These case studies feature a realistic hypothetical client to demonstrate the power of SIPS. We will provide an in-depth analysis of structured income plans, focusing on cash flow management and tax strategy.
Key Highlights:
- Wealth Projection: Asset levels across different life stages.
- Retirement Targets: Defining and meeting income goals.
- Tax Analysis: Projecting approximate tax rates.
- Visual Insights: Data-driven charts to illustrate core financial milestones.
Key Sections in the Article:
Introduction: Meghan R. is a single, 52-year-old who has been working in the private school sector for her entire professional career. Recently, she obtained her license as a real estate agent and started working in this field alongside her full-time job. She enjoys both her jobs and plans to work both until she retires.
Background:
- Name: Meghan R.
- Age: 52
- Marital Status: Single
- Occupation: Private School Administrator, Real Estate Agent
Incomes (yearly):
- Private School Administrator $125,000 (no pay increase; at the top of the pay cycle)
- Real Estate Agent $25,000; projecting every year to go up by 5%
- SS (Social Security) at 67 (full retirement age): $18,600, expected COLA increase 2.8% per year
Assets:
- Brokerage Account: $350,000; Moderate Growth 3% net growth per year
- Traditional IRA: $100,000; Moderately Aggressive 4% net growth per year
- 403(b): $850,000; Aggressive 5% net growth per year
To learn more about the Client Dashboard see articles:
Step 1: Client Information: All background information is displayed on the Client Information page. 
Step 2: Incomes: Primary income and Social Security details are displayed on the Incomes page. 
Step 3: Assets: All asset details are displayed on the Assets page.
To learn more about Structured Income Plans see articles:
Structured Income Plans:
Retiring at 70: Below is the structured income plan for the client to retire at age 70. This plan has implemented all the goals that are mentioned below. We will highlight each column and its meaning starting on the left-hand side.
Goals and Objectives:
- Target Income: The first year will start at $75,000 with an inflation factor of 2%. When in retirement, the target income will continue to grow at 2%.
- 403(b): Contribute 5% to receive the employer match ($6,250 employee and $6,250 employer) until the age of 70. In retirement years, withdrawal amounts to meet the RMD.
- Traditional IRA: Contribute $8,000 until the age of 70 and starting in retirement years withdrawal amounts to reach the target income for the remainder of the plan.
- Brokerage Account: Contribute the yearly excess amount from the target income until the age 70 and when retirement starts withdrawing to meet the target income. When there are excess amounts in retirement years, reinvest it back into the Brokerage Account.
Expenses:
- Gifting to Child: While working $12,000 per year, in retirement $24,000 for the remainder of her lifespan
- Travel: While working $10,000 with an inflation rate of 2.8%, at age 70 starts at $20,000 with an inflation rate of 2.8% until age 80.
Step 1: Numbers at age 70: Note the numbers at age 70 in the year 2044.
Step 2: Numbers at the End of the Plan: Note the numbers at the end of the plan; they represent the total amounts of the columns. 
Step 3: RMD Column: This column represents the amount that needs to be withdrawn from qualified accounts, which for this plan includes the Traditional IRA and the 403(b). The background color is white, which indicates the exact RMD amount has been withdrawn. If the background color is red, not enough is being withdrawn to satisfy the RMD in that year. If the background color is green, more than the RMD is being withdrawn from qualified accounts in that year. 
Step 4: Year: Each row represents one year in the plan.
Step 5: Name & Age: This column displays the client’s name and age. 
Step 6: Brokerage Account & Income: The grayed-out section displays the growth rate (shaded in orange) and the initial account balance. The left column with the header "Account" displays the estimated account balance at the end of that year. The right column with the header "Income" represents any cashflow in or out of the account in that year. Since the header is "Income" a contribution would be negative and a withdrawal would be a positive number. 
Step 7: Traditional IRA Account & Income: This follows the same pattern as the Brokerage Account with "Account" and "Income" columns. 
Step 8: 403(b) Account & Income: This follows the same pattern as the Brokerage Account with "Account" and "Income" columns.
Step 9: Accounts Total: The sum of all the assets displayed by year. 
Step 10: Planned Distribution: This is the netted total of all funds added or withdrawn from the accounts in that year of the plan. Numbers in (parentheses) indicate overall net savings to accounts in that year; numbers not in parentheses indicate a net withdrawal from accounts in that year.
Step 11: Percent Distribution: This value represents the percentage amount of the total funds added or withdrawn from the account in that year of the plan. If the percentage is a negative amount, it represents the amount being deposited. If the percentage amount is positive, it represents the withdrawal rate.
Step 12: Wages: This column is part of the income section and represents the client’s yearly wage. The orange section displays the annual growth rate for the yearly wage increase. The starting wage amount corresponds to the value entered on the income page. Similarly, the annual growth rate is initially populated based upon the percentage specified on the income page in the client dashboard.
Step 13: Employer Match: This column represents the employee’s contribution amount to the 403(b). The orange section displays the annual growth rate for this income.
Step 14: Real Estate Agent: This column represents the self-employment wage. The orange section displays the annual growth rate for this income.
Step 15: SS: This column represents the Social Security income. The income begins based upon the age specified for this income in the structured income plan. You can change the start-date for social security using the "Manage" button for the Social Security Income. The orange section displays the annual growth rate for this income.
Step 16: Gifting: Expenses are modeled as a negative income. The orange section displays the annual growth rate for this expense. Since this amount is an expense, it is displayed as a negative number. 
Step 17: Travel: Expenses are modeled as a negative income. The orange section displays the annual growth rate for this expense. Since this amount is an expense, it is displayed as a negative number. 
Step 18: Approx Income Tax: This is the estimated income taxes and effective tax rate percentage for each year in the plan.
Step 19: After Tax Income: Since this is an Income Plan, the after-tax income is the same as the annual after-tax cashflow the plan generates each year.
Step 20: After Tax Target: The after-tax target is the annual after-tax cashflow that the client would like to have. Any income generated over this amount will be reinvested into Accounts. The inflation factor represents how much their target income or annual target after-tax cashflow needs to rise to maintain the spending power illustrated in year 1.
Step 21: Income Gap: This column indicates whether there is a monetary difference between the After Tax Income and After Tax Target that is not being made up using deposits or withdrawals from accounts. If the numbers are red, this means there is an income shortfall for that year by the amount in red and the actual income generated from the netted account withdrawals plus incomes minus expenses and taxes is less than the After Tax Target income. If the numbers are green, there is an excess, which means the actual income generated exceeds the target income and is not being reinvested into the accounts. If the number is 0 and has a white background, it means that the After Tax Income and After Tax Target are perfectly aligned and equal.
Retiring at 67: Below is the structured income plan for the client to retire at age 67. This plan has implemented all the goals that are mentioned below. We will highlight which column has had significant changes from the retiring from 70 scenario.
Goals and Objectives:
- Target Income: The first year will start at $75,000 with an inflation factor of 2%. When in retirement, the target income will continue to grow at 2%.
- 403(b): Contribute 6% to receive the employer match ($7,500 employee and $7,500 employer) until the age of 67. In retirement years, withdrawal amounts to meet the RMD and the target income.
- Traditional IRA: Contribute $8,000 until the age of 67 and starting in retirement years withdrawal amounts to reach the target income for the remainder of the plan.
- Brokerage Account: Contribute the yearly excess amount from the target income until the age 67 and when retirement starts withdrawing to meet the target income. When there are excess amounts in retirement years, reinvest it back into the Brokerage Account.
Expenses:
- Gifting to Child: While working $12,000 per year, in retirement $24,000 for the remainder of her lifespan.
- Travel: While working $8,000 with an inflation rate of 2.8%, while in retirement until age 80 $16,000.
Step 1: Numbers at Age 67: Note the numbers at age 67 in the year 2041.
Step 2: Numbers at the End of the Plan: Note the numbers at the end of the plan; they represent the total amounts of the columns.
Step 3: After Tax Target: The after-tax target is the annual after-tax cashflow that the client would like to have. Any income generated over this amount will be reinvested into accounts. The inflation factor represents how much their target income or annual target after-tax cashflow needs to rise to maintain the spending power illustrated in year 1.
Step 4: 403(b) Account & Income: The orange section displays the net return and the grey section shows the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
Step 5: Traditional IRA Account & Income: The grayed-out section displays the net return (in orange) and the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
Step 6: BA Account & Income: The grayed-out section displays the net return (in orange) and the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
Retiring at 62: Below is the structured income plan for the client to retire at age 62. This plan has implemented all the goals that are mentioned below. We will highlight which column has had significant changes from the previous scenarios.
Goals and Objectives:
- Target Income: The first year will start at $75,000 with an inflation factor of 2%. When in retirement, the target income will continue to grow at 2%.
- 403(b): Contribute 7% to receive the employer match ($8,750 employee and $8,750 employer) until the age of 62. In retirement years, withdrawal amounts to meet the RMD and the target income.
- Traditional IRA: Contribute $8,000 until the age of 62 and starting in retirement years withdrawal amounts to reach the target income for the remainder of the plan.
- Brokerage Account: Contribute the yearly excess amount from the target income until the age 62 and when in retirement start withdrawing to meet the target income.
Expenses:
- Gifting to Child: While working $12,000 per year, in retirement $24,000 for the remainder of her lifespan.
- Travel: While working $8,000 with an inflation rate of 2.8%, while in retirement until age 80 $6,000
Step 1: Numbers at Age 62: Note the numbers at age 62 in the year 2036.
Step 2: Numbers at the End of the Plan: Note the numbers at the end of the plan; they represent the total amounts of the columns. 
Step 3: After Tax Target: The after-tax target is the annual after-tax cashflow that the client would like to have. Any income generated over this amount will be reinvested into accounts. The inflation factor represents how much their target income or annual target after-tax cashflow needs to rise to maintain the spending power illustrated in year 1.
Step 4: RMD Column: This column represents the amount that needs to be withdrawn from qualified accounts, which for this plan includes the Traditional IRA and the 403(b). The background color is white, which indicates the exact RMD amount has been withdrawn. If the background color is red, not enough is being withdrawn to satisfy the RMD in that year. If the background color is green, more than the RMD is being withdrawn from qualified accounts in that year. 
Step 5: 403(b) Account & Income: The grayed-out section displays the net return (orange) and the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
Step 6: Traditional IRA Account & Income: The grayed-out section displays the net return (orange) and the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
Step 7: BA Account & Income: The grayed-out section displays the net return (orange) and the initial account balance. The left side of the column displays the individual asset balance. The right side of the column displays the deposits and withdrawals of the account. 
The Cashflow and Tax Advisor can provide a simple way to look at the next level of detail for tax estimates in a given year. You can walk through all relevant items on a 1040 tax form and even print a hypothetical 1040 for any future year of the plan or scenario that you model yourself.
To learn more about Cashflow and Tax Advisor see articles:
In this section we will assume that the client has decided that she would like to follow the retiring at 67 scenario. In the current scenario we will explain what each line is, for the remainder of the scenarios we will point out significant changes. Below are the tax scenarios we will be looking at:
- Current Year (2026)
- Year 2042 Age 68 (One Year after Retirement)
- Year 2044 Age 70 (Withdrawing Only from the Brokerage Account, 0% Effective Tax Rate)
- Year 2050 Age 76 (RMDs withdraws)
Step 1: Manage: Click on the green Manage button within the Approx Income Tax column. 
Step 2: Create Tax Scenario For Year Textbox: Click on the down caret arrow in the Create Tax Scenario Text box and select the year. 
Step 3: Create Tax Scenario For Year: Click on the green Create Tax Scenario for Year button. 
Step 4: Uncondense/Condense button: You will automatically be taken to the Cash Flow and Tax Advisor button. Click on the Uncondense/Condense button to get the condense view. 
Step 5: Wages: The first-year income will automatically be displayed in the tax return column.
Step 6: Qualified Dividends: SIPS treats dividend from investment accounts as qualified.
Step 7: All Dividends: These are the dividends from the non-qualified investment account.
Step 8: IRA Distributions Tax Return: This amount is equal to the total net amount of withdrawals from qualified assets withdrawn or deposited in 2026.
Step 9: Short Term and Long-Term Capital Gains Tax Return: These tax liabilities can either be triggered from turnover within a taxable account or when assets are withdrawn from taxable accounts. In this example, there is just one taxable account, the Brokerage Account.
Step 10: Self Employ Biz: The income accumulated from the real estate agent position.
Step 11: All Other Schedule 1 Income: The employer monetary amount that was entered in the Advanced Tax Adjustment Screen should automatically be displayed in the tax return column.
Step 12: Schedule 1 Income: Total amount of any Schedule 1 Income.
Step 13: SE Tax Deduction: The portion of your self employment tax; specifically, the employer equivalent half that you can deduct from your income to reduce your adjusted gross income.
Step 14: Schedule 1 Adjustments: This is a total of all Schedule 1 Adjustments.
Step 15: Income Total: These total amounts show the cash flow and tax return amounts of the total income. 
Step 16: Standard Deduction: This is the standard deduction based upon the tax year and filing status.
Step 17: Largest Ded –Sch A or Std: If your itemized deductions from Schedule A is larger than your standard deduction, the higher amount will automatically be used.
Step 18: Qual Biz Income Deduction: This is a tax deduction that allows eligible self-employed individuals and small-business owners to deduct up to 20% of their qualified business income from taxable income. Since this client had a small business QBI income, this is automatically populated. 
Step 19: Total Deduction: The combined amount of all deductions such as the standard or itemized deduction and any additional adjustments that reduce your taxable income before calculating income tax.
Step 20: Cap Gains and Qual Dividnds: Investment income taxed at special lower long-term capital gains rates instead of ordinary income tax rates. 
Step 21: Taxable Income: This is the total amount of taxable income. 
Step 22: Self Employment Tax: The tax that self-employed individuals pay to cover their Social Security and Medicare contributions, similar to the payroll taxes withheld from employees. 
Step 23: Effective Tax Rate: Take note of the effective tax rate; this rate is rounded for display purposes. This rate corresponds to the effective rate shown in the income plan each year. For this scenario, it's year 1 which is 2026 for this plan.
Step 24: Approximate Tax Calc: The estimated amount of income tax you owe before applying credits, based on your taxable income and the IRA tax tables or tax brackets. Take note of the Tax Return calculation. The dollar amount should match precisely on the structured income planning page. 
Step 25: Discretionary Income: The amount of income left after subtracting taxes and essential deductions, showing how much is available for non-essential spending. 
Step 26: Amount You Owe: The total tax you still need to pay after subtracting all withholding, payments, and credits from your calculated tax liability.
Year 2042: Age 68 (One Year After Retirement)
In this example, we will take a detailed look at the tax calculation the year after retirement and compare it side-by-side with the tax calculations in year 1, during working years. We will highlight significant changes between both scenarios.
Step 1: Wages: Since this person is retired, there is no amount shown in the Wages section. 
Step 2: IRA Distribution: Displays the net amount withdrawn from qualified accounts in that year. 
Step 3: Social Security: SIPS automatically calcualtes the amount and percentage of Social Security that is taxable. 
Step 4: S1 Items: Note that there are no amounts in these sections since the client no longer has these incomes during this year of the plan.
Step 5: Qual Biz Income Deduction: Note that there are no amounts in this section since the client is retired.
Step 6: Effective Tax Rate: The effective tax rate is rounded for display purposes and automatically applied to the corresponding year of the Structured Income Plan. 
Step 7: Print 1040: Click on the green Print 1040 button.
Step 8: Hypothetical 1040 for Year 2042: A hypothetical 1040 tax form for 2042 is automatically generated. 
Year 2044: Age 70 (Withdrawing Only from the Brokerage Account, 0% Effective Tax Rate)
During the next five years the client will withdraw from her brokerage account to help meet the target income. Her two income streams are the withdrawals from the brokerage account and Social Security. Since the brokerage account is not tax‑qualified nor tax‑deferred there is no effective tax rate on these withdrawals. In this example, we highlight significant changes between the scenarios.
Step 1: IRA Distribution: There is no withdrawal in this year. 
Step 2: Social Security: SIPS automatically shows the amount and percentage of Social Security that is taxable.
Step 3: Taxable Income: This is the total taxable income. At this income level, the effective tax rate is 0%. 
Step 4: Discretionary Income: The amount of income left after subtracting taxes and essential deductions, showing how much is available for non-essential spending. 
Year 2050: Age 76 (RMD Withdraws)
In this example, we highlight significant changes between the scenarios.
Step 1: IRA Distributions Tax Return: This amount is equal to the net amount withdrawn from qualified accounts in 2050.
Step 2: Social Security: SIPS automatically shows the amount and percentage of Social Security that is taxable. 
Step 3: Effective Tax Rate: The effective tax rate is rounded for display purposes and automatically applied to the corresponding year of the Structured Income Plan. 
Step 4: Approximate Tax Calc: The estimated amount of income tax you owe before applying credits, based on your taxable income and the IRA tax tables or tax brackets. Take note of the Tax Return calculation. The dollar amount should match precisely on the structured income planning page.
Step 5: Discretionary Income: The amount of income left after subtracting taxes and essential deductions, showing how much is available for non-essential spending. 
Step 6: Amount You Owe: The total tax you still need to pay after subtracting all withholding, payments, and credits from your calculated tax liability. 
To learn more about Asset Allocation and Net Worth see articles:
The Asset Allocation and Net Worth page provides a visual summary of the assets in the scenario the client has chosen to follow.
Step 1: Scenario Explanation: SIPS will automatically display a pie chart and indicate what the asset allocation is set to. 
Step 2: Monetary Assets: SIPS will automatically display the monetary assets.
Step 3: Summary: SIPS will automatically display text stating the client’s total net worth. This amount includes both monetary and major assets. 
To learn more about Graphs see articles:
Along with the Asset Allocation and Net Worth page the Graphs page provides a visual summary of the accounts and incomes.
Step 1: Project Account Value Graph: A visual way to see how the accounts total column has changed over time. 
Step 2: Planned Yearly Income Graph: A graph to quickly understand the scenario and the structured income plan. 
To learn more about Reports see articles:
The Reports is a way for you to share a customizable snapshot of your client's financial data. The report is created as a pdf document so it is easy to give digitally or in a paper format.
Step 1: Report: A condensed view of the report. 
If you feel you need more support or would like to set up demo time with one of our representatives, please contact us at: support@planscout.com.
