Overview

Your Base Plan answers an important question:

What does my financial future look like based on the information I’ve entered today?

But, in MaxiFi, we encourage you to take it a step further and ask:

What if I did something differently?

That’s where Alternative Profiles come in.

An Alternative Profile lets you change one or more assumptions without changing your Base Plan. You can then compare the two plans and see how the decision affects your spending, assets, taxes, retirement accounts, housing, and estate over time.

If you haven’t used Alternatives before, or you haven’t logged into MaxiFi in a while, here are some useful scenarios to try.

See Alternative Profiles and Comparison Reports for more information on creating Alternative Profiles. 

QUICK USE GUIDE

Before You Begin: Start With Your Base Plan

Before creating an Alternative, take a few minutes to review your Base Plan and make sure your information is current.

Pay particular attention to things that may have changed since your last visit, such as:

  • earnings and retirement dates
  • account balances
  • housing information
  • pensions and other income
  • recurring or special expenses
  • Social Security assumptions

Once your Base Plan reflects your current situation, create an Alternative Profile and make only the changes needed for the question you want to explore.

If you change five things at once, it can be hard to tell which decision caused the result. Start with one question at a time.

1. What If I Retire Earlier?

Maybe you planned to work until 67, but 65 is starting to look awfully attractive.

What to change

In your Alternative Profile, go to your employment/earnings information and change the year or age when your employment income ends.

If retirement also affects a pension or another source of income, update the applicable start date there as well.

For a clean comparison, leave everything else the same.

What to look for

Run the Alternative and compare it with your Base Plan.

Look at:

  • your sustainable discretionary spending
  • retirement-account withdrawals
  • Regular Asset balances
  • taxes
  • your ending estate
  • when MaxiFi begins drawing from different accounts

You may find that retiring a year earlier has a meaningful cost, or surprisingly little impact.

Then try the opposite: What if I work one more year?

That comparison can be just as useful.

2. What If We Spend More on Travel?

A retirement plan should account for living, not just paying bills. If you expect to travel more during the first several years of retirement, you can model that directly.

What to change

Create an Alternative and add a Special Expense for travel.

You might model something like:

  • $10,000 per year for five years
  • one major $25,000 trip
  • higher travel spending from ages 65 through 75

Use the timing and amount that best reflects what you are actually considering.

What to look for

Compare the Alternative with your Base Plan and ask: What did that travel actually cost me over my lifetime?

You may see changes in:

  • discretionary spending available in other years
  • Regular Asset balances
  • retirement withdrawals
  • taxes
  • the amount remaining in your estate

Remember that spending an additional $50,000 does not necessarily mean your lifetime discretionary spending falls by exactly $50,000. MaxiFi is recalculating the entire lifetime plan.

3. What If We Downsize or Move?

Housing is often one of the largest financial decisions in a plan. Maybe you are considering downsizing, relocating to another state, buying a retirement home, or simply staying where you are. See Housing & Real Estate for more information. 

What to change

In your Alternative Profile, update the relevant housing information.

Depending on the scenario, that could include:

  • selling your current home
  • changing the sale date
  • entering a new home purchase
  • changing the value of the replacement home
  • adjusting mortgage information
  • changing ongoing housing expenses

What to look for

Compare how the move affects:

  • available spending
  • Regular Assets
  • housing wealth
  • taxes
  • retirement-account withdrawals
  • your final estate

A less expensive home may free up assets for spending, while a more expensive move may reduce available lifetime resources. The useful question isn’t simply, “Can I afford the house?” It’s: “What does choosing this house do to the rest of my financial life?”

4. What If I Help My Kids or Grandkids?

Maybe you want to help with a down payment, college expenses, a wedding, or simply give money while you are around to see it used.

What to change

Create an Alternative and enter the gift as a Special Expense in the year or years you expect to make it.

For example:

$50,000 in 2028 for a child’s home purchase; or,

$10,000 per year for four years toward a grandchild’s education

What to look for

Look beyond the immediate expense.

Compare:

  • lifetime discretionary spending
  • Regular Assets
  • retirement withdrawals
  • taxes
  • your final estate or bequest

This is one of the situations where Alternatives can be especially helpful because you can test several amounts.

Try $25,000. Then $50,000. Then $75,000.

You may discover where the decision begins to meaningfully change the rest of your plan.

5. What If I Make a Big Purchase?

A car, RV, boat, home renovation, vacation property, or another major purchase can be modeled the same way.

What to change

Add the purchase as a Special Expense in the Alternative. If the purchase also creates ongoing costs, consider including those too. For example, an RV might involve:

  • a $75,000 purchase
  • $5,000 of additional annual expenses for several years

What to look for

Compare the Alternative against your Base Plan and look at where the money comes from.

Does MaxiFi:

  • reduce Regular Assets?
  • increase retirement-account withdrawals?
  • lower sustainable discretionary spending?
  • change taxes?
  • reduce the ending estate?

This can be more informative than simply asking whether your current checking or investment account has enough money for the purchase.

6. What If I Work Part-Time Instead of Retiring Completely?

Retirement does not have to be a light switch. Maybe you want to leave your full-time career but still earn $25,000 or $40,000 for a few years.

What to change

In the Alternative, adjust your future earnings to reflect the part-time income and the years you expect to earn it.

For example:

$30,000 annually from ages 65 through 68 instead of ending earnings entirely at 65.

What to look for

Compare:

  • retirement-account withdrawals
  • Regular Assets
  • taxes
  • discretionary spending
  • Social Security timing, if relevant to your plan
  • the long-term value of those additional working years

Part-time work can sometimes have an impact beyond the paycheck because it may also reduce the amount you need to withdraw from savings.

7. What If Our Expenses Change in Retirement?

Some expenses disappear in retirement. Others appear. You may stop commuting but start traveling more. Your mortgage may end. Healthcare costs may rise.

What to change

Use the Alternative to adjust the applicable fixed or special expenses and their timing. Try modeling the version of retirement you realistically expect rather than simply carrying today’s spending forward indefinitely.

What to look for

Watch how the change affects your discretionary spending. MaxiFi separates spending that you have committed to from the spending available for everything else. That distinction can help answer a much more useful question than “How much do I spend today?”

It helps answer: “After accounting for the expenses I know I want or need, how much can I sustainably spend on everything else?”

8. What If I Change My Roth Conversion Strategy?

Roth conversions are a little different because MaxiFi has dedicated tools for analyzing them. Before jumping straight into the Roth Conversion tools, make sure you understand your Base Plan first.

What to change

Review your retirement accounts and applicable Roth conversion/maximization settings & assumptions. You can then use MaxiFi’s Roth-related tools to compare the plan with and without conversions or with different conversion assumptions.

What to look for

Do not judge the result only by the tax bill in the year of conversion.

Look at how the strategy affects:

  • lifetime taxes
  • Traditional retirement-account balances
  • Roth balances
  • RMDs
  • discretionary spending
  • your final estate

A Roth conversion intentionally creates taxes today, so seeing higher taxes in the conversion year does not by itself tell you whether the strategy improved the lifetime plan.

9. What If Something Goes Wrong?

Alternatives do not have to represent things you want to happen. They can also help you explore risks.

Maybe you wonder:

  • What if I have to retire two years earlier?
  • What if we need an additional $50,000 for healthcare?
  • What if a major home repair happens?
  • What if our retirement spending is higher than expected?

What to change

Create an Alternative representing the concern. Change only the assumption associated with that risk.

What to look for

Instead of asking whether the Alternative is “good” or “bad,” look at how resilient your plan is. Does discretionary spending fall dramatically? Do assets still last? Does the estate shrink while your lifetime spending remains relatively stable? Sometimes an Alternative can turn a vague financial worry into something measurable.

Use “What Changed?” as Your Road Map

Once you run an Alternative, don’t immediately dive into every page of the report. Start with the comparison between the Alternative and your Base Plan. Ask: What changed? Then follow those changes into the reports.

For example, if discretionary spending falls, look at the asset and withdrawal reports to understand why.

If your estate changes substantially, look at what happened to Regular Assets, retirement accounts, or housing.

If taxes change, look at which income or withdrawal decisions caused the difference.

Not Sure Where to Start?

Try this simple exercise.

1. Create one Alternative to answer one question; even consider using a hypothetical to start! 

2. Run the report.

3. See what changed.

4. Then create another Alternative Profile and change it to happen one year later, or make it more expensive, etc. to see the impacts in a different way.

Suddenly you have three versions of a financial future to consider. 

Alternative Profiles cannot predict exactly what will happen, or how it will happen, but they can help you understand what could happen if a different choice was made now or in the future. Start with one question and use an Alternative Profile to help yourself find the answer!