roth at a bracket that fits this year, and leave Social Security to grow. These figures are illustrative. A full analysis of your own balances and brackets, not a rule of thumb, is what a plan produces.
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If the decisions on this page are ahead of you, the two of you can work through them with Robert Boeck before any of them becomes permanent.
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