The Retirement and IRA Show

Jim and Chris discuss listener emails on the Social Security Fairness Act, an IRMAA question involving deferred compensation, Roth conversions before and after key age milestones, Roth contributions for high-income catch-up savers, and how TEFRA affects an inherited annuity.

(9:45) — A listener disagrees with the show’s characterization of the Social Security Fairness Act as unfair, explaining that after paying into both a government pension and Social Security for 40 quarters, she believes receiving both without penalty is fair for her situation.

(27:45) — The guys field a question from a retiree who retired in 2025 and will receive deferred compensation payments through 2029 that push his income over the IRMAA threshold. He wonders whether he can file an SSA-44 in 2029 to eliminate the IRMAA surcharges.

(37:00) — Jim and Chris are asked to revisit a recent discussion on moving money from Traditional to Roth accounts instead of taking distributions, with a listener wanting more detail on the implications of doing so before age 59 and a half and after RMD age.

(48:30) — George asks for the pluses and minuses of continuing Roth 401(k)/403(b) contributions later in life compared with investing in a taxable brokerage account, including how a 50-year-old might decide between the two and whether those aged 61-63 should use the Roth option for super catch-up contributions.

(1:03:30) — A listener has several questions about TEFRA, including what it stands for, when it was enacted, and how it affects distributions from an inherited annuity listing Pre-TEFRA and Post-TEFRA cost basis.

The post Social Security, IRMAA, Roth Conversions, Roth Contributions, TEFRA: Q&A #2633 appeared first on The Retirement and IRA Show.

Chris’s Summary

Jim and I are joined by Jacob Vonloh as we continue our discussion on investment positioning, wrapping up asset placement for emergency, aging, and long-term care reserves and the fun spending that flows from your Fun Number, across the Go-Go and Slow-Go/No-Go phases. Jacob also outlines the guaranteed inheritance set-aside and closes with the growth and legacy position, the leftover dollars not assigned elsewhere.

Jim’s “Pithy” Summary

Chris and I are joined by Jacob Vonloh as we pick back up right where we left off last week on investment positioning, finishing up the fun spending and SEAL Reserve pieces we didn’t get to. I keep coming back to this: retirement is the mirror opposite of the accumulation years, and when your whole portfolio looks like one big pot, a down market makes it feel like everything’s going down — and that fear is what stops people from spending on fun.

That’s exactly why we don’t look at it that way. Jacob walks through how we tier the SEAL Reserve by age, and how fun spending gets laddered and benchmarked differently depending on how soon you’ll need it — all made possible by looking at each position on its own instead of one blended portfolio, which is the whole idea behind what I coined the See Through Portfolio. It’s also why you can’t compare your protected short-term Go-Go dollars to your long-term positions and think something’s wrong — that’s an apples-to-oranges comparison from the start. There’s a real cost to saving your whole life just to sit there and watch the money grow instead of enjoying it — don’t become what my dad used to call a Debbie Downer.

Before we wrap, we also touch on two more positions that won’t apply to everybody. If you’ve got a specific bequest you want locked in today, there’s a guaranteed inheritance set-aside for that. And if you end up with dollars left over once everything else is funded, we get into what to do with what we call the growth and legacy position.

The post Investment Positioning Part 2: EDU #2632 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener emails on Social Security spousal benefits, a listener PSA on HSA tax strategies and treasuries, and inherited IRA RMD rules for minor beneficiaries.

(9:00) A listener asks about qualifying for spousal benefits after a lengthy separation, since both spouses are now retired but remain legally married.

(28:15) The guys share a listener PSA on tax strategies involving harvesting HSA-eligible expenses, including Medicare B and D premiums, as a tax-free funding source, and on laddering treasury bills through Fidelity or Schwab instead of TreasuryDirect.

(40:15) George follows up on inherited IRA rules for minor child beneficiaries, asking whether an eligible designated beneficiary can elect the 10-year rule instead of taking the stretch, which requires RMDs.

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If you’d like to skip past Jim, Chris, and Jacob’s opening chat about Jacob relocating to Iowa, Jim’s hiking plans, weather, office dog Apollo, and generational pop culture gaps, skip ahead to (10:00).

Chris’s Summary

Jim and I continue our discussion on the Fun Number, joined this time by Jacob as we turn to investment positioning of those pieces. Jacob walks through tracking positions without professional software, using individual fund assignments, spreadsheets, and a two-credit-card approach, plus the liquidity account and fall tax planning. We then cover delay period and post-delay Minimum Dignity Floor investment options, moving from full principal protection in the near term to a lesser degree of it further out.

Jim’s “Pithy” Summary

Chris and I pick back up on the Fun Number series, this time bringing Jacob on to tackle investment positioning, the piece everybody asks about once they’ve done the math from the first two episodes. Jacob spent years helping me build this from scratch, back when we tracked everything by hand before we ever had access to professional-grade tracking software, and he shares some of the tools do-it-yourselfers can use to keep track of their own toy box of positions without that kind of software.

We also dig into the liquidity account, the piece that quietly connects your positions to your actual spending. Jacob’s two-credit-card idea for separating Minimum Dignity Floor from fun spending ties directly into it, and I explain why we do our tax planning once a year, in the fall, rather than guessing all year long. There’s a reason we’d rather convert to a Roth than take a straight withdrawal when refilling that account, and it comes down to what happens if your plans change.

Once Jacob turns to investment options for the delay period and post-delay portions of your essential spending needs, we get into how the degree of principal protection shifts depending on how far out that money is needed, from fully protected in the near term to something with a little more market exposure further down the road. This is the heart of what I call the See-Through Portfolio, the whole reason we break things out this way instead of running one big portfolio, and there’s a real difference in how we treat money a couple of years away versus a decade out.

The post Investment Positioning Explained: EDU #2631 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener emails on Social Security survivor benefits after the GPO repeal, estate planning for minor children, and annuity safety.

(10:00) A listener asks whether the repeal of GPO permits the survivor in a mixed Social Security and non-covered pension couple to keep both Social Security benefits rather than only the higher benefit, and where this rule appears in the POMS.

(37:00) The guys review whether a revocable living trust should remain the contingent beneficiary of retirement accounts while the couple’s children are minors, despite the potential for higher taxes, and what alternatives or overlooked issues may apply.

(1:16:15) Jim and Chris address whether someone considering a $500,000 single premium immediate annuity (SPIA) should split the purchase between two insurers to reduce insolvency and state guaranty association risk.

The post Social Security, Estate Planning, Annuity Safety: Q&A #2631 appeared first on The Retirement and IRA Show.