Rajiv Rebello

1/What happens when an industry creates individual incentives of a system that pit the individuals against each other and leads to a worse outcome for both of them--but a better outcome for the industry? I explore this topic in this week's "Separating Value From Bias" edition separatingvaluefrombias.substack.com/p/7-game-theor…

I mean mathematically it is. Your strategy cost the client an extra $700k in taxes upfront and exposed them to volatility drag from sequence of return risk that happens when you are taking withdrawals like that on a 100% S&P investment. What happens when you compound that for 30 years? I think, perhaps, you are suggesting that the 1% fee is too much. Which is a valid position. But you don't have to pay the ongoing 1%. You can have someone do a financial/retirement plan for anywhere from $5k to $15k and then you can implement the results. Keep in mind that the quality of the plan/advice doesn't depend on the price, but on the expertise of the provider. The reason people pay someone else the 1% is because they want someone else to execute the plan for them. And to your point, yes, some people are overpaying. But others are delivering tremendous value. And a lot of that value comes from trying to prevent clients from doing illogical things like what you suggested here. The fee is high, not because executing the plan is difficult. But in order to execute the plan you have to work with people who are not always financially savvy but are very emotionally driven and bring their own biases to the table. So the advisor is literally getting paid a high fee because working with clients becomes more about therapy than finance.

@RajivRebello @zachmelloh26 Thanks. That was clearly worth $2.5 million.

Mike retired at 54 with $ 4.1M. He had done everything “right”: • Maxed out his 401(k) • Saved consistently for 30+ years • Paid off his home • Avoided debt But:

@Galtslaststand are you familiar with sequence of return risk? Why would a retiree who needs to draw down on their portfolio put 100% of their money in the S&P500? At 180k income per year on a 2.6M portfolio, that's about a 7% withdrawal rate. If your withdrawal rate is high and you have poor early year performance at the same time you risk running out of money. There are legitimate reasons why a 1% fee can be high and not worth the drag. In fact, I've written about them. But you're clearly showing why retirees need an advisor. Because in the absence of that people don't understand the risk behind what they're doing. And putting 100% of your money in the S&P500 when you're retiring with a high withdrawal rate and thinking that's a risk-free retirement plan is clear evidence that they need an advisor. Also the idea that you would do a $4M Roth conversion all in one year at the highest bracket instead of spreading it out over time at lower bracket amounts to reduce tax drag and lead to more wealth creation is beyond me. On $4M, you would pay federal and NY state taxes here. You're looking at a 42% effective tax rate on that entire amount. Add in another 4% if they are residents of NYC. So The client would be better off paying an advisor the 1% fee ongoing to get proper retirement and investment planning advice than listening to the advice you've given here for free. Of course not all advisors provide quality advice, but quality advice does add significant value. And I'm not sure you're appreciating that.

$4 million in 401k. Assume 35 percent state local tax. You’re left with $2,600,000. Or you have $2,600,000 in Roth. That’s after tax. Which means you still had to make $4 million. Also, Roth has income restrictions. You’re a “Nietzche Financial Analyst: They muddy the water to make it seem deep.” You also fail to mention your 1 percent fee. That’s $26k per year x 30 years, assuming 7 percent compounded, cost client around $2.5 million. Or client can put all their money in an S and P index fund and never hire you! Boom. I just made that client richer by millions.

Great thread on the value of partnership vs service providers as it relates to fee models and AUM vs Flat Fee. Partners help you execute the plan. Service providers just tell you what should be done. The value of great advice is meaningless if the client doesn't execute on it. The cost of a bad partner who charges you a fee and does nothing is high. But the value of the right partner who helps you see your blind spots and navigates you through it is immense. So are you finding the right partners in your life or not?

Tax Alpha - The solutions are getting better. We use many of these tools at @RitholtzWealth. One of our partners is @patrick_oshag. We’ve been using their Canvas custom indexing platform. Last week @awealthofcs sat down with @FactorInvestor: awealthofcommonsense.com/2026/04/tax-al…

Those who don’t understand will constantly preach simplicity and low cost as the only way. Those who only have something to sell you will constantly preach complexity as the only way. The truth typically lies somewhere in the middle.

Helping the 1% pay less tax is controversial But HENRYs (high earners not rich yet) get punished the moment income jumps The biggest tax savings come from a few overlooked moves ↓ ↓ ↓

He thought he’d found the easy money $1M in his IRA $100K already taxed “I’ll just move that piece to Roth” That’s exactly where people get burned ↓

"I like to deal with people where I feel a one-page contract will do the job. If I have to have 50 pages in there to protect me against the guy I'm dealing with, I'll always wonder whether I needed 51." – Warren Buffett

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Retirement math that should scare you: Portfolio drops 50% → you need 100% just to break even. Now add a $50k withdrawal on top: $1,000,000 → $500,000 (market crash) → $450,000 (withdrawal) → Need +122% to recover And if you keep withdrawing through the downturn, you may never get back. This is sequence of return risk. Guaranteed lifetime income is the fix — no forced selling in a down market. It allows you to get retirement income without drawing down on markets during bad years and depleting your portfolio 🗓 Free webinar — March 18, 12 PM PST / 3 PM EST 🔗 Link in comments

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Most people think annuities = low returns. $1M into the right guaranteed lifetime income annuity: → $131,964/yr income (13.2% payout rate) → 7.06% pre-tax IRR to life expectancy → 6.19% after-tax IRR → $3.17M in total lifetime payments Backed by billions in bond reserves. Guaranteed income. Where are else are you guaranteed to get an income every year that can give you a 7% guaranteed rate of return if you live to your life expectancy? Learn why you should be utilizing guaranteed lifetime income as part of your retirement strategy on our free Webinar on March 18th. 🗓 Free webinar — March 18, 12 PM PST / 3 PM EST 🔗Link in comments

$1M in a bond portfolio earning 4.5% — can net you just $36K after tax. The same $1M in a guaranteed lifetime income solution? → $76K/year for life → ~$2K/year in taxes → $74K after tax → $38K LESS pulled from your equity portfolio every year More income. Lower taxes. Bigger portfolio. This is why guaranteed lifetime income is one of the most underused retirement tools. 🗓 Free webinar — March 18th, 12 PM PST / 3 PM EST 🔗 Link in comments

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Want to learn how guaranteed lifetime income was the difference between a hypothetical client who retired with $1M in 2000 ending up with $3M at the start of 2026 instead of $96,000? Then join our webinar on March 18th at 12 PM PST/3 PM EST where we’ll go over all things guaranteed lifetime income and why guaranteed lifetime income can provide you with the following benefits: · Higher pre-tax and after-tax returns and income from the bond side of your portfolio · Higher returns for the wealthier and those in good health · Higher chance of meeting your retirement income goals · Protection against market downturns and outliving your portfolio · Ability to accumulate more wealth from the equity side of the portfolio · Peace of mind Registration link in the first reply:

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@MrNQDC 4) The fund minimums here are anywhere from $250k+ to $1M. So you have to be willing to invest a significant amount of capital into the vehicle (typically at least 1-2M) for it to make sense for both the client and the carrier

@MrNQDC 3) While the PPLI vehicle itself has liquidity and you can take 85-90% of principal and gains out, the underlying funds have lock-up periods. So in order to take money out of the policy, you have to wait until the lock-up period for these funds is over

PPLI = a “Super Roth” for the ultra-wealthy • No income limits • No contribution limits • Tax-free growth on institutional funds • Access to ~85–90% of gains (not locked until 59.5) • ~0.5–1% costs vs. 23.8%+ tax drag But it only works for the right assets. Full breakdown : tinyurl.com/yck27sbd