The Retirement and IRA Show

Listeners dive into the complexities of Social Security, exploring how SSDI can transition to retirement benefits and the effects of family maximums on multiple child benefits. Key points include the intricacies of 60-day rollovers, RMD calculations for inherited IRAs, and strategies for using deferred income annuities to address future income needs. The hosts also discuss potential alternatives and flexibility in annuity structures, weighing current rates against future possibilities. It's a treasure trove of insights for navigating retirement finances!

This week, with Jim away at a conference, Chris is joined by Jake for an EDU episode that takes the shape of a Q&A, focusing on tax planning strategies. The guys cover a series of emails that highlight how different tax rules and opportunities intersect with retirement planning, income management, and financial decisions. (10:30), the first question explores how the new OBBB changes—particularly the $40,000 SALT deduction and $6,000 senior deduction—are affecting Roth conversion strategies. Chris and Jake break down who might benefit from larger conversions, who may want to scale back, and how the extension of lower tax brackets plays into long-term planning. (26:45), a listener with high health care costs asks what qualifies for deduction, how the 7.5% AGI threshold works, and whether items like chiropractor visits and insurance premiums count. The guys walk through the rules, the limits, and which expenses can make a difference. (39:00), the third question looks at the backdoor Roth. A “long-lost” 401(k) rolled into an IRA raises concerns about the pro rata rule and whether it threatens the clean execution of annual conversions. The guys explain how to handle the rollover and keep the strategy on track. (49:45), tax-loss harvesting and the wash sale rule take center stage. The listener wants to know how dividend reinvestments across different accounts might complicate reporting and whether timing strategies can keep things clean. Chris and Jake lay out how the rule works and what to watch for. (1:02:45), a self-employed listener asks if funding a solo 401(k) before converting to Roth could save self-employment tax. The guys explain the mechanics, the limits on employer contributions, and the modest but real savings this tactic may offer. The post Tax Planning Strategies: EDU #2539 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on IRMAA reductions and Roth-conversion effects, widow filing status and IRMAA, in-kind stock Roth conversions and RMD transfers, annuity RMD interactions, and 60-day rollover mail timing. (7:45) George asks whether an approved SSA Form 44 that reduced 2025 IRMAA will also govern next year, how a large 2026 Roth conversion will be trued up and affect future IRMAA brackets, and whether that conversion will cause higher IRMAA in multiple subsequent years. (18:45) A listener wonders if a recently widowed spouse’s IRMAA in 2026 will reflect single status or remain based on the 2024 joint tax return. (24:45) The guys ask whether in-kind stock Roth conversions change the stock’s tax basis inside a Roth and whether an in-kind RMD transfer to a brokerage establishes a stepped-up basis. (49:45) Jim and Chris consider a hypothetical where an IRA annuity’s annual payout might be less than the RMD and what happens if the RMD exceeds the annuity payment. (1:02:15) One listener argues that claiming a mailed check took longer than 60 days to arrive is implausible because USPS optical scans and Informed Delivery images could let the IRS verify delivery dates. The post IRMAA, Widow Status, Roth Conversions, Annuity RMDs, and Rollovers: Q&A #2538 appeared first on The Retirement and IRA Show.

If you would like to skip over Chris and Jim chatting about a recent Colorado hail storm and Jim’s garden while he’s in Ohio, please skip to the 7:45 mark. Article discussed in today’s show: https://www.kiplinger.com/retirement/retirement-planning/the-me-first-rule-of-retirement-spending Chris’s Summary I chat with Jim about a recent article regarding retirement planning and compare how the article approaches a number of concepts in a similar way to the way that we look at retirement planning here at the firm. Jim’s “Pithy Summary” Chris and I chat about a Kiplinger article that was sent over by a couple of our frequent podcast listeners to get our thoughts. I walk through some of the background on our unique approach to retirement planning including concepts like the Minimum Dignity Floor (MDF) and covering expenses with secure income rather than relying on a safe withdrawal style of approach. We weigh the seesaw between the younger you and the older you when it comes to spending in your youth versus saving in retirement. The post Discussing An Article On Retirement Planning: EDU #2538 appeared first on The Retirement and IRA Show.

Jim and Chris discuss a listener PSA on WEP treatment for foreign pensions, followed by questions on Social Security strategies, benefit calculators, account consolidation, and MYGA selection.(13:00) Georgette shares a PSA on how a lump-sum superannuation payout impacted WEP treatment under the POMs rule and led to a successful Social Security appeal.(21:45) George outlines his family’s situation and asks if claiming Social Security now is the best strategy to activate child-in-care and DAC benefits.(36:15) A listener asks which online calculator Chris previously recommended to determine the taxable portion of Social Security benefits.(38:45) The guys address a question about whether the SSA benefit estimates shown at FRA and age 70 include COLA adjustments.(43:30) Jim and Chris respond to a question about how different retirement plan components might be treated when considering account consolidation.(56:00) A listener asks what criteria to use in MYGA selection, including how to evaluate insurers and what the minimum AM Best rating should be. The post Social Security, Account Consolidation, and MYGA Selection: Q&A #2537 appeared first on The Retirement and IRA Show.

If you would like to skip over Chris and Jake chatting about Jake’s recent trip to Ireland you can go to 7:00. Chris’s SummaryI am joined by Jake today, while Jim is traveling, to examine taxes in retirement. We look at why not all taxes belong in the Minimum Dignity Floor. We also consider the trade-offs between Roth conversions and IRMAA, and the role of a cash reserve during the delay period in protecting both essential and discretionary spending when markets move against you. Jim’s “Pithy” Summary While I’m traveling, Chris and Jake dig into taxes in retirement. The Minimum Dignity Floor comes up, and a lot of folks get part of this wrong. It’s about protecting the basics with secure income. Start dragging every tax expense into it and that’s when you end up purchasing annuities you don’t need. Roth conversions and IRMAA can trip people up too. Skip the conversions and you dodge the tax bill for now—but that just means bigger RMDs and bigger taxes later. Convert more today and you feel the hit right away, sometimes with IRMAA stacked on top. There’s no move that makes it painless, and with larger portfolios IRMAA simply becomes part of life. The delay period brings up that old 3% safe withdrawal. The problem is what it puts at risk when markets stumble. It’s not the basics that get cut first—it’s the Fun Number. That’s why Chris and Jake talk about keeping a moat. A pool of safe assets would give you the security and confidence to keep enjoying retirement even if the markets dip. The post Planning for Taxes in Retirement: EDU #2537 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on surviving spouse Social Security benefits and Roth conversions, SSDI and pensions, the Social Security Fairness Act, managing large HSA reimbursements, and choosing between MYGAs and the TSP G Fund.(7:45) George asks whether Roth conversions count toward the earnings test when planning to claim his surviving spouse Social Security benefits.(26:30) A listener asks how SSDI interacts with pensions, how SSDI transitions to regular Social Security, and why SSDI can sometimes be higher.(35:00) The guys address a listener’s point that repealing WEP and GPO also benefits immigrants with foreign pensions, not just government employees.(44:45) Jim and Chris consider whether taking large HSA reimbursements could increase the risk of an IRS audit.(52:00) Georgette wonders whether to move fixed income from the TSP G Fund into MYGAs, including questions on protection limits and rate comparisons. The post Social Security, HSA Reimbursements, and MYGAs: Q&A #2536 appeared first on The Retirement and IRA Show.

Chris’s SummaryJim and I look at behavioral finance in retirement planning, noting that spending from secure income feels safer while drawing from assets feels like a loss. People resist balances going down after decades of saving, even though the money was built to be spent. We highlight how framing savings as deferred spending and covering the Minimum Dignity Floor with income addresses uncertainty, complexity, and the tendency for retirees to underspend. Jim’s “Pithy” SummaryChris and I dive into two listener-sent pieces — a Kiplinger’s article and a research report from Blanchett and Finke — and they line up perfectly with what we’ve been saying for years. Folks, this is behavioral finance! Retirees spend Social Security, pensions, and annuity checks with ease, but hesitate to touch their own savings. I call it the bottomless cup of coffee: when the pot keeps getting refilled, you drink. When it’s just a thermos, you guard it and leave joy on the table. We also get into how framing makes all the difference. Too many people see their IRA as wealth to preserve instead of deferred spending to use. That’s why Required Minimum Distributions suddenly feel like permission slips — people spend because they think they’ve been told they can. And while loss aversion is real, taxes push those same buttons too. This is why we push to cover the Minimum Dignity Floor with secure income. If food, utilities, transportation, housing, and healthcare are guaranteed, you take uncertainty and complexity off the table. That’s what gives you the confidence to pursue your Fun Number, knowing the basics are covered and you can spend without second-guessing every dollar. Show Notes: Blanchett and Finke Report The post Behavioral Finance in Retirement Planning: EDU #2536 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on Social Security timing rules, retroactive benefits for an ex-spouse, investment strategy philosophy, fraternal benefit societies, and Roth conversions.(6:30) The guys address a listener’s question about whether applying for Social Security at 70 requires enrolling in Part B or if retroactive filing is an option without losing payments.(16:00) A listener asks why their 75-year-old father was denied six months of retroactive spousal benefits while a widowed friend who applied at the same time received them.(33:30) Jim and Chris respond to a listener who questions the “You won the game, why take the risk” from a previous episode and asks whether a high-equity portfolio still makes sense.(53:00) The guys respond to a listener’s email about fraternal benefit societies that operates outside guaranty associations.(1:12:00) Georgette asks whether converting to a Roth and then spending from it makes more sense than other withdrawal options. The post Social Security, Risk Philosophy, Fraternal Benefit Societies, Roth Conversions: Q&A #2535 appeared first on The Retirement and IRA Show.

If you are not in the mood for Jim and Chris’s delightful banter, you can skip ahead to (5:45). It should be noted that of all the episodes to start sharing that information, it’s the one in which Jim said “we didn’t even banter!”. But, from now on, right here before the guys’ summaries you can find the timestamp to jump ahead to if you want to get to the meat of the show. Chris’s SummaryJim and I continue working through Ed Slott’s advisor quiz. After introducing the mandatory Roth catch up rule last week, we now focus on how W-2 wage definitions determine who’s affected, which plan types are exempt, and how administrative delays impact implementation. We also clarify rules around QCDs from inherited IRAs and debunk common errors made by ChatGPT when interpreting the 60-day rollover rule and plan eligibility. Jim’s “Pithy” SummaryChris and I keep going with the Ed Slott quiz, diving deeper into how the mandatory Roth catch up rule will actually work when it takes effect. We go through how wages are defined for this purpose—specifically Box 3 of the W-2, not Box 1—and why that matters for who’s subject to the rule. That single detail creates big carve-outs for groups like self-employed individuals and many state or local government employees who don’t pay into Social Security. We also highlight how a plan’s design matters. If your employer doesn’t offer a Roth option and you’re over the wage limit, you won’t be allowed to make catch up contributions at all. And we explain how the one-year look-back works, including why a job change can give someone a temporary exemption. ChatGPT joins us again and gets several key questions wrong—like saying the rule applies to SIMPLE IRAs (it doesn’t), or insisting QCDs can’t come from inherited IRAs. Wrong again. If the beneficiary is over 70½, QCDs are allowed, and the IRS has even designated a code on the 1099-R for that exact scenario. Once it thought a little harder, Chat backed off and conceded. Smack talk retracted. We close with a scenario on the 60-day rollover rule—what happens if a distribution check shows up while you’re out of town for months. Chat claimed the clock starts when it hits your mailbox. But that’s not how it works. According to private letter rulings, the 60-day window starts when you actually receive the check. The post Roth Catch Ups and the 60-Day Rollover Rule: EDU #2535 appeared first on The Retirement and IRA Show.