Case Study

• Entering retirement 
• Roth conversions
• Required minimum distributions (RMDs)
• Qualified charitable distributions (QCDs)

Dave retired in his 60s and, together with his wife Kathy, wanted to manage their retirement accounts and additional savings efficiently. Giving to their church and a local nonprofit was important to them, and they sought to balance generosity with tax planning. They also wanted to ensure that their adult children would not face unnecessary tax burdens when inheriting assets.

• IRA Tax Bill: Discussed how traditional retirement accounts are taxable upon withdrawal and how future changes in tax rates could affect their savings.
• RMD Issue: Reviewed how required minimum distributions might impact taxable income later in retirement.
• Inheritance Considerations: Evaluated how leaving a large IRA to heirs could create tax implications under current distribution rules.

• Roth Conversions: Explored gradually converting portions of the IRA into a Roth IRA in coordination with their tax advisor to prepay taxes during lower-income years, potentially reducing future RMDs.
• QCDs: Recommended considering charitable contributions directly from retirement accounts to support charitable goals while potentially lowering taxable income.
• Stress-Testing the Plan: Used financial planning tools to model scenarios, including market changes, inflation, and health-care events, to provide a framework for planning.
• Investment Alignment: Tailored the portfolio to match risk tolerance and long-term goals.
• Professional Coordination: Connected them with trusted estate planning and tax professionals.

Dave and Kathy gained greater confidence in managing retirement, charitable giving, and planning for their children’s inheritance.

This case study is hypothetical and provided for illustrative purposes only. It does not represent an actual client, and outcomes are not guaranteed. Clients should consult their own tax and legal professionals before implementing any strategy.