1. How to Win Clients Near Retirement by Focusing on Tax Efficient Distribution Strategies
Joe Cowling, Managing Director of Partnerships

2. Agenda
Why a Tax Efficient Distribution Strategy can help you grow your practice
Using the RightCapital Distribution and Conversion tool to make the client conversation an easier one
How to incorporate into your practice to attract new clients

3. Why Tax Efficient Distribution Strategy Can Help you Grow Your Practice
Differentiate yourself from other advisors
The complexity of the topic has made it difficult for many advisors to effectively deliver the message to their clients and/or prospects
Deliver significant new value fast
The RightCapital tool is intuitive and interactive allowing you to begin conversations as soon as plans are created
Most valuable for near retirement prospects
Clients and prospects near retirement are most interested in tax during distribution. Executing a smart tax efficient distribution strategy will help you grow your AUM faster by allowing more assets to remain invested rather than used to pay unnecessary taxes.

4. Tax efficient Retirement distribution
Your strategy for withdrawing retirement assets is as important as your strategy for accumulating them
An thorough financial plan should illustrate:
which accounts money should be taken from
Taxable
Tax deferred
Tax free
in what order
what conversion opportunities exist to maximize efficiency

5. Three drawdown strategies to consider
Pro Rata strategy
Withdraw from taxable, tax deferred and tax free accounts proportionally
Not optimal in most cases
Sequential strategy
Withdraw from taxable accounts first; then tax deferred accounts; lastly tax free
The classic approach
Sequential with Roth Conversion strategy
Roth conversions are executed to take advantage of periods of lower tax brackets
Michael Kitces’ blog post
retirement-spending-needs/

6. Using the Distribution and Conversion Tool to make the client conversation easy

7. Incorporate into your Practice to Attract New Clients
Customizable slide deck to be used with prospects and clients in seminars/webinars
High level education and case study
Graphs pulled from RightCapital tool to help tell the story
Slides will be mailed directly to you at conclusion of webinar

8. Tax efficient Retirement distribution
Your strategy for withdrawing retirement assets is as important as your strategy for accumulating
Not all retirement savings assets are equal from a taxability standpoint
Taxable
Tax deferred
Tax free
An thorough financial plan should illustrate
which accounts money should be taken from
in what order
what conversion opportunities exist to maximize efficiency
A customized tax efficient distribution strategy could save you significant value and extended the time horizon of your retirement assets

9. CASE STUDY

10. Meet the Bradys
Mike and Amanda — married Current Ages — 56/54 Target Retirement Age — 65/65 Salary — $200K/$50K Social Security — 70 Monthly Expenses in Retirement — $9K Invested Assets — $1.0 MM qualified $100K non-qualified

11. Tax brackets during retirement can be surprising
Surprisingly high taxable income
in later years of retirement
Low taxable income after retirement before age 70
RMD and social security
drive up taxable income starting age 70

12. Large IRA Distributions Drive Up Tax Brackets
Years with
high tax rates
Years with
low tax rates

13. Smoothing out the tax liability out
Less Taxable Income when tax rate is higher
Intelligent Roth Conversion to fill up tax bracket

14. Take-Aways
Change the conversation you are having today with clients and prospects and differentiate yourself from other advisors
Utilize RightCapital’s Distribution and Conversion tool to make conversations with clients easy to understand and interactive
Hold educational webinars/seminars incorporating client slides
Develop customized plans for clients – revisit during annual checkup