Perennial Income Model Archives

How a Thoughtful Plan Turns Retirement from Stressful to Simple

Posted on April 17, 2026 by Alex Call, CFP®

If there’s one thing I wish every retiree understood, it’s this:

Retirement doesn’t have to feel stressful.

In fact, with the right plan in place, it can be quite the opposite.

Instead of worrying about markets, second-guessing decisions, or wondering if you’re withdrawing too much… you can move forward with confidence. You can know, clearly and concretely, that your money is designed to last as long as you do.

And when that happens, something powerful takes place.

You stop focusing on your money… and start focusing on living your best life.

Retirement Was Never Meant to Be This Stressful

I meet a lot of retirees who did everything right.

They saved diligently. They invested consistently. They prepared for decades.

And yet, when retirement finally arrives, the stress doesn’t go away, it often increases.

Why?

Because the questions change.

Instead of “How much should I save?” the question becomes:

“How much can I safely spend?”

Instead of “How should I invest?” it becomes:

“How do I turn this into income that will last 30 years?”

These are not small questions. And without a clear plan, they can feel overwhelming.

But here’s the good news:

With a well-structured retirement income plan, those questions don’t just get answered, they get simplified.

What Confidence in Retirement Actually Looks Like

When someone has a real plan in place, I see a shift happen.

They no longer feel like they’re guessing.

They know:

What their income will look like year after year
Where that income is coming from
How their investments support that income
And most importantly, that they are not on a path to run out of money

This kind of clarity changes everything.

It allows you to relax.

It allows you to enjoy.

It allows you to focus on what actually matters, your family, your health, your relationships, and the experiences you’ve worked your whole life to enjoy.

The Role of the Perennial Income Model™

At Peterson Wealth Advisors, the way we help clients achieve that level of confidence is through the Perennial Income Model.

This isn’t about chasing high returns or making bold predictions about the market.

It’s about something much more reliable.

It’s a logical, systematic approach to retirement income planning that answers not just what will happen, but how it will happen.

Instead of a vague projection, the Perennial Income Model shows:

How your assets are structured into time-based segments
How to match your investments with your income needs
When each segment will be used for income
How those segments are invested based on time horizon
And how your income is designed to remain consistent and inflation-aware

It brings order to what often feels like a financial “junk drawer” of accounts and investments.

And most importantly, it gives you a clear income range to live within.

Your job becomes simple:

Stay within that plan, and you’re taken care of.

A Conservative Approach That Prioritizes Peace of Mind

One of the biggest misconceptions in retirement planning is that success depends on achieving high returns.

It doesn’t.

In fact, the goal of a retirement income plan is not to maximize returns, it’s to maximize reliable and consistent income.

The Perennial Income Model is built on conservative assumptions and time-tested principles. It doesn’t rely on:

Market timing
Stock picking
Or unrealistic return expectations

Instead, it focuses on:

Matching investments to when you’ll need the money
Creating a predictable income stream
Reducing unnecessary risk
Coordinating withdrawals in a tax-efficient way

Because at the end of the day, what matters most is not how your portfolio performs in any given year…

It’s whether your plan allows you to live confidently for the next 30 years.

Planning for More Than Just Income

A well-designed retirement plan doesn’t just answer the question:

“Will my money last?”

It also answers:

“What will be left behind?”

One of the most meaningful outcomes of the Perennial Income Model is that it allows retirees to plan intentionally for a legacy.

Because your income is structured and your assets are allocated with purpose, you gain visibility into:

What remains over time
How your assets can be passed on
And how to support the people and causes you care about

Unlike strategies that simply “spend down” assets, this approach creates the opportunity to:

Leave a financial legacy to children and grandchildren
Support charitable causes in a tax-efficient way
And make giving part of your living years, not just your estate

In other words, your plan doesn’t just support your life, it extends your impact beyond it.

The Real Goal: Freedom to Focus on What Matters

When everything is said and done, the purpose of a retirement income plan is not financial, it’s personal.

It’s about creating the freedom to:

Spend time with family
Travel without hesitation
Give generously
And live with confidence instead of concern

With the right plan in place, money becomes a tool, not a source of stress.

And that’s exactly how retirement should feel.

Ready to Take the Next Step?

If you’ve been wondering whether your current plan truly supports the kind of retirement you want…

Or if you’re still asking yourself:

“Will I outlive my money, or will my money outlive me?”

Now is the time to get clarity.

At Peterson Wealth Advisors, we help retirees build a personalized plan using the Perennial Income Model™, so they can move forward with confidence, not uncertainty.

Schedule a free consultation today and take the first step toward a retirement built on clarity, confidence, and peace of mind.

How to Reduce Taxes in Retirement with a Smarter Income Plan

Posted on April 14, 2026 by Carson Johnson, CFP®, CRPC™, NSSA™

When most people think about retirement, they focus on one question:

“Do I have enough?”

But there’s another question that can be just as important—if not more so:

“How much of what I have will I actually keep after taxes?”

Because the reality is, for many retirees, taxes become one of the largest expenses they’ll face throughout retirement.

And without a clear plan, those taxes can quietly erode the income you worked so hard to build.

Why Taxes Matter More in Retirement Than You Think

One of the biggest surprises for retirees is this:

You don’t stop dealing with taxes when you stop working.

In fact, in many ways, you become more responsible for how and when you pay them.

During your working years, taxes are relatively straightforward. Income comes in, taxes are withheld, and the system runs in the background.

But in retirement?

You’re in control.

You decide:

How much income to take
Where to take it from
And when to recognize that income

And each of those decisions carries different tax consequences.

Without a plan, it’s easy to make withdrawals that unintentionally push you into higher tax brackets, increase Medicare premiums, or reduce the efficiency of your income.

The Foundation: Know Your Future Income

Before you can make smart tax decisions, you need clarity on one thing:

What will your income actually look like in retirement?

This is where many retirees fall short.

They attempt to make tax decisions in isolation—without first projecting their income over time.

But without that projection, it’s nearly impossible to answer key questions like:

Which accounts should I withdraw from first?
How much can I take without increasing my tax burden?
How do I coordinate withdrawals with Social Security and other income sources?

A well-structured retirement income plan answers these questions upfront—so your tax strategy becomes intentional, not reactive.

Not All Income Is Taxed the Same

Here’s where things start to get more nuanced—and more powerful.

Different sources of retirement income are taxed in different ways.

For example:

Social Security may be partially taxable depending on your income
Pension income is typically fully taxable
Investment withdrawals can vary widely based on the type of account you have

This creates both a challenge and an opportunity.

Because if you understand how each income source is taxed, you can begin to coordinate withdrawals in a way that minimizes your overall tax burden.

The Three Tax Buckets Every Retiree Should Understand

One of the simplest and most effective ways to think about taxes in retirement is through what I call the three tax buckets.

Each bucket represents a different type of account—and each is taxed differently.

Understanding how to use these buckets strategically is key to creating a tax-efficient retirement income plan.

1. Tax-Deferred Accounts

This includes accounts like:

Traditional IRAs
401(k)s, 403(b)s, and other types of retirement accounts

These are often called pre-tax accounts because the money went in without being taxed.

But there’s a catch:

Every dollar you withdraw in retirement is taxed as ordinary income at your tax rate.

And later in retirement, Required Minimum Distributions (RMDs) force you to take money out—whether you need it or not.

Without planning, this can create:

Large, unexpected tax bills
Higher Medicare premiums
And reduced flexibility

2. Tax-Free (Roth) Accounts

This includes:

Roth IRAs
Roth 401(k)s

With these accounts, you’ve already paid taxes on the money going in.

The benefit?

Qualified withdrawals are completely tax-free.

That makes Roth accounts incredibly valuable in retirement, because they give you:

Flexibility in managing your taxable income
A way to avoid pushing yourself into higher tax brackets
And a powerful tool for long-term tax planning

3. Taxable Brokerage Accounts

These are your standard investment accounts.

They’re called “taxable” because:

Interest and dividends are taxed along the way whereas retirement accounts are not taxed on the investment earnings
Capital gains are taxed when investments are sold

While that might sound less appealing, these accounts play an important role—especially in early retirement.

They can provide income before Social Security begins, helping you:

Control your taxable income
Potentially reduce healthcare costs
And delay withdrawals from tax-deferred accounts, allowing you to take advantage of other tax strategies such as Roth conversions

Turning Tax Complexity Into a Strategic Advantage

At first glance, having multiple account types with different tax rules might seem complicated.

But with the right plan, it becomes an advantage.

Because instead of being at the mercy of the tax code…

You can orchestrate your withdrawals across these buckets to:

Stay within favorable tax brackets
Reduce lifetime tax liability
And create a more efficient, sustainable income stream

This is exactly the kind of coordination that a structured retirement income plan is designed to provide.

How the Perennial Income Model™ Supports Tax Efficiency

At Peterson Wealth Advisors, we incorporate tax planning directly into the retirement income strategy through the Perennial Income Model.

This approach doesn’t treat taxes as an afterthought.

Instead, it:

Projects your income over time
Aligns withdrawals with your tax situation
Coordinates income sources to minimize unnecessary taxes
And adapts as tax laws and your situation evolve

The goal is simple:

Create an income stream that not only lasts—but does so as efficiently as possible.

Because it’s not just about how much you earn in retirement…

It’s about how much you keep.

I’m working with a client right now where this type of planning has made a big difference. On the surface, they had plenty of savings for retirement to cover their needs. But the real question was how to turn those savings into income without unnecessarily increasing their tax bill. After projecting their retirement income through the Perennial Income Model and carefully evaluating which accounts to draw from, we found that the best approach was to take roughly 60% of their income from IRA and other tax-deferred accounts and 40% from Roth IRA accounts. That mix allowed them to stay in the 12% tax bracket rather than moving into the 22% bracket, while also preserving valuable tax deductions made available under the recent One Big Beautiful Bill that could have been reduced or lost at higher income levels. In their case, that planning is expected to save nearly $8,000 per year in taxes in addition to the other tax and charitable giving strategies we will continue to implement throughout their retirement. It is a good example of how retirement tax planning is not just about reducing taxes in a single year, but about creating a smarter income strategy over time.

The Bigger Picture: Income, Taxes, and Legacy

When you manage taxes effectively in retirement, the benefits extend beyond your monthly income.

You also gain more control over:

How your assets are preserved
How they’re passed on to future generations
And how you support the people and causes you care about

Tax-efficient planning can help reduce the burden on your heirs and increase the impact of your legacy—turning smart decisions today into meaningful outcomes or future generations to come.

Ready to Take Control of Your Retirement Taxes?

If you’ve spent years building your retirement savings, it’s worth taking the next step to protect them from unnecessary taxes.

A thoughtful, coordinated plan can make a significant difference in:

Your lifetime tax liability
Your retirement income
And your overall peace of mind

If you’d like help building a tax-efficient retirement income strategy, we’re here to help.

Schedule a free consultation today and see how the Perennial Income Model can help you keep more of what you’ve earned—and use it to live the retirement you’ve been planning for.

How the Perennial Income Model™ Helps Intermountain Caregivers Turn Benefits into a Reliable Retirement Paycheck

Posted on April 2, 2026April 14, 2026 by Scott M. Peterson, ChFC®

You’ve spent decades accumulating a pension benefit and building your retirement savings through Intermountain Health’s 401(k). Perhaps you have accumulated additional assets in HSAs, IRAs, or spousal plans along the way. But now comes the bigger question: How do I turn these assets into income I can actually live on, month after month, year after year?

At Peterson Wealth Advisors, we work with Intermountain Health Retirees to create exactly that: a structured, sustainable, and stress-free retirement income plan.

Our proprietary solution is called the Perennial Income Model™, and here’s how it transforms uncertainty into clarity.

The Problem With Traditional Withdrawal Strategies

Most retirees lack an actual retirement income plan built specifically to address their unique needs. Instead, they are told to “just withdraw 4% each year.” But what happens when the market drops 20%? What if inflation spikes or your expenses shift? And how do you know which accounts to tap first?

For Intermountain caregivers that are used to steady paychecks, this kind of guesswork feels risky and uncomfortable.

You need a smarter strategy that:

Matches your current investments with your future income needs
Minimizes market risk when you’re most vulnerable
Gives you confidence to spend, without fear of running out

That’s where the Perennial Income Model™ comes in.

How the Perennial Income Model™ Works

We divide your retirement into six 5-year segments, each with a specific responsibility to provide income for a five-year period of your retirement. Think of it as a series of retirement “paychecks” that change and adapt with you over time.

Segment 1 (Years 1–5): Stability and Access

This segment is invested conservatively and provides the income you need immediately in retirement. It’s your safe and dependable financial foundation.

Segment 2 (Years 6–10): Protected but Growing

Segment 2 is slightly more growth-oriented but still designed for stability. These assets will soon be your paycheck source and are positioned to support you without excessive risk.

Segments 3–6 (Years 11–30): Growth for the Long Haul

These later segments are invested with increasing levels of growth, aiming to outpace inflation and keep your income strong—even in your 80s and 90s.

Benefits for Intermountain Retirees

1. Predictable Paychecks

The Perennial Income Model™ allows us to structure distributions so that every month, you get a “retirement paycheck.” No guesswork. No scrambling.

2. Tax Efficiency

We tailor withdrawals from Roth, Traditional, and taxable accounts to reduce your tax burden over time. This is especially helpful for Intermountain retirees with both pre-tax and Roth 401(k) contributions.

3. Risk Management

The two biggest risks for retirees are market volatility and inflation. Because your early retirement years are funded conservatively, you’re not forced to sell stocks during market downturns. Money designated to provide income during the later years of your retirement is invested for growth to keep up with inflation.

4. Flexibility for Living Your Best Life, Serving, Traveling, or Giving

Whether that means traveling, serving in your church or community, or spending time with your family, the segmented design makes it easier to plan for larger, short-term expenses without disrupting your overall income strategy.

5. Confidence in Retirement

When you know what you can spend (and where it’s coming from), you make decisions with confidence. That’s a powerful shift from “Will I run out?” to “How do I want to live?”

Real-Life Application for Intermountain Retirees

We’ve used this model to help:

Nurses transition to early retirement with confidence
Physicians phasing out of practice into semi-retirement
Administrators maximizing Roth conversions during low-income years
Couples coordinating their incomes for maximum tax efficiency

Each plan is customized, but all are grounded in the same powerful structure.

Want to turn your Intermountain benefits into a clear, structured retirement paycheck? Let’s create a plan that brings lasting peace of mind.

Visit petersonwealth.com or call (801) 225-0000 to schedule your complimentary Perennial Income consultation.

Peterson Wealth Advisors is a fee only registered investment adviser. The information presented is for educational purposes only. Please consult with a qualified financial advisor before implementing any strategy.

Bringing It All Together: Why The Perennial Income Model™ Makes Sense

Posted on March 17, 2026March 27, 2026 by Alek Johnson, CFP®

If you’ve ever asked yourself, “Will I outlive my money . . . or will my money outlive me?” then you’re asking the right question. It’s the same one we’ve helped hundreds of retirees answer through our Perennial Income Model™. And frankly, there’s never been a better framework to provide that answer with confidence and clarity.

At Peterson Wealth Advisors, everything we do revolves around this time-tested, goal-based income strategy because it works.

Let’s walk through how the Perennial Income Model ties together income sources, time segmentation, inflation protection, and long-term planning into one unified approach to retirement peace of mind.

Solving the “3 Big Risks” of Retirement

Retirement can bring some of life’s biggest financial questions—and its biggest risks:

Longevity risk (What if I live longer than expected?)
Inflation risk (What if my money doesn’t keep up with rising costs?)
Volatility risk (What happens if the market crashes at the wrong time?)

The Perennial Income Model is designed to strategically address all three.

How? It organizes your assets into time-segmented portfolios, aligned with when you’ll actually need the money. Conservative assets cover short-term needs, while more aggressive investments are earmarked for the later years, giving them time to grow and ride out market ups and downs.

This time segmentation isn’t just theory. It’s been battle-tested for nearly two decades and through multiple market downturns. And it’s built on Nobel Prize-winning economic principles.

Bringing Clarity to Income Sources

One of the most overlooked aspects of retirement planning is how to coordinate all your income streams: Social Security, pensions, rental income, investment withdrawals—and sometimes even part-time work.

The Perennial Income Model integrates all of this.

Instead of treating your portfolio and income decisions as separate conversations, we bring them into one cohesive plan. This lets us help you:

Optimize when to claim Social Security
Choose between pension lump sums or annuitization
Layer in required minimum distributions (RMDs)
Minimize your tax burden along the way

This integration helps clients feel empowered by their choices, rather than overwhelmed.

Removing the Guesswork

Many traditional retirement plans rely on rough rules of thumb, like the “4% rule.” But what if the market drops 30% right after you retire? Suddenly, that 4% feels like a big gamble.

The Perennial Income Model takes a different path. It maps out your income year by year, for the next 30+ years. It’s not a guess. It’s a visual roadmap that accounts for inflation, taxes, volatility, and evolving income sources.

This clarity is what gives our clients permission to spend with confidence. For many who’ve spent decades diligently saving, it’s a refreshing shift: from hoarding wealth out of fear to enjoying it with purpose.

Laying the Foundation for Tax-Efficient Planning

When you know what your income will be in the future, you can plan today to minimize taxes later. Whether it’s timing Roth conversions, leveraging Qualified Charitable Distributions (QCDs), or sequencing withdrawals from different accounts, the Perennial Income Model makes proactive tax planning possible.

This isn’t just about saving money—it’s about keeping more of your retirement income working for you and your family.

Peace of Mind, Season After Season

One of my favorite parts of my role at Peterson Wealth Advisors is seeing clients’ confidence grow once their plan is in place.

Many come to us feeling anxious about “doing the right thing” with their money. They’re not looking for the hottest investment . . . they’re looking for clarity, stability, and the confidence to live a retirement that’s both fulfilling and secure.

The Perennial Income Model is the backbone of that transformation.

It’s not a product. It’s not a one-size-fits-all solution. It’s a customized roadmap that we build together, so you know exactly:

Where your income is coming from
How it changes over time
How your investments support that plan
What tax strategies can protect more of your income
And what legacy you can leave behind

This is why our clients keep returning to the Perennial Income Model. It works. It’s clear. And it delivers peace of mind season after season.

Ready to plan not just for retirement, but for a life well-lived? Schedule a retirement consultation with a Peterson Wealth Advisor today at petersonwealth.com.

The Best Way to Create a Retirement Income Plan

Posted on May 16, 2023September 24, 2025 by Scott M. Peterson, ChFC®

Scott Peterson was a guest writer on the popular White Coat Investor blog—a blog esteemed amongst physicians and other high-income professionals. Scott’s blog outlines our proprietary process for investing, The Perennial Income Model™. The article also presents a retirement income plan creation example of a couple who have accumulated $1 million for their retirement.

Click here to read Scott’s blog in its entirety on WhiteCoatInvestor.com.

Reduce Your Taxes Throughout Retirement With the Perennial Income Model™

Posted on November 2, 2022August 21, 2025 by Scott M. Peterson, ChFC®

“You must pay taxes. But there is no law that says you gotta leave a tip.” -Morgan Stanley

How can any retiree make a good decision about reducing taxes in retirement, or any financial professional recommend a proper course of action, without first mapping out, and projecting a future income stream?

The answer is . . . they can’t. Retirees often end up making only short-term, immediate tax-saving decisions, while missing out on more advantageous, long-term tax reduction opportunities because neither they nor their advisor project income streams across a full retirement. Focusing only on the current tax year ends up costing retirees many thousands of dollars because they fail to recognize, and then to organize, their finances to take advantage of long-term opportunities to reduce taxes.

A comprehensive retirement income plan must consider a lifetime tax reduction strategy that focuses on how today’s decisions to withdraw money from the various types of accounts will impact their tax liability years into the future. The Perennial Income Model™ is the ideal tool to help retirees recognize and organize long-term tax-saving opportunities to keep more of their wealth.

Three retirement account tax categories

Before looking at strategies to maximize your lifetime tax savings, you must first understand the categories of retirement accounts and the tax implications of each. How your investments are taxed depends on the type of account in which they are held. There are three categories of accounts to consider:

Tax-deferred retirement accounts

The money in IRAs/401(k)s and a variety of other company-sponsored retirement saving plans are 100% taxable upon withdrawal unless you use the Qualified Charitable Distributions exception (to be explained). Non-IRA annuities can likewise be lumped into this category with the exception that only the interest earned on the non-IRA annuity is taxed upon withdrawal, not the entire value of the annuity.

Tax-free retirement accounts

The funds in Roth IRAs and Roth 401(k)s can be withdrawn tax-free.

Non-retirement accounts (after-tax money)

Investments that are individually owned, jointly owned, or trust owned have their dividends and interest taxed annually. They are also subject to capital gains taxation in years when investments are sold at a profit.

Three strategies to reduce your taxes in retirement

At Peterson Wealth Advisors we use our Perennial Income Model to provide the organizational structure to recognize and benefit from major opportunities to reduce your taxes. Let’s consider three of these tax-saving strategies that can benefit you in retirement:

1. Managing investment income according to tax brackets

Thankfully, your retirement income stream can come from a mix of tax-deferred, tax-free, and non-retirement accounts used in combination to lower your tax liability. Even though income stemming from tax-deferred accounts is 100% taxable, Roth IRA funds can be withdrawn tax-free and money coming from non-retirement accounts hold investment dollars that can oftentimes be withdrawn with limited tax consequences.

The key is to determine which of the above categories of accounts should be tapped for future income needs . . . and when. Tax-efficient income streams that are thoughtfully mapped out at the beginning of a retirement, as we do with the Perennial Income Model, can be extremely effective to help minimize your lifetime tax burden. With advanced planning, you can avoid the costly mistakes of conventional wisdom: paying almost zero tax from retirement date to age 72, then paying high taxes and higher Medicare premiums until death. The Perennial Income Model shows us that it is better to pay minimal taxes from retirement date to age 72, along with how to be able to pay minimal taxes and minimal Medicare premiums from age 72 to death. When you structure your retirement income streams from a variety of tax locations within your portfolios, thoughtfully planned out, you can experience a higher standard of living while still paying very low tax rates.

2. Qualified Charitable Distributions

The most overlooked, least understood, and one of the most profitable tax benefits recognized by forecasting income streams through the Perennial Income Model comes from the use of Qualified Charitable Distributions. A Qualified Charitable Distribution, or a QCD, is a provision of the tax code that allows a withdrawal from an IRA to be tax-free if that withdrawal is paid directly to a qualified charity. Our clientele consists of retired people who regularly donate generous sums to charities. By simply altering the way contributions are made to charity, you can make the same charitable contribution amounts and reduce your taxes at the same time.

The ability to transfer money tax-free from an IRA to a charity has been around for a while, but the doubling of the standard deduction from the 2018 Tax Cuts and Jobs Act, was the catalyst that brought this valuable benefit to the forefront. With larger standard deductions, only 10% of taxpayers itemize deductions. Here is the catch: you only get a tax benefit from making charitable contributions if you itemize your deductions, and with the higher standard deduction, fewer of us will be itemizing. So, a 65-year-old single taxpayer, with no other itemized deductions, could end up contributing up to $13,000 and a 65-year-old couple could end up contributing up to $27,000 to charity and it would not make any difference on their tax returns, or their tax liability, because both generous charitable contribution amounts were lower than the standard deduction. So, they will just end up taking the standard deduction. Another way of saying this is that these charitable donors will not receive a penny’s worth of tax benefit for giving so generously to charity.

Doing a direct transfer of funds to a charity by doing a QCD versus the traditional writing a check to a charity, can restore tax benefits lost to charitable donors. QCDs are only available to people older than age 70 1/2, they are only available when distributions come from IRA accounts, and a maximum of $100,000 of IRA money per person is allowed to be transferred via QCD to charities each year.

3. Roth IRA Conversions

Converting a tax-deferred IRA into a tax-free Roth IRA can be a valuable tool in the quest to reduce taxes during retirement. Unfortunately, few retirees get it right deciding when to do a Roth conversion, deciding how much of their traditional IRA they should convert, or even deciding if they should convert any of their traditional IRAs at all. Without a projection of future income that the Perennial Income Model provides and the subsequent projection of future tax liability, it is virtually impossible to determine whether a Roth IRA conversion is the right course of action. Perhaps the greatest unanticipated benefit that we have observed since creating the Perennial Income Model is its ability to clearly estimate future cash flows and subsequent future tax obligations for our retired clients. Given this information, the decision whether to do a Roth conversion becomes apparent.

As advantageous as Roth IRA conversions can be, they are not free! The price you pay to convert a traditional IRA to a Roth IRA comes in the form of immediate taxation. 100% of the conversion amount is taxable in the year of the conversion. For this reason, investors must carefully weigh whether doing a Roth conversion will improve their bottom line.

Too much of a good thing usually turns a good thing into a bad thing. So, it is with Roth conversions. Excessively converting traditional IRAs into Roth IRAs without fully considering the tax consequences, can cause some investors to pay more tax than they otherwise would if they didn’t do a Roth conversion in the first place. So, it’s important to recognize when, and when not, to do a Roth conversion.

The Perennial Income Model™ as a tax planner

We first designed the Perennial Income Model to provide the structure to reinforce rational decision-making. It started with a focus on helping retirees match their current investments with their future income needs. Now, we see that the Perennial Income Model’s role is much bigger, including providing the benefit of reducing your taxes throughout the entirety of your retirement.

The Perennial Income Model™ – Retirement Income “bad luck insurance policy”

Posted on April 22, 2022August 21, 2025 by Scott M. Peterson, ChFC®

The Perennial Income Model™ was created and launched in 2007. Through all the ups and downs of the stock market, it has withstood the test of time. The initial goal of the model was to provide a logical format for investing and for generating inflation-adjusted income from investments during retirement. In the beginning, we did not fully anticipate all the accompanying benefits that would result from projecting a retiree’s income over such a long timeframe. However, our eyes have been opened to a number of benefits, one of them being how the Perennial Income Model acts as a ‘bad luck insurance policy’.

The Perennial Income Model can help protect your retirement income during a bad market

The Perennial Income Model can protect you if you are unlucky and happen to retire about the same time as a stock market crash. Every stock market correction is temporary, but that knowledge isn’t helpful if you are ill-prepared and are having to liquidate equities in down markets to support yourself.

Let me share with you an example, Mike had been carefully planning for his retirement for years and it was finally his turn. He wanted to be conservative as he selected investments for his retirement years, but he knew enough about investing to realize that a good part of his investment portfolio had to be invested into equities if he was going to keep ahead of inflation.

So, he reluctantly invested more than half of his portfolio in stock-related investments. Mike retired, and almost immediately his worst fears were realized, as the stock market dropped by 50%. His money was invested in a balanced mutual fund that was composed of 60% stock and 40% bonds. Unlike the working years, Mike couldn’t just wait for the stock market to recover, he had to withdraw a portion of his money every month from his mutual fund just to pay the bills. As Mike withdrew his monthly stipend, he realized that he was liquidating a proportional amount of stocks and bonds each month from his balanced mutual fund. This meant, he was systematically selling stocks at a loss every month that the stock market was down, and it could take months, or even a couple of years before the stock market recovered.

Mike was frustrated, and even a little angry. He thought to himself, “why did this happen to me? I anticipated, and planned for, every contingency of my retirement in detail, then the one thing that I have no control over trips me up. I must be the unluckiest person on the planet!”

Mike is not alone; this exact scenario happens and will continue to happen to millions of new retirees every time there is a market correction. It’s true when we are no longer contributing and we begin taking withdrawals from our accounts, the temporary ups and downs of the market can have a much bigger impact on our investments than when we were working and had time to wait out market corrections.

To be clear, Mike’s mistake wasn’t in being too aggressively invested because a 60% stock, 40% bond portfolio is a very reasonable allocation for a new retiree. His mistake was failing to have a plan that allowed him to only liquidate the least impacted, non-stock portion of his portfolio to provide immediate income during a market downturn.

To illustrate this point, let’s take the example of two investors, Mr. Green and Mr. Red. Both have decided to retire at age 65 and both have saved up a $1,000,000 nest egg. Each of them plan to withdraw 5% of their initial balance each year to have an annual income of $50,000. As you can see from the table, both average the same 6% return during their 25-year retirements, but Mr. Green ends up with more than $2,500,000 to pass on to his heirs at death, while Mr. Red runs out of money halfway through his retirement. How can this be?

Every aspect of their retirement experience is identical except for one thing: the sequence of their investment returns.

retirement income planning chart comparing two possible outcomes

As you can see from the chart, Mr. Green experiences overall positive returns at the beginning of his retirement and a string of negative returns towards the end. Mr. Red experiences the same returns only in reverse. He goes through a series of negative returns at the beginning of retirement and the more positive returns come at the end. Again, both investors average the same 6% return over their 25 years of retirement. The sequence of those returns is the only difference. We can see from the table just how much of a difference the order of returns makes.

Set yourself up for retirement success

The good news is that it’s possible to set ourselves up to be successful no matter what the markets happen to do year by year. The Perennial Income Model is the bad luck insurance policy that can protect you from the pitfalls that Mr. Red experienced.

I’m not suggesting that following the Perennial Income Model will guarantee that your account balance will never go down, or suffer temporarily because it will. What I am saying is, that by following the Perennial Income Model, you shouldn’t find yourself having to sell stocks at a loss during a stock market correction.

Mr. Red’s losses are realized as he liquidates equities in down years at a loss to cover his expenses. If Mr. Red were to have his portfolio organized according to the investment regimen provided by the Perennial Income Model, he would not be in a position where he would have to liquidate stocks in down years to provide income. He would have a buffer of conservative investments to draw income from while giving the more aggressive part of his portfolio a chance to rebound when the stock market temporarily experiences periods of turbulence.

The Perennial Income Model’s design is intended to give immediate income from safe, low-volatility types of investments. At the same time, it furnishes you with long-term, inflation-fighting equities in your portfolio, equities that won’t be called upon to provide income for years down the road. Market corrections typically last for months, not years. So, even if you are the unluckiest person on the planet and your retirement coincides with a market crash, your long-term retirement plans won’t be derailed as long as you are following the investment guidelines found within the Perennial Income Model.

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Four Questions Your Retirement Plan Should Answer

Posted on April 3, 2022August 21, 2025 by Alex Call, CFP®

Creating a retirement plan can be a daunting task. At Peterson Wealth Advisors, we use our propriety process, the Perennial Income Model™, which outlines three ‘building blocks’ to a retirement plan. Whether you use the Perennial Income Model or another type of retirement plan, these building blocks will make sure you are on the right track to a successful retirement.

The three building blocks to a retirement plan are income and investments, taxes, and legacy. If your plan is built on these three blocks you should have the necessary information to answer the following crucial retirement planning questions.

4 Questions your Retirement Plan Should Answer

1. Do I have enough money to satisfy my income needs in retirement?

2. How do I invest my money to ensure this income lasts throughout retirement?

3. What can I do to protect my income from taxes?

4. How can I make sure my money goes to who I want it to go to when I want it to go to them?

If your retirement plan doesn’t give you the necessary information to answer those four questions, then it’s a poor plan and you should find something better. If it does, then you’re on the right track.

3 Building Blocks to a Retirement Plan

Block 1: Income and Investments

The income and investment block is the foundation to a retirement plan. Income and investments go hand in hand because how much income you can expect to have in retirement is determined in large part on how you invest your money.

The income portion of the block is where your different sources of retirement income – investments, social security, pensions, rentals, etc. – are gathered to create a consistent single stream of income throughout your retirement. To maximize your income, you must look at each source in the context of your entire plan, not in a vacuum. For example, the goal is not to maximize your Social Security income, but the goal is to maximize your retirement income.

The investment portion of the block determines how to invest your money while balancing risk and return. The money you need to live off in the early years of retirement needs to be invested conservatively to limit volatility, where the money you don’t need for decades needs to be invested aggressively to keep pace with inflation.

The Perennial Income Model achieves both these objectives, letting you know how much income you can expect to have in retirement and how to invest your money to ensure your income lasts throughout retirement. It’s up to you to determine if this amount of income will satisfy your income needs in retirement.

Block 2: Taxes

The goal of tax planning is to pay the least amount of income tax, not just in the first year of retirement but throughout all of retirement. Knowing what your income will be over the next 30 years allows you to build a long-term tax plan. This is exactly what the Perennial Income Model does, allowing you to build an efficient tax plan throughout your retirement.

The different tax strategies that can be used are beyond the scope of this post, you can learn more about them here, but they include using tax-efficient investment funds, minimizing Required Minimum Distributions, utilizing Roth conversion, and charitable giving strategies.

Block 3: Legacy

Once your income is secure throughout retirement you move on to the Legacy building block.

The goal of the Legacy building block is to effectively and efficiently transfer your assets to who you want them to go to when you die.

Knowing how much you will have at the end of your retirement plan gives you the insight needed to make those decisions and to know if you should be concerned about estate taxes. People typically fall into one of three groups:

Simple: This group wants their money split evenly between their heirs when they die, and their estate isn’t large enough to be affected by estate taxes (an individual’s estate needs to be over $12.06 million, in 2022, before estate taxes affect it).
Minor Complexity: This group wants more control, outlining when the money goes to their heirs and what they can use it for, and their estate still isn’t large enough to be affected by estate taxes.
Complex: This group has a large enough estate where estate taxes will be a concern – they need to not only think about who will receive their money and when they will receive it, but also how they will avoid paying estate tax on their money.

The different estate tax strategies that can be used are more than can be covered here but they include creating a gifting plan, knowing which accounts should be donated to charity, and moving money out of your estate to avoid estate taxes.

The Perennial Income Model lets you know how much you will have at the end of your plan, giving you the necessary insight into how much you’d like your heirs to have and when they receive their money. It also allows you to know if you need an estate tax plan.

Will Your Retirement Plan Succeed?

When presented with a retirement plan, whether it be by Peterson Wealth Advisors or someone else, you need to first ask yourself “will the income from this plan be enough for my retirement needs?” If the answer is yes, then ask your advisor these three crucial follow-up questions to make sure your retirement plan will succeed:

How do I invest my money to ensure this income lasts throughout retirement?
What can I do to protect my income from taxes?
How can I make sure my money goes to who I want it to go to when I want it to go to them?

The Perennial Income Model is based upon the three building blocks of a retirement plan – income and investments, taxes, and legacy – giving you the necessary information to answer these retirement questions.

Ready to discuss your retirement plan? Schedule a complimentary consultation.