Meta Title: Kim & Nate’s Passport Dilemma: Beyond the 3.5 % Rule
Meta Description: Sequence-of-returns and long-term-care costs could ground a globe-trotting couple’s plans—see why a dependable-income blueprint beats a 3.5 % market-only withdrawal.
Slug: passport-dilemma-35-withdrawal-risk
Excerpt: Kim and Nate want to tick thirty countries off their list, but a 3.5 % withdrawal plan could jeopardize their travel dreams, their homes, and their legacy. Discover the hidden risks—and the stewardship strategy built to keep their passports busy.
Word Count: 1,040
Control Your Capital. Build Your Legacy.
Chapter 1 – Two Passports, One Question
Kim clicked “Book Now” on a pair of off-season tickets to Lisbon—her first victory on the couple’s “Thirty Countries by 2030” bucket list. Nate, coffee in hand, refreshed their Edward Jones dashboard. Up popped the familiar green line: Projected Portfolio Life: Age 88.
“Lisbon’s a go,” Kim smiled, “but will Rome… or Kyoto… still be in the cards?”
Nate paused. “You mean—what if the market tanks while we’re lugging backpacks through Tuscany?”
They’d both watched their parents outlive actuarial charts, nudging into their early 90s. They’d also watched neighbors forced to sell a beloved lake cottage to cover long-term-care bills. Kim and Nate were determined not to repeat that story—especially if it meant sacrificing the tiny beach bungalow on Maui they’d been eyeing for winters.
Chapter 2 – From Accumulation to Decumulation (and the Hidden Trip Wire)
Their advisor had served them faithfully for decades, guiding them through IRAs, Roth conversions, and the steady climb of the S&P. A 3.5 % withdrawal plan made perfect sense while they were stacking chips.
But retirement is a different game:
That shift—from adding to accounts to subtracting from them—introduces a silent saboteur: Sequence-of-Returns Risk.
If the market dives in Year 1, Kim and Nate must sell more shares while they’re cheap, shrinking every future withdrawal. Picture a leaky canteen on the first mile of a desert hike.
Now layer on longevity—probable life into their 90s—and long-term-care costs that can crest $100,000 per year. Medicaid rules could claw back home equity if resources fall too low, threatening both their primary residence and that future Maui getaway.
Suddenly their tidy $2,000/month portfolio paycheck looks less like a pension and more like a house of cards.
Chapter 3 – A Wake-Up Call at 37,000 Feet
Somewhere between Chicago and Madrid, Kim queued up a finance podcast. The host asked a piercing question:
“Why guard your nest egg with only diversification when you can build dependable income first and let diversification handle the surplus?”
Landing in Spain, the pair drafted a short email: “We love our advisor, but does he have tools for the decumulation phase? We need a second set of eyes.”
Chapter 4 – Enter the Stewardship Blueprint
That email landed in my inbox. We saw a couple who’d done nearly everything right—yet were one market meltdown or health event away from trading travel dreams for Medicaid spend-down paperwork.
The Risks We Flagged
- Sequence-of-Returns: Early losses + fixed withdrawals = permanent pay-cut.
- Longevity Risk: 92 is the new 82; portfolios must last.
- Long-Term-Care Shock: Average need begins 78–85—exactly when a 3.5 % plan often runs thin.
- Real-Life Inflation: Flights, hotels, and gelato rarely get cheaper.
The Solutions We’re Sketching
Without revealing every tool in the workshop (that’s for Kim & Nate’s eyes first), here’s the spirit:
- Floor First: Carve out guaranteed cash-flow for the non-negotiables—housing, food, tithing, and (yes) off-season EuroRail passes.
- Guard the Roof: Design a tax-smart LTC strategy that protects both the Chicago home and dream bungalow from spend-down rules.
- Let Growth Be Growth: Position the excess capital for upside, knowing essentials are locked in.
- Optimize Taxes: Sequence withdrawals so Uncle Sam funds a few of those cappuccinos.
- Keep Control: Embed liquidity so they can pop over to Maui—or bail out grandkids’ first home purchase—without penalty.
In short: Income security first. Adventure forever. Legacy always.
Chapter 5 – Counting Counties, Not Coupons
Imagine Kim and Nate six summers from now, stamping passports in the Azores, then hopping to Burgundy for a cousin’s wedding—never once checking the Dow Jones before ordering another bottle of Beaujolais.
Their Maui place? Tenants cover the HOA when they’re abroad. Their Chicago home? Shielded from Medicaid claws. Their monthly “fun money” deposit hits like clockwork—indexed for inflation—whether markets soar or sputter.
That’s stewardship: capital controlled rather than feared, blessings magnified beyond their lifetimes.
The Takeaway
Kim and Nate’s story isn’t unique. Many couples leave the workforce with a well-diversified portfolio but an undiversified income plan. The same advisor who guided accumulation may lack the risk-pooling, LTC, and cash-flow tools needed for life’s next chapter.
If your bucket list is longer than your spreadsheet can currently prove, maybe it’s time for your own Stewardship Blueprint Session.
Because retirement is no time to trade Spanish sunsets for market stress.
