Every Dollar with a Job: A Five-Slice Retirement Income Case Study

A well-built retirement income plan assigns every dollar in a portfolio a specific job and year, rather than leaving assets to be drawn down in whatever order feels easiest. This hypothetical case study walks through how we approached planning for a retired Central Ohio couple (referred to here as Ben and Marie), turning a collection of separate accounts into a proposed, coordinated, five-part income structure, and why the order in which they spend their accounts matters just as much as how those accounts were originally funded.

The Situation: Plenty of Assets, No Financial Plan

Ben and Marie came to us earlier this year, both newly retired and in their mid-sixties. One had just closed out a long corporate career with a pension attached. The other had just finished a long career in education. Both spend extended stretches of the year overseas.

Here's what their financial picture looked like:

• About $1.7 million in retirement savings, spread across a rollover IRA, a workplace plan, an inherited IRA, and a modest pile of individual stock and cash
• Pension and Social Security income arriving automatically
• Two small annuitized contracts already in place
• An analytical, fee-conscious mindset, having managed their own money through a single long-time provider for years

They had plenty of assets, but no cohesive plan tying those assets to their actual cost of living. They arrived describing a complaint about their current provider. What they really had was a complaint about the shape of their plan: the portfolio existed in disconnected pieces, and no one had ever answered the question of which dollars would pay for which parts of their life, in which year.

That question, where is our paycheck going to come from?, is the one every retirement income plan ultimately has to answer.

How We Designed Their Plan: Measuring the Income Gap First

Before designing any single piece of the structure, we laid out Ben and Marie's entire portfolio on one page and measured the distance between what arrives automatically each month (pension, Social Security, existing annuity income) and what their life actually costs. The gap came to roughly $2,700 a month, uncovered.

Every decision that followed was designed to close that gap first, then to support everything layered behind it. The slices below are a proposed plan, not an implemented one.

What Are the Five Slices of a Retirement Income Plan?

We organized Ben and Marie's proposed plan into five sequenced slices. Each slice represents one decision, and we re-showed the whole portfolio after every decision so the couple could watch their plan assemble piece by piece, rather than being handed a finished plan to simply accept.

Slice 1: The Income Floor

The first slice solves the monthly income gap using guaranteed lifetime income. We proposed directing roughly $320,000 into a guaranteed income annuity, structured as four equal contracts rather than one single contract, designed to protect the surviving spouse where appropriate and keep staged activation available.

We proposed four contracts because that structure preserves flexibility: income can be switched on in stages, or left off entirely, and different households activate different pieces at different ages depending on how the rest of the plan performs. A single-contract structure surrenders that choice on day one. The trade-off is straightforward: $320,000 leaves the market-exposed portion of the portfolio permanently, in exchange for income designed to continue for both spouses' lifetimes. That income depends on the claims-paying ability of the issuing insurance carrier.

Slice 2: The Bridge

The second slice covers the years before guaranteed income begins. Ben and Marie's guaranteed income is designed to start about five years out, so we needed a plan for the years in between. We proposed funding this bridge using the inherited IRA, plus roughly $150,000 in a three-year guaranteed annuity at a locked rate.

We proposed spending the inherited IRA first by design, not by default. Of all the accounts in the portfolio, it carries the least flexibility. It cannot be converted, it offers no strategic optionality later in the plan, and its depletion timeline is largely outside the household's control. Draining the least flexible account first is exactly what preserves flexibility everywhere else in the portfolio.

Slice 3: The Inflation Offset

The third slice protects Ben and Marie's purchasing power against rising costs. A guaranteed paycheck is level for life, but the cost of living is not. We proposed allocating roughly $183,000 into a long-horizon growth allocation, funded over time through annual Roth conversions, so that both the growth and the eventual withdrawals may come out tax-free if Roth rules are met.

The income floor in Slice 1 is designed to address sequence-of-returns risk for that portion of the plan, but it does nothing to address rising prices over a multi-decade retirement. This slice sits in market exposure and earns its return without a floor of its own. That's the trade-off for keeping pace with inflation.

Slice 4: The Protected Growth

The fourth slice uses principal-protected growth to do the job a bond allocation traditionally handled. We proposed allocating about $500,000 to a strategy offering market participation with a floor, sized specifically to bridge the guaranteed income floor and the growth-oriented inflation slice.

This slice only exists in the plan because Ben and Marie purchased long-term care coverage years before working with us. Without that coverage, the same $500,000 would have had to sit in reserve against a potential care event instead of being put to work. A decision they made years earlier is what gave this slice a job today. The trade-off: market participation is capped at the level the protection floor requires, meaning the household gives up some upside in strong years in order to reduce the risk of losing ground in down markets. Protection features depend on the issuing carrier's claims-paying ability.

Slice 5: The Tax Bracket

The fifth slice manages the tax cost of the plan directly, rather than letting it arrive as a surprise. We proposed a modest annual Roth conversion running about seven years, with each year's conversion amount sized to the available bracket headroom.

Naming the tax bill as its own slice, up front, turns a known cost into capital that's priced into the plan rather than absorbed as friction later. The trade-off: Ben and Marie would pay tax now, at today's rates, on money that doesn't technically need to move yet. For this household, that trade-off is manageable precisely because the bracket math is knowable rather than guessable.

The Result: A Paycheck Before They Need One

With all five slices proposed, the design gives every dollar in Ben and Marie's portfolio a specific job. The plan is designed so their paycheck starts before they need it, rather than scrambling to arrange income after the fact. It also aims to reduce the household's forced retirement withdrawals at age 75, though the size of any reduction depends on the assumptions noted at the end of this article.

What Did This Case Teach Us About Sequencing Retirement Withdrawals?

Two insights from this plan apply broadly to retirement income planning.

First, the order in which accounts are spent matters as much as the order in which they were filled. Ben and Marie's most constrained account (inherited, required to be emptied, impossible to convert, with no flexibility of any kind) was exactly the right account to spend first. Spending it early protects the accounts that still have choices attached: the ones that can be converted, grown, or left alone. Most households do the reverse by instinct, drawing from whatever account is easiest to reach, and arrive at seventy-five with every option already used up.

Second, a guaranteed paycheck is level for life, and a level paycheck creates an inflation problem by definition. Buying guaranteed income and stopping there means building only half a plan. The step that solves income is the same step that creates the next problem to solve, which is why these five slices form a stack, not a menu. The order isn't optional, and each solution is entangled with the problem it surfaces.

What We Learned, and How We Can Help in a Similar Situation

Planning for Ben and Marie reinforced something we see across many of the Central Ohio households we work with: having significant retirement assets doesn't automatically translate into having a retirement income plan. Accounts accumulated over a career (a rollover IRA, a workplace plan, an inherited account, individual holdings) don't organize themselves into a monthly paycheck or a tax-efficient withdrawal order on their own. That takes deliberate design.

If you're sitting on a collection of retirement accounts and aren't sure which ones should be spent first, how to bridge the years before guaranteed income begins, or how to keep inflation from eroding a level paycheck, you're facing the same questions Ben and Marie faced. We help households in this position by laying out the full picture of what's coming in automatically versus what life actually costs, then building a sequenced plan, slice by slice, that puts every dollar to work in the right year. Learn more about our retirement income planning approach, and if any part of this case study sounds familiar, we'd welcome the chance to walk through your own plan with you. For a related example of testing a plan against more than an average outcome, read On Track Isn't Protected: A Retirement Case Study.

Frequently Asked Questions

What is an inherited IRA, and why does it get spent first in a retirement plan?

An inherited IRA is a retirement account passed down to a beneficiary. Inherited accounts are generally subject to withdrawal requirements and offer limited flexibility. They typically cannot be converted to a Roth account and must be drawn down on a timeline that is largely outside the beneficiary's control. Because it offers the least flexibility of any account type, spending it earlier in retirement preserves other accounts that still have choices attached, such as the ability to convert or grow tax-free.

Why would someone use annuities instead of simply withdrawing from investment accounts in retirement?

Guaranteed income annuities are designed to provide a paycheck for the lifetimes of both spouses, which may reduce the risk of running out of money regardless of market performance. The guarantee depends on the claims-paying ability of the issuing insurance carrier. Withdrawing directly from investment accounts, by contrast, exposes a household to sequence-of-returns risk: the danger of needing to sell investments during a market downturn early in retirement.

Do I need long-term care coverage before building a protected-growth slice into my plan?

Not necessarily, but the two are often connected. In this case, the couple's existing long-term care coverage freed up $500,000 that would otherwise have needed to sit in reserve against a potential care event, allowing that money to be put toward protected growth instead.

Hypothetical case study based on a real planning engagement; identifying details have been changed. The plan discussed is a proposed retirement income structure at draft stage, not yet fully implemented, and every figure shown is a design projection on that proposed plan, not a result achieved by any client. Outcomes shown are illustrative and depend on assumed rates of return, tax law, insurance underwriting, and household-specific circumstances. Guaranteed-income and principal-protection features described are subject to the claims-paying ability of the issuing insurance carrier. Roth conversion figures are illustrative only and are not tax advice; conversion decisions should be reviewed with the client's own tax professional. Product categories only are described; no carriers or products are named. Past performance is not indicative of future results.