Retirement Income Management
for
People Who Would Rather Not be Bothered.

Retirement income management can be distilled down to:

  1. Round up the two or three documents listed below,
  2. Fill in the form below
  3. Ask the Optimal Retirement Planner (ORP) to maximize amount of money available for spending this year.
ORP recommends how much to withdraw from each savings account to achieve its spending budget.
Retirement Income Sources
  1. Guaranteed income - (e.g. Social Security Income, pension income, annuities) Once you enter retirement you have little influence on the size and frequency of this income source.
  2. Savings withdrawals ( IRA, Roth IRA, the taxable account). The size and frequency of savings withdrawals are completely under your control.

info icon  Amounts are in thousands of dollars
(example: For $10,000 , enter 10 into the box)

Retiree Spouse
Current Age(s) ORP assumes you are retired or about to retire, otherwise you wouldn't be fooling with this.

Document #1: Your brokerage statement.
Tax-deferred How much do you have in your 401K, IRA and other tax-deferred savings? $ $
Roth IRA Savings $ $
Regular Savings and Brokerage Accounts. $

Document #2: Your Social Security Advisory Letter
Social Security Benefits Every year the Social Security Administration sends you a letter advising you of your benefits for the coming year. $ $

Document #3: Your pension statement
Pension statement advising you of your pension income. $ $

Although ORP computes a tax efficient plan for the rest of your retirement, the present year of retirement is where all your decisions are made: budgeting for the year and withdrawing savings to fund that budget. Next year's decisions need not be made and implemented until next year. Certainly decisions for 10 years out can be deferred. Retirement is implemented one year at a time. Every year the plan is recomputed to reflect the change in asset values and reduction in the term of the plan by one year.

Once retirement is started the only decision you have to make is the order and amount of withdrawals from your three savings accounts.

To see what's behind the curtain click here.

And the bad news? Be prepared to accept year to year budget variability.

ORP

  • Maximizes spending
  • Minimizes taxes
  • Avoids plan failure
  • Leaves no surplus

The Optimal Retirement Planner (ORP) is the computational engine being used here:

  • Essential ORP provides the essence of retirement income planning, including integration of the accumulation and the distribution phases of retirement.
  • Extended ORP is a full function system that explores the issues of retirement income management.
  • At the bottom of the Extended form is a simulator that demonstrates how the plan described here performs for your choice of historical stock market time periods.