The Retirement and IRA Show

Chris’s Summary:Jim and I discuss annuity types and features during Annuity Awareness Month, focusing on immediate vs. deferred annuities and fixed vs. variable structures. We cover how each type works, what they offer, and where caution is warranted. Jim’s “Pithy” Summary:Chris and I continue our Annuity Awareness Month series by diving into the foundational aspects of annuities—what they are, how they work, and what to watch out for when buying one. We explain the four primary annuity types and features—immediate, deferred, fixed, and variable—and share why understanding the difference between a noun and a verb matters in this world. When you annuitize, that’s the verb; you’re locked in, and there’s no getting out. That’s why we call deferred income annuities a big commitment—once you’re in, there’s no divorce clause! I share my concerns with the tax deferral hype, especially when annuities are held inside IRAs. Many folks mistakenly believe they’re gaining tax advantage, but in reality, they might just be compounding future tax headaches. We talk about how annuities can offer principal protection and guaranteed lifetime income—but not all annuities do both. And we dive into what happens if you die early or live long, covering things like period-certain options, cash refunds, and installment refunds. We also walk through the origin of single premium immediate annuities as a modern-day answer to tontines—yes, those ancient, now-outlawed mortality pools where surviving members collected increasingly larger checks. Mortality credits are still alive and well, just repackaged into today’s SPIAs. And if you’ve ever been pitched a variable annuity with enhanced death benefits or living benefits, we explain how those work, what they really cost, and why you need to read the fine print. From mortality and expense fees to revenue-sharing subaccounts, there’s a lot going on behind the scenes. The post Understanding Annuity Types and Features: EDU #2524 appeared first on The Retirement and IRA Show.

Jim and Chris answer questions on defined maturity bond ETFs, Social Security account linking and spousal offsets, 401k annuities vs IRA Annuities, and annuitization definitions.(14:30) Jacob joins the guys to explain how estimated net acquisition yield works for defined maturity bond ETFs, including how to interpret it and evaluate risk when holding through maturity.(38:30) A listener asks about sending a marriage certificate to Social Security for account linking and whether there’s any confirmation of linking on SSA.gov.(44:15) George wonders whether his wife will automatically receive a spousal benefit increase once he claims Social Security at age 70, and how to confirm PIA and eligibility.(52:30) Jim and Chris address a suggestion that annuities held inside 401k plans may be less tax efficient than IRA annuities because of RMD aggregation rules.(1:06:45) A listener asks why so few annuities are annuitized and whether turning on income from a DIA or SPIA counts as annuitization. The post Bond ETFs, Social Security, 401k Annuities, and Annuitization: Q&A #2523 appeared first on The Retirement and IRA Show.

Chris’s Summary:Jim and I kick off our annual Annuity Awareness Month series by explaining how using annuities in retirement planning can help manage longevity risk and provide guaranteed income. We cover when they’re worth considering, what they actually solve for, and how they might fit into a plan—if at all. We also explain why many people are skeptical of annuities and why, in many cases, that skepticism is justified. Jim’s “Pithy” Summary: Chris and I launch our annual series for National Annuity Awareness Month with a foundational discussion on annuities: what they are, why they exist, and how we use them—sparingly but strategically—in retirement planning. This episode lays out the key insurance roles of annuities: to protect against longevity risk and to provide principal guarantees. We explain the importance of matching secure income to the Minimum Dignity Floor, especially for clients who worry about running out of money or spending too little early in retirement. We also touch on the emotional and cognitive benefits of predictable income streams—what I call “bottomless cup of coffee” money. It helps people feel secure, simplifies decisions as we age, and eases the burden on a less-involved spouse. We explore the history of how annuities got such a bad rap—some of it deserved, especially when the industry prioritized commissions and free dinners over client outcomes. I also share how my own financial education at Boston University drilled anti-annuity rhetoric into my head, even while praising the “three-legged stool” of Social Security, pensions, and savings. It made no sense: the annuity was the obvious substitute for the lost pension leg. If you’re a regular listener, you already know we’re not annuity salespeople, and we certainly don’t hate them either. We see them as tools, and just like dogs, you match the tool to the task. You wouldn’t take a bichon duck hunting, and a Chesapeake Bay retriever doesn’t belong in a carry-on crate. Same principle with annuities. The post Annuities in Retirement Planning: EDU #2523 appeared first on The Retirement and IRA Show.

Jim and Chris answer listener questions on Social Security filing, a PSA on SSA’s online application process, the Roth 5-Year Rule, HSA strategy, and bond principal risk. (8:00) A listener asks whether Social Security’s claim that delayed retirement credits aren’t applied until the end of the following year is accurate, and whether anyone receives them without persistent follow-up. (29:15) The guys share a listener PSA with their experience applying for Social Security online and highlights the confusing communications around application status and approval timelines. (18:15) George asks how and when to apply for Social Security if they want benefits to begin at age 70 and their birthday falls on the first of the month. (35:45) Jim and Chris respond to a question about whether each Roth conversion has its own 5-year clock, even for someone over age 59½ with existing Roth IRAs. (42:15) Georgette wonders how the Roth 5-Year Rule applies to non-spouse beneficiaries and whether it transfers from the original account holder. (48:00) A listener shares their HSA strategy as a substitute for long-term care insurance, along with personal experience on how cafeteria plan deductions affected Social Security earnings. (56:00) The guys explain whether bondholders risk losing principal at maturity when interest rates rise significantly. The post Social Security Filing, Roth 5-Year Rule, HSA Strategy, and Bond Principal: Q&A #2522 appeared first on The Retirement and IRA Show.

Chris’s Summary:Jim, Jake, and I use this Dialogue EDU episode to explore how we approach flexible retirement spending. We respond to listener emails about DIY simplicity, budgeting for irregular expenses, and how we assign assets to spending needs. The conversation highlights why we prioritize adaptability over rigid withdrawal rules. Jim’s “Pithy” Summary:Chris, Jake, and I use this Dialogue EDU episode to explore what flexible retirement spending really looks like—beyond the spreadsheets and into the real-life tradeoffs people actually face. A few listener emails set the stage, from a DIYer aiming for simplicity to someone tackling unexpected home repairs, and another asking how we assign dollars to various spending needs across tax categories. We take those as a jumping-off point to talk about the importance of structure without rigidity, and why having a plan doesn’t mean you need to over-optimize every detail. I share thoughts on safe withdrawal rates (you can guess where I land!), why the best-laid plans always get tested, and how people get in trouble when they assume retirement is just a math problem. Jake weighs in on building plans that bend instead of break, and Chris brings it all back to how our See Through Portfolio and 2-1-0 Tax Ordering Number provide enough order to make decisions—without painting you into a corner. Along the way, I go on a bit of a tangent about why rules of thumb usually leave people stuck—especially if they’ve been good savers their whole life but have trouble flipping the switch to spending. We get into how why simple doesn’t always mean easy and how people can tie themselves in knots trying to make every move efficient. There’s a reason we keep coming back to flexibility: it’s the only way a plan actually holds up when life starts throwing curveballs! The post Flexible Retirement Spending: EDU #2522 appeared first on The Retirement and IRA Show.

Listeners dive into crucial topics like the optimal timing for Social Security benefits and the implications of large pre-tax contributions on earnings tests. The discussion also clarifies how to isolate IRA basis during conversions and the complexities of the Roth 5-Year Rule. Personal anecdotes about a classic TV show add a nostalgic touch, while trivia games bring light-hearted fun to serious retirement strategies. Expert advice shines through, making complex financial topics more approachable and engaging.

Chris’s Summary:Jim and I are joined again this week by Kevin Sebesta from the Rock Retirement Club in this EDU episode. We explore what helps retirees start spending confidently—especially when markets are volatile or the saver mindset is hard to shake. Kevin shares how structure, support, and community all play a role, and why building confidence takes more than just having a solid financial plan. Jim’s “Pithy” Summary:Chris and I bring Kevin Sebesta back this week for round two, and this time we’re talking about what it really takes to start spending confidently in retirement. Kevin’s been retired for over a decade and now coaches others through the emotional messiness of it all—because let’s face it, knowing you “have enough” and actually feeling comfortable using it are two very different things. We dig into how savers struggle to flip the switch, how things like the Fun Number and Minimum Dignity Floor can give people the permission they need to enjoy their money, and why building in a simple cash reserve might just be the difference between “Hey, let’s upgrade the cruise cabin” and “Let’s sit in steerage because the market dipped 8%.” We talk about community, support, peer influence (yes, even a little friendly shaming), and how watching other retirees live well can sometimes do more than a spreadsheet ever could. Kevin shares some great anecdotes—including what happens when frugality runs too deep—and I get into my usual rants about emotional risk, the real cost of inaction, and why deferring fun until your 80s is a plan only a masochist could love. Retirement planning isn’t just about having a secure strategy—it’s about creating a life worth funding! The post Spending Confidently in Retirement with Kevin Sebesta: EDU #2521 appeared first on The Retirement and IRA Show.

With Jim away at a conference, Chris is joined by Jake and Jacob to answer listener questions on child-in-care spousal benefits, the Earnings Test, HSA strategy, reconstructing cost basis, and Social Security timing concerns. (6:00) A listener asks whether reaching full retirement age makes him ineligible for child-in-care spousal benefits, and what steps he can take to appeal the denial. (21:30) George questions whether excess earnings prevent payment of family Social Security benefits when the worker’s own benefit is offset (34:00) The guys address how inheritance and medical spending may influence HSA strategy and if it’s possible to overfund an HSA. (50:00) “Chris and the Jacobs” respond to a couple trying to reconstruct the cost basis of mutual funds purchased in the 1980s without access to their records. (1:02:15) Georgette wonders if divorce should be considered while deciding when a lower-earning spouse should claim Social Security, as well as whether pre-tax 401(k) contributions reduce reported earnings for benefit calculations. The post Social Security, HSA Strategy, and Cost Basis: Q&A #2520 appeared first on The Retirement and IRA Show.

Chris’s Summary:Jim and I welcome Kevin Sebesta from the Rock Retirement Club in this Dialogue EDU episode to explore the retirement mindset and why preparing for life after work goes beyond just the numbers. Kevin shares lessons from his own journey and the broader retirement community about identity, purpose, and what makes a fulfilling transition. Jim’s “Pithy” Summary: Chris and I welcome Kevin Sebesta to this Dialogue EDU episode for a conversation that veers off the usual technical path and gets into something trickier—the retirement mindset. Kevin’s a retirement coach and longtime member of the Rock Retirement Club, and he joins us to talk about the emotional challenges of leaving work. Kevin shares lessons from his own early retirement and what he’s learned working with hundreds of other retirees—plus a few gems that made even me and Chris stop and think. We get into why so many savers have a hard time flipping the switch to spending, the tension between saving and spending, and how tools like the Fun Number can help reframe your mindset around using money for more than just security. The post Exploring the Retirement Mindset with Kevin Sebesta: EDU #2520 appeared first on The Retirement and IRA Show.

Listeners are treated to insightful discussions on the importance of verifying Social Security records and understanding survivor benefits. The hosts tackle the nuanced process of designating a Trust as an IRA beneficiary, covering essential tax implications. They also clarify the Roth 5-year rule, addressing what happens in the case of a recent conversion before a beneficiary inherits. With personal anecdotes and practical tips, this discussion empowers listeners to navigate their retirement planning with confidence.