Episode 6 of 6
The Withdrawal Strategy
Fiona designs her drawdown plan: which accounts to tap first, how to manage the Roth conversion ladder, and how to generate income without triggering ACA subsidy cliffs. The final model integrates everything — allocation, location, healthcare, and withdrawal sequencing.
Key Insight
A Roth conversion ladder during her first 5 years of early retirement — converting $40k/year from Traditional to Roth — keeps her MAGI below $50k, potentially qualifying her for meaningful ACA premium tax credits (actual amounts vary by year, household size, and benchmark plan — check the Healthcare.gov calculator or IRS Premium Tax Credit guidance). Over 5 years this can add up to substantial healthcare savings while building a tax-free withdrawal base.
Model This Scenario