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.

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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.

 

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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.

Chris flies solo for this long promised, very special, EDU episode where he describes our retirement planning philosophy and approach in just 30 minutes.

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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.

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?

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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.

While Jim is at a conference, Jake joins Chris to discuss a listener’s simplified retirement planning approach. They examine their straightforward strategy, focusing on key points like living within your means, how finances often simplify in the mid-70s after covering the Minimum Dignity Floor, and the impact of passing the delay period for larger withdrawals. They also consider potential risks, such as inflation and interest rates, in this type of allocation.

The post A Discussion on Simplified Retirement Planning: EDU #2506 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions relating to Social Security, QLACs, TIPS ETFs, and buffered ETFs.

(9:00) A listener who worked in Australia in the late 1980s asks how the U.S.-Australia Totalization Agreement might affect their Social Security benefits. Jim and Chris discuss whether their earnings record can be adjusted and what steps to take.

(16:00) The guys respond to a listener with a sizable public pension who is considering claiming Social Security at 62 and investing the funds. They analyze the strategy and explain why delaying benefits is often the better choice for protecting the Minimum Dignity Floor.

(47:30) Jim and Chris address a question about QLACs and IRA valuations: Should the end-of-year fair market value of a QLAC inside an IRA be included when calculating the total IRA balance for pro-rata basis conversion purposes?

(58:15) George asks about TIPS ETFs—if phantom income from inflation adjustments isn’t reinvested, does that diminish or eliminate inflation protection?

(1:07:30) A listener nearing retirement lays out their funding strategy for a 5.5-year delay period and beyond. Jim and Chris share their thoughts on the approach and the role of buffered ETFs.

 

Show Notes: Article discussed in Question 2

The post Social Security, QLACs, and ETFs: Q&A #2505 appeared first on The Retirement and IRA Show.

Jim, Chris, and Jake share their thoughts on a recent Morningstar study that lowers the industry-standard safe withdrawal rate to 3.7%. They review a MarketWatch article discussing the study, highlighting points of agreement and disagreement. Throughout the conversation, they explore their approach to retirement planning, including the Minimum Dignity Floor, See-Through Portfolio, and Fun Number concepts, comparing these to the safe withdrawal rate and Monte Carlo methods for determining retirement spending.

 

 

Show Notes:

Read in MarketWatch

Watch the video from Morningstar

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Jim and Chris discuss listener questions relating to Medicare enrollment, Social Security benefits, and estate taxes.

(6:00) George asks about Medicare’s special enrollment period and the impact of large Roth conversions on IRMAA thresholds after retirement.
(18:30) A listener wonders about the impact of the Social Security (Un)Fairness Act on spousal and survivor benefits eligibility.
(23:00) The guys weigh in on a question about eligibility for survivor benefits after delaying Social Security to age 70.
(28:30) Jim and Chris address concerns about strategies to mitigate estate taxes, including the use of Qualified Charitable Distributions (QCDs) and trusts.

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