If you would prefer to skip Jim and Chris’s banter about Jim’s garden greens and his trip to Nashville, Indiana you can skip to (12:00).

Chris’s Summary
Jim and I discuss little-known IRA rules that trace back to the IRS final regulations released in July 2024. The rules covered include how an older eligible designated beneficiary may calculate RMDs, a spousal RMD that is both hypothetical and retroactive, and the documentation requirement for see-through trusts. Some of these changes simplify the rules, while one adds complexity.

Jim’s “Pithy” Summary
Chris and I start into a list of little-known IRA rules that I put together from my old Ed Slott notes, and the three we cover all trace back to what the IRS did in July of 2024. Most of them involve beneficiaries, because that is where IRAs stop being basic and start getting confusing. Remember, when you hear the words designated beneficiary, throw them out of your brain and put in the word human. We start with an eligible human who inherits from someone younger, and I put Chris on the spot with a true or false. He gets partial credit, and that IRS decision explains why.

That same release also created the hypothetical retroactive spousal RMD. Hypothetical. It’s not real. It never happened, yet it may still land on a surviving spouse who moves an inherited IRA to their own. That name is a mouthful, so I walk through examples, including what changes when the spouses are different ages and what the IRS means by “first applicable year.” It’s easy to forget, yet forgetting it can cause real trouble.

We also get into see-through trusts. Trusts are pieces of paper, and trusts don’t die, so the IRS set parameters a trust has to follow before it will treat one like a human. I go through them, and on the beneficiaries my advice is name names. Then there is a documentation rule the IRS made simpler in that same release, but not for every type of account. Why that is, I still can’t tell you. If you have an explanation, I’m all ears.

The post Little-Known IRA Rules, Part 1: EDU #2642 appeared first on The Retirement and IRA Show.

Jim and Chris are joined by Tom Stivers for a couple questions on COBRA coverage for a younger spouse and Social Security survivor benefits and the RIB-LIM rule. Jim and Chris continue on without “Grasshopper” for a listener PSA following up on the Chip and Dale/Chippendale banter from a previous episode and questions on pension deferral past RMD age, insurer service after inheriting a 403(b), single premium deferred annuities (SPDAs), and the timing of annuity purchases as financial understanding declines with age.

(16:15) George follows up on a recent episode’s COBRA discussion, noting that a non-Medicare spouse is limited to 18 months of coverage when the qualifying event is retirement at 64.5.

(26:45) A listener asks for an explanation of the Retirement Insurance Benefit Limit (RIB-LIM) and wonders whether, after both spouses claimed at 62, a surviving spouse would receive the higher earner’s monthly benefit or something more.

(40:30) The guys receive a PSA following up on the Chip and Dale/Chippendale banter from a previous episode, explaining the history of the names and which came first.

(44:45) A pension recipient wonders whether a pension office is correct that the deferred portion of a pension held in a 401(a) can stay deferred past age 73 while RMDs begin, as a way to remain in the 24% tax bracket.

(57:45) Jim and Chris revisit an earlier question about a delayed 403(b) inheritance, as the follow-up asks why anyone would buy an annuity from an insurer that struggled to process a simple inheritance.

(1:13:30) Georgette wants to know whether a five-year, 4.4% single premium deferred annuity (SPDA) purchased with funds from an IRA was a good move and what to consider when it matures.

(1:26:15) A longtime DIYer asks whether waiting until a Minimum Dignity Floor shortage arrives to buy an annuity conflicts with the goal of the younger self protecting the older self.

The post COBRA, Social Security, Pension Deferral, Annuities: Q&A #2642 appeared first on The Retirement and IRA Show.

If you would prefer to skip Jim and Chris chatting about fall weather in Colorado and Ohio, Jim’s upcoming trip to Nashville, and country music, you can skip to (11:30).

Chris’s Summary
Jim and I look at stretch IRA eligibility after the SECURE Act and who now qualifies as an eligible designated beneficiary. We start with why naming a beneficiary matters, then trace how the stretch was assembled from the Keogh Act, TEFRA, and IRS regulations before SECURE curtailed it. From there, we define the five categories still allowed to stretch, how the date of death determines eligibility, and how IRAs and employer plans treat disability and chronic illness certification differently.

Jim’s “Pithy” Summary
Chris and I take a deeper dive into eligible designated beneficiaries, something that seems benign but isn’t as straightforward as it sounds. What a lot of people don’t realize is that Congress never created the stretch IRA. It was stitched together like Frankenstein from two different acts and separate IRS regulations, and it got so ingrained that it took a specific act of Congress to greatly curtail it. Under the old rules, if a 1-year-old inherited an IRA, it could stay open for 80-plus years. But Congress wanted to get money out of IRAs sooner rather than later for the tax revenue so the rules changed.

Think of the Black Knight from Monty Python, gravely injured but still doing its best to carry on. Congress wounded the stretch IRA, but they didn’t kill it. What survived is the eligible designated beneficiary, or eligible humans, and there are 5 categories still allowed to stretch. Some we go through wicked quick. Others send us down little rabbit holes.

We dig into stretch IRA eligibility questions like does the IRS accept common-law marriage? Do stepchildren and foster children count as a minor child? And why can one day before an 18th birthday change how disability is defined? Then there’s the question of how a beneficiary proves they’re disabled or chronically ill. The IRS waived some of the certification requirements, but it didn’t treat IRAs and employer plans the same way. I don’t get why that is, but I share Ed Slott’s theory on it.

The post Stretch IRA Eligibility: EDU #2641 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener emails on Social Security first check timing at age 70 and child-in-care spousal benefits, additional milestone ages and HSA contribution PSAs, Roth withdrawals under the Rule of 55, and finding annuity providers with good customer service.

(11:30) A listener asks whether Social Security benefits started in the month of a 70th birthday should arrive the following month, or only after the first full month at age 70, as the Social Security Administration explained.

(19:45) The guys field a question on whether a spouse can collect a child-in-care spousal benefit for caring for a stepson who became disabled at 21 and receives Supplemental Security Income.

(27:30) Jim and Chris share a PSA that 120 is a milestone age worth noting, since that is when the life expectancy factor used for most RMDs stops decreasing each year.

(34:30) Georgette notes that each spouse’s $1,000 HSA catch-up contribution must go into their own HSA and wonders whether Roth withdrawals of growth qualify under the Rule of 55 or must wait until 59½.

(43:15) The guys share another PSA pointing out that Rule 72(t), which allows penalty-free IRA withdrawals before 59½, is another milestone worth adding to the recent Retirement Milestone Ages episode.

(49:15) A fellow CFP® clarifies that Medicare enrollment, not age, ends HSA contribution eligibility, so someone working past 65 without Medicare can keep contributing, including the $1,000. catch-up.

(58:15) Jim and Chris address whether any annuity providers offer solid customer service.

The post Social Security, Milestone Ages, HSAs, Roth Withdrawals, Annuity Providers: Q&A #2641 appeared first on The Retirement and IRA Show.

Chris’s Summary: 
With Jim traveling, I’m joined by the newest member of the Jim Saulnier & Associates team, Tom Stivers, to review an email from a listener couple who both chose a single life pension, with term life insurance on the higher earner. Their situation raises concerns about Social Security claiming ages, their Minimum Dignity Floor catching up to income if their pensions lack a cost-of-living adjustment, health insurance before Medicare, Roth conversions, and a potential need for a long-term care plan.

Jim’s “Pithy” Summary: 
While I’m traveling, Chris brings in Tom Stivers, a newer member of our team, to work through a longer listener email that doesn’t fit a Q&A show. George and Georgette both took their state education pensions without a survivor benefit. George has the bigger pension, so he bought a term life policy to age 78 to help replace his income if he dies first. Chris admits the hair went up on the back of his neck the moment he saw a single life pension, and it went up again at the word “term”. Tom zeroes in on that word too, because almost none of us know the date we’re going to die. But the rest of the email does change the picture.

They believe they might be unicorns, and with $191,000 of secure income once George claims Social Security at 70, against $110,000 of spending, you can see why. Chris pictures it as a race: income starts way out ahead, but spending keeps slowly catching up, and their pensions likely have no automatic cost of living adjustment. Tom also spots a sneaky line about Georgette’s health insurance before Medicare. George thinks Roth conversions matter for taxes and IRMAA. Georgette isn’t worried and doesn’t want to pay the taxes now. And when Chris asks whether conversions should stop once Social Security starts, Tom answers with a question: what’s your 2-1-0 Tax Ordering Number?

And then there’s what the email never mentions: a long-term care plan. Chris explains why their savings may not stretch as far as it sounds if one of them needs care, and why secure income that continues for the survivor can matter. He points out people can obsess over decisions that barely move the needle while missing the ones that do.

The post Single Life Pension Tradeoffs: EDU #2640 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener emails, beginning with a listener PSA on HSA catch-up contributions at age 55, then cover Social Security spousal benefits when claiming before full retirement age, paying IRMAA with HSA funds and the SSA-44 form for IRMAA appeals, whether a Roth conversion counts as a 60-day rollover, and annuity timing as interest rates fall.

(6:45) A listener shares a PSA noting that HSA holders age 55 and older can contribute an extra $1,000 per year until they reach Medicare age, and a spouse can do the same in their own HSA.

(22:00) The guys get a question on whether claiming Social Security at 65 still allows a spousal benefit of half their spouse’s higher benefit, or whether that requires waiting until full retirement age.

(27:15) Georgette asks whether IRMAA surcharges can be paid with HSA funds, following a prior episode’s mention that Medicare Part B and D premiums qualify.

(32:30) A listener seeking IRMAA relief after a spouse’s retirement payout wants to know which year belongs in section 2 of the SSA-44 form.

(45:00) Jim and Chris are asked whether a Roth conversion is treated as a 60-day rollover subject to the once-per-365-days limit.

(1:05:45) A listener who has attended several annuity sales presentations wonders why Jim doesn’t buy his planned annuity now and turn on the income later if payout rates are likely to keep dropping.

The post HSA Catch-up PSA, Social Security, IRMAA, Roth Conversion, Annuity Timing: QA #2640 appeared first on The Retirement and IRA Show.

If you would prefer not to learn about Jim’s upcoming drive to Ohio and the family change of plans also sending him to Massachusetts, you can skip to (10:00).

Chris’s Summary
Jim and I walk through retirement milestone ages, from age 21, when a minor child beneficiary’s stretch gives way to the 10-year rule, through catch-up contributions, penalty-free withdrawal ages, Social Security survivor and retirement claiming ages, the IRMAA lookback at 63, Medicare at 65, QCDs at 70½, and RMDs at 73 or 75. We also cover an obscure age 75 RMD rule for pre-1987 403(b) contributions and the age 85 limit for starting a QLAC.

Jim’s “Pithy” Summary
Chris and I work through a list of retirement milestone ages I’ve been holding onto for a while, and the first stop, age 21, is a deep one. Folks, the stretch IRA is the Black Knight from Monty Python and the Holy Grail. It’s gravely wounded, but it’s not gone. A minor child of the deceased IRA owner, an eligible designated beneficiary, or as I call it, an eligible human, can still stretch until 21. Then the 10-year rule applies, and Chris and I guessed wrong on what happens next. I checked with the Ed Slott Group, and the answer comes down to one phrase: at least as rapidly.

Then we hit catch-up contributions at 50, including a new Roth rule this year that some listeners call a loophole. I don’t. We cover the carve-out that lets public safety employees skip the 10% early withdrawal penalty at 50, and the rule of 55, including a strategy the IRS has implicitly blessed. And then there’s the super catch-up. Folks, I have no idea what Congress was thinking. An extra $3,250 a year in your 60s is not going to fix anybody’s retirement. Let people in their 20s and 30s put more in, where it can compound. Chris brings in the Social Security and IRMAA ages, including a disabled surviving spouse rule that taught both of us something new.

At 70½, QCDs can help at the margins when a big RMD threatens an IRMAA tier. I make Chris guess an obscure age 75 rule tied to 403s, and he earns a B+. Then he pulls out one I totally missed at 85: QLACs. I give Treasury credit here, not Congress, and I explain why we’re a little softer on QLACs than on other deferred income annuities.

The post Retirement Milestone Ages: EDU #2639 appeared first on 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 calculated.

(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.

The post Social Security, TIPS Ladder, Investment Positioning, Buffered ETFs: Q&A #2638 appeared first on The Retirement and IRA Show.

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.

The post Power of Attorney Mistakes: EDU #2637 appeared first on The Retirement and IRA Show.