FedEx ALPA · 2026 TA Section 28
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⚠️ Estimates only. Rates from 2026 TA §3. IRS limits 2025 values. Not financial advice.
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💰 WITHDRAWAL PLANNER

💰 Retirement Withdrawal Planner

Year-by-year drawdown model (ages 60 through plan horizon) using a hybrid Roth conversion strategy. Hybrid bracket optimization: 24% top in pre-Medicare years, 22% top in Medicare years (IRMAA-aware). Social Security with 20% conservative haircut. RMDs from age 75.

🏦 Pension Election (changes starting balances) COMMON DEFAULT
Opt 3 + MBR: Lower pension ($50K), preserves full Cash-Over-Cap bucket for Roth conversion fuel. Recommended for most pilots maximizing DC accumulation.
Inflation rate (CPI & SS COLA) 2.5%
0%1%2%3%4%5%6%
Why 2.5%? (historical basis)

2.5%/yr is the planning default because it brackets the two numbers that matter:

  • The Fed's long-run target is 2% PCE, which runs roughly 2.3–2.5% in CPI terms.
  • Recent-decades U.S. CPI averaged about 2.5%/yr (1990–2020). The very long run (1913–2024) is higher, ~3.1%/yr, pulled up by the 1970s–80s.
  • Social Security COLAs have averaged roughly 2.6%/yr over the past ~25 years (with spikes like 8.7% in 2023).

This one rate drives spend growth, the SS COLA, and tax-bracket / IRMAA threshold indexing together.

Key caveat: your FedEx pension is modeled as frozen nominal (no COLA). Raising this slider erodes the pension-heavy option (Opt 1) far faster than the market-funded options — nudge it to 3–4% to stress-test that.

Retirement-phase growth rate 6.0%
3%4%5%6%7%8%
🛡 Market Crash Insurance
Simulates retiring INTO a market crash. The engine drops your DC + taxable buckets at retirement, then uses cash reserve to weather the recovery without selling at lows.
Crash severity at retirement -30%
0%-10%-20%-30%-40%-50%
Historical context: 2000 dot-com (-49%), 2008 financial crisis (-37%), 2020 COVID (-34% intra-year), 2022 stagflation (-25%). Default -30% reflects a typical severe crash.
Cash reserve (years of spending) 3.0 yr
012345 yr
≈ $750,000 reserved from Cash-Over-Cap
When insurance is ON: at retirement, your DC + taxable buckets take a one-time haircut at the severity above. The engine draws spending from cash reserve first and pauses Roth conversions for the first 3 years (recovery window). Tests \"what if I retire into 2000 / 2008 / 2020?\"

Outcomes at this growth rate

Estate at 90
Sustainable Spend
real/yr (leave $1M)
Lifetime Taxes
nominal total
Pretax Depleted
age
⚖ Strategy Comparison
Does the aggressive Roth conversion strategy actually win for YOUR numbers? Compares against a "pre-tax first, no conversions" baseline.
Computing comparison…
Annual Income Sources by Age (Nominal $)
Pension
Social Security
Cash-Over-Cap Sale
Roth Withdrawal
Pretax (RMD + Extra)
Spending target

5-Phase Strategy

Phase 1 — Ages 60-64: Aggressive Conversion
Convert to top of 24% bracket. No Medicare, no IRMAA, no SS yet. Fund spending from Cash-Over-Cap.
Phase 2 — Ages 65-69: Throttled Conversion
Top of 22% bracket. Medicare and IRMAA active. Roth withdrawals supplement (tax-free, no MAGI impact).
Phase 3 — Age 70+: Social Security Begins
Major income shift. SS adds significant taxable income. Conversion room shrinks; continues at top of 22% after SS.
Phase 4 — Ages 75-84: RMD-Driven
RMDs mandatory. SS + pension + RMD covers most spending. Roth tops up. Pretax exhausts mid-80s.
Phase 5 — Ages 85-90: SS + Roth
Pretax done. SS + pension + Roth carry spending. Federal tax near minimum. Roth legacy preserved.

Max sustainable real spending by legacy goal

Spend it all
Leave $1M real
Leave $2M real
Leave $3M real

Pension Option Comparison (at current growth rate)

Compares all three FedEx pension elections assuming MBR is captured in each. Opt 1 forfeits the Cash-Over-Cap entirely. Opt 2-Lump rolls MBCB into IRA + small CoC. Opt 3 keeps full CoC.

Year-by-year detail
AgeSpendPensionSSCoC SaleRoth W/DPretax W/DTaxTotal EOY
Cash-Over-Cap breakeven vs Opt 1 + MBR
GrowthOpt 1 SpendBreakeven CoCvs Your $Verdict

Assumptions: inflation slider-adjustable (default 2.5%/yr, drives spend, SS COLA & bracket indexing). MFJ filing, TN state (no state tax). Hybrid Roth conversion (24% pre-Medicare, 22% afterward). SS conservative -20% haircut, 85% taxable. RMDs from age 75 (Uniform Lifetime Table). LTCG 15-18.8% with NIIT. IRMAA Medicare surcharges applied age 65+. Cost basis on taxable bucket assumed 100% initial (conservative on LTCG). Plan horizon configurable (age 75-95, default 90). Estate reflects remaining buckets at plan horizon age.

Compares your current annual 401k contributions against projected income and tax bracket trajectory. Recommends optimal pre-tax vs. Roth split per year based on bracket arbitrage vs. retirement. Retirement bracket is auto-detected from your projected drawdown income in the Drawdown tab.

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