The Retirement And IRA Show podcast

1:16:49

Chris’s Summary Jim and I continue our review of interesting and sometimes confusing retirement planning facts, mostly drawn from Jim’s recent Ed Slott conference. We focus on the two Roth five-year rules and how they apply to Roth IRAs versus Roth 401(k)s. I explain the key distinctions between tax-free earnings and penalty-free access. Jim goes further into how “seasoning” from a Roth 401(k) carries over to a Roth IRA. We also touch on pro rata distribution rules in Roth 401(k)s, the IRS’s strict interpretation of the age 55 exemption, and the unique planning window between 59½ and RMD age. Jim’s “Pithy” Summary Chris and I continue our “things that make you go hmm” EDU series with more head-scratchers, funny moments, and some planning tips you’ll definitely want to remember. I came back from the recent Ed Slott conference with a pile of notes, and we dig into the most confusing—and most commonly misunderstood—rules surrounding Roth accounts: the dreaded five-year rules. I walk through both of them, explain how they apply to Roth IRAs and Roth 401(k)s, and we talk about the critical difference between tax-free and penalty-free withdrawals. Then we hit what I think is the big “ah-ha!” moment—the idea of “seasoning” Roth 401(k) dollars. Whether you picture that as a cast iron skillet like Chris or a cracked pepper roast like me, the point is: once a Roth 401(k) is fully seasoned, it keeps its flavor—even after being moved into a Roth IRA. We also touch on a Roth 401(k) rule that surprises many people: how distributions are treated when they’re not qualified. Spoiler—it’s not like a Roth IRA! Plus, we go over a tax court case involving a guy who thought he was exempt from the 10% early withdrawal penalty and got hit with taxes, penalties, and interest anyway. It’s a cautionary tale, and the court’s response had us both shaking our heads. Finally, we wrap up with some strategic talk about what Ed calls the “donut hole,” which matches what we refer to in the office as the tax planning window—that sweet spot between age 59½ and your RMD age when there are no penalties, no withdrawal restrictions, and total flexibility in how you tap your retirement accounts. If you’re doing any kind of serious tax or retirement planning, understanding this window is critical. Oh—and yes, there are plenty of food metaphors in this one, because I was hungry the whole show. Hope you enjoy! The post Roth 5-Year Rules and the Tax Planning Window: EDU #2513 appeared first on The Retirement and IRA Show .…

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Social Security Benefits, Roth Conversions, and Annuities: Q&A #2512 1:15:07

πριν 6 μέρες1:15:07

1:15:07

Jim and Chris discuss listener questions relating to Social Security strategies, spousal benefits, Roth conversions, and annuities. (8:15) George asks whether a widow who was widowed before age 60 has two Social Security claiming strategies available based on the FRA benefit of each spouse. (20:30) The guys address a question about how spousal benefits are calculated when one spouse took Social Security early and the other has a PERA pension. (29:30) Georgette wonders how she and her husband should approach Roth conversions given their $4 million in IRAs, her larger balance, and concerns about future RMDs and legacy planning. (1:03:30) Jim and Chris provide guidance on whether to use current or future spending when purchasing a SPIA to cover base expenses and how laddering might play a role. The post Social Security Benefits, Roth Conversions, and Annuities: Q&A #2512 appeared first on The Retirement and IRA Show .…

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Things That Make You Go Hmm – RMD Rules, IRA Mistakes, and Tax Court Surprises: EDU #2512 1:09:21

πριν 9 μέρες1:09:21

1:09:21

Chris’s Summary: This week’s EDU show is a throwback to an old favorite—things that make you go “hmm.” Jim brought back a list of oddities from the latest Ed Slott training, covering everything from RMD rules the IRS only recently addressed to real-world court cases involving bankruptcy, lottery tickets, and IRA self-dealing gone wrong. Turns out, there are plenty of IRA mistakes you can make—some more ridiculous than others. Jim’s “Pithy” Summary: It’s another round of “things that make you go hmm,” straight from my latest trip to Ed Slott’s two-day training. These are the kinds of cases and quirks that catch my attention—some because they’re important, some because they’re just bizarre, and some because they make you wonder why no one’s brought them up before. Ever wonder what happens if your IRA balance drops so low that you can’t take your full required minimum distribution? Turns out, the IRS finally put something in writing—but it took them long enough to address it. Then there were some real-world case studies that left me shaking my head. One involved an all-or-nothing gamble with an IRA that didn’t go as planned. Another showed how trying to get too creative with IRA-owned real estate can backfire in a big way. And here’s one you probably haven’t thought about—doing an in-plan Roth conversion in your 401(k) might have unintended consequences that could close the door on a major tax strategy. We’ll also talk about a handy tool for checking state estate and inheritance taxes—because where you live (or where you move) could have a bigger impact than you think. Hope you enjoy the mix of useful, surprising, and “you’ve got to be kidding me” moments! The post Things That Make You Go Hmm – RMD Rules, IRA Mistakes, and Tax Court Surprises: EDU #2512 appeared first on The Retirement and IRA Show .…

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Social Security records, GPO, QCD Timing, Annuity Costs, and Excess IRA Contributions: Q&A #2511 1:19:10

πριν 13 μέρες1:19:10

1:19:10

Jim and Chris answer listener questions on Social Security records, GPO, QCD timing, annuity costs, and excess IRA contributions. (10:30) Georgette asks about fixing gaps in her Social Security record. (19:30) The guys discuss how a listener’s spousal Social Security benefits work after the repeal of GPO. (28:30) George seeks clarification on the timing of QCDs and RMDs. (53:30) Jim and Chris answer a query about the administrative costs of annuities. (1:04:15) George faces challenges with excess IRA contributions and MAGI limits. The post Social Security records, GPO, QCD Timing, Annuity Costs, and Excess IRA Contributions: Q&A #2511 appeared first on The Retirement and IRA Show .…

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IRA Rules Quiz: EDU #2511 59:52

πριν 16 μέρες59:52

59:52

Chris’s Summary: Jim’s back from his conference and Jake joined the show again this week as we tackled the latest Ed Slott quiz. Unlike last time, Jim didn’t give us the book to reference—so Jake and I were going in cold. Jim also decided to test ChatGPT by giving it the entire quiz and the manual. With all that information, the AI was still imperfect. While seeing if we could outscore both the AI and each other, we covered Inherited IRA RMD rules, SECURE Act 2.0, self-certification for disability, Roth 401(k) rules, and spousal consent for IRA beneficiaries. Jim’s “Pithy” Summary: It’s time for another Ed Slott IRA quiz, and this time, I decided to put both AI and my co-hosts to the test. Before the show, I handed the entire quiz—along with the Ed Slott manual—to ChatGPT to see if it could finally outscore us mere humans. Turns out, even with all that information, AI still flunked five questions. So, while the robots might be getting smarter, they’ve still got a long way to go before they can challenge a real retirement planner. Chris and Jake joined me as we tackled some tricky questions on Inherited IRA RMDs, Roth 401(k) surprises, SECURE Act curveballs, and even some quirky beneficiary rules. To make things more interesting, I made sure they had no book, no notes—just their wits. And, of course, I had the pleasure of revealing exactly where the AI got it wrong (which, let’s be honest, was just as fun as answering the questions). Along the way, we covered why certain Inherited IRA RMD rules have changed, how Roth 401(k)s can still trip people up, and why SECURE Act provisions aren’t always as straightforward as they seem. Plus, we had some fun debating the bizarre quirks of beneficiary designations—because apparently, even the IRS likes to keep us guessing. Think you can outscore AI? Maybe even outscore Chris and Jake? Play along and see how you do! The post IRA Rules Quiz: EDU #2511 appeared first on The Retirement and IRA Show .…

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Qualified Dividends, Gifting Strategies, Roth Conversions, and Trust Taxation: Q&A #2510 1:20:45

πριν 20 μέρες1:20:45

1:20:45

Jim and Chris are joined by Paul Neiffer, CPA to answer listener questions on qualified dividends, gifting strategies, Roth conversions, and trust taxation. (09:00) George wonders if frequent rebalancing in his taxable brokerage account is causing more of his dividends to be classified as unqualified. (21:30) A listener asks for guidance on which accounts to withdraw from when planning a large financial gift to an adult son. (37:15) The guys offer their perspective on doing Roth conversions early in retirement in order to reduce RMDs, and thus taxes, later in retirement. (59:30) Georgette seeks clarity on revocable trust taxation, IRA beneficiary designations for minors, and whether a trust should be named as the beneficiary of a Roth or brokerage account. The post Qualified Dividends, Gifting Strategies, Roth Conversions, and Trust Taxation: Q&A #2510 appeared first on The Retirement and IRA Show .…

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Setting the Record Straight on Clickbait vs Reality: EDU #2510 59:00

πριν 23 μέρες59:00

59:00

Chris’s Summary: Jim is at yet another industry conference, so Jake is stepping in to join me this week. We pick up where Jim and I left off last time, discussing misleading financial articles. This time, we take a critical look at an article from Moneywise that claims to lay out the “standard” order for withdrawing retirement funds—but seems more focused on promoting paid links than providing useful advice. We break down why a one-size-fits-all withdrawal strategy doesn’t work, how tax planning should drive these decisions, and why you should always approach articles like this with skepticism. Jim’s “Pithy” Summary (Even Though He’s Not in This One): Well, I wasn’t on this episode because—surprise, surprise—I was off at an industry conference (again!), this time hunting for the next great fintech tool to help our office and clients. I’m always looking for ways to improve the advice we give, the services we offer, and maybe—just maybe—find a tool that doesn’t require me to beg Chris to teach me how to use it! Meanwhile, Chris and Jake tackled yet another clickbait financial article, this time from Moneywise , which attempted to pass off a barely disguised ad as solid financial advice. Now, I haven’t listened to the episode yet, but I can already feel my blood pressure rising. Articles like this—pretending to provide helpful guidance while actually steering unsuspecting retirees toward whatever paid service they’re shilling that day—really get me going! From what I gather, Chris probably got straight to the point, and Jake—being the level-headed guy he is—kept things grounded with solid explanations. They covered why tax planning should drive your withdrawal strategy, how blindly following a set order can lead to higher taxes, and why taxable accounts might be more valuable later in retirement than these so-called experts admit. And I’m sure they took a few well-earned jabs at the deceptive ways financial content is being turned into a giant ad machine. I’ll be back next week, but in the meantime, Chris and Jake are more than capable of keeping things straight—though, let’s be honest, the episode is probably missing at least one good rant from me, plus a few mispronounced words, incorrect names, and deep rabbit holes that make Chris sigh in exasperation! The post Setting the Record Straight on Clickbait vs Reality: EDU #2510 appeared first on The Retirement and IRA Show .…

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Social Security, 529 Plans, Fun Vision, and Annuities: Q&A #2509 1:21:29

πριν 27 μέρες1:21:29

1:21:29

Jim and Chris sit down to discuss listener questions relating to Social Security, 529 plans, Fun Vision, and Annuities. (Intro – 12:00) Chris provides a Social Security PSA. (19:00) A listener wonders whether her husbands Social Security benefits have been getting a COLA since his passing or if they’ve been frozen. (26:00) A listener wonders if missed payment history from the 1980’s can be corrected and included when calculating their Social Security benefit. (36:15) A listener asks about other alternative investment options for his 529 plans depending on the future of his daughters education needs. (50:45) A listener wonders what the difference is between Fun Vision and the Fun Number. (1:03:30) George looks for advice on taking his 401(k) as an annuity versus a SPIA down the line. The post Social Security, 529 Plans, Fun Vision, and Annuities: Q&A #2509 appeared first on The Retirement and IRA Show .…

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False Facts and Real Consequences: EDU #2509 57:19

πριν 4 weeks57:19

57:19

Chris’s Concise Summary: Jim and Chris examine a recent Suze Orman article on inherited IRA rules, identifying key errors that could mislead readers. They clarify the nuances of the 10-year rule, explain how the required beginning date determines whether annual RMDs are necessary and why Roth IRAs don’t have required minimum distributions. The guys also emphasize the importance of verifying financial information before making decisions. A note to listeners: Regular listeners know that Jim is always looking for ways to improve. The podcast is no exception, so some changes are coming in the EDU episode descriptions! In this space, between the usual basic summary (now called Chris’s Summary ) and the new, more detailed, Jim’s Summary, you’ll soon find links to related articles, documents, and other resources that Jim and Chris believe may be useful or interesting to listeners. Jim’s “Pithy” Summary : The guys take a critical look at a recent Suze Orman article discussing inherited IRA rule changes for 2025, identifying inaccuracies that could mislead readers navigating these complex rules. One key issue they highlight is the claim that all inherited IRAs, including Roth IRAs, require annual RMDs under the 10-year rule. Jim and Chris explain why this is incorrect and clarify that the rules depend on whether the original account owner had reached their required beginning date before passing away. They break down how the “at least as rapidly” (ALAR) rule applies to inherited accounts when RMDs were already in progress, ensuring listeners understand the distinctions that many articles fail to address. The conversation also dives into Roth IRAs, reinforcing that they do not have required minimum distributions during the original owner’s lifetime, which means beneficiaries are not required to take annual distributions. Instead, most non-spouse Roth IRA beneficiaries can allow the funds to grow tax-free and withdraw the full balance in the 10th year. Chris and Jim stress that financial publications often oversimplify these rules, leading to confusion and potential missteps for individuals managing inherited accounts. In addition to dissecting the article’s errors, the guys discuss broader issues with financial media, including the need for thorough fact-checking and the risks of relying on clickbait-style headlines for retirement planning guidance. They express concerns that many widely shared articles fail to provide the necessary nuance, which could result in readers making uninformed decisions. Beyond the technical discussion, Jim and Chris also touch on upcoming podcast plans, including a potential follow-up episode covering a “Moneywise” article that Jim believes may be misleading in its own way. With Jim’s upcoming travel, they discuss the logistics of recording, including the possibility of Jake stepping in for an episode to analyze the “Moneywise” piece. The post False Facts and Real Consequences: EDU #2509 appeared first on The Retirement and IRA Show .…

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Social Security Benefits, RMD Taxes, IRMAA, and Social Security Taxation: Q&A #2508 1:14:01

πριν 5 weeks1:14:01

1:14:01

While Jim is attending a conference, Chris is joined by Jake to discuss listener questions relating to Social Security benefits, RMD taxes, IRMAA, and taxability considerations for claiming Social Security. (5:00) Georgette asks whether her survivor benefit will be reduced since her husband passed away at age 71. (13:30) The guys address whether claiming early on a work record reduces a spousal benefit or if the child-in-care provision prevents the reduction. (22:15) An email comment corrects a hint given on a previous episode regarding NFL team names. (26:30) A listener questions whether Chris overlooked the Qualifying Widower status in a previous Q&A episode answer. (35:00) Chris and Jake respond to a listener asking whether taxes on a December RMD must be paid immediately or with the next estimated payment. (44:30) George, who pays IRMAA due to a large Roth conversion, wonders if there’s a way to avoid it without qualifying under the listed exceptions on the SSA-44 form. (53:45) A listener considers whether changes in Social Security taxation at the state and federal levels should influence their decision on when to start benefits. The post Social Security Benefits, RMD Taxes, IRMAA, and Social Security Taxation: Q&A #2508 appeared first on The Retirement and IRA Show .…

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Our Retirement Planning Philosophy and Approach, Condensed Version: EDU #2508 31:19

πριν 5 weeks31:19

31:19

Chris flies solo for this long promised, very special, EDU episode where he describes our retirement planning philosophy and approach in just 30 minutes. The post Our Retirement Planning Philosophy and Approach, Condensed Version: EDU #2508 appeared first on The Retirement and IRA Show .

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Social Security, IRMAA, IRA Distributions, Roth Contributions, Catch-up Contributions, and Inherited IRA RMDs: Q&A #2507 1:11:49

πριν 6 weeks1:11:49

1:11:49

Jim and Chris discuss listener questions relating to Social Security benefits, IRMAA, IRA distributions, Roth contributions, catch-up contributions, and inherited IRA RMDs. (6:30) George asks how inflation adjustments apply when a reduced Social Security benefit converts to a spousal benefit. (13:45) The guys address whether the end of non-qualified deferred compensation qualifies as a life-changing event for IRMAA purposes. (22:00) Jim and Chris discuss whether taking IRA distributions in a lump sum or spreading them out over time is the better approach for someone retiring at 63. (35:45) A listener explores the idea of making an intentional excess Roth contribution then reevaluating their options before the extended tax filing deadline. (54:45) The guys clarify the defined contribution limit and how catch-up contributions affect the total amount allowed. (58:00) Jim and Chris answer whether RMDs on a recently inherited IRA must begin in 2025 or if the clock starts in 2026. The post Social Security, IRMAA, IRA Distributions, Roth Contributions, Catch-up Contributions, and Inherited IRA RMDs: Q&A #2507 appeared first on The Retirement and IRA Show .…

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A Smart Approach to Retirement: EDU #2507 1:13:19

πριν 6 weeks1:13:19

1:13:19

In this EDU episode Jim and Chris review and discuss an article sent in by a listener after their critique of the safe withdrawal rate approach to retirement. Some of the points made in the article should sound familiar to listeners… Nobel laureates William F. Sharpe and Robert C. Merton argue that traditional retirement withdrawal strategies, like the 4% rule, fail to adequately balance investment risk with income certainty. The laureates highlight the inefficiencies of relying on volatile investment portfolios to fund fixed expenses, proposing instead that retirees match investments to specific future expenditures through strategies like Sharpe’s “lock-box” method or Merton’s tiered income approach. Ultimately, they advocate for securing a base level of guaranteed income, embracing flexible spending, and recognizing that higher returns always come with higher risk. Show Notes: How do Nobel Laureates Approach Retirement ? The post A Smart Approach to Retirement: EDU #2507 appeared first on The Retirement and IRA Show .…

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Survivor Benefits, Social Security Disability, and Donor Advised Funds: Q&A #2506 1:10:15

πριν 7 weeks1:10:15

1:10:15

Jim and Chris discuss listener questions relating to Survivor Benefits, Social Security Disability Insurance, and Donor Advised Funds. Before diving into listener questions, Jim shares insights from his recent trip to an industry conference, where he investigated financial planning software options that might align with their Secure Retirement Income Process and Fun Number . The guys also discuss the challenges of retirement projections and why existing tools often fall short. (29:00) The guys address a question about whether someone can claim six months of retroactive Social Security benefits before switching to a survivor benefit if their spouse passes away. (42:30) A listener wonders if their mother-in-law may have permanently reduced her Social Security benefit after being advised to file while waiting for SSDI approval. (53:30) George asks if his children can establish their own Donor Advised Fund (DAF) to receive Qualified Charitable Donations (QCDs) from his IRA after his death, avoiding federal income tax. The post Survivor Benefits, Social Security Disability, and Donor Advised Funds: Q&A #2506 appeared first on The Retirement and IRA Show .…

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A Discussion on Simplified Retirement Planning: EDU #2506 59:20

πριν 7 weeks59:20