The “321 Stress Test” for Retirement: Taxes, Volatility, Drawdown, and Where Income Should Come From

Leibel explains the annual “321 stress test” as reviewing where you are today, projecting the future, and stress-testing that future against key retirement risks, especially drawdown (market losses and taxes), inflation, and longevity. He emphasizes examining what is decreasing portfolio value—illustrating with an example of a retiree generating large taxable interest—and using a SWOT-style review of strengths, weaknesses, opportunities, and threats to decide year-end actions like Roth conversions, tax-loss harvesting, reallocations, and retirement plan contributions. He argues there is no blanket rule for whether retirement income should come from taxable accounts, IRAs, Roth accounts, or Social Security because it depends on the tax return, time horizon, and goals (including RMD and survivor concerns). He highlights a 60-second questionnaire and free retirement tax SWOT analysis, and discusses near-term volatility drivers including AI IPOs, Congress, and global events, plus limited expected market impact from Buffett stepping down.