What is a fee-only financial advisor?

A fee-only financial advisor is compensated solely by the client — not through commissions, product sales, or referral fees. At Macallen Capital, we are a fee-only registered investment adviser, which means our advice is never influenced by outside incentives. We are paid only by you, and our recommendations are made exclusively in your best interest.

Who does Macallen Capital work with?

Macallen Capital works primarily with families and small business owners who have built a foundation of $500,000 or more in savings. We specialize in the 'red zone' — clients aged 50 and above who are planning for retirement or transitioning out of the workforce — as well as delegators who are ready to hand off the financial complexity to an expert.

Is Macallen Capital a fiduciary?

Yes. As a registered investment adviser and fee-only firm, Macallen Capital operates as a fiduciary at all times. That means we are legally and ethically obligated to act in your best interest — not ours.

What services does Macallen Capital offer?

Macallen Capital offers comprehensive wealth management including investment planning, retirement planning, Social Security and income planning, tax planning, risk management and insurance review, employee benefits review, and estate and legacy planning. We coordinate all of these disciplines into a single, integrated financial plan.

How do I get started with Macallen Capital?

Getting started begins with an initial consultation — a brief conversation to understand your goals and determine if we're the right fit. From there, we move into discovery and analysis, build a customized strategy, and implement your plan with ongoing support. You can start by visiting macallencapital.com/start.

Does Macallen Capital work with clients outside of Phoenix?

Yes. While Macallen Capital is headquartered in Phoenix, Arizona, we work with clients nationwide. As a registered investment adviser, we are able to serve clients across the United States.

What is a beneficiary designation and why does it matter?

A beneficiary designation is the form attached to your IRA, 401(k), or life insurance policy that dictates who receives those assets when you pass away. Unlike a will or trust, beneficiary designations override your estate planning documents entirely — the form wins, regardless of what your will says. Keeping these designations current and coordinated with your overall estate plan is one of the most important — and most overlooked — steps in financial planning.

What is the HSA shoebox strategy?

The HSA shoebox strategy involves paying current medical expenses out of pocket, saving the receipts, and leaving your HSA funds invested to grow tax-free. Because the IRS places no time limit on when you can reimburse yourself for a qualified medical expense (per IRS Publication 969), you can pull those funds out years or decades later — tax-free — while the original balance continues to compound. It turns your HSA into a long-term, tax-free investment vehicle rather than a simple spending account.

How Much Do I Need to Retire in Arizona?

Name: Macallen Capital
Address: 2325 E Camelback Rd. #400, Phoenix, AZ, 85016, US
Telephone: (602) 536-7828
Price range: Fee-Only

May 27

Written By Mark Sanaiha

Often, someone sits across from me and asks some version of the same question: "Do I have enough?" Well, a few months back, I got that question during a routine dental cleaning, so instead of across from me, it was above me! It is the most important question in personal finance, and it almost never has a clean answer.

Spitting out a generic formula or a cookie-cutter percentage doesn't work. Instead, let's try to answer it the way I did then: with real data, real context, and a real Arizona couple whose story might sound a lot like yours.

What Arizona actually costs to retire in

Before we talk about what you need, let's establish what you're likely to spend. The most recent U.S. Bureau of Labor Statistics' survey found that the average American household spent $78,535 annually. However, retirees, particularly in the 65–74 age range, typically spend less than the all-household average, with spending declining further after age 75 as travel and activity slow down.

Arizona's cost of living runs about 6% higher than the national average primarily due to housing costs in the Phoenix metro, which may not come as a surprise for most of us. For retirees, the state's tax profile often offsets that premium meaningfully.

Why Arizona is genuinely good for retirees

When most people think about Arizona, they think about the Grand Canyon, our scorching hot summers and maybe golf. Especially this time of year. They often don't think about the tax advantages, which are real and meaningful for retirees drawing down qualified accounts.

Social Security income. Fully exempt from Arizona state tax
State income tax rate. Flat 2.5% on all taxable income — among the lowest flat rates in the U.S.
Estate / inheritance tax. None — Arizona has no state estate or inheritance tax
IRA / 401(k) distributions. Taxable at 2.5% state rate (federal taxes apply separately)
Property tax. 0.48% effective rate — well below the national average
New senior deduction (2026). $6,000 for individuals and $12,000 for married couples age 65+

The 4% rule: a starting point

The most cited & discussed benchmark in retirement planning is the "4% rule," first introduced by William Bengen in a 1994 paper in the Journal of Financial Planning. The principle is straightforward: a retiree who withdraws 4% of their portfolio in year one, adjusting for inflation annually, has historically not run out of money over a 30-year retirement. The 4% rule was designed for a 30-year retirement with no Social Security income assumed in the original model. Just last year, however, Bengen actually updated his benchmark to 4.7%, which hasn’t garnered as much attention.. For most Arizona retirees, Social Security meaningfully reduces the amount that needs to be withdrawn from the portfolio each year, which is one reason the right withdrawal rate for you may look different than the textbook number.

So what does 4% or 4.7% mean in dollar terms for Arizona retirees?

Meet Mike and Sherry

I find numbers are easier to understand when they're attached to real people. So, let me tell you about ‘Mike and Sherry’, a couple I had the privilege of working with through a significant transition in their lives.

Mike and Sherry had spent their lives building something — by the time they came to me, they had accumulated $1.8 million, held primarily in their IRA accounts and a brokerage account. Here’s the vision they shared with me: move into a retirement community in Tucson, travel a few times a year, gifting to kids/ causes and start relaxing.

The first thing we did was build a complete picture of their income. Not just what the portfolio could generate, but Social Security timing, the community's down payment & monthly costs, healthcare projections, and what they genuinely wanted to do with their time. The spending plan we built came in below 4% of their portfolio annually — even accounting for the retirement community fees, a travel budget, and a meaningful reserve for healthcare.

We structured their withdrawals deliberately: drawing from their brokerage first, considering highly appreciated assets to accomplish their charitable goals, pre-tax accounts strategically to manage their taxable income each year, keeping Social Security entirely exempt at the state level, and being intentional about the sequence of distributions to minimize the tax drag over time.

The result: Mike and Sherry are accomplishing everything they planned for. The Tucson retirement community. The trips. Most importantly, the peace of mind! Their portfolio, managed carefully, supports their lifestyle without the anxiety that had accompanied so many of their pre-retirement years.

Is $1.8 million "enough" for Mike and Sherry? Yes, we’ve built a plan around their life, tested scenarios, provided guardrails to determine what they can and cannot spend, but it’s not a number around a rule of thumb.

So how much do you need?

The honest answer: it depends on factors that only you can define.

Your spending. Not what you think you spend, but what you actually spend and what you want to spend in retirement. Often I meet with couples who are completely surprised by their actual spending. The little things add up, so a good budget helps. In addition, many retirees find they spend more in the early years (travel, activity, home projects) and less in later years, so a good plan accounts for both.

Your income sources. Social Security alone can cover a meaningful portion of a modest retirement budget. For a couple both claiming at 67, combined benefits can easily exceed $50,000 annually, which is a significant offset to portfolio withdrawals. Arizona's full state exemption on Social Security makes this income even more valuable here than in most states.

Your timeline. A 62-year-old couple today may need their money to last 30 years or more. That changes the math considerably compared to a 70-year-old planning a 20-year horizon.

Your tax picture. With the bulk of most pre-retirees' wealth sitting in qualified accounts — traditional 401(k)s and IRAs — the distribution strategy matters enormously. The sequence and timing of those withdrawals, and whether you do Roth conversions in lower-income years, can meaningfully change your after-tax outcome over a long retirement.

Everyone’s situation is different. A couple who paid off their Tucson home and wants to spend $65,000 a year has a very different situation than another spending $65,000 per person on short-term luxury cruises. No one size fits all.

The conclusion: $1.8M was enough for Mike and Sherry

Yes — $1.8 million was enough. Not because it's a magic number, but because their plan was built around a spending rate their portfolio could sustain, income sources that offset what the portfolio needed to produce, and a tax strategy that kept as much of those dollars working for them as possible.

But, Mike and Sherry's number is not your number. You might need more. You might need less. What you absolutely need is a plan that takes your life, your spending, your income, your timeline, your goals seriously.

Retirement isn’t a formula. Despite the promotional emails filling your inbox, it isn't. It's a decision about how you want to live, backed by disciplined planning that gives that life the best possible chance of lasting as long as you do.

That's the work we do at Macallen Capital. And it all starts with a conversation.

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1. U.S. Bureau of Labor Statistics, https://www.bls.gov/cex/" https://www.bls.gov/news.release/cesan.nr0.htm
2. U.S. Bureau of Economic Analysis average per-person spending in Arizona, https://www.consumeraffairs.com/movers/arizona-cost-of-living.html
3. Arizona tax treatment of retirement income, https://www.kiplinger.com/state-by-state-guide-taxes/arizona Kiplinger Arizona Tax Guide, https://remotelaws.com/state-income-tax/us-states/arizona/
4. Morningstar, https://www.morningstar.com/news/marketwatch/20250528214/the-guy-behind-retirements-4-rule-now-thinks-thats-way-too-low-heres-how-much-more-money-you-could-spend
5. Arizona cost of living, https://www.salary.com/research/cost-of-living/az

"Mike and Sherry" is a composite case study reflecting the experience of real clients. Names and identifying details have been changed to protect privacy. Past results are not indicative of future outcomes. This content is for educational purposes only and does not constitute investment, tax, or legal advice. Please consult a qualified professional regarding your specific situation. Macallen Capital LLC is a registered investment advisor.

Mark Sanaiha