You’ve spent your entire life saving. But when the time comes to retire, the question shifts: How do you actually use what you’ve built? That’s the question Tommy and Monica are asking—with $4 million saved and retirement in sight, they want to know how to turn a strong portfolio into a meaningful lifestyle.
This video walks through their financial plan—not just the numbers, but the tradeoffs, strategies, and mindset shifts that create a confident retirement.
Snapshot: Where They Stand Today
Tommy (61) and Monica (62) have accumulated $4 million across joint investment accounts, 401(k)s, IRAs, and a Roth IRA. They own their home (valued at $925,000) with a remaining mortgage and $7,000 in annual property taxes. While their savings are strong, they’ve never truly mapped out what retirement could look like—and more importantly, what their money is for.
Income Picture: Where the Money Will Come From
Tommy earns $182,000/year in tech, and Monica earns $215,000/year as an attorney. Bonuses aren’t guaranteed, so they’re not included in projections.
At age 70, they plan to take Social Security:
- Tommy: $4,960/month (after delayed retirement credits)
- Monica: $4,836/month
They also expect a $600,000 inheritance in about five years from the sale of Monica’s parents’ home.
These income sources play a key role in offsetting withdrawals from their portfolio, especially once fixed income streams like Social Security kick in. Planning for the timing of those inflows is crucial.
Stress-Testing the Plan
We modeled their retirement using real cash flow projections to answer two core questions:
- Can they maintain their desired lifestyle?
- What pressure will that put on their portfolio?
Early Retirement Pressure
If they retire at 65, there’s a five-year gap before Social Security begins. During that window, the entire $400,000/year (including living, travel, taxes, etc.) must come from their portfolio.
Fortunately, by the time they retire, their $4M portfolio—assuming reasonable average growth—could grow to $5.4M. With withdrawals of $400K in the early years, then a drop to ~3% withdrawal rate once Social Security kicks in, they’re in a strong position.
Even “failure” in a Monte Carlo simulation still leaves them with:
- A paid-off home
- Over $150,000/year in Social Security
That’s a solid fallback scenario. Of course, these projections use long-term averages and hypothetical assumptions that are not guaranteed.
Exploring Their Options
Tommy and Monica were surprised—and relieved—to see they might not need to work until 65. What if they retired sooner? What if they traveled more? What if they spent less or more per month?
We ran scenarios:
- Retire earlier: It lowers the portfolio, but doesn’t break the plan
- Reduce spending by $1,000/month: Pushes their probability of success back above 90%
- Increase travel budget: Adds joy, without dramatically harming long-term security
One of the most impactful shifts was simply adjusting their spending expectations. Retirement income needs aren’t fixed—they often follow a curve, decreasing in later years. This is known as the “retirement smile”: higher spending early, tapering off with age, before potentially rising again due to healthcare.
They also learned how coordinating their withdrawal strategy with Social Security timing—delaying until age 70—reduced pressure on their portfolio and improved long-term sustainability, and comes with confidence. Not because every detail is perfect, but because they can see the levers and adjust them.
Retirement Spending Strategy: Not Just One Number
Tommy and Monica initially fixated on a single monthly number—$12,000 after-tax. But planning goes deeper than that. We helped them break their expenses into:
- Core essentials (housing, groceries, insurance)
- Discretionary wants (travel, dining, entertainment)
- One-time needs (cars, home renovations, healthcare)
This framework let them see which expenses were flexible if markets underperformed or life changed unexpectedly. It also helped them make proactive decisions around how and when to tap their investment accounts
The Real Point
This isn’t just about $4 million. It’s about how you align your money with your life. When you run the numbers—not just on income, but on expenses, taxes, timing, and goals—you begin to see your options more clearly.
And when you see your options, you start to live more intentionally.
At Root, we believe retirement planning isn’t about guessing. It’s about clarity, flexibility, and designing a life that fits you, not the other way around.
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.
Root Financial Partners, LLC provides tax planning as part of its financial planning services. However, we do not provide tax preparation services, represent clients before the IRS, or offer legal advice. Clients should consult their CPA or attorney before implementing any tax or legal strategies discussed. Nothing in this content should be interpreted as a recommendation to take a specific tax position or legal action.
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.
This content may include discussions around advanced financial planning strategies such as Roth conversions, backdoor Roth IRAs, tax loss harvesting, charitable giving, estate planning tactics, or Social Security claiming strategies. These concepts are general in nature and are not personalized advice. Suitability for these strategies depends on your individual tax situation, income, age, investment profile, estate plan, and other factors. Actions related to these strategies may trigger tax consequences or legal implications. Always consult with your CPA or attorney to assess suitability based on your personal financial circumstances.
This content may also 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.
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.