We built a hypothetical couple from patterns we see across real clients to show how retirement planning actually works, lever by lever.
By Courtney Hoffman, CFP®, AAMS™ EverPar Advisors
We get some version of the same question all the time. Do we have enough to retire? The honest answer is that the number on your statement doesn’t tell you much on its own. So instead of using one client’s real numbers, we built a hypothetical couple, Dave and Susan, out of patterns we see across a lot of client conversations, and used their situation to walk through what actually goes into a retirement plan.
Meet Dave and Susan: A Hypothetical Case Study
Dave is 61 and burned out. He’s ready to stop working. Susan is 60 and wants to retire alongside him rather than one of them sitting at home while the other keeps working. Their home is paid off and worth $500,000. They’re both healthy, and they want $100,000 a year in net income, with plans to travel more in the early years of retirement.
Their portfolio sits at $2.4 million. On paper, that sounds like a reasonable place to retire from. Whether it actually works depends on how well a handful of moving pieces get coordinated, not just the size of the number.
Where the Money Sits: A $2.4 Million Portfolio Breakdown
Before we can talk about spending, we have to talk about taxes, because not all $2.4 million is created equal. Here’s how Dave and Susan’s portfolio breaks down:
1.5 million dollars sits in 401(k) and IRA accounts. This is tax deferred, meaning every dollar withdrawn is taxed at ordinary income rates.
500,000 dollars sits in a taxable brokerage account, taxed at capital gains rates and generally more flexible to access.
250,000 dollars sits in a Roth IRA, which grows and can be withdrawn tax free.
150,000 dollars sits in cash or money market funds, their emergency reserve.
This is a very typical distribution for a pre-retiree. Most people accumulate the bulk of their savings pre-tax through an employer plan, then build an after-tax reserve alongside it. Where the money sits changes almost everything about how a plan gets built.
The Five Levers of Retirement Planning
Once we know the guaranteed income sources and the account breakdown, the real planning work comes down to coordinating five levers over the next 10 to 15 years. It’s not a switch that gets flipped the day someone retires. It’s an ongoing process.
Lever 1: Spending Isn’t a Hard Number
Most people have heard of the 4 percent rule, introduced by Bill Bengen in 1994. On Dave and Susan’s 2.4 million dollar portfolio, that works out to about 96,000 dollars a year. Morningstar’s most recent base case suggests 3.9 percent, or 93,600 dollars, though that assumes rigid, inflation adjusted spending. In practice, a safe withdrawal rate can run anywhere from around 4 percent up toward 6 percent as required minimum distributions increase over time.
Dave and Susan’s target of 100,000 dollars a year works out to about 4.2 percent of their portfolio, which sits within a reasonable range. But the real point is flexibility. The plan should be able to adjust up or down with market returns, rather than locking in one number and refusing to move. The number on your statement isn’t what tells you whether you can retire. The plan is.
Lever 2: Bridging the Healthcare Gap
Healthcare is often the biggest surprise for people retiring before 65. Dave has a four year gap until Medicare begins, with no employer plan to bridge it. For 2026, the ACA’s enhanced premium tax credit has expired and the 400 percent poverty subsidy cliff is back, which means marketplace premiums for a couple in their early sixties can run well into 2,000 dollars a month, or 24,000 dollars a year, on top of the 100,000 dollars they need for everyday spending.
The planning tension here is real. Keeping taxable income under the subsidy threshold, around 85,000 dollars for a couple, works directly against doing Roth conversions in the same years. Solving for both at once is one of the more delicate parts of the plan.
Lever 3: When to Claim Social Security
There’s no single right answer here, only trade offs. If Dave claims at 62, he protects the portfolio early but locks in the lowest benefit, at a little over 2,300 dollars a month, and shrinks Susan’s potential survivor benefit. If he waits until 70, he gets the largest guaranteed, inflation adjusted benefit, around 4,100 dollars a month, and maximizes what Susan could receive as a survivor. The break even point for waiting typically falls in the mid to late 80s.
The decision usually comes down to whether the priority is preserving the portfolio for beneficiaries or securing guaranteed income for as long as possible. There isn’t a universal right answer, only the one that fits a given family’s goals.
Lever 4: The Tax Bomb and the Roth Conversion Window
Because Dave was born after 1959, his required minimum distributions won’t begin until age 75. That gives him a long runway, from 61 to 75, and the years where he isn’t earning a paycheck are the richest tax planning years of his life.
For 2026, the standard deduction for married couples filing jointly is 32,200 dollars, and the 12 percent tax bracket runs up to 100,800 dollars of taxable income. The strategy is to fill up whatever bracket makes sense each year with Roth conversions, paying tax now at a known, lower rate instead of later at an unknown, possibly higher one. If that 1.5 million dollars in pre-tax accounts doubles or triples by age 75, the required withdrawals could push Dave and Susan into a much higher bracket, and trigger IRMAA surcharges on Medicare, which currently begin around 218,000 dollars for a couple.
There’s also a temporary boost worth knowing about. The Big Beautiful Bill Act added a 6,000 dollar per person senior deduction starting at 65, available through 2028 with a phase out at 150,000 dollars, which quietly widens the conversion window for a few years.
Lever 5: Sequence of Returns Risk
The first five years of retirement matter more than almost any other stretch. The same average return, in a different order, can produce very different outcomes. If Dave and Susan retire and the market drops significantly in year one, that’s one of the biggest risks to the whole plan, especially if they’re withdrawing on the higher end of the safe range.
This is where their 150,000 dollar cash reserve earns its keep. It acts as a buffer, along with spending guardrails, so they aren’t forced to sell shares at a loss just to generate income during a downturn. Selling into a down market to generate the same dollar amount consumes more of the portfolio. Selling into an up market is just harvesting gains. That difference, repeated over years, is what sequence of returns risk really means.
So, Can Dave and Susan Retire?
The honest answer is a qualified yes. Yes, if the levers get used well. Spending holds near 100,000 dollars a year, with room to flex. The healthcare bridge to 65 is funded and income is managed around it. Social Security is claimed strategically rather than by default. The Roth conversion window gets used before RMDs begin at 75. And the portfolio keeps a growth sleeve instead of turning conservative the moment retirement starts.
It tips toward no if spending is rigid at 140,000 to 150,000 dollars, if Social Security gets claimed without weighing the other factors, if a market drop early on meets a plan with no cash buffer, or if the 1.5 million dollars in pre-tax accounts gets ignored until age 75 and detonates into a tax and IRMAA problem all at once.
The question of whether 2.4 million dollars is enough to retire on doesn’t have a real answer by itself. The plan is what answers it.
If you’re wondering how your own numbers hold up against these same five levers, we’d love to help you find out. Schedule an introductory strategy session at everpar.com.
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