Redwood Case Study:
Retiring Early
Meet John & Cynthia
At 64 and 61, John and Cynthia were just a few
years away from their planned retirement when
John was unexpectedly laid off.
This made them question everything, including
their ability to retire on time. With only one
income left, they asked: Can we still retire now—
and be okay?
Confirm that early retirement is possible
Develop a sustainable and flexible cash flow plan
Maximize Social Security and retirement income
Minimize future tax burdens from required minimum distributions
Avoid tapping retirement accounts prematurely
John & Cynthia’s 4 Key Questions
Will we be financially okay if we retire now?
How can we create income without draining our retirement savings?
Should we take Social Security now—or wait?
Since our annual income will be lower this year, should we take advantage of long-term tax saving strategies?
How We Helped
After listening to John and Cynthia’s concerns about how this layoff would impact their ability to retire early, we revisited their financial plan and created a new version built around today’s reality—not last year’s assumptions.
We often say financial planning is part science, part art. While this change to their financial circumstances wasn’t ideal, it was a chance to get creative.
Scenario Planning:
We shifted John’s projected retirement from 68 to 64 after seeing how Cynthia’s own work timeline (3 more years) could support this transition. We ran stress tests on this new timeline to help John and Cynthia see the probability of success.Cash Flow Generation (Spend Bucket):
Without touching their retirement accounts, we carved out $300,000 from John and Cynthia’s taxable portfolio and implemented a cashflow generation strategy on a diversified group of stocks. This generated monthly income to bridge the gap in a tax-efficient way and reduced their worries over John’s lost income.Social Security Deferral & Tax Efficiency (Grow Bucket):
By generating sufficient cash flow from the taxable portfolio and Cynthia’s income, we were able to defer both of their Social Security benefits until age 70. Delaying benefits enabled them to enjoy higher monthly payments. Because we were able to meet their cash flow needs, this strategy also allowed us to leave their retirement accounts in tact.Strategic Roth IRA Conversion (Secure Bucket):
After consulting with their CPA, we completed a partial Roth IRA conversion, taking advantage of their lower marginal tax bracket this year (due to John’s layoff). Their Roth IRA is now housed in the “Secure” bucket, earmarked for long-term growth and eventual tax-free withdrawals.
The Outcome
- John officially retired—earlier than planned and with
total confidence - Cynthia continues working on her own terms, knowing
their future is protected - They deferred Social Security to age 70 and reduced
future RMD tax exposure - Their investment portfolio is now structured and aligned
with their new lifestyle
Most importantly, they transformed uncertainty into
empowerment. With a flexible, forward-looking plan in place,
John and Cynthia are living life on their terms—without second-
guessing whether they’ve “done enough”, because they know
they have.
