How much should a plan count on money that has not arrived?
Tim and Jennifer have about $2.5 million invested, $1.5 million of it in traditional retirement accounts and $1 million in a taxable brokerage account. They spend roughly $175,000 a year, and they want to spend about ten of their healthiest years traveling and living in different cities before they settle down. They have no children. Whatever is left will go to their favorite charities and to their nieces and nephews.
Their spending is ambitious for the assets they have today, which is why two things carry most of the weight in the plan: when they stop working, and whether Jennifer's inheritance arrives. A plan that assumes the inheritance can look comfortable. A plan that ignores it can look tight. Neither answer is useful until they can see both side by side.
The inheritance was the one number they could not control. The question was whether the plan could stand without it.
Analysis
What we looked at
When to retire
Tim and Jennifer want to retire as soon as they can without giving up the decade they have planned. We compared retiring now, in five years, and in ten, so that the cost of each extra year of work, and the cost of stopping early, were both visible rather than guessed at.
How to treat the inheritance
Jennifer expects a significant inheritance within the next ten years, but its timing and size are uncertain. We ran each retirement date with and without it. That showed how much of their plan depended on it, and it gave them a reason to learn more about its likely timing and form now, while that information can still change their decisions.
Which goals come first
With ambitious plans and finite resources, not every goal can be funded at its fullest. We worked through the order they would give things up in if they had to, whether that meant fewer travel years, a later retirement date, or a smaller gift at the end, so the plan reflects their priorities rather than an average couple's.
Roth conversions
Between retiring and age 75, when required distributions begin for anyone their age under current law, Tim and Jennifer will have a run of years with little earned income. Those are years when converting part of their $1.5 million in traditional accounts may cost relatively little in tax, and every dollar converted is a dollar that will not be forced out later as a required distribution.
Where they live each year
Moving between cities means moving between tax systems. A state generally taxes the income of the people who reside there, so a year spent living in a state with low or no income tax can be the right year to convert or to realize gains. The planning only works if the move is real, because residency depends on where you actually live, not where you spend a few weeks, and states with high income taxes look closely at people who say they have left.
What they leave behind
With no children, Tim and Jennifer plan to divide what remains between charities and their nieces and nephews. Those two groups are taxed very differently on what they receive. A charity pays no income tax on a traditional IRA, while a niece or nephew generally has to empty an inherited IRA within ten years and pay tax on every withdrawal. Naming the charities on the traditional accounts and leaving the Roth and taxable assets to family can change what each side actually receives, without changing what Tim and Jennifer spend.
Tax figures reflect federal law for 2026 and may change.
The examples shown are illustrative and do not represent any actual client. The situations are constructed, and the figures are rounded and chosen for illustration. They are not a projection, a recommendation, or an indication of results any client did receive or should expect to receive. Individual circumstances vary, tax rules change, and the analysis appropriate to one situation will not apply to another. Financial North Partners and NewEdge Advisors do not provide tax, legal, or accounting advice. You should consult your own tax, legal, and accounting professionals before making decisions based on the strategies discussed.