Maximizing Your Plan

After establishing your Base Report, you can run the Maximized Plan. This special report maximizes your lifetime spending, potentially by hundreds of thousands of dollars. It considers thousands of Social Security collection and Retirement Account withdraw strategies to safely raise your lifetime benefits and lower your lifetime taxes.

After selecting the Maximized Plan you will see the four maximization options that will guide you in making sure that you're getting the most out of Social Security and your retirement accounts. You can also choose to see how increasing retirement account contributions impacts your plan. The report will show you how your Base Plan differs from your Maximized Plan and you'll be able to apply changes to your Base Plan.

Each of these options has a small ? that when moused over provides additional information about that option. Although you can run all options at once, it may be helpful to run each in turn in order to isolate the impact on discretionary spending of just that maximization option. After running a maximization report, you will have the option of applying that setting to the base profile to save you the time of then returning to the base profile and manually making those changes.

Maximizing your plan evaluates the new plan in terms of the lifetime present value of the advantage. In other words, postponing Social Security brings more money into your personal economy over the lifetime of the model. But in doing so in some cases it could constrain the near-term period of discretionary spending because of lack of liquidity. So while the lifetime plan, taken as a whole, provides a higher present value (accounting for the time-weighted value of the money) it's possible that the consequences for the near term, say the period up to age 70, suffer a much lower discretionary spending. There are ways to address this "liquidity constraint," discussed elsewhere in this user manual.

It is possible to run the maximization report and limit the amount of optimization in ways that accounts for this liquidity constraint by using the option at the bottom of the panel to limit reduction in spending. If you choose 0%, the algorithms that optimize will not optimize in ways that reduce spending in any period. This will of course limit the lifetime optimization, but it may create a more practical model. Conversely, one can check the "No Limit" box and discover the plan's highest optimization, greatest present value over a lifetime, without regard to any cash constraint. In some cases, this may involve pushing wealth far into the future and lowering discretionary spending when you need it or want it most.