If your retirement savings plan feels solid, then it’s time to sharpen your strategy for greater spending flexibility.

Reaching financial readiness opens the door to a new kind of planning: one that focuses less on “having enough” and more on HOW TO USE IT WISELY.

SHARPEN FRAMEWORK

As a key part of our 365 Retirement Plan Process, the Sharpen Framework focuses on improving retirement spending flexibility using four strategies, including Roth conversions, charitable giving, family gifting and tax planning.

Each strategy is designed to help you use today’s financial stability to PROACTIVELY MANAGE FUTURE COSTS. 

Specifically, by bringing certain expenses into the present—you create more spending flexibility during your retirement years.

But first, have you double checked your PIN?

Before diving into the Sharpen Framework strategies, take a moment to revisit your PIN (Portfolio Income Needs). It’s the amount you’ll need to withdraw from your retirement savings each year to maintain your lifestyle. Use our PIN calculator to confirm this important baseline before moving forward.

Understanding your PIN is essential. The Sharpen Framework works best when your savings exceed your PIN by about 25%. This gives you flexibility to pay future expenses in advance and lower your taxes later. 

Now, let’s increase your spending power…

4 STRATEGIES TO IMPROVE SPENDING FLEXIBILITY IN RETIREMENT

#1—Roth Conversions

A Roth conversion is when you move money from a traditional IRA or 401(k) (hasn’t been taxed yet) into a Roth IRA, where it can grow and eventually be withdrawn tax-free. 

You pay income tax on the amount you convert in the year you make the move, but once it’s in the Roth, future growth and withdrawals are TAX-FREE.

During retirement, qualified withdrawals from a Roth IRA are NOT considered taxable income. 

This means they don’t:

• Show up on your tax return as income.
• Impact your tax bracket.
• Count toward income thresholds for Medicare premiums or Social Security taxation.

HOWEVER…

To qualify, the withdrawals must meet two key conditions: The account has been open for at least five years and you’re age 59½ or older.

When does a Roth conversion make sense?

It’s a smart strategy in certain cases. Specifically, consider one when you want to:

• Take advantage of a lower tax rate now compared to what you expect in the future.

• Reduce future Required Minimum Distributions (RMDs).

• Fill up your current tax bracket without spilling into a higher one, strategically controlling how much is converted.

• Use non-retirement funds to pay the taxes, preserving more in the Roth for long-term growth. 

• Leave tax-free assets for your heirs, creating more financially flexible for them.

Used strategically, a Roth conversion can give you more spending flexibility in retirement, especially in how and when you draw income. Use our Roth Conversion Flowchart to determine if a Roth conversion is the right move for you.

#2—Charitable Giving

For high-net-worth individuals like yourself, charitable giving serves dual purposes: supporting causes you care about and reducing taxes. To do both effectively, consider strategies that offer flexibility, immediate tax benefits or better timing for your deductions, including:

Donor-Advised Funds (DAFs): This tool allows you to contribute a variety of assets (e.g., cash and appreciated securities) into a charitable account, take an IMMEDIATE TAX DEDUCTION, and then distribute funds to charities over time. DAFs may also help you avoid capital gains tax.

Qualified Charitable Distributions (QCDs): For individuals age 70½ or older, QCDs enable you to donate directly from an IRA to a qualified charity. This counts toward your (RMDs) while excluding the amount from your taxable income.

There’s an annual limit to the amount you can donate; specifically, $108,000 per person for 2025. Married couples filing jointly can each contribute up to $108,000 from their respective IRAs. Lastly, the donation must go directly from your IRA to the charity.

Donation Bunching: This strategy involves combining multiple years’ worth of charitable contributions in a single tax year to exceed the standard deduction threshold. It increases your itemized deductions in high-income years while allowing you to continue supporting your charities over time.

#3—Family Gifting

To help reduce estate taxes and increase retirement spending, consider these gifting strategies:

Gift Annually: In 2025, you can gift up to $19,000 per recipient without triggering gift taxes or using any of your lifetime exemption ($13.99 million per person in 2025*). For married couples, it’s $38,000 per recipient. Over time, these tax-free gifts can SIGNIFICANTLY REDUCE THE SIZE OF YOUR TAXABLE ESTATE while benefiting family members now.

Pay for Education and Medical Expenses: Directly paying tuition to an educational institution or medical expenses to a healthcare provider on behalf of someone else does not count as a taxable gift. This allows you to provide substantial financial assistance without impacting your annual or lifetime gift tax exemptions.

Front-Load 529 Education Savings Plans: 529 plans offer a way to reduce your taxable estate by front-loading gifts for education. Although annual contributions may exceed the $19,000 gift tax exclusion in 2025, you can elect to spread a large contribution over five years, allowing up to $95,000 in 2025 without gift tax implications.

*Important: The lifetime estate exemption may drop to about $6-7M in 2026 if the Tax Cuts and Jobs Act expires at year-end.

#4—Tax Planning

You’ve done an excellent job accumulating wealth. Now it’s about preserving more of it by managing taxes wisely. This starts with creating a mix of tax-deferred, tax-free and taxable accounts—so you have more flexibility in how and when you draw income, especially as tax laws evolve.

CONSIDER THESE KEY TAX-PLANNING STRATEGIES:

Tax Diversification for Retirement Income: With significant pre-tax assets, large RMDs are likely down the road. Roth conversions—done gradually and strategically—can help shift assets into tax-free territory and reduce future tax pressure.

Tax-Bracket Management: Income timing matters. Mapping out when and how to recognize income, such as through partial Roth conversions or capital gains, can help you “fill up” lower tax brackets and avoid unnecessary jumps into higher ones. (Also, key Tax Cuts and Jobs Act provisions may expire after 2025, which could raise tax brackets—like 24% reverting to 28% and 37% to 39.6%.)

Capital Gains Harvesting: If you hold appreciated investments in a taxable account, realizing gains in lower-income years can reset cost basis and reduce future taxes. It’s a proactive way to manage long-term tax exposure.

Tax-Efficient Withdrawal Sequencing: The order in which you draw from accounts matters. A SMART WITHDRAWAL STRATEGY balances income needs with tax efficiency. (See more about smart withdrawal strategies below.) Remember, higher taxable income can increase how much of your Social Security is taxed and may push you over Medicare income thresholds, triggering higher premiums. Strategically managing your withdrawals helps minimize these increases.

Final Thoughts

Lowering your future tax obligations while increasing your retirement spending flexibility isn’t simple. It involves navigating a maze of financial thresholds, rules and timing considerations. 

An experienced financial advisor can help you make sense of the options, avoid costly missteps and move forward with confidence. If you’re feeling unsure, then check out our 365 Retirement Plan. It’s easy and reduces stress.

[Smart Income Withdrawal Strategies] When you have more than enough savings, the focus shifts to using it wisely. Distribution optimization helps turn your savings into a tax-efficient income stream built to last, while minimizing risk and taxes. Learn how in our article: The Key to Long-Lasting Retirement Wealth? A Smarter Withdrawal Plan.