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Overview

Event: Maximize After-Tax Wealth in Retirement: Discover the Smart Way to Plan Distributions and Roth Conversions
Date: November 18, 2025
Host: Tom Dickson, Financial Experts Network
Guest Speaker: Jim DiLellio, Ph.D., Professor of Decision Sciences at Pepperdine University Graziadio Business School
Tools Discussed: https://etfmathguy.com/ 

Jim DiLellio shared insights into retirement distribution strategies and Roth conversion optimization, introducing two sophisticated tax-efficient retirement calculators developed from his academic research. These tools help financial planners and individuals model after-tax wealth, manage retirement income sequencing, and identify tax alpha opportunities that can improve estate outcomes by up to 2.2% per year.

Jim DiLellio’s Background

• Ph.D. in Applied Mathematics and Professor of Decision Sciences at Pepperdine University.
• Research focus: quantitative modeling of retirement strategies, stochastic returns, and tax efficiency.
• His academic work led to the creation of ETF Math Guide, a suite of web-based calculators aimed at financial planners and self-directed investors.
• Website: https://etfmathguy.com/
• Jim noted that over 1,000 registered users currently access his calculators, which have evolved from a classroom and research project into practical advisory tools. Data security is ensured through Python-based code, Stripe payment processing, and upcoming migration to Amazon Web Services (AWS) for enhanced scalability and protection.

Calculator #1: Retirement Savings Growth and FIRE Simulation

The first calculator focuses on retirement savings forecasts and early withdrawal modeling.
It is particularly useful for Financial Independence, Retire Early (FIRE) scenarios and mid-career planning.

Key Features

• Models savings growth based on user inputs for:
  • Current age, retirement age, and life expectancy.
  • Contributions to tax-deferred, taxable, and Roth accounts.
  • Expected investment returns, volatility, and inflation.
• Simulates outcomes using two statistical methods:
  • Bootstrapping of historical returns
  • Geometric Brownian motion (GBM) to project future uncertainty.
• Supports variable contribution patterns and real-dollar adjustments for inflation.
• Displays deterministic forecasts alongside probability distributions of account balances.

Practical Use

Jim demonstrated how the calculator can show the probability of meeting future income needs, as well as how asset allocation and contribution adjustments influence the distribution of terminal wealth.

Output visuals include fan charts showing potential wealth ranges, helping advisors explain investment risk and savings adequacy to clients.

Link: https://apps.etfmathguy.com/

Calculator #2: Tax-Efficient Withdrawal and Roth Conversion Optimizer

The second calculator is designed for retirees and pre-retirees seeking to maximize after-tax income and minimize future required minimum distributions (RMDs).

It provides a multi-year tax optimization engine that integrates account balances, Social Security, capital gains, and ordinary income.

How It Works

1. Users input:
   • IRA, Roth, and taxable account balances.
   • Expected Social Security and pension income.
   • Annual spending needs and state of residence.
   • Projected heir tax rates (for estate efficiency modeling).
2. The tool computes:
   • Standard deduction and income tax brackets.
   • Short- vs. long-term capital gains.
   • RMDs and Roth conversions under different timing scenarios.
3. The optimizer identifies withdrawal and conversion combinations that yield the highest after-tax terminal value.

Jim explained that these algorithms are grounded in tax alpha optimization, where small annual advantages (≈2.2%) compound significantly in wealth preservation and inheritance outcomes.

Link: https://apps.etfmathguy.com/

Understanding “Tax Alpha”

“Tax alpha” refers to the incremental return achieved through tax-efficient decision-making rather than market performance.
Jim demonstrated, using the second calculator, that optimizing Roth conversions and withdrawal order can improve heirs’ inheritances by over 2% annually compared to conventional withdrawal sequencing (e.g., “pro-rata” or “common rule” strategies).

Example Findings

• Early partial Roth conversions reduce future RMDs and IRMAA surcharges.
• Tax-deferred accounts should typically be drawn last, except when bracket management allows Roth conversions at low marginal rates.
• Strategic Roth conversions during “tax valley years” (between retirement and Social Security start) produce the largest benefit.
• The model assumes inflation-adjusted dollar values, allowing for realistic comparisons over time.

Key Calculator Outputs

Each simulation provides:

• Taxable, tax-deferred, and Roth account balances over time.
• Annual tax liabilities and marginal tax rate changes.
• Optimal Roth conversion amounts per year.
• Estate values for primary and secondary beneficiaries.
• Comparative graphs showing “common rule vs. optimal strategy” results.

The tool’s output clearly illustrates how strategic withdrawals and conversions can extend portfolio longevity and increase after-tax inheritance.

Practical Applications for Advisors

• Ideal for advisors creating distribution plans and Roth conversion analyses.
• Enables side-by-side comparisons of withdrawal strategies under real tax code rules.
• Incorporates standard deduction, Social Security taxation, and Roth ordering rules.
• Accounts for inflation adjustments to pensions and fixed annuities.
• Can be used annually to reflect changes in tax law or income levels.

Jim emphasized that tax optimization is an iterative process, requiring annual recalibration as clients’ ages, income, and tax environments change.

Enhancements, Feedback, and Future Development

During the discussion with Tom Dickson and audience members (including “Bob”), several tool enhancements and feedback points were discussed:

• State income taxes: Currently modeled generically but will be expanded to allow specific state-level inputs in 2026 updates.
• Real estate and business income: Future releases will include modules for capital depreciation, rental income, and carry-forward losses.
• Scalability: Migration to AWS hosting will enable simultaneous multi-user sessions.
• Security: All sensitive data remain anonymous; users are encouraged to input only rounded, non-identifiable figures.
• Inflation modeling: Future versions may support Monte Carlo inflation shocks for more realistic sensitivity analysis.
• User experience improvements: Additional “advisor mode” dashboard planned for 2026 to allow batch scenario storage.

Jim confirmed the premium version (annual subscription) offers additional features:

• Up to five client profiles instead of one.
• Detailed decision data for each year of retirement.
• Priority support and access to new beta tools.

Subscription link: https://apps.etfmathguy.com/

Security and Data Privacy

• Hosting: Currently at Hosting.com; moving to AWS (Amazon Web Services) for better uptime and data encryption.
• Code and Infrastructure: Written in Python, which offers more security than PHP.
• Billing: Managed via Stripe, handling all credit card and address information securely.
• Data Use: No tracking or resale of user data; only anonymized metrics used for analytics.

Jim reassured attendees that only users have access to their client information and encouraged using non-identifiable test data for client demos.

Advisor and User Statistics

• Over 1,000 registered users (as of November 2025).
• Free and paid tiers available; exact paid subscription figures are not disclosed for competitive reasons.
• Users include CFPs®, CPAs, and independent RIAs.
• Most frequent use cases: Roth conversion timing, retirement income sequencing, and legacy optimization.

Key Takeaways

1. Tax Alpha ≠ Investment Alpha: Advisors can add measurable value through smart tax strategy without taking additional market risk.
2. Withdrawal sequencing and Roth conversions can significantly improve portfolio longevity and inheritance.
3. Annual re-optimization is essential to adapt to inflation, changing tax laws, and client circumstances.
4. Tools like ETF Math Guide calculators empower advisors to illustrate complex tax strategies in client-friendly visual formats.
5. Data security and transparency are prioritized—users maintain control of their own information.

Action Items

• Access the calculators at https://apps.etfmathguy.com/.
• Request a demo or discount code (25% off premium subscriptions) via the Financial Experts Network email list.
• Follow up with Jim DiLellio through the contact form on https://apps.etfmathguy.com/ to discuss premium access or integration options.
• Use the calculators annually for each client’s tax and income review.
• Provide feedback for upcoming modules (real estate, state taxes, and advisor dashboards).