For the record, I’m using “lazy” a little tongue-in-cheek. I know most high earners don’t sleep cuddling their tax optimization whiteboards and Expo markers like I do.

Anyway, I’m a sucker for a good infographic, and bonus points if that infographic is – gasp! – animated.

So you can imagine how I stopped in my tracks (scroll) when I saw an animated infographic that portrayed several buckets being filled with water, sequentially – the go-to analogy I use for maximizing your contributions to tax-advantaged accounts:

It showed water flowing from a carafe into buckets in the following order:

1. 401(k) match

2. Roth IRA

3. 401(k)

4. Backdoor IRA

5. Taxable brokerage account

“Hm, fascinating,” I thought, clicking on the ad (and breaking my algorithm-busting rules of not clicking on ads that populate in my feed, but what can I say? Zuck clearly gets me). At first, I was interested because I knew someone couldn’t fill up both a Roth IRA and a Backdoor Roth IRA in the same year (or rather, wouldn’t need to) unless it was a Mega Backdoor Roth IRA, so yeah – safe to say it piqued my interest.

Playbook: A financial product that helps with tax-optimized investing

It was an ad for a product called Playbook, which – essentially – preaches the same thing that I do: That high earners need to take advantage of their tax benefits that expire every year in order to grow wealth more quickly.

But man, these people took it a step further and turned that conceptual belief system into a dang app!

kicks self once more for not becoming a software engineer

And while my earning and investing situation is super “edge case-y” (a term I do know from software engineering, thanks to my full-time gig as a content designer who works with engineers) and I was pretty sure it wouldn’t be fully supported in the product, curiosity got the best of me and I went down the sign-up flow path to see what types of questions it asked me.

I grabbed a few screenshots along the way.

Signing up for Playbook

Step 1: Connect your accounts

Because I love to make things complicated, I have (as of December 2021) 20 different bank and investment accounts. Le sigh.

I didn’t want to link every single one (because I’m only actively contributing to a handful), so I just linked my current Roth IRA, brokerage account, and 401(k), as well as my bank accounts.

In retrospect (if I were going to use the product in an ongoing way), I would’ve connected every single one, as its calculation of my net worth was obviously limited to the accounts I linked. Your current net worth determines the accuracy of their predictions for the future, so it’s important that all of your accounts are linked (and hopefully you’re not like me, with dozens).

Step 2: Answer questions about your 401(k)

This was an interesting interaction for me and a time where I wanted to say, “But wait, I have an employer 401(k) and a Solo 401(k) for my business!”

But again, I’m an edge case.

Step 2 (continued)

You’ll fill out what percentage of your salary your employer matches, and then the percentage of that match – i.e., does your employer match your contributions dollar-for-dollar, or a percentage of your contributions?

It’s nice that they take this into account, as your employer contributions can measurably impact the account balance over time and alert you if you’re not taking advantage of your full match.

Step 3: …and that’s pretty much it

Making sense of my results

Don’t mind me, generating such a complimentary success message!

Playbook describes their ability to help you optimize further as the “Playbook Impact.” Mine was low, because (as far as their algorithms are concerned) I’m already as tax-optimized as I can be.

When I clicked “See Playbook Impact,” it basically showed me two identical paths: Confirming that their plan for me and my original plan for me are the same.

That’s where I hit my first roadblock:

I didn’t realize this, but the product is still very new – and most members who’ve signed up until now were put on a waitlist. I reached out to Playbook to see if I could get off the waitlist to see the product (for the good of research!), and I ended up on a call with a guy named Theo who walked me through the product and granted me the coveted early access.

(By the way, it sounds like new users will be split about half and half between product access and the waitlist – but I’m not sure how those decisions are made, or if it’s random.)

Things that impressed me about Playbook

As a content designer by day, the user experience impressed me (though I did give Theo some feedback on our call, as I’m sure he really appreciated), and I think it does a good job of walking someone who’s maybe not as familiar with tax-optimized investing through their best options and illustrating the outcomes clearly.

I’m also (frankly) jealous that they created this before I did – and to my knowledge, they’re the only company that’s doing it.

It’s only $19/mo., which is actually pretty good (as a flat rate) since it’s not an AUM pricing model – if $19/mo. is going to make you properly automate your tax-optimized investing, it’s very well worth the money.

How Playbook works with your existing accounts

One of the initial questions I had about Playbook was whether it was – in itself – a brokerage firm, or if it just connected to accounts you currently have. I heard through the grapevine that they’re looking at becoming a brokerage firm, too, so you could have the option in the future to open accounts with them directly or connect your existing ones.

For the time being, it connects with your existing accounts and then basically prompts you to do the following (of which I don’t have screenshots, because I was doing this on a Zoom call – #apologies):

1. Input your income.

2. Input how much you’re currently saving every month (though I gave them feedback that I actually think it’s more effective to ask how much people are spending, but I guess that’s potentially more difficult to know for sure as it fluctuates). In short, they’re using this number to determine how much margin you have. If you tell Playbook you make $5,000/mo. and only save $1,000, it’s going to assume that you’re spending the other $4,000, and make sure there’s enough in checking to spend $4,000 each month. All that to say: You may want to make sure that you’re calculating how much you can save based on income and spending, not how much you’re actually transferring to savings now (if you’re not optimized at all).

3. Agree to their recommendations, which would effectively start automating things for you.

For example, if their recommendation for you was to contribute the maximum to your Roth IRA every year, they’d essentially ask you (a) where you want to fund that account from and (b) which of the Roth IRA(s) you connected is the one you want to fund. Then, it would automate that process.

Who Playbook might be good for

If you’re someone who’s already working with a CPA and CFP and asked for a refund on High Earner’s Code because it wasn’t advanced enough for you, Playbook is not for you.

If you’re someone who has a really bizarre earning situation (or really, any self-employment income) , it’s also probably not for you. Why? Because that’s considered an edge case.

If you’re a six-figure earner who has access to a 401(k), Roth IRA, HSA, and taxable brokerage account (or any mix of the aforementioned) and you’re interested in having a one-stop shop to automate your contributions to these accounts, Playbook might be for you.

Everyone always talks about the importance of automation, but if you’ve got a mental block around it and would rather have some #light financial planning software to do it for you, check out Playbook. Here’s what my “Your Plan” looks like:

During the setup process, it calculates an emergency fund value for you (as well as a “reserve fund,” which was basically a second emergency fund that was invested in low-risk assets). Then, it asks you to “assign” current accounts to these goals, to show that you’ve already met them.

For example, if your emergency fund is $10,000 but you assign that emergency fund goal to an account with $5,000 in it, it’s going to tell you that you’re behind and need to send more money there first.

Since the algorithm essentially looks at the balance in your checking account and then assigns the dollars in excess of what’s been identified as “for spending” to their most tax-optimized locations and transfers them accordingly, you have to define the balance you don’t want your checking account to dip below.

This part (Priority 2) threw me for a loop, because I’m above the income limit for both the deductible Traditional IRA and the Roth IRA. My assumption is that it’s telling me to contribute to a Traditional IRA that’s non-deductible because it’s the first step in a Backdoor Roth IRA.

Like I said, my situation is really edge case-y – if yours is, too, this tool probably won’t be very helpful for you. But if you don’t have an edge case situation, I think this would be a really nice way to aggregate and automate everything in one place if you’re not comfortable (or not interested) in doing so on your own.

What “building your Playbook plan” entails

As you’ll see in the screenshot above, I went through all the way to the end before it got to the point where I had to actually set up the monthly transfers, because my earning situation is too complicated. I earn a salary, cash bonus, and RSUs from my W2 employer, but earn a lot of (untaxed) income from self-employment, too, and the self-employment wasn’t taken into account in this initial version of the product.

I’m hopeful that over time their engineers will build in more functionality for unusual situations, though.

Set up a financial foundation

This was the section where it checks you’ve got your safety nets in place. Ideally, I’d assign the “emergency fund” goal to my savings account in cash, and then assign a Betterment Safety Net to the “reserve fund” goal.

Build your tax strategy

This is where you see your order of operations and the potential outcomes. It calculates what you need to contribute to get your full 401(k) match (kinda cool) as well as notes where you’re ineligible for things and how that changes the story (like the Roth IRA > Backdoor Roth IRA below).

A note on the Backdoor Roth IRA: To my knowledge, Playbook does not execute the Backdoor Roth IRA for you. If you need help doing that, check out this article about how to perform a Backdoor Roth IRA (and know if it’s right for you).

Add life goals

This section impressed me because it includes “financial independence” as a goal. I’m not sure how that impacts their calculations on the backend, but it gave me some reassurance that we were on the same page about what we’re shooting for here.

Monthly transfers

This is the step where I stopped, but if you were to go through it, you’d basically choose a “source” account (most likely going to be your checking account where your direct deposit happens) and then answer a series of “transfer account” questions, like which Roth IRA or taxable brokerage account(s) you want the money moved to each month to check the boxes for you.

Final verdict: Playbook is for six-figure earners with “normal” situations who want to aggregate all their automation and strategy in one place

Playbook isn’t a great fit for my current situation, because my current situation is a dumpster fire. Not only that, but I’m incredibly in the weeds with this stuff on a personal level, so I’m happy to toil away like a mad scientist in the chem lab on managing my own transfers and strategies.

If you do have a regularly “normal” situation (W2 job) and you’re interested in getting all of your stuff automated in one place with projections built in, Playbook might be a good fit for you.

They more or less tell you their strategy upfront (in that magical GIF), which you could – theoretically – just go enact yourself, but I think the value proposition here for using (and paying for) something like this is the ease of use and automation that’s built into it.

It will also (probably) give you some peace of mind, as it ensures you’re checking the boxes (and allows you to see the long-term outcomes!).

In some ways, its goals are not all that dissimilar from the goals of High Earner’s Code – except it doesn’t include self-employment income and HEC does, as I’m selfish and wanted my own situations to be covered in my (educational) product that notably doesn’t execute the transfers for you (like I said, I should’ve studied computer science).

The fine print, since we’re talking about investing

All events, persons and results described herein are entirely fictitious and amounts will vary depending on your unique circumstances and factors not necessarily accounted for here, such as market volatility, inflation, advisory fees, reinvestment of dividends or earnings, etc. 

Investing involves risk of loss and performance not guaranteed. Just my opinions, not advice. I asked Playbook if they’d be interested in sponsoring a review of their product, and they agreed. Sponsored by Playbook.