One of the biggest questions people face as they approach retirement isn’t just can I retire?—it’s how much can I safely spend once I do? That’s the question Jeffrey and Cindy, a recently retired couple, brought to the table. With a $3 million portfolio and Social Security benefits around the corner, they were well-positioned for a secure retirement—but they didn’t want to settle for just “secure.” They wanted to be intentional. Could they spend more? Travel more? Enjoy more?
Let’s walk through their plan to see how we approached these questions and how the same principles can apply no matter where you are in your retirement journey—whether you’ve saved $300,000 or $30 million.
Meet Jeffrey and Cindy
Jeffrey (66) and Cindy (64) are newly retired and ready to enjoy their next chapter. Their portfolio totals around $3 million, spread across investment accounts, an IRA, and a 401(k). They also own their home, but since it’s an illiquid asset and they intend to stay put, it’s not part of the spending conversation.
Their goals are straightforward:
- $7,000/month (after taxes) for core living expenses
- $30,000/year for travel—for the first 12 years of retirement
- Healthcare costs: $8,000 pre-Medicare for Cindy, then ongoing Medicare premiums plus $4,600/year in out-of-pocket costs for both
Jeffrey’s Social Security benefit at full retirement age is $3,800/month. Cindy’s is $3,850/month, but since she’s claiming early at 64, she’ll receive a reduced amount.
With this foundation, they want to know: Can we really spend this much—and possibly more—without running out of money?
It Starts With Cash Flow
Regardless of your net worth, retirement planning begins with understanding your cash flows. How much income will you receive? What are your expenses, including taxes? How much needs to come from your portfolio?
We projected out Jeffrey and Cindy’s financial life through age 90, factoring in:
- Social Security income
- Core expenses and travel
- Healthcare
- Taxes based on where income is sourced (IRA withdrawals, brokerage, etc.)
This gives us a complete picture of net flows—the actual amount they need to pull from their portfolio each year to fill the gap between income and expenses.
Projecting Portfolio Growth and Withdrawals
Assuming a 6.5% annual return (a reasonable but not guaranteed estimate), we mapped out what happens to their portfolio over time.
The result? Even after covering all expenses—including travel, healthcare, and taxes—Jeffrey and Cindy’s portfolio continues to grow. By age 90, it could reach $8.5 million.
But don’t let that number mislead you. That’s in future dollars, not adjusted for inflation. In today’s dollars, their portfolio grows modestly—from $3 million to around $4 million in real terms. That’s a good sign: they’re maintaining their purchasing power and living the retirement they envisioned.
Their plan has a 100% probability of success—meaning that in every simulation we ran, they didn’t run out of money.
But Wait—Is a 100% Success Rate Too Conservative?
It might seem counterintuitive, but a 100% success rate isn’t always a good thing.
Why? Because it could mean you’re under-spending. If you’re consistently withdrawing well below what your portfolio can sustain, you might be unintentionally leaving experiences—and impact—on the table.
That’s exactly what we saw with Jeffrey and Cindy. Their initial portfolio withdrawals were about 3.6%, then quickly dropped to 2.2–2.4% as Jeffrey’s full Social Security benefit kicked in. These are very conservative withdrawal rates, far below the typical 4–5.5% range that can support a 30-year retirement.
The Power of Optionality
Here’s where retirement planning gets exciting.
With this solid foundation, Jeffrey and Cindy now have options:
- Increase monthly spending from $7,000 to $10,000? Still very doable.
- Take more elaborate trips—maybe bring friends or family along? No problem.
- Start giving more to charity or gifting to kids now instead of waiting? Absolutely.
Running these “what if” scenarios showed that even with higher spending, they could maintain a high probability of success. Yes, the projected portfolio value would be lower in the end—but if they’re using that money to create meaningful experiences or invest in relationships, that’s a tradeoff worth making.
Or Maybe You Don’t Need to Spend More
Not everyone wants to spend more just because they can—and that’s perfectly fine.
The key is to be intentional. If your goal is to leave a legacy—whether to kids, grandkids, or causes you care about—then spending less now might align beautifully with your values. But don’t end up with a $10 million estate accidentally simply because you underestimated what you could afford to enjoy.
The Bottom Line
Jeffrey and Cindy’s story is a great reminder that retirement isn’t just about numbers—it’s about priorities. The goal isn’t to hoard every dollar just to ensure a mathematically perfect plan. It’s to find the sweet spot where your money supports your life—now and later.
So, whether you’re already retired or still planning, ask yourself:
- Are you spending enough to truly enjoy the life you’ve saved for?
- Have you explored all your options—retiring earlier, traveling more, giving more?
- Does your plan reflect your values, not just your assets?
Because when done right, financial planning doesn’t just improve your finances—it empowers better life decisions.
The information presented is for educational and informational purposes only and should not be construed as personalized investment or financial advice. The content discusses general retirement planning strategies and is not intended to recommend any specific course of action for any individual.
Social Security claiming strategies involve a number of variables, including life expectancy, portfolio returns, tax considerations, and personal circumstances. Decisions regarding Social Security benefits should be made in consultation with your financial advisor, taking into account your full financial picture.
Examples provided are hypothetical and for illustrative purposes only. They do not reflect any specific client situation and should not be relied upon for investment decision-making. Past performance of investments is not indicative of future results. All investing involves risk, including the potential loss of principal.
This content may include hypothetical or forward-looking performance examples, including Monte Carlo simulations. These are intended to illustrate concepts and do not reflect actual investment results or guaranteed outcomes.
Assumptions used in simulations may not reflect real-world market conditions or client behavior. Actual results may vary significantly.
This content is for illustrative and educational purposes only and does not constitute a recommendation or personalized financial advice.