Retirement Answer Man

How do you pivot from a moderately aggressive portfolio in the accumulation stage of retirement planning to the decumulation stage? In today’s episode, we tackle two listener questions about the mechanics of decumulation in retirement planning. You’ll also hear a question about using QLACs to reduce RMDs. If you are wondering about the details on how exactly you are going to make this retirement thing work then be sure to press play. Retirement plan live is coming soon to a podcast near you!  In January we’ll be hosting the next edition of Retirement Plan Live. Retirement Plan Live is an extremely popular series that we run each year where I walk out the logistics of creating a retirement plan over the course of 4 episodes with a listener. At the end of the series, we host a live webinar where we analyze whether that particular plan is feasible. Our last Retirement Plan Live series dealt with Trish and her unexpected retirement. If you would like to be the next subject of RPL, make sure you are signed up for the 6-Shot Saturday newsletter so that you can access the link to the application form. We’ll choose one listener from the dozens of applications we receive. We will make sure to change the name and details of your situation while at the same time keeping the generalities in check. Listen in to hear the details. How to get the most bang for your buck in your retirement portfolio Steve has invested moderately aggressively, but as he turns 65 and enters retirement he is looking to become more conservative while at the same time getting the most bang for his buck. He is trying to figure out how to structure his portfolio conservatively while providing a bit of growth and income through dividends.The best way to approach this or any retirement planning question is to take a top-down approach. If you start at the bottom and work your way up you miss out on how your question fits into the big picture. Retirement planning starts with your overall goals for retirement. Then you need to understand how this particular question fits into your retirement plan. Once you have a feasible plan, then you can build a cash flow model which plans out your spending over the next 5 years and beyond. Once you have this cash flow model in place then you can make that model resilient. This is where your question comes in. How would you make your plan resilient? Do you want to optimize your portfolio for more money and higher returns or do you prefer to have a high level of confidence in your spending no matter the market? Rather than getting the most bang for your buck, consider what kind of outcome you would prefer to secure. How to simplify retirement accounts without taking a huge tax hit Karen is planning on retiring at age 61, but before she does she would like to simplify her retirement accounts. Currently, she has over 50 different investments. She wants to simplify the accounts into as few funds as possible and rebalance them without taking a huge tax hit. Once again, we must approach this problem in an organized way. When you consider what you are trying to accomplish by simplifying your accounts then you can see how this exercise will fit into your overall retirement plan. How would you approach this question? OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [1:30] News on the showLISTENER QUESTIONS [6:25] Using QLACs in retirement planning to reduce RMDs[11:35] Rita is interested in another series on long term care[12:46] Steve’s question getting the most bang for his buck during decumulation[30:20] Karen’s question about simplifying her portfolioTODAY’S SMART SPRINT SEGMENT [40:14] Go beyond the normal thankful things--think about the things that warm your spiritResources Mentioned In This Episode Retirement Plan Live 2021 - start hereDecumulation series - start hereRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

We often have monthly themes to guide the topics of this show, but this month on Retirement Answer Man we are doing a bit of a mishmash. Today I want to share some thoughts I had on retirement in general and answer a few retirement questions. As you listen, think about which topics apply to you and your situation and see if you can come up with actions that can get you closer to your retirement goals. Overcoming frugality can be a challenge After decades of saving your money and delaying gratification, suddenly letting loose to spend money on the things that make you happy may not come easy. If you have been a diligent saver over the years, you may find it challenging to shift from a saving mindset to a spending mindset especially when that mindset shift is timed with the loss of income from your human capital. The good news is that shifting to a spending mindset doesn’t need to happen like flipping on a light switch. This is a gradual change that can occur slowly. One way to help yourself become more open to spending is to construct a framework to help you make decisions.Becoming a new version of yourself takes time. Give yourself grace and time to make change happen. Retirement planning is complicated If anyone ever tells you that they have all the answers to retirement planning, run in the other direction. This is because no one can ever have all the answers to something so complicated as retirement planning. The way I like to go about planning is by organizing decisions under 3 separate categories. Are your dreams feasible? Consider the life you want and whether it is feasible given your resources. This means that you need to consider your values and what you really want. Next, you’ll want to discuss it with your spouse if you are married and run the numbers to see if your dreams are truly feasible.Is your plan resilient? The winds of change will come and they could take many forms. They could come in the form of inflation, uncooperative markets, death, or healthcare bills. Having a resilient plan will help you stay the course that you set. Ways that you could make your retirement plan resilient could be through cash flow planning, matching your assets, and managing your risks in an organized way. Can your plan be optimized? Optimization is a way to enhance your journey. Tax planning, asset allocation, Roth conversions, ACA credits, and Medicare decisions all fall under the category of optimization. These are ways that you can enhance your plan to improve it. However, it is important to remember that these are the extras, not the plan itself. Organize your retirement planning to stay on track By organizing your retirement planning under these 3 pillars you can ensure that you aren’t letting the tail wag the dog. Having an organized way to deal with your retirement plan will ensure that you aren’t missing out on an aspect of retirement that could have a major impact on your life. Make sure to stick around for the listener questions segment of the show. You’ll hear me answer questions on how to calculate modified adjusted gross income to include capital gains and I’ll even respond to a recent critique that I had from one listener. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN REFLECTIONS ON RETIREMENT [4:35] Overcoming frugality is a challenging thing for many recent retirees[6:50] Retirement planning is complicatedLISTENER QUESTIONS [13:07] Modified Adjusted Gross Income [16:33] My response to Janet’s critique[18:57] Otto’s comments on a recent question I answeredTODAY’S SMART SPRINT SEGMENT [22:28] Think about something that you need to undoResources Mentioned In This Episode Rock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Ever since listeners enjoyed our Retirement Tax Management series with Andy Panko we have received an influx of questions surrounding taxes. I’ll answer several questions today about filling up your tax buckets. I’ll also respond to queries about planning when to take Social Security when you will have excess RMDs and how to incorporate balanced funds into your asset allocation. Don’t miss this episode if you still have burning tax questions left over from last month’s series on retirement tax management. The Rock Retirement Club has so much to offer The Rock Retirement Club recently hosted the Retirement Rodeo Round-Up in Fort Worth, Texas. I was so impressed by the levels of motivation and excitement that I saw from the participants. Everyone who attended was excited to share their knowledge and learn from each others’ journeys so that they could make the most out of their retirement. Have you considered joining the Rock Retirement Club? If so, or even if you just want to learn more about it, check out the virtual open house that we’re having on November 16. At the open house, you’ll get a sneak peek of the Club’s Retirement Master Class and preview member tools like Everplans and the New Retirement Planner Plus calculator. The open house will be a great way to decide whether the RRC is right for you. Register for this event at LiveWithRoger.com. Are you having trouble overcoming frugality? One common concern from the participants at the Retirement Rodeo Round-Up conference was the challenge of overcoming frugality. Like many Retirement Answer Man listeners, RRC members are amazing savers, but after saving and delaying gratification for so many years it is hard to break the habit. There is a mental shift that must take place to switch from saving to spending and shifting your mindset can be difficult. Instead of watching your accounts grow, you now see them stay stagnant or decrease over time and this can set off alarm bells in your mind. Have you experienced difficulty navigating this change? What did you do to shift your mindset from saving to spending? When should Jenny claim Social Security? Jenny has been a diligent saver and will end up having excess RMDs. This issue has caused her to think about the most beneficial time to claim Social Security. She is considering taking Social Security at age 62 to lower her income, but I have another strategy for her to consider. Listen in to hear my thoughts on what you should do if you have substantial projected RMDs. How to fill up your tax bracket bucket in retirement One of the strategies that Andy Panko and I talked about last month in the Retirement Tax Management series was filling up your tax bracket. When filling up your tax bracket you'll want to take funds from your IRAs or other tax-deferred accounts and either spend that money, invest it in after-tax assets, or convert it to a Roth IRA. Work out the best situation for you by creating a retirement plan of record and then test different outcomes. Have you created a retirement plan of record yet? OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS [2:40] It takes a big mental shift to stop saving and start spending[4:01] How much to allocate to asset allocation if you have balanced funds in your portfolio?[7:05] How Social Security works with RMDs[13:10] How to fill up the tax bracket bucket[15:15] What to do with the money that you fill up your tax bracket with[16:26] Scott really enjoyed the episodes with Tanya NicholsTODAY’S SMART SPRINT SEGMENT [17:10] Calculate your projected income for 2021Resources Mentioned In This Episode Register for the Rock Retirement Club’s virtual open house at LiveWithRoger.comTanya Nichols with Align FinancialCheck out Tanya Nichols in the Women in Retirement series - Start HereRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Do you wish you could find a comprehensive guidebook to help you plan your retirement? If so, you won’t want to miss this interview with Dr. Wade Pfau. Wade is the founder of the Retirement Researcher website and a retirement income professor at the American College. He is also the author of several books and his newest, the Retirement Planning Guidebook, was recently published. This book is the most detailed retirement guide that you will find, so don’t miss out on this interview to hear what to expect from Wade’s guidebook. There is no one way to plan for retirement Unfortunately, there isn’t a simple answer to how to plan your retirement. The way that works for you may not be ideal for your next-door neighbor. This is why it's important to come up with a strategy first. That way you can build your retirement plan according to your strategy. If you can come up with a flexible solution then you can make iterations based on changes in the world around you. Retirement planning is all about preparing for uncertainty. With the right strategy, you can make educated decisions to carry you through those uncertain times. Retirement choices cause a ripple effect throughout other areas The choices you make in retirement have a ripple effect in many areas and one decision can create unexpected consequences in another part of your retirement plan. This makes it challenging to make any choices and can lead to analysis paralysis. Let’s see how one decision could lead to a domino effect. Say that you are trying to diversify your portfolio. If you sell a major position that you hold then you could end up with capital gains which could push you into another tax bracket which could eliminate the possibility of using ACA credits and so on. Rather than be paralyzed by the fear of making the wrong decision, you need to think in an organized way about what problem you would like to solve. If you are trying to lessen your market risk you will need to sell to diversify your portfolio. However, if you are trying to focus on getting ACA credits the decision to diversify all at once may not be the best strategy. How much should we consider tax policy in retirement planning Taxes are one of the great unknowns in retirement planning. No one can say for certain how tax policy may change in the future. So how much should you try to predict tax policy changes when planning for retirement?It is always good to start with a basis and then test different outcomes. The current tax rates are a good starting point for building your retirement plan of record. Once you build this foundation, you can tease out different outcomes as you learn more information. Retirement tax planning isn’t made on a yearly basis, rather you should plan to try and reduce your overall lifetime tax bill.Learn how to utilize Social Security, plan for the unknown, and lower your lifetime tax bill on this episode of Retirement Answer Man with Wade Pfau. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WADE PFAU INTERVIEW [3:30] One decision you make in retirement affects others[10:21] There is no one way to plan for retirement[13:31] How much should we consider tax policy in retirement planning?[16:45] Social Security considerations[25:53] Consider the premium cliffs that are out there[31:31] How to factor in a cognitive decline[34:58] How to navigate the lump sum vs. lifetime income decisionResources Mentioned In This Episode BOOK - Retirement Planning Guidebook by Dr. Wade PfauRetirement Researcher websiteThe American CollegeBOOK - How to Decide by Annie DukeBOOK - Because a Little Bug Went Ka-Choo by Rosetta StoneRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Do you understand what you need to do to build a happy retirement? My guest today has studied the data to tell the story of happy retirees in his new book, What the Happiest Retirees Know. Wes Moss is not only an author of multiple books, he is the host of the live radio show, Money Matters, and the Retire Sooner podcast. Learn the habits to develop now to create a happy retirement by listening to this interview with Wes Moss. Are you retiring to something or away from something? The real-world data shows that 70% of people don’t like their job and 20% of people actively hate their job so much that they want to hurt the company they work for.These sad statistics lead to people thinking that retirement is the answer to their unhappiness. However, it isn’t enough to retire away from something. We must retire towards something to find happiness in retirement. Is your objective to retire away from your job or towards happiness? Think about what you would like to retire towards. Do pre-retirees have misconceptions about what a happy retirement really is? Most people have a preconceived notion about retirement. They believe that once you reach a certain level of financial security, you’ll stop working and then the skies will open up and the world will become a happy place. They feel like retirement will be some version of heaven.However, the reality is much different. There is a period of transition and not an instant magical change. Preparing well in advance will help to create a happy retirement and avoid disappointment. It only takes $75,000 per year to be happy One of the biggest worries in retirement is having enough money, but research shows that it only takes between $70,000 and $80,000 per year to create a happy life. Having more money won’t increase levels of happiness. It doesn’t take as much as you think to avoid an unhappy retirement. Even though many people feel the loss of a sense of purpose and increased loneliness once they retire, with a bit of preparation, anyone can create a happy retirement. Habits to develop to create a happy retirement Wes describes ten categories in his book that contribute to happiness in retirement. These habits include: Money habitsCuriosity habitsFamily habitsLove habitsFaith habitsSocial habitsHome habitsHealth habitsInvesting habitsWithin these categories, only a few areas actually have to do with money. If you can build up a solid foundation of healthy habits before you retire, you will have a greater chance of creating a happy retirement. What the Happiest Retirees Know can even be used as a workbook. As you read through, find the habits that you want to improve and see how you can stack them to work on 3 or 4 together at the same time. Listen in to hear how golfing is a way that I habit stack areas that I am actively working on in my own life. What are you working on to ensure that you create a happy retirement? OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WES MOSS INTERVIEW [2:30] The data tells the story[3:55] Do pre-retirees have misconceptions about what a happy retirement really is?[11:54] It only takes $75,000 per year to be happy[15:14] If your base is in place then you don’t need to worry so much about money[21:45] How to use Wes’s book as a workbookResources Mentioned In This Episode BOOK - What the Happiest Retirees Know by Wes MossBOOK - You Can Retire Sooner Than You Think by Wes MossRetire Sooner podcastMoney MattersBOOK - The Top Five Regrets of the Dying by Bronnie WareRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Do you let perfection get in the way of progress? Trying to reach perfection could prevent you from reaching your goals. Retirement coach, BW joins me to discuss forward movement and setting realistic goals. In this episode, you’ll also hear listener questions about claiming spousal Social Security, preparing for retirement after divorce, and annoying financial surprises. You won’t want to miss the differing points of view on benefit protections, so make sure to listen until the end. What can Hazel do to prepare for retirement? Hazel is 51 and going through a divorce. She doesn’t plan to retire until she is age 65 even though she is eligible for a pension at age 55. She is looking ahead to what she should be doing to prepare for her retirement in the midst of her divorce. The first thing that she needs to do is to get through this divorce. Divorces can be messy or they can be amicable. While no one wants to create a messy divorce, it is important to make sure to take care of yourself first. Don’t mistake being nice with sacrificing your own interests. The next thing to do is to continue to save in a 401K. Even though Social Security and the pension will be Hazel’s main income streams in retirement, it is important to continue to build her retirement savings. The last thing that Hazel and you can do to prepare for retirement is to head over to DoRetirementRight.com and download this guide that will walk you through the steps to take in the years leading up to retirement. How to time the spousal Social Security benefit Mike has a question about the timing of his wife’s spousal Social Security benefit. He is considering taking his benefit early at age 62, but his wife is 3 years younger than him. If he takes his benefit at 62, his wife will still not be eligible for her benefit until she turns 62. However, if he waits until full retirement age at 66 then she could take her benefit at age 62. A great way to begin to plan this out is to create a retirement plan of record using the full retirement age as the basis and then to create different what-if scenarios. You can use the Spousal Social Security calculator to help calculate the percentage that your spouse would receive. Check out this recent interview I had with Wade Pfau to hear just how important Social Security is to retirement plans. An annoying financial surprise or spousal protection? Rhonda doesn’t have a question but rather a comment on annoying surprises that she has discovered in her finances. She has a pension and has to decide how she wants to take it. Recently, she discovered that if she decides to take the maximum benefit that only covers her own lifespan then her husband has to sign off on the form to approve this benefit selection. This isn’t the only thing that she has noticed that she needs her husband’s notarized signature for. If she chooses to change her beneficiaries on her retirement accounts she must also get approval from her husband. Rhonda feels like this is one more obstacle for women to overcome to live life in a man’s world, but I have another perspective. These rules (which vary state by state) were actually created to help protect women when men were the main breadwinners. How do you see these rules? Do they protect women or make it more challenging for them to keep their hard-earned money? Don’t let perfect be the enemy of the good As we finish off the month-long series on retirement tax management it can be easy to get caught up in the details of optimizing your situation. However, trying to get something perfect can lead to analysis paralysis. Sometimes we just have to point ourselves in the right direction and move ahead. It is important to be realistic about what is possible. There are so many unknowns when it comes to future tax planning that it is hard to be precise. The most important thing to do is to get the big things right and let the small things take care of themselves. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WHAT DOES THAT MEAN? [2:30] What can Hazel do to prepare for retirement?[8:30] Mike’s Social Security question[12:36] You don’t need to feel dumb[15:12] Rhonda discovered annoying surprises to deal with as a womanCOACHES CORNER WITH BW [21:07] Don’t let perfect be the enemy of the goodTODAY’S SMART SPRINT SEGMENT [29:18] Have a safe HalloweenResources Mentioned In This Episode Start listening to the Women in Retirement series hereSpousal Social Security calculatorWade Pfau interviewDoRetirementRight.comRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Over the past several episodes you have learned so much about tax planning in retirement. You learned why tax planning is important, all about the hidden tax bombs, and tools that you can use to defuse those tax bombs. Now it’s time to incorporate all of this newfound knowledge into your retirement plan.Andy Panko from Tenon Financial joins me once again to discuss how to incorporate tax planning into your retirement plan. Press play to hear how you can create a retirement plan that incorporates tax planning. How to become comfortable with uncertainty Oftentimes people are looking for a hard and fast rule to follow to make their retirement plan foolproof; however, there is no magical number or rule to create an iron-clad retirement plan. We can’t predict the unknowable, so we have to become comfortable with the uncertainty that retirement brings. To help you conquer that uncertainty, it is important to build a process that will help you make better decisions. The way that you can do this is by creating a retirement plan of record and testing projections and what-if scenarios. By setting up a decision-making framework, you will be able to manage your retirement finances in an uncertain world. Tax planning is a way to optimize your retirement plan Before you can start tax planning you need to ensure that you have the basics in place. As long as you can first map out the fundamentals of retirement planning like your expenses, your retirement paycheck, and your asset allocation you will then be able to optimize your retirement journey with tax planning. Remember that tax planning isn’t the main part of retirement planning, it is simply a way to enhance your retirement experience and financial plan in retirement. Choose a retirement planning tool and stick with it There are plenty of tools on the market that can help you create your retirement plan and projections. In the Rock Retirement Club we use the paid version of the New Retirement Calculator, but there is also a free version that you can use. You may be happy by creating a simple spreadsheet to help guide you.Just like there is no perfect retirement plan, there is also no perfect retirement planning tool. Whatever you decide to use, stick with that tool the way that you stick with the same scale to check your weight. You don’t want to flip flop back and forth between different calculators since the numbers may not look the same. Make an educated guess Even though you can’t predict what will happen in the future with tax legislation, you can make educated guesses about what would work best for you based on your own situation. Educated guesses are not just guesses. By using your retirement plan of record and modeling what-if scenarios you know that you are doing your best to make the best decisions for your retirement. Your decisions won’t always be the ‘right’ decisions, but that doesn’t mean that you shouldn’t plan in the first place. By creating a retirement plan of record and making projections you will be able to create a model that you can work from. Staying agile is the most important way to establish a successful plan so that you can rock retirement. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [4:30] Build a process to make better retirement decisions[7:52] Create a resilient plan[11:11] What if scenarios are important to creating a retirement plan[17:35] Educated guessing is a big part of retirement planning[24:24] Action items[30:05] How to choose a financial advisor or tool to help you planTODAY’S SMART SPRINT SEGMENT [31:40] Start the process of getting a plan of record in placeResources Mentioned In This Episode Tenon FinancialBOOK - Thinking in Bets by Annie DukeBOOK - How to Decide by Annie DukeThe New Retirement CalculatorRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Roth conversions, HSAs, pension choices, risk management: these are the topics of today’s listener questions. Susan, Gina, IM, and Daniel all submitted their questions to me via RogerWhitney.com/AskRoger and you can too! If you have any retirement questions, or even if you simply want to leave a comment about the show, click on the link to present your question. Whether you are looking to learn more about HSAs, Roth conversions, or evaluate your pension choices, listening to other listeners’ questions can help you learn how to frame your own questions and consider your options by always keeping your goals in mind. How to evaluate the best way to take a pension? Susan recently asked her financial advisor how she should take her pension and wasn’t satisfied with his answer. There are several options to choose from when deciding how to take a pension. One choice is to take the pension for a larger monthly sum for the duration of the pensioner’s life. Another option is to take a smaller amount over the course of the lives of both the pension holder and their spouse. A third option is to opt for a lump sum payment and forgo the monthly payments altogether.When making this decision there are a few ways to evaluate your choices. Create a what-if scenario to help you compare all the options. Then evaluate them next to your retirement plan of record. Listen in to hear how I perform this exercise with my clients. HSAs after age 65 HSAs are amazing tools that can help you reach your retirement goals. Gina’s question is about HSAs after age 65. She is still employed and plans to continue working for a few more years. She would like to continue to stay enrolled in her high deductible insurance plan so that she can continue to contribute to her HSA, but she isn’t sure how that would affect her Medicare choices. This is a great idea but navigating these waters is tricky since the rules surrounding Medicare are so complicated. Making a mistake could lead to a gap in coverage or even a lifetime penalty on parts B and D premiums. You’ll first want to check the rules surrounding your Medicare eligibility with your employee health insurance provider. Next, you should contact a Medicare navigator like Boomer Benefits. Should IM roll over her 401K to a Roth if she is worried about financial protections? IM writes in with a question about rolling over a 401K to a Roth IRA. She is worried about losing ERISA coverage when transitioning this money. ERISA stands for the Employee Retirement Security Income Act which was put in place to protect workers’ retirement plans. 401Ks are covered under this federal law; however, the protections for IRAs vary wildly from state to state. The first thing to do when considering this question is to check on the rules governing Roth IRA protections in your state. Next, you’ll want to evaluate your personal financial risk and how important this kind of coverage is to you. Make sure to scroll down to the bottom of the show notes to check out all the links to the resources mentioned in this episode. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS [4:41] Which pension choice best suits Susan’s needs?[13:40] A question about HSAs after age 65[17:23] Do the risks associated with Roth IRAs outweigh the benefits?[22:12] Daniel has a few Roth conversion questions[30:22] Daniel has a few HSA questionsResources Mentioned In This Episode YouTube episode with Andy Panko on retirement tax bombsBoomer BenefitsBOOK - Retirement Planning Guidebook by Wade PfauInterview with Wade PfauThe Retirement and IRA ShowNeuYear.netRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Are you worried that you won’t be able to live the life of your dreams in retirement? This is one of the main issues facing many people on the cusp of retirement. That’s why I created the Retirement Answer Man Show. I want to help you find the confidence to truly rock retirement.One way that you can become more confident in your retirement plan is by utilizing the tax planning tools that are available to you. Andy Panko from Tenon Financial is here to help you identify all the tools available in your tax toolbox. Press play to open up your tax toolbox and see what is inside. Opening your tax toolbox  Before you can pick up a tool from the tax toolbox you must start with a broad understanding of your tax situation both now and in the future. This means that you’ll have to do some educated guessing to figure out what your future tax situation will be.Projecting your tax situation out 10 or 20 years down the road won’t be an exact science, so don’t try to make it so. More accuracy doesn’t mean more precision in future tax planning; there are too many factors at play.Simply because your tax situation won’t be exactly the way that you estimate it to be doesn’t mean that you shouldn’t take the time to map it out. You must take this step to get the framework you need to make educated decisions. This framework will be your basis for making practical decisions. 4 useful tools in your tax planning toolbox Fill up your tax brackets. If you retire before you start taking Social Security you may find yourself in an unusual situation. You may not have any income and therefore you won’t have a tax bill! Rather than marveling at this newfound freedom from the taxman, you may actually want to realize enough income to stay within the 12% tax bracket. By paying a bit in taxes now you could be utilizing an opportunity to lower your lifetime tax bill. Remember that those tax-deferred accounts are sitting there waiting for you to pay taxes on them when you reach age 72. Do Roth conversions. While you’re filling up the lower tax brackets you can convert your tax-deferred assets to Roth. The money will continue to grow, but you’ll be able to rest easy knowing that the taxes have already been paid. By performing Roth conversions you'll ensure that you won’t have all of your assets in tax-deferred accounts waiting for your RMDs. By converting some of your assets into Roth you’ll provide yourself with more flexibility, control, and optionality. Tax-loss and gains harvesting. Tax-loss and gain harvesting is a little-utilized tool that applies to brokerage accounts when you sell a position and realize a gain or a loss. You can use these gains and losses strategically to optimize your tax situation. Listen in to hear how this tool could work for you. Qualified charitable donation. If you are charitably minded QCDs are a great way to give to your favorite charity and save money on taxes at the same time. The trick with QCDs is that they must transfer directly from the IRA custodian to the charity. In retirement, tax planning isn’t the same as in your working years. You need to plan ahead so that you can optimize your lifetime tax bill.Next week you’ll learn how to incorporate all of these tools into your retirement plan so that you can avoid those tax bombs. Don’t miss that episode so that you can build a retirement plan that will give you the confidence to rock retirement. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [1:30] Financial planning should be a collaborative process[7:25] Opening your tax toolbox [13:29] Filling up your tax brackets should be your first tool[21:44] Roth conversions[29:39] Tax-loss and gains harvesting[39:36] Qualified charitable donationTODAY’S SMART SPRINT SEGMENT [42:03] Map out your future income and build a net worth statementResources Mentioned In This Episode Tenon FinancialJordan PetersonRock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center

Do you feel like you are late to the ball game in saving for retirement? Have you ever wondered if an annuity could take some of the stress out of writing your own retirement paycheck? Are you trying to figure out the best way to self-fund long-term care for you or your spouse? All of these questions come directly from listeners like you. If you have questions about retirement, Fridays are a great time to tune in. We are now releasing 2 episodes a week: one focused on the monthly theme and the other focused on listener questions. If you have a query of your own question head on over to RogerWhitney.com/AskRoger to submit your retirement questions. How to maximize retirement savings after getting a late start Catherine writes that this podcast has helped her get over the shame and frustration of not prioritizing her retirement savings earlier. Now that she has worked her way through those feelings she wonders what the best way to increase her retirement savings would be after getting a late start.Catherine is maxing out her 401K, and her husband has a simple IRA and no access to a 401K. However, if he could convince his partners to switch to a 401K he could max out the contributions and begin to expand their savings. Another way to get plenty of bang for your buck is to use an HSA. Many people don’t consider the HSA as a retirement account, but it can be a great way to help play catch up. You can contribute up to $7200 per year to your health savings account if you are enrolled in a high deductible insurance plan. Not only do you get to use pre-tax assets, but you can invest those assets to use in retirement. If you invest your HSA aggressively, it can become like a supercharged Roth IRA. Would an immediate annuity be a good idea for Mary? Mary is considering purchasing an immediate annuity with the proceeds from the sale of her house. She would like to receive between $1000-2000 per month from the $300,000 profit.A single premium immediate annuity (SPIA) could provide this kind of stable return, but before she jumps into such an arrangement she should consider the pros and cons of this type of annuity. The pros and cons of purchasing a SPIA One of the main reasons that people consider purchasing an annuity is their ease. With the SPIA Mary won’t have to manage her investments or worry about the markets. She’ll be receiving a guaranteed income for the rest of her life. There is definitely an advantage to this kind of simplicity. On the other hand, if she passes away shortly after purchasing the annuity then the money will not be hers to pass on to her heirs. By giving up her $300,000 and committing to an annuity she loses out on optionality. One way to combat this would be to make sure to have liquid assets on hand in case of an unforeseen event.Press play to hear my thoughts on purchasing an annuity and to learn how to self-fund for long-term care. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS [2:57] Getting over the regret of not saving better sooner[10:06] Tom wonders if there will ever be an audiobook version of Rock Retirement[11:46] Would an immediate annuity be a good idea?[17:34] How to best self-fund for long-term careResources Mentioned In This Episode Rock Retirement ClubRoger’s YouTube Channel - Roger ThatBOOK - Rock Retirement by Roger WhitneyWork with RogerRoger’s Retirement Learning Center