$140K Taxable vs. $285K Tax-Free Retirement Income

Many professionals spend decades building sizable retirement accounts through 401(k)s, IRAs, and brokerage investments. But when it comes time to retire, a common question arises:

“How much can I safely withdraw without running out of money—or losing too much to taxes?”

For years, the standard advice has been to follow the “4% rule”—withdraw about 4% of your portfolio each year and hope the market holds up. But this traditional approach has serious drawbacks:

• Withdrawals are taxable

• They can reduce Social Security and Medicare benefits

• Inflation quietly eats away at purchasing power

• Market swings create constant uncertainty

There is, however, a smarter way forward—one that allows higher withdrawals, shields your income from taxes, and provides peace of mind.

The Smarter Tax-Free Approach

The strategy I work with executives and professionals on helps them:

✅ Convert retirement accounts into a tax-free environment
✅ Protect their savings from direct stock market swings
✅ Do it with no out-of-pocket cost

This approach changes the math of retirement completely.

Example 1: The 45-Year-Old Professional

Let’s say a 45-year-old has a $1M retirement portfolio that grows at 8% annually until age 65.

• Traditional route (4% withdrawals):
  They could take about $186K in withdrawals, taxed down to roughly $140K net. After 20 years of inflation, that’s only worth about $70K in today’s dollars—and it still impacts Social Security and Medicare eligibility.

• Smarter tax-free route (10% withdrawals):
  Instead, the strategy allows about $285K per year, completely tax-free—preserving value and keeping benefits untouched.

👉 That’s the difference between shrinking income vs. nearly doubling retirement income without worrying about market swings.

Example 2: The 68-Year-Old Nearing Retirement

This isn’t just for those who start young. Even someone approaching retirement can benefit.

Imagine a 68-year-old with $1M in a brokerage account or cash savings, planning to retire at 70.

• Traditional portfolio approach:
  At age 70, withdrawing ~3.5% means about $35K taxable, or around $30K after tax each year. That’s not much to support a comfortable retirement.

• Smarter tax-free strategy:
  By repositioning the same $1M, they could withdraw $100K per year, tax-free, starting at age 70. And the portfolio continues to grow instead of shrinking.

👉 That’s the difference between barely covering expenses vs. retiring with confidence and legacy intact.

Why This Works

• Withdrawals are tax-free

• Income doesn’t reduce Social Security or Medicare eligibility

• Wealth can be transferred to heirs completely tax-free

• The portfolio keeps working for you, instead of against you
  

Final Thoughts

The traditional 4% rule may have worked decades ago, but in today’s environment of higher taxes, inflation, and market volatility—it can leave you with less income and more worry.

With the right strategy, you can enjoy higher withdrawals, tax-free, and still preserve your legacy.

👉 Ready to see how this could apply to your retirement? Schedule a free consultation with Sure Life Plans today.