The Retirement and IRA Show

Jim and Chris discuss listener emails on the best month to claim Social Security, IRMAA strategy for married couples, Social Security ex-spouse benefits, inflation and annuity purchase decisions for a Minimum Dignity Floor shortfall, and Minimum Dignity Floor tax calculations.

(9:30) A listener asks whether there is a best month to apply for Social Security benefits before age 70, given how often benefits are recalculated.

(20:00) George wants to know whether the SSA-44 IRMAA strategy applies to married couples filing jointly, and whether a spouse delaying retirement until mid-January would allow a large Roth conversion that year without that conversion triggering IRMAA later.

(29:30) The guys are asked to clarify ex-spouse benefit figures a Social Security agent gave a listener’s sister-in-law, including whether she can claim spousal benefits without starting her own and whether the numbers indicate she was the higher earner.

(47:30) Jim and Chris field a question on how to account for future inflation when making an annuity purchase to cover a Minimum Dignity Floor shortfall.

(1:10:30) A final email wonders why the Minimum Dignity Floor calculation doesn’t simply account for the taxes owed on that income separate from Fun Number spending.

The post Social Security, IRMAA, Annuity Purchase, MDF Calculations: Q&A #2639 appeared first on The Retirement and IRA Show.

Chris’s Summary

Jim and I use a Life Annuity Specialist article on pension risk transfer mortality models to examine longevity risk for individual retirees. These models weigh sub-ZIP codes, income, and over 200 socioeconomic factors, suggesting some retirees may live more than 10 years past age-65 life expectancy. We discuss why a household is a risk pool of one, why projections should reach well into the 90s, and why advocacy matters as the tax planning window closes.

Jim’s “Pithy” Summary

Chris and I dig into an article from Life Annuity Specialist, and no, this is not an annuity discussion. It covers a new approach to mortality tables that a consulting firm built to help insurers price pension risk transfers, and I’m not a fan of those, as you know. What amazed me was how granular it gets: sub-ZIP codes, pension size, blue-collar versus white-collar, and a model trained on millions of life years of data.

Here’s the thing, folks. The subset of the population this model says will live longer is pretty much those of you listening to this podcast. You VGers, you do-it-yourselfers, you’re more likely to have taken care of your health and followed what Dr. Phillip Snider shares about healthspan, not just lifespan. These risk tables let insurance companies handle that uncertainty because they’re spreading it across thousands of people, so no single long life throws them off. You don’t get that luxury. You’re a risk pool of one, a zebra on the Serengeti trying to survive outside the herd. You can pool longevity and cash flow through an annuity if you want, but you cannot pool your cognitive ability or your ability to avoid fraud.

Whether or not you ever buy a lifetime stream of guaranteed income to protect your Minimum Dignity Floor, that’s up to you. What we talk about in this episode is longevity risk that goes beyond outliving your money. Who is going to advocate for you at 85, 90, 95? Who updates your power of attorney, checks your beneficiaries, and looks out for the surviving spouse who was never into this stuff? As the tax planning window closes, the need for advocacy grows, and many of you are going to live a lot longer than you think.

The post Longevity Risk Beyond Money: EDU # 2638 appeared first on The Retirement and IRA Show.

Chris and Jacob discuss listener emails on Social Security survivor benefits, a TIPS ladder paired with a QLAC, investment positioning across taxable, tax deferred, and tax-free accounts, and buffered ETFs for sequence of returns risk.

(12:30) A listener whose spouse recently died asks whether they can claim child in care survivor benefits now while caring for their young daughter, and whether claiming now would affect their own survivor benefit at full retirement age.

(25:00) George asks for feedback on a TIPS ladder that runs only to age 79, with an extra amount set aside at 75 to buy a QLAC that begins paying at 80 and covers the Minimum Dignity Floor from there.

(48:15) The guys take a question on how to position a $2.8 million portfolio split evenly between taxable, tax deferred, and tax free accounts when funding spending and weighing tax implications.

(1:05:15) Chris and Jacob respond to a question about using buffered ETFs to help manage sequence of returns risk.

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Chris’s Summary

Jim and I discuss five common power of attorney mistakes flagged in an estate planning attorney’s article, along with points from Peter Scott. We cover naming an alternative agent, the friction a springing agency can create, gifting authority that is either absent or overly broad, notifying old agents and financial institutions after a change, and the boilerplate real estate language that title companies may refuse to accept.

Jim’s “Pithy” Summary

Chris and I go through an article timestamped December 2022, one of the 72 sitting in my iPad folder, where an estate planning attorney lists her five biggest mistakes to avoid with a financial power of attorney. I’m not an attorney, nor do I play one on TV, but I’ve been in this industry 27 going on 28 years and we deal with these forms quite often. I read her five, opine on them, and Chris weighs in after each. I also bring in Peter Scott, who shared with us on this show before he retired, because Pete flagged two of these as the big ones.

Her list covers backup agents, springing powers, gifting authority, changing agents, and real estate. I used to be a fan of springing powers. I’m not anymore, and it was Pete who turned me around on it. I had never thought of it that way before. Gifting is the one I think gets overlooked most, and I use my own mother’s document to explain why, because what wasn’t in hers had me beside myself. It involved my sister, my niece and nephew, and a lot of college tuition. Chris adds that locking a document down too tightly can backfire just as badly, and suggests what to do with wishes that don’t fit into legal language.

We also get into why banks and financial institutions often refuse older forms, the Colorado law Pete said he could fly a 747 through, and two clients whose documents came from the exact same software, where one attorney took the time to do the job and the other just clicked print. Pete’s warning on real estate was about boilerplate language, and Chris explains why the address you use every day may not be the one that matters.

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Jim and Chris are again joined by Dr. Phillip Snider. They discuss listener emails on coronary artery calcium scoring, followed by a broader conversation on healthy aging. Dr. Snider revisits the five tests he recommended in a previous episode, explains what the calcium score ranges mean, and covers how to get the tests done. He then turns to the dietary patterns linked to a longer, healthier life and closes with where the evidence actually stands on the common supplements vitamin D, vitamin E, CoQ10, and beta-carotene.

(11:30) George shares that after requesting the five tests Dr. Snider recommended, his coronary artery calcium score came back high despite other excellent health markers, and he and his physician are now building a treatment plan.

(29:00) A listener who is a retired emergency physician offers a different view on the calcium score, arguing that testing asymptomatic people carries risks of its own.

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