Summary

Preparing for retirement by saving and investing can be challenging, but deciding how to spend retirement savings wisely may be even harder. Choosing the right withdrawal strategy is crucial to avoid either running out of funds or unnecessarily skimping on expenses that could enrich retirement life. In addition to carefully planning withdrawal amounts, it’s important to consider tax implications and potential impacts on Medicare premiums.

Several financial planning companies have launched software to help retirees model optimal withdrawal strategies for their savings. From services like Schwab Intelligent Income to options like Kindur and Income Strategy, these tools help users determine the most tax-efficient and sustainable withdrawal methods tailored to individual needs. However, users should still consult with a financial expert, as some mistakes can be difficult to reverse.

This article explores three prominent retirement withdrawal tools: Schwab Intelligent Income, Income Strategy, and Kindur, highlighting their unique features, costs, and potential benefits for those planning a sustainable retirement income.

💰 Schwab Intelligent Income

Schwab Intelligent Income is a part of Schwab Intelligent Portfolios, Schwab’s robo-advisor platform. Launched in January, Schwab Intelligent Income uses market simulations to analyze retirement accounts, projecting optimal monthly withdrawal amounts while considering tax brackets, required minimum distributions, and how funds are distributed among taxable, tax-advantaged, and tax-free accounts. Users can set up automatic transfers to receive their “retirement paycheck” at regular intervals, providing a hands-off, consistent approach to managing retirement income.

This service is free from management fees, although Schwab offers a premium option for $300 as a setup fee and $30 per month. This premium service provides access to a certified financial planner and allows users to customize their financial plans with income sources like Social Security and pensions.

Takeaways:

• Schwab Intelligent Income provides a structured, automated way to manage retirement income withdrawals based on thorough simulations.

• Free from management fees, it offers affordability, with an option for human advice for additional support.

Key Terms

• Robo-Advisor: A digital platform that provides automated, algorithm-driven financial planning services without human supervision.

• Required Minimum Distribution (RMD): The minimum amount that must be withdrawn from certain retirement accounts annually, typically beginning after age 72.

📊 Income Strategy

Income Strategy is designed for retirees who seek flexibility in crafting their withdrawal plan. This tool lets users manage their accounts without moving assets to a new provider and offers near-endless customization options. The basic subscription is priced at $20 per month, while the premier level at $50 per month offers more in-depth features. Additionally, a premier bundle is available for $1,500, which includes one year of service, training, consultations, and an annual review.

For those who prefer professional management, an affiliated investment advisor can take over investing for a starting asset management fee of 0.8%. Income Strategy allows users to access tax-efficient withdrawal strategies, adjust for Medicare income limits, and navigate advanced financial decisions.

Takeaways:

• Income Strategy is ideal for users who need flexibility and advanced customization in managing their retirement funds.

• Offers a range of subscription levels to match varying support needs, from basic guidance to full-service investment management.

Key Terms

• Medicare Income-Related Monthly Adjustment Amount (IRMAA): Additional Medicare premiums for higher-income individuals based on modified adjusted gross income (MAGI).

• Roth Conversion: The process of transferring funds from a traditional IRA to a Roth IRA, typically triggering a taxable event but potentially lowering taxable income in future years.

💼 Kindur

Kindur offers a comprehensive platform with tools for estimating retirement expenses, determining income needs, and calculating longevity. For $99 annually, its SmartDraw service creates a personalized withdrawal plan that includes an annual review with a certified financial planner. The platform also offers premium services for more in-depth planning and frequent consultations.

To supplement retirement income, Kindur provides a commission-free annuity option with American Equity. Investment management services are available at an annual rate of 0.5%, giving retirees access to the SmartDraw tool and additional advisor support. Kindur’s focus on income stability through annuities may appeal to retirees looking for guaranteed sources of income.

Takeaways:

• Kindur helps retirees determine their retirement expenses, recommend Social Security timing, and suggest annuities for income security.

• Offers investment management at a competitive fee, along with annual reviews to ensure retirement goals stay on track.

Key Terms

• Annuity: A financial product providing regular income, often purchased for retirement to offer stability.

• SmartDraw: A tool by Kindur for developing a withdrawal strategy, integrating multiple accounts, and including annual expert review.

Conclusion

Choosing a safe, sustainable retirement withdrawal strategy is essential, but it doesn’t have to be overwhelming. With platforms like Schwab Intelligent Income, Income Strategy, and Kindur, retirees have options to create tax-efficient, predictable income plans suited to their preferences. While each tool has unique features, from automated transfers to expert reviews and investment management, they all offer retirees the chance to optimize income for longevity and financial peace of mind. When in doubt, seeking professional guidance ensures these tools are used to their fullest potential, helping retirees achieve a financially secure future.