Portfolio Research Lab
RET-CC-002 · Run Your Own Numbers

What would a covered-call overlay cost you?

The published study runs one frozen protocol: a $1,000,000 portfolio, a 4% withdrawal, a 65-year-old couple. Your situation is not that. This page runs the same engine on your numbers — and runs it three times, once in each account type, because that is the choice the answer actually turns on.

See the published study and its assumptions

Your situation

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The answer for your numbers

Same strategy, three wrappers

MetricTaxable brokerageTraditional IRARoth IRA

What the overlay costs you in tax, year by year

Taxable brokerage Traditional IRA Roth IRA

Cumulative extra federal tax caused by writing the calls — the covered-call portfolio's lifetime tax minus the buy-and-hold portfolio's, on the median path. Flat is free. The traditional IRA line stays flat until your RMDs begin, then starts to climb: money forced out of the shelter lands in a taxable account, and the overlay follows it there.

This page cannot model everything about you

No state income tax. No rolling the calls instead of being assigned. No Social Security provisional-income rules. One wrapper at a time rather than a real mix of accounts. Each of those can move the answer, and none of them is modelled here.

Model-based research, not investment advice, not tax advice, and not a recommendation about any portfolio or any account. The tax rules here are modelled well enough to compare two strategies against each other under identical conditions — they are not suitable for computing anyone's actual liability. Federal only; 2026 brackets; married filing jointly with both spouses over 65. Talk to a qualified tax professional about your own situation.