Intro

This chapter explores essential year-end actions for retirement planning, particularly regarding asset withdrawal. It also includes a case study introduction and a personal anecdote about the speaker's decluttering journey, contrasting 'stuff' with 'gear'.

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Episode notes

Join us in this insightful episode as we continue our series on year-end action items, focusing on optimizing your retirement planning. Today, we delve into the intricacies of withdrawing assets, discussing everything from flexible spending accounts to inherited IRAs. We also explore the concept of "gear, not stuff" with insights from Michael Easter, and how making thoughtful purchasing decisions can impact your financial health and the environment. Don't miss our deep dive into tax strategies and the importance of building a resilient retirement plan. Plus, we answer listener questions about decumulation, working with financial advisors, and more. Tune in to take actionable steps toward a secure and fulfilling retirement!

PRACTICAL PLANNING SEGMENT

(00:00) This week we continue to discuss year end action items to optimize your retirement planning

(00:50) We are gearing up for a retirement plan live case study for January. This time we will be focusing on someone who is single with no children.

(02:10) Roger shares an anecdote about having his kitchen cabinets painted and discusses gear versus stuff.

(05:00) Roger discusses the importance of buying high quality items that last.

(07:25) Today we're going to talk about accounts we should consider withdrawing money from before the end of the year. First up are FSA accounts.

(08:14) The next accounts we are going to talk about are inherited pre-tax accounts.

(09:30) If you inherited an IRA prior to January 1, 2020, your required minimum distribution is required to be taken out by the end of this year.

(10:48) What happens if you inherited an IRA after 2020?

(12:25) Since the Secure Act 2.0 started in 2023, the penalty for not taking the required minimum distribution is 25% of what you should have taken.

(13:35) The next type of required minimum distributions we are going to talk about are those that are age related for original IRA owners.

(15:03) Proactively taking qualified distributions can lower your overall tax rate in retirement.

LISTENER QUESTIONS

(20:44) Next Month, we'll focus on answering some of your questions on AskRoger.

(21:12) The first question comes from Scott about principal versus interest and decumulation.

(28:59) Next, Joy says she needs help with retirement planning and decumulation of assets.

(32:45) Mike asks about decumulation and resilience. How should pre-retirees position retirement assets as they reach the last five years or so before retirement?

(39:11) Tom asks about the five year rule for Roth 401k conversions.

SMART SPRINT

(41:08) Take a look at the items that we talked about in terms of withdrawing assets.

BONUS

(41:45) Roger reads another excerpt from his grandfather's war journal.

REFERENCES

Ask Roger

https://www.rogerwhitney.com/askroger

Michael Easter
https://twopct.com

Dinkytown Calculators- specifically the 1040 tax estimator
https://dinkytown.net

Schwab Required Minimum Distribution Calculator
https://www.schwab.com/ira/ira-calculators/inherited-ira-distribution-calculator

Six Shot Saturday
https://6shotsaturday.com