Show Notes

• 00:00 – Intro: This Week on the YMYW Podcast
• 01:05 – Is 4% Too Conservative? A Listener’s 50-Year Backtest (E-Dog)
• 17:10 – Roth Conversion to the Top of 24% Tax Bracket, or Protect My ACA Subsidy? (James, TX)
• 27:53 – Will RMDs Be My Biggest Problem on a $13M Portfolio? (Donna Summer, CA)
• 36:47 – $4.35M and Scared to Spend It. What’s Our YOLO Number? (Hansel & Gretel, MN)
• 44:30 – In My Late 30s With $750K Income: Save to Roth or Pretax 401(k)? (Mark)
• 49:40 – Outro: Next Week on the YMYW Podcast
• 51:05 – The Derails: Donna Summer, Hansel & Gretel, Joe’s six fridges, and TV

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Transcription

(NOTE: Transcriptions are an approximation and may not be entirely correct)

Intro: This Week on the YMYW Podcast

Andi: How much can you actually spend in retirement without running out of money? That’s today on Your Money, Your Wealth® podcast number 604. Longtime listener E-Dog built a fifty-year backtesting spreadsheet to call out Big Al and prove the famous four percent rule is way too cautious. This is always a topic of great debate on our YouTube channel, so jump into the comments there and weigh in with your thoughts. Also coming up, hot stuff “Donna Summer” wonders if her biggest problem with her $13 million dollar portfolio is going to be the distributions she’ll be required to take from it and how to manage them. Hansel and Gretel in Minnesota are trying to figure out now what a lot of good savers never do: how to give themselves permission to spend their $4.3 million portfolio. James in Texas needs a spitball on how much to convert to Roth before Social Security and Medicare kick in, and Mark needs a spitball on whether he should save for retirement to his pre-tax 401(k) or his post-tax Roth. I’m Executive Producer Andi Last and here are the hosts of Your Money, Your Wealth®, Joe Anderson, CFP® and Big Al Clopine, CPA.

Is 4% Too Conservative? A Listener’s 50-Year Backtest (E-Dog)

Joe: We got a question from E-Dog.

Al: E-Dog. Okay, great.

Joe: “Hi there, YMYW crew. I was listening to episode 557 today.” It’s wonderful. That’s a great episode

Al: I’m sure it was wonderful

Joe: “Joe and Al reviewed several early retirement emails and performed a quick and dirty spitball analysis for emailers age 40 to 50.

Great stuff. However, Al kept reiterating that if one were to retire at 45 or 50 or 55, he would want a very low withdrawal rate. He mentioned as low as 2.5% for the 45-year-old, as an example. I realize some of the conservatism comes from Al’s personal perspective and what happened to him from a real estate perspective when he was in his mid-40s.”

Al: Oh, he’s been listening to the show.

Joe: Wow, spoiler alert. he’s still working. Wow.

Al: Working.

Joe: He’s just busting your chops here.

Al: Is that a- That must be a dig. He’s still working. He can’t even retire.

Joe: He can’t even retire. He’s broke. but a two and a half seems particularly extreme. “In Al’s defense, many people use the 4% safe withdrawal rate that was popularized in 1994 paper by Bill Bengen, and further reiterated in the 1998 Trinity study.

These papers refer to a safe withdrawal rate based on historical data over 30-year retirement period. Bengen’s rule was actually 4.2, but it was simplified to 4% for ease of discussion in application, i.e. multiplying spend by 25 times is simpler than multiplying spend by 23.8. Bengen was since updated to a 4.7% safe withdrawal rate.

What these papers from the last millennia did not describe was more advanced with- withdrawal strategies which allowed for more flexible spending. They assumed a flat spending percentage of the original portfolio value with an annual adjustment for inflation only. All right. If a retiree were able to adjust their spending based on portfolio returns, spending more in up years and spending less in down years, they could adjust their baseline spend up significantly while still- still enduring long retirement durations.

To test this, I created a spreadsheet, here’s the link if you’re interested, that captures stock, S&P 500, and bonds, what triple- what triple B corp real returns for all years from 1929 through 2025. I then tested both the 30-year and the 50-year durations of each year going back to 1929. I ran all 100 year possibilities.

The withdrawal rate used varied, by year based on real returns from the market. In years where the market returned below 0%, the withdrawal rate was adjusted down by 20%. In years where the market returned above the baseline, the withdrawal rate increased 20%. In all other years, the baseline withdrawal rate was used.

With this analysis, I see a baseline of 4.6% with-” Plus or minus 20% withdrawal guard bands, to 3.7 to 5.8, resulting in a success of 91 out of 100 years, starting with the 30-year retirement, and a 89 of 100 of a 50-year retirement, okay? That were all successful. So defining to have at least $1 at the end of retirement.

More than $1.

Al: More than a dollar.

Joe: More than a buck. That’s success.

Al: Yep.

Joe: Okay. the median account balance after a 30-year duration was 1.9 times the initial balance, and after a 50-year duration was 3.9 against the starting balance. In other words, you are substantially more likely to die with more money than you started at retirement with you, than you are to run out of money.

Al: Yeah.

Joe: Okay? So he’s saying his bands of a distribution rate ran between 3.7 and 5.8.

Al: So he’s saying if the rate of return, I think, was between zero and 4.6, he used 4.6% distribution rate. Above that, he used 5.8, and below zero, he used 3.7. So that’s, kind of the guardrails. In other words, you, end up withdrawing more, Joe, when the market does well, and w- withdrawing less when the market doesn’t do any return or it goes down.

Joe: Well, I think he said if the market was above the average of the 50 or 100 year, then that’s when you pull 20% more, and if the market ever returned negative or zero or negative, then that’s when you reduce the withdrawal rate by 20%.

Al: Is that what he said?

Joe: I don’t know. I’m asking you.

Al: I thought it was between z- yeah, I don’t know.

But I guess the point, Joe, is that it’s a, it’s an uneven withdrawal rate. In other words, the market does well, you take more out. The market does not so well, you take less out.

Joe: Yep,

Al: which I like.

Andi: This is the guardrail strategy, right?

Joe: That’s right.

Al: Yeah, no, I like that a lot.

Joe: all right. I like to think about retirement less…

Oh, retirement risk-

Al: Analogously.

Joe: I’m not even gonna try.

Andi: The same way I think of early plan on leaving for the airport.

Al: Yeah, you could say it that way.

Joe: Okay, so I think about retirement risk-

Al: In the same- …

Joe: analogy-

Al: In the same way.

Joe: Of how I would, how early I plan on leaving for the airport. If I leave too early, I risk wasting time sitting at the gate longer than necessary.

If I leave too late, I risk missing the flight. For what it’s worth, I’ve never missed a flight.

Al: That’s great.

Joe: Okay. “I’d like to hear Joe and Al’s perspective on various retirement withdrawal strategies versus the easy 4% over a 30-year retirement scenario. Many exist. An overly conservative approach will have you sitting at the gate, AKA working way too long.

I also realize there’s a bit of an elephant in the room regarding the unconscious bias that financial service providers have when they are compensated based on assets under management. The lower the recommended withdrawal rate, the more assets they are to manage as a means of more money in the pockets of the financial advisors, even if they are fee-only fiduciaries.

As always, thanks for what you do. Educating the public on personal finance is super important, and I hope you find it engaging and rewarding. Best re- regards, Edo.” Yes, my dog says hi.

Al: Yep,

Andi: and there’s the- And there- … E-Dog’s dog.

Al: Yeah. Okay, good. Waving. Okay. Well- Pretty talented dog. He’s got a great spreadsheet and a talented dog both.

Andi: And j- just, to, for a quick look, here’s E-Dog’s spreadsheet. He went deep. He spent a lot of time on this. So we hear-

Al: Oh, wow

Andi: … about a lot of people that send in their spreadsheets. This is E-Dog’s. Yeah. Does yours look like this?

Al: Oh, wow. That’s, it’s impressive. Well, Joe, I, so first of all, the concept I agree with. I, think if- see, here’s the problem as, as, I see it. A lot of people can’t spend less. They have their spending, and it’s hard to spend less. So that’s partly where we’re coming from when we come up with a withdrawal rate because a lot of people just can’t simply spend less. But let’s say you can.

Let’s say you can spend less and more, and you’ve done a good job trying to figure out what your actual needs are versus your wants, you know, and maybe you can spend less. If you can, this is a great way to go, meaning that the market does well, you pull more out, the market doesn’t do as well, you pull less out.

you have a much greater chance of success regardless of what withdrawal rate you pick.

Joe: Yeah. Yeah, I, got a couple of things. I think the 4% rule is just a spitball.

Al: I, well, yes.

Joe: it’s worthless in real-life application, to be honest with you. It- we don’t like i, in, in practice- Yeah … it’s not we’re going to clients and saying, “Well, 4%, here’s what you’re gonna pull out.”

Al: Yeah, for the next 30 years.

Joe: Yeah. We’re, running detailed cash flow analysis very similar to his spreadsheet- to look at, well, what is the demand for the portfolio? How much do you need to generate from that portfolio? How are you gonna create the income? How’s it gonna be taxed? What’s the inflation rate?

You run a bunch of different assumptions- that we know that it’s going to be wrong over the next 30 years. That’s why this is, like, an ongoing process versus, you know, a spreadsheet and say, “Hey, you’re good. Pull out 5% per year.” When people call in or write in, it’s like, all right, well, are you on track or not on track, is what we’re trying to do with the spitball.

Al: Yeah.

Joe: And we use 4% to be conservative, to say, “Hey.” When most people don’t know. Mm-hmm. Like, “Hey, I wanna spend $100,000 a year, and I have $400,000. Can I retire?” Well, the answer’s probably no, depending on what your fixed income sources are. So we’re trying to at least help people with the overall math- Sure

that they can do on their own. I don’t think- m- most people couldn’t put together a spreadsheet like E-Dog did.

Al: I think with E-Dog, he can do anything he wants.

Joe: Yeah. Well, E-Dog, I mean, he’s solid. So, I- Yeah … I- I agree with you 100%. I think you could be a lot more aggressive on your withdrawal rate, depending on how you’re managing the overall retirement stream of income over the years.

If you’re disciplined and you understand how markets work, you understand how tax work, and you have a strategy and plan and you’re disciplined to that, then by all means, you probably can pull out more. But I think what we’re trying to do is to say, “Hey, 4% is a good rate. If you’re 45 years old and you wanna retire, you probably wanna pull out a little bit less.”

Yep. Even though they could probably pull out more and they’ll have, you know, m- money left over. But-

Al: And, of course- …

Joe: we’re not giving advice here.

Al: No.

Joe: as w- as well.

Al: Yeah, and I-

Andi: That’s why they’re called spitballs.

Al: Yeah. A- and I think the way I look at it, Joe, is I would rather tell someone on a conservative basis they’re okay, versus telling them aggressively, “Yeah, you’re okay,” and they’re kinda maybe not.

Joe: yeah. Yeah. Y- no, I, like his point, too, because I think he’s right in regards to the industry itself of saying, “Hey, be conservative- Sure … because let’s not pull out a m- more out of your portfolio because, w- you know, we get paid on the portfolio, and the less- yeah … that comes out, the better that we are, and b- Right

blah, blah. Yeah, and I think there’s a lot of that goes on in the overall industry. So, and we haven’t really talked about that in years, but y- you, you wanna… if you’re working with an advisor, you wanna make sure that you understand where their interest lies.

Al: Mm-hmm.

Joe: And that if they’re coming up with a retirement income strategy, is it gonna be 4% every year?

Well, then you’d probably hire a new advisor.

Al: I would agree with that.

Joe: If that’s their strategy, then, Yeah … it’s not worth the fees that they’re charging you.

Al: Yeah. But yeah, so s- case in point, so we- we’ll get someone that’s 45, and their distribution rate’s 7%, right?

Joe: And,

Al: and-

Joe: That’s, gonna be rich

Al: it’s gonna be pretty tough to make that work, and we’ll say that. Now, if 2.5, is that the right number? I don’t know. It de- there’s so many variables it can depend upon. If 4% is kind of a 65-year-old with a 25-year timeframe, that’s kinda where that came from, it, seems to, be… You know, a 50-year-old or a 45-year-old would probably want a lower percentage just to be safe.

Well- What, that exact percentage is, it’s hard to say. And, the contrary, you retire at 70, 75, you could probably do a 5 or 6% distribution rate.

Joe: but I think the problem is, this is all back-tested. Yeah. This is what the market has done. Well, that’s a good thing. And if you take a look at the market over the last 20 years, it’s done pretty well.

Al: That’s right.

Joe: So you’re, back testing over the last 20, 30, 40, 50 years. Yeah. It’s gonna come up Pretty decent

Al: Yeah, Now he says he’s gone back 100 years.

Joe: Well, well then that’s where he’s 80% success rate, 20% fail, or- Yeah … 89%. That’s-

Al: And we looked at his rate of return, it’s about 8.5%.

Joe: 8.5%, you pull out four, it should be 100%.

Al: Yeah,

Joe: But the, the issue is that I, think looking at these spreadsheets and it is great to help you as a starting point.

Al: Mm-hmm.

Joe: But it’s the sequence of return risk I think is where if the market drops 30%- Yeah … and you’re still pulling the same amount of money out, I don’t know, it’s really difficult to come back, your portfolio to come back, depending on how much money that you have.

If you’re pulling out 5, 5.5% when the market’s down 20%, th- that’s gonna be a pretty difficult ride back up, depending on what the market does over the next 5, 10 years. So I think it’s looking at your portfolio, what is the demand for the portfolio, how much income do you need to have, and come up with a strategy each year of how you’re going to pull the money out so that, hey, if the market is down 20%, you could still have the safe withdrawal and you’re pulling it from a, a, another piece, like a safer place in the portfolio.

He’s using a 90/10 portfolio. Mm-hmm. 90% stock, 10% bond, I think I saw on the spreadsheet. I mean, that’s pretty aggressive. The market’s down 20, 30 per- percent, there’s really… The, you, have to grab from stocks it would seem like- … and he’s using triple B corporate bonds. I mean, that’s- Yeah … gonna give you a lot higher rate of return than a treasury.

Al: Yeah, with, certain amount of risk. And-

Joe: Sure … yeah. So I mean, you could create any spreadsheet, depends on what assumptions that you use- That’s

Al: true …

Joe: it to, face your, or to really back your point.

Al: Yeah. I think, maybe a way to think about this is, like, let’s say you’re 45 and you wanna retire, and maybe I’ll tell you 3% is what, maybe that’s what I’d be comfortable with.

Maybe you’re comfortable with higher. Sure. It’s, you know, I’m just saying- Oh, what I feel comfortable with. But, but also if I was 45 years old and wanted to retire, I would ha- want to have a plan that if this didn’t really work out like I want it to, I could go back- Back to work … to work and make some money.

Joe: Sure.

Al: And, and/or I could figure out how to spend less or downsize if I really didn’t wanna go back to work, or maybe consider, like, a part-time job. I would have all these things, plan B, plan C, plan D. That… See, when you retire that early, it’s, a lot of things can happen- Sure … I guess is my point.

So it’s probably why I would generally say a smaller distribution percentage at a young age, just ’cause there’s so many unknowns.

Joe: Yep. No, I agree. I think we’re just giving a back of the envelope spitball on most of this. But he’s done the ho- the homework. Yeah. So kudos to him.

Al: Yeah, and I would-

Joe: Taking the time to run the spreadsheets, to look at the numbers, to run the analysis, to say, “You know what? I feel confident that I can pull a lot more- Yeah … from my portfolio than the standard Bill Bangen, who lives just right down the- Yeah … creek from us here- Good. Good. Yeah … in San Diego, California.

Al: Yeah. Yeah, and I think, I guess I will summarize by saying, Joe, I think, E-Dog’s done a great job.

I don’t disagree with all this.

Joe: Yeah, totally aligned.

Andi: You may think that you can just wing it with your retirement withdrawal strategy, but did you realize that up to seventy percent of your retirement savings can get eaten up by taxes: income taxes, estate taxes, and state taxes if you just wing it, according to Bankrate. E-Dog spent who knows how many hours building a fifty-year backtest to answer this all-important question: how much can I safely pull from my portfolio without running out in retirement? Most of us aren’t going to build that spreadsheet. But our free download can give you more clarity on figuring out your retirement income plan. The  Withdrawal Strategy Guide will show you the odds of success for different withdrawal rates, based on how your money is invested. It illustrates the trade-offs between taking a flat dollar amount, the classic four percent rule, and a flexible rate that moves with the market – the guardrails we were just talking about. And the Withdrawal Strategy Guide will show you how planning which accounts to pull from in what order can help you keep more of your money for yourself and your family, instead of giving it to the IRS. Click or tap the link in the episode description to grab the free Withdrawal Strategy Guide, and when the form asks how you heard about us, choose podcast.

Roth Conversion to the Top of 24% Tax Bracket, or Protect My ACA Subsidy? (James, TX)

Joe: Okay, let’s go to James from Texas. “Hey, Joe, Big Al, Andi. Thanks for all that you do. I have taken Joe’s advice over the years and put as much into Roth as possible, including doing an in-plan conversion of my 401(k) to max out the 24% tax bracket for the past several years.”

Look at this guy.

Al: Love it.

Joe: James, Jimmy, has taken some words of wisdom.

Al: Yeah, apparently.

Joe: All right. He goes, “I manned up and paid the tax, betting on higher tax in the future. This gives me more confidence to withdraw more than the pit- pitiful three to 4% that Big Al continues to recommend- Oh … to the listener.”

Al: There we go. Yeah.

Joe: He’s busting chops. “I would really appreciate your spitball for future Roth conversions. I’m 61, retiring in late 2026, and my wife is 59. We file married, filing jointly, and live in the great state of Texas. Our investable assets are approximately $600,000 in taxable.” He’s got a traditional IRA, 401(k), 1.4 million.

He’s got $1.4 million in Roth IRAs. So the total portfolio is $3.5 million, plus $1 million of home equity. Well, good for you, James.

Al: Yeah, great.

Joe: Great net worth there. “I plan to use COBRA insurance through 2027,” that’s age 62, “ACA from 2028 until Medicare, age 63 and 65, to l- to delay Social Security until age 70.

My dilemma is what to do in 2027 because I will have a very little earned income. I could convert a large amount from my traditional IRA to the Roth while still on COBRA.” One strategy would be to convert enough to fill the 24% federal tax bracket. Another strategy would be to convert much less and keep income low, the same as planned during the ACA years, to maximize premium subsidies.

Given my age, account balances, and retirement timeline, would you convert aggressively in 2027 and potentially pay more tax now, convert only enough to fill the lower brackets and preserve ACA subsidies, or stop worrying about the Roth conversions altogether since nearly half my retirement assets are already in Roth accounts?

If you were in my situation, approximately how much would you convert in 2027 and in the years before Social Security and Medicare begins? Thanks for the spitball. James in Texas. Follow-up, ‘Hi, Andi. I didn’t include my spending from my original question submitted. I plan to spend around 5 to 6% from when I retire until I take Social Security, then it will drop to 4% or less.’

Al: So Joe, that’s about $170,000 to call it $200,000- Okay … of spend- spending total.

Joe: All right. So what does James do?

Al: Yeah. So ACA subsidiaries. So, so basically, what, that is when you make a certain amount of money and it’s, it’s, low enough, it l- like for a married couple, for example, it’s, a little above $80,000 you can make for 2026, and then get, some help on your health insurance.

And Joe, I looked it up, $80,000 of income for a couple would probably give you at least $1000 a month, if not more, in subsidy benefits. So $12,000 or more for keeping it $80,000 and below.

Joe: Taxable income or adjusted gross?

Al: adjusted gross.

Joe: Okay.

Al: So anyway, that’s, so that’s the question. Does he… And he’s 61, so he’s got a few years where he could use the ACA subsidy.

Joe: He’s gonna be on Cobra in ’27, so he’s like, “All right. So since- Yeah … I don’t have the subsidies in ’27, do I convert or not to convert?” And then in 2026, through Medicare, he’s probably gonna keep his income below the $80,000 to get the subsidies.

Al: yeah.

Joe: so does he convert in 2027? He’s gonna have very low income.

Al: What do you, what would you do?

Joe: Well, I don’t think I would convert to the top of the 24.

Al: No.

Joe: Because he’s got already- S- … a million and a half in Roth. He’s got one and a half in traditional, $600,000. He wants to spend $170,000 a year.

Al: Yeah.

Joe: So that is a, what’s he saying, a five or 6% burn rate?

Al: Yeah.

And, right. Currently with, That’s what he wants to spend, but Social Security-

Joe: Is gonna come at age 70. Yeah And then his g- his distribution rate is gonna drop below four.

Al: About, four or less. Yeah. Yeah. Yeah. and I think I’m, good with that. Yeah, I would tend to agree with you. Me personally, I would probably keep my income under $80,000 till I got to Medicare to get the subsidy, and then after that, probably from 65 to 70, before Social Security, I’d look at conversions.

How much I would convert would be dependent upon what tax bracket I thought I was gonna be in when my RMDs hit. You know, maybe 22%.

Joe: God, I don’t know if I would c- I, I would have to run the numbers because I think how I would look at this is that he could potentially be in a 0% tax bracket from age 70 to the rest of his life if he plays his cards right

Al: Because the only income is Social Security

Joe: Yeah, Social Security if he gets

Al: rid of the RMDs

Joe: He, he- Yeah

he can still take distributions- Yeah … from his retirement account. Let’s say he pulls, you know, he could pull, like, $40,000 out- Yeah … with the standard deduction to get him to the- l- lower threshold of the provisional income. Then he can pull everything else out, depending on how tax-efficient he is with his taxable account, and he’s got a ton of money in Roth.

So I would want to make sure that my RMD would not breach my provisional income when Social Security hits at age 70.

Al: Yeah.

Joe: That would be my strategy, and I don’t know if I would take distributions to live off of it- Sure … or if I would convert.

Al: Yeah. A- and I, don’t disagree with that. It’s just, it’s hard to give up the s- the subsidies from-

Joe: Well, and I think

Al: the key- … 60,

Joe: 61

Al: to

Joe: 65 … I think you could get, Totally agree. And I think, even though I agree with the math, I don’t agree with the,

Al: No, I know what you’re gonna say. Yeah, it doesn’t seem right somehow. So- That nevertheless- It, it- … it is a strategy …

Joe: it is. It’s a tax strategy-

and I’m all about that. So, from 62 to 65, y- you would just probably pull from your taxable account.

Al: Yeah

Joe: And then from 65 to 70 is that I would pull my income probably to, yeah, I think to 22. Maybe you pull income for, to the 12%, you do the conversion to the 22, and then you, take the rest out of your taxable account or your Roth to live off of.

Al: Yeah.

Joe: Well, if you’re gonna do a conversion, you wouldn’t want to pull any money from the Roth until at- probably at age, till 70.

Al: Yeah, if you can help it, right? I think you- Then

Joe: you don’t convert.

Al: I think, well, here’s what I think. I think you don’t, you may not do any conversions till age 65, but after 65 you got all the way from there- But,

Joe: he’s got 67, so he could convert next year.

And should he do a conversion next year? I would do a conversion in ’27 because he doesn’t have subsidies in ’27- Yeah … because he’s on COBRA. And so,

Al: Yeah, and I agree with that …

Joe: I would, you convert to the 24 or 22? 24 is a s- few hundred thousand.

Al: Yeah. Y- well, it’s about 200,000,

Joe: To the top of 22-

22 …

Al: taxable

Joe: income.

Al: Yeah, or 20- Double … or double for 24.

Joe: Mm-hmm.

Al: I would consider either. It’s, that’s not a very good answer, but I would probably, I would for sure do the 22, and I would consider 24, particularly if there’s a little bit of a market dip and I’d want to get it in while I could. I’m gonna say something else, too.

Even between 62 and 65, even though that wouldn’t be my primary strategy to convert, if there’s a big market dip, I’d forget the subsidy. I’d do a big conversion to the top of the 24 and get a lot of this done. I do agree with you, and, I guess for our listeners’ benefit, what Joe is saying is if all the money comes out of a non-qualified, I, should say, a Roth account or non-qualified, right?

Then you could keep your income in the 12% bracket, which, or even less than that below the provisional income, which means your Social Security wouldn’t even be taxed, which means you could actually potentially pay no tax the rest of your life. So that’s what you’re saying.

Joe: Yeah. It’s just, you, I need to, you would have to run the numbers there to see how much that you would wanna get out of the- The, traditional IRA or the 401(k) Yeah.

Yeah … so the, the RMD, usually what happened, the RMD- Yeah … pumps you up and you’re already- in that, the, the taxable th- thresholds of-

Al: Yeah …

Joe: in, in your provisional income. So-

Al: Yeah …

Joe: because provisional income is gonna be half of your Social Security and it- it’s an add back. Your- Sure … half of your Social Security is added back to your AGI.

Al: Correct.

Joe: But if I’m pulling dollars from a Roth IRA that’s not included- That, yeah … and it doesn’t even show up- on the tax return. If I can tax manage my taxable account in a certain way where I can tax loss harvest and try to shelter as much money, that will show up on the tax return- then I’m good there. The, issue’s gonna be the IRA and the RMD, once he hits 75, is gonna push enough out, does that hit that, that threshold? Or can I get enough out of the retirement account? It’s not zeroing the account out.

Al: Yeah.

Joe: You would s- you, you could still have some money in there, but just looking at, well, how much would that RMD, given certain rates of return, just- Yeah

keep that RMD low enough-

Al: I agree …

Joe: where it wouldn’t, w- wouldn’t affect my, m- my Social Security taxation.

Al: In, in fact, you’d probably never want to zero out an IRA-

Joe: Never …

Al: be- because you can use it for-

Joe: Because

Al: you have a deduction, yeah … yeah, you can use it for medical costs if you need to go to long-term care or something like that.

You pull it out of the IRA. Yes, it’s income, but you got a medical cost deduction that helps offset it, so it’s good to keep some in there. But ag- what you’re saying, which I agree with, is if the RMD is low enough plus half the Social Security keeps you below the provisional income rate, then none of the soci- Social Security will even be taxed- Right

which is a great thing.

Joe: Yeah. Yeah. I mean, that could save you a bunch of money.

Al: Yeah. Yeah.

Joe: Yeah, he’s done a great job. I mean- Yeah … you could really get this thing dialed in if you wanna use, like, E-Dog’s spreadsheet. but, you know, he’s already converted-

Al: Yeah, he’s done a great

Joe: thing … I mean, th- rarely do we see a Roth account at, a million and a half.

Al: Yeah, equal to the other.

Joe: usually the, the retirement account is significantly higher than the Roth account, so. but he’s done a great job of getting diversified from a tax perspective. Does he do more? Yeah, but it’s, it’s, it’s not nearly maybe as aggressive as he thinks he needs to be.

Al: Sure.

Will RMDs Be My Biggest Problem on a $13M Portfolio? (Donna Summer, CA)

Joe: All right. What do we got? Let’s see. “Your Money, Your Wealth®, a spitball please. My name is Donna. Donna Summer from MacArthur Park, California.”

Andi: Get ready for all the references coming up.

Al: Yes, I can imagine.

Joe: What, where is, what is MacArthur Park, California?

Andi: MacArthur Park- Oh … is one of the songs that Donna Summer did

Joe: Oh, I see Joe and Al, you guys are such hot stuff-

Al: Wow.

Joe: with your well-reasoned, reasoning spitballs. And Andi, I love to love you, baby.

Al: Oh,

Andi: wow. That’s another Donna Summer song.

Al: And, it’s

Joe: great. Okay, here we go. We’re just gonna do the whole-

Al: We are. It keeps going.

Joe: Okay. We business girls work hard for our money.

Andi: We work hard for the money.

Joe: Yeah.

Al: Yep.

Joe: nice. I drink hard.

The rad rodents raved about my drink of choice is red Rubios.

Andi: Rooibos. It’s tea.

Joe: Red rooibos. Rooibos. Or mos- Rooibos. Pisani’s?

Andi: I think it’s Tisane’s, but I’m not sure

Joe: Tisane’s?

Al: I think I like yours.

Joe: Pisani’s. Yeah. Sounds good. That’s

Al: Italian. Oh,

Joe: yeah.

Al: Pisani.

Joe: Yeah, t- tastes, tastes wonderful.

Al: Yeah. ”

Joe: I’m 63 years old, and my retired partner may, analyze finances on a future segment.

I have no debt of any kind and no children. My total portfolio balance is $13 million.” Wow. Wow. Maybe it’s Donna

Andi: Summer. I will retire-

Joe: Let’s go.

Al: There’s some good royalties on these songs.

Joe: Yes. They’re right. “I will retire when it’s 15 million, which hopefully will be in about a year, as it’s compounding well after 31 years.

Actually, I will retire at the end of 2027 regardless. Pre-tax is 6.8, almost all in S&P and US stock index funds. Post-tax brokerage is 5.6 million. Again, same allocation. I got some CDs and other savings, about 600,000. This buffer my crazy aggressive investment tolerance.” Oh, this buffers my crazy aggressive investment tolerance.

Al: Yeah.

Joe: So $600,000 in cash, everything else is in US stocks. All right. “I will claim Social Security at 70. My desired spending is $200,000 per year. This will flex up or down as Father Time and economics dictate. I would be comfortable with much less if need be if I have to tighten up the skirt sequence of return risk.

How does this strategy sound? After retirement, live off the fixed until the market is great to cash out enough of the brokerage account to pay for Roth conversions to live off of. Roth convert aggressively, especially during down years. Don’t get too worried about IRMA and Social Security tax hits because the RMD problem could outweigh any of the after-mentioned taxation.

Am I correct in assuming that RMDs could be the biggest problem for me? Thank you, team. And another thing, Big Al, my sandy-haired friend, when you say I probably would not exceed the 24% tax brackets to convert, where does that leave me at RMD age with a large pre-tax balance? Up a creek?” “And Joe, with your wife’s permission, I’d love to have the last dance.”

Al: Another- Oh, there we go …

Joe: Donna Summer song. Oh.

Al: Oh, wow.

Joe: Let’s go.

Al: She’s a Joe fan.

Joe: No permission

Andi: needed. And she probably hasn’t even seen Joe dance. She doesn’t even know what she’s getting herself into.

Al: he’s a pretty good dancer. Yep.

Andi: I tell you.

Al: I think she’s right. It’s a problem having all this money in effect, but- Well, you got

Joe: $6.8 million.

She’s 63 years old. She’s got another, what, 13 years?

Al: Yeah.

Joe: Wants to spend $200,000 a year. So-

Al: Which is a 1.5% distribution,

Joe: right? So let’s say if you get an average of 6, it’s still gonna grow 5%, you know- Right …

Al: Exactly.

Joe: Or, 4.5.

Al: Yeah, So she doesn’t say… She says her partner.

I don’t know if she’s married or single. But, but- But e- either way, she’s either in a 35% or 37% tax bracket at RMD age, right? You figure that 6.8 million, I mean, even if it doesn’t double, it’s gonna be 12 million or more. It’s r- It could be 15.

Joe: Exactly.

Al: If it’s 12 million-

Joe: It’s all in stocks.

Al: Yeah.

Joe: Over 10 years- Yeah

it probably could grow 8% easy.

Al: If, it’s 12 million, the RMD would be about 500,000, right? If it’s 15, it’ll be closer to 600,000-

Joe: Yeah …

Al: which is the highest tax bracket. So yeah.

Joe: You would wanna go more than 24.

Al: In this case. I think for a lot of people, I think 24%’s probably the right number, but- ‘

Joe: Cause it’s such a big bracket.

Al: It is. It goes all the way to over 400,000 for a married couple, and that’s taxable income, not gross income. Yeah.

Joe: So if she’s single, I mean, yeah, the RMD from a tax… I mean, she’s fine regardless. She can- Well- … probably just spend more, right?

Al: She can do whatever she wants. but yeah, to try…

Yeah. And to save taxes, she’d wanna get a lot of this converted.

Joe: Yep.

Al: And this is a case where I would go above the 24% bracket because the numbers are so big.

Joe: Yep. And if tax rates go up, you’re just gonna lose more. If tax rates stay the same, you’re okay. But where does the money go? I’m curious, too.

Al: Yeah. It doesn’t say

Joe: if that’s what it’s- If it’s going to kids, if it’s going to… She doesn’t have kids, but- Oh, she does have kids … does it- Yeah … nieces and nephews? Yeah Does it go to a charity? Does it… I mean, I think all of that plays into account, too. Mm-hmm. If it goes to charity at the end, well, then there’s charitable strategies that she can do now-

Al: Right

Joe: to kind of buffer some of that tax and organize this in a maybe a little bit more tax-efficient, more tax-friendly way.

Al: Sure.

Joe: but- Yeah, you’re right. I mean, she’s right. That’s the biggest problem

Al: It is the ver- biggest problem. It’s a great problem to have, though.

Joe: Totally. Totally.

Al: I mean, wouldn’t you take that one?

Joe: I would take that all day every day. Oh. Man, $7 million in pre-tax retirement account.

Al: You know, you figure, so how do you think she got that much money in a retirement account?

Joe: Well, she was aggressive.

Al: Yeah.

Joe: It was all in-

Al: All, in stocks, all in …

Joe: all in stocks for the last 31

Al: years. For 31 years, yeah.

And, plus 20-year bull market or maybe, Yeah, almost 20.

Joe: You don’t see, at 63 years old, you don’t see $6.8 million.

Al: No, you don’t. That’s why I’m asking.

Joe: The, the only way is it has to, she, there, there had to have been, she rolled money out of a 401(k) into an IRA and then bought some individual stocks that hit.

There’s one guess.

Al: or she had company stock that, and was a very successful company in the retirement

Joe: account. In the retirement account, or she was self-employed and she set up, like a- Defined benefit … defined benefit plan-

Al: Yeah.

Joe: that you could put a lot more than- Fair … the 401(k) limits. Could be,

Al: yeah.

Joe: Because y- at 61 years old, on average, if someone maxed out the plan-

Al: Be hard to get to this level …

Joe: you s- it’s like two and a half million, and that’s seven. So that’s a huge, number.

Al: It’s giant.

Joe: so yeah, interesting. it would be interesting to see kind of the journey over the last 31 years of how she’s accumulated, Right, good for you. Good on you.

Al: Yeah, for sure.

Joe: All right. Not a ton of value there, Al, but-

Al: No. Well, her question was, “Am I correct in assuming RMDs could be the biggest problem for me?”

Joe: Yep.

Al: Yes.

Joe: Next.

Andi: Just about everyone who writes into YMYW is really asking the same questions: do I have enough, and how much can I actually spend? Joe and Big Al spitball it on air for a lucky few, but you don’t have to wait to get read on the show to get your own numbers run. Use our free, self-guided Financial Blueprint tool and run your numbers yourself in just a few minutes, right now – from your couch if you want. Plug in your age, your savings, your income, and the lifestyle you want in retirement and it’ll build you a personalized snapshot: what you’ve got, what you’ll need, and the gap between Social Security and any pension. It shows you a range of how much you’ll need: from a likely minimum, to a comfortable target, to a maximum, with the tradeoffs spelled out, because there’s no single magic number that’s right for everybody. It even walks through how people create retirement income in ways you might not expect, and the questions that are worth bringing to a human financial professional. It’s free, it’s fast, and there’s no cost and no obligation. And it’s the easiest and quickest first step to go from wondering if you’re okay to seeing a spitball of your future on paper. Minimize your stress, maximize your life, and prepare for that future. Click or tap the link in the episode description, get your Financial Blueprint. And why not tell a friend so they can run their own numbers too?

$4M and Scared to Spend It. What’s Our YOLO Number? (Hansel & Gretel, MN)

Joe: All right, let’s go to Hansel and Gretel from Minnesota.

Al: Okay.

Joe: Oh, the homeland. “Hi Joe, Al, and Andi.

This is Hansel and Gretel from…” I thought it w- it wasn’t Greta? It’s Gretel? Gretel.

Andi: No, it was Hansel and Gretel. Yes.

Joe: Not Greta.

Al: No.

Joe: No. All right. “This is my second time writing to the show-

Al: Damn …

Joe: which I listen to religiously while doing painful things like mowing the lawn, cleaning the house, or out on a long-distance run.”

Al: I’m surprised she still likes our show-

Joe: I

Al: can’t- … when it’s painful

Joe: it is. I mean, she said it’s a double pain. “As like all good Minnesotans, don’t you know?” You

Al: said that just right.

Joe: You betcha. “We enjoy a good old fashion and drive a Ford F-150. Pretty typical, eh?”

Al: Eh,

Joe: yep. Don’t you know?

Al: Yep. ”

Joe: This is my s-” Okay, we already read that.

Al: Yeah. ”

Joe: The first time I was looking for a spitball is I was about to retire while Gretel was planning to work a little bit longer. Your response was something like, ‘Good job saving money. You are fine.’ Retirement has been wonderful and we have been financially very secure and stable, so now my question takes a different spin.”

See, look at the… I mean, we were like, “Yeah, great job.” Yeah. “You’re fine. Next question.” The value that we provide on this show is- It’s unbelievable … remarkable.

Al: Remarkable. That’s why people, they listen while they’re cleaning the house. I know. ‘Cause they don’t really care.

Joe: they listen to, like, four episodes and it’s like-

“This sucks.”

Al: There’s no value.

Joe: There’s zero value and it’s the same s-

Andi: Thank you for self-editing. I appreciate that.

Al: yeah. Well- Yeah, that was very good

Joe: All right, so let’s go. So Hansel’s got a different spin here. “I want to still very conservatively go and YOLO so that we fully enjoy our retirement.

As lifelong savers, if we only take from our portfolios what we need, we will never likely do many of the big, crazy fun things that we could do. What if instead we draw a conservative amount each year when we s- which will still be more than what we need, and let the extra build in a YOLO savings account that can fully enjoy with no regrets?

How would we go about figuring out what the withdrawal rate should or could be?” We are f- here’s a few details. We’re 60, YOLO, and have no debt. W- we own our house and it is totally paid off. Our spending estimate is $200,000 a year. This does not include any income tax, but does factor about $30,000 each year for healthcare premiums and medical expenses until we qualify for Medicare.

Of course, we hope we don’t use that much, but it’s built into our plan. This spending also includes vacations and regular splurges, but not YOLO splurges.

Andi: You only

Joe: live once. Something was YOLO?

Andi: You only live once.

Joe: YOLO. Oh. You only live once. So do you have a

Andi: YOLO- So GoGo going, YOLOing in their GoGo years

Al: splurge?

Joe: No. Okay. Nope. I don’t GoGo or YOLO. Another,

Al: another golf membership or- Yeah.

Joe: No … new clubs? There’s no YOLO or GoGo.

Al: new golf cart?

Joe: Nope. No? Okay. I- We kinda but- we buttoned that budget down, Al.

Al: Apparently.

Joe: Just, you know, lock her up. “I have a pension of $110,000 a year, which is fixed with no COLA.

Our combined Social Security will be about $135,000 in future dollars if we d- delay until age 70. Our investments include $3 million in an IRA, $300,000 in a Roth, $100,000 in an HSA, $800,000 in a brokerage, $150,000 in cash. We stick to a 70/30 ratio of stocks, bonds. Our kids are launched and doing well.

It is not a priority for us to leave any inheritance, but rather spend the money on ourselves and help the kids out occasionally with big life events as they come up. Given this, how might you frame up a withdrawal strategy with appropriate guardrails? I suppose I could use the good old 4% rule.” Andi, we got a theme today, don’t we?

We sure did.

Andi: You’re just now figuring that out, Joe.

Joe: But, that just seems a little bit too boring.

Al: It does seem too boring.

Andi: Not going with the withdrawal rate because it seems boring. Wow.

Joe: Yeah. We’re looking to get some help with our GoGo and YOLO.

Andi: So how do they YOLO, Joe?

Joe: I don’t, he’s got, what do they got?

Three and a half, four million bucks?

Al: Well, they got, yeah, they got 4.3.

Joe: 4.3 million. Their fixed income is gonna cover 100%, roughly, of their-

Al: Correct

Joe: So spend a million dollars a year for the next three and a half years.

Al: And have

Joe: fun. Go nuts.

Al: Have fun.

Joe: Have fun, and then just live off-

Andi: And then start over

Al: … your fixed income.

Joe: I mean, they could do whatever they want.

Al: I, agree.

Joe: I mean, but the withdrawal rate-

Al: No matter what we tell them, they’re not gonna spend that much

Joe: … make 10% off.

Al: yeah.

Joe: Who cares? Because their fixed income’s 110, plus their Social Security’s gonna be another, what, 80 he said?

Al: Yeah.

Joe: They spend $200,000 a year.

Al: Yeah, and their- They’re

Joe: 60 years old …

Al: Social Security is 135, pension’s 110, so that’s 245 and they’re spending 200. Now, I know Social Security’s in 10 years from now, but still.

Joe: Then you got a little bit of inflation, but-

Al: yeah …

Joe: the burn rate is almost nothing with that.

Al: It’s almost nothing.

Joe: Yeah. If you don’t wanna give a big inheritance to the kids, you would rather have the events and do it with the kids while you’re YOLOing, go-going.

Al: So I played, like, what would I do in this situation? I played with, I said, what if I, just to put a number to it-

Joe: Yep

Al: … what if I take 6% out of the portfolio- Yeah … each year? Okay, that would be 260,000, plus I got 110,000 of fixed already, so I could spend 370. So maybe 350 to even 400, maybe something like that for the next decade.

Now, I bet they don’t spend anywhere near that, but I think there’s, I guess the point is there’s a lot of room here to do whatever they wanna do.

Joe: Yeah. I would not hold back on any life events.

Al: Yeah. Now, if that seems too rich for them, do a 5%. That’s 216,000 plus the 110, that’s 325. Spend 325 a year. If you don’t spend it, put it in that YOLO account.

Joe: Yeah.

Al: Yeah.

Joe: And then spend it next year.

Al: Yeah.

Joe: Yeah. You could- Yeah. Yeah, I, might even go richer than that.

Al: You could. You could.

Joe: And then just kind of w- wait and see, right? If the market gets a little, you know, volatile, maybe you pull back a little bit. Maybe.

Al: Yeah.

Joe: but- You, can’t buy back the time

Al: no

Joe: You can’t take the money with you

Al: Yeah, so I would say if they’re spending 200, I think they could-

Joe: Double it

Al: I, yeah, I think you could double. Yep.

Joe: Yep. Even more. Because it, if they burn it to zero- … they’re still way-

Al: They still have-

Joe: … ahead of most- They still have- … because of the f- the pension of $100,000

Al: Right. And the Social Security. Yeah.

Joe: I don’t know, at age 85, are they gonna be spending $500,000 a year on travel and things?

I hope so, but- Yeah … maybe not. You probably- Probably not … what, is the, after the go-gos?

Al: Well, the slow go.

Joe: Oh, yeah, the slow go. And then

Al: no go. Okay. that’s not good. Yeah. Yeah.

Joe: So,

Al: Yeah

Joe: There you go. And- Al said spend 4, 4.2%.

Al: I, s-

Joe: I say spend- I- I dunno, go 8 …

Al: I said spend, 350 to 400.

Joe: Yeah.

Andi: Joe’s going

the Ramsey

route.

Joe: Redo that backyard, buy the RV. You know, put a pool in.

Al: That’s right. Get a new garage refrigerator to get the drink. Oh,

Joe: you gotta get a… guaranteed they got a garage fridge.

Al: Well, they live in Minnesota.

Joe: 100% they have a garage fridge.

Al: All right.

Joe: It’s full of beer.

Al: Well, get a better one.

Joe: Yeah. Get a bigger one.

In My Late 30s With $750K Income: Save to Roth or Pretax 401(k)? (Mark)

Joe: All right. We got Mark from St. Elsewhere.

Al: Oh, okay.

Joe: Okay. “Team, looking for a spit ball. I drive a GM truck and my wife drives a VW SUV that are both paid off. I drink IPAs, but not hazies. They give me a headache.” Yep, just like the rest of us. Old-

Al: Except I like them.

Joe: Yes. “Old fashioneds or anything anyone else is buying.”

All right. “My wife will order a margarita once in a month at a Mexican restaurant and drink half before passing it to me to finish.” All right. “We’re both in our late 30s. I’m a doctor who recently took a new job with a big raise.” Well, congratulations, doc.

Al: Yeah.

Joe: “We’ve decided how to invest.” All right. We’re deciding how to invest.

Al: They are deciding.

Joe: All right. “I previously made about 300 to $350,000, but I’m gonna make 700 to 750 in W-2 wages at my new job.” Wow. “And my wife makes about $50,000 a year. We got a million dollars in pre-tax 403(b)s and 457s, 350,000 in a Roth, 75 in cash, 50,000 in taxable, 20,000 in HSAs. We own our home with 500 left on the mortgage at 2.7.

At the new job, I have a 401(k) with access to the Megatron.”

Al: Oh, yeah.

Joe: All right. “My wife also has a 401(k). I no longer have access to contribute to an HSA.” “I’m gonna max out the Megatron, do two backdoor Roth IRAs, and put about $100,000 in the taxable account each year. My big question is, should we do our employee 401(k) contributions as pre-tax or Roth?

I’ll be in the 35% tax bracket and have a 5% state income tax. I know my high tax bracket would suggest pre-tax is better, but I have a large pre-tax account already which will give me an RMD problem, and I’m relatively young, which makes the Roth attractive. I’ve been listening to about six months.” All right, so you got…

He’s way gone. Now- “So I’ll probably quit listening before you respond.” Oh my God, yeah, you’re probably close to quitting.

Andi: See, he’s been listening to yours.

Al: He’s being honest.

Joe: Yeah. You will- yeah, you’re at that six-month mark. It’s tough, man. Yeah, It’s tough to hang on after that.

Al: It- very tough. It’s- Except for us.

Except for us. And it’s been 20 years. That’s a long

Joe: years. “But wanted to ask anyway. Also, you could rename your show Alcoholics Arguing Over Roth Planning.” Double ARP.

Al: I love it.

Joe: All right.

Al: That sounds right.

Joe: “Thanks in advance. Love the show.”

Al: Okay.

Joe: I’m going Roth all day for- … our good doctor friend. He’s in his 30s.

He’s already got a million bucks. I’m not worried about RMDs. I just think, you know-

Al: He’s being young.

Joe: Yeah.

Al: Get it rolling.

Joe: it’s not a ton. It’s like-

Al: Yeah …

Joe: he makes $750,000 a year. He’s a doctor. He’s gonna be saving a ton of money. He’s got $100,000 saving into a brokerage account. you wanna take advantage of the Roth.

I know it’s a higher tax bracket, but I think that tax payment is gonna be worth it in the long run. I’m going Roth.

Al: Got it. Okay. I think I’d probably go pre-tax.

Joe: Yep.

Al: You expected that, right?

Joe: Yep.

Al: So let me, I’ll just go through the numbers, Joe. So, employee, 24,500, right? So that’s the amount he can contribute.

That’s the amount we’re talking about. that’s what’s at stake.

Joe: Yeah, the 24,5- Yeah … go pre-tax.

Al: Y- yeah.

Joe: You count after tax and backdoor.

Al: Y- And then the match, I don’t know what the match is, but let’s just say it’s 4%. The maximum comp is 360, so let’s call it 14,5. So that’s a total of 39,000, which then allows an after-tax Megatron of about 33,000.

In other words, the height, the, the top of the 401(k) is 72,000. So if you don’t know what a Me- Megatron is, what that is that some plans allow you to put after-tax money into the plan over and above the 24,500, and then that money just goes in at after-tax, and you’re allowed to convert that to a Roth IRA.

Now, once it’s in the plan, if it grows, whatever it grows to, the, the growth part, yeah, you have to pay taxes on that. But the actual basis, what you contribute, you can send right over to a Roth, Joe, and then have a lot more money go into a Roth. So I think we’re, out of 72 grand, we’re really only talking about 24- 24

5 ’cause the 14,5 batch is, already gonna be taxable. So you say-

Andi: And let’s clarify that the Megatron is actually a nickname that is specific to this show, that it’s actually called-

Al: Well, yeah

Andi: … the Mega Backdoor Roth.

Al: Okay. good point. Yeah, good point. Is, yeah, so I would probably go, pre-tax just because of the tax deduction.

You would go, Roth because of the, he’s young. I think you could make a great argument either way. I really do.

Joe: Yeah. S- what is it? Pff. 8,000, 6,000 to $8,000 of tax.

Al: Yeah,

Joe: I don’t know. I, I- 30 years, is he gonna remember that?

Al: Yeah. Well, I partly say that ’cause he’s also putting two backdoor Roths in for se- He,

Joe: I mean, he’s, gonna have a, quite a bit in Roth if he does- He is

the Mega Backdoor and- Yeah, pretty good … the, backdoor Roths and all of that. Yeah. So. Yeah. All right.

Al: Yeah.

Joe: Is that it? I think that’s it for us.

Andi: That’s it. That’s all we got for you.

Al: I think that’s it.

Joe: Okay. We’ll see you next week. Okay. Thanks for the questions. we’ll see you next time. Show’s called Your Money, Your Wealth®.

Outro: Next Week on the YMYW Podcast

Andi: Quick message for George, who sent me a really nasty email this past week: we have replied and fulfilled your requests, multiple times so. please check your spam or junk folder, and if our emails are there, mark them as safe! If you, like George, have requested something from our website and it never showed up, please do the same. Thank you!

Lots of Derails at the end of the episode today, on everything from Donna Summer and Hansel and Gretel to Joe’s six fridges, St. Elsewhere and MacGyver, so stick around. Next week on YMYW, more spitballing and more making fun of finance. Follow or subscribe wherever you’re watching or listening so you don’t miss a thing.

We’re in the final three months of 2026 now, and you have some big end of year decisions to make: after you run your free Financial Blueprint that I talked about earlier, why not schedule an assessment with the experienced professionals at Pure Financial Advisors to review it. They’ll help you identify strategies and actions that can put you on the path to the retirement you’re dreaming of. Click or tap the link in the episode description to book yours, either in person at our offices around the country, or via Zoom, right from home.

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this podcast and does not represent that the securities or services discussed are suitable for any investor. As rules and regulations change, podcast content may become outdated. Investors are advised not to rely on any information contained in the podcast in the process of making a full and informed investment decision.

The Derails: Donna Summer, Hansel & Gretel, Joe’s six fridges, and TV

Joe: What is Donna Summer’s most popular song?

Andi: Oh, let me find out for you. God, I, know it’s gonna be on the m- top, tip of my tongue.

Joe: Is Donna Summer the one that, like, had beads, like kind of f- like long beads in her hair?

Andi: Yeah, I think so. I almost think- Hot Stuff- was her- Like, kind of- … her, top song …

Joe: yeah, like ’70s disco.

Al: that’s pretty good.

Joe: That could be, yeah. Yeah.

Al: Yeah.

Joe: Kind of ’70s disco vibe look.

Al: Yeah.

Joe: Got it.

Andi: Hang on. All right. Here, h- here she is. Donna Summer, her big song was Hot Stuff.

Al: Hot Stuff. No beads there.

Joe: Yeah. Maybe that was a movie she was in.

Andi: Maybe.

Joe: Yeah. Very beautiful lady.

Andi: Yeah.

Joe: All right.

Al: Cool. Okay.

Joe: Yeah. I got- It’s been a while since I had put on a little

Andi: dance music. Have you danced to Donna Summer’s m- music?

Joe: Of course.

Al: Yeah, no, I… Yeah, I’ve… Well, it was a few years ago, I saw you dance to all the Michael Jackson songs.

Joe: Yeah, that was a few years ago.

Andi: I can totally imagine him dancing to hot stuff. Yeah. That would be perfect.

Joe: I could dance to just about anything.

Al: I can imagine.

Joe: okay. Well, Hansel and- is that where they went, Was, was the wolf after them? Or what’s, Hansel and Gretel? Oh, the story?

Al: Is that the, the gingerbread house? I forget.

Joe: The gingerbread house?

Al: I don’t know.

Joe: Oh.

Andi: They’re abandoned in the forest and fall into the hands of-

Joe: The big

Andi: bad wolf … a witch who lives in a house made of bread, cake, and sugar. The witch intends to fatten- Oh, yeah … Hansel before eventually eating him. Look at me now.

Gretel saves her brother by pushing the witch into her own oven, which kills her. Such a lovely children’s story.

Al: It’s, amazing.

Joe: Oh, that’s right, that was the gingerbread house. Mm-hmm. Yeah. And then they’re gonna fatten Hansel up.

Al: Yeah.

Joe: And then what? Gretel was like, “No, you’re not gonna fatten my brother up,” and she-

Andi: Gretel’s like, “Witch, you’re going in the oven.”

Joe: All right.

Al: Okay.

Joe: I have two now.

Al: You have two?

Joe: I do.

Al: I don’t even have one.

Joe: I have two, refrigerators in my garage.

Al: For what? Beer?

Andi: All the beer, all the Coors Lattes.

Joe: Just too much. Well, I think one, we had to get because our normal refrigerator blew up.

Al: Oh, okay.

Joe: And so- So you

Al: don’t have one in the house.

Joe: We do now.

Al: Oh, you do now.

Joe: We do now, yes.

Al: Okay.

Joe: But we needed a, a cheapo-

Al: Like a, just something to get

Joe: you- Just something to get you by. It’s because they had to put it in the wall- Yeah … and they had to- Got it … you know, cut a cabinet out of

Al: it. That’s why you have three now really.

Joe: Yeah, we have three.

One in the house and two- And a broken one. We have… How many fridges do I have? I got a small one that is, outside, then two. One, two. Like on the front

Andi: porch next to the car that’s up on blocks?

Joe: Well, yeah, but- Yeah … yeah. Yeah. It’s like in, yeah, by the pool in, Oh, yeah … the backyard.

Al: Well, you have to have a pool one.

Joe: Yeah. So… Yeah, I got like six, I think six fridges.

Al: Six? Wow.

Andi: Coors Lattes in all of them.

Al: I’ve got the- No … I’ve got the one, but I’ve got three homes, so I’ve got three if you

Joe: count

Al: it that way.

Joe: You… There you go. Yeah. I got one home. And I got six fridges.

Al: How many cars do you have?

Joe: Two.

Al: Two.

Joe: Two cars.

Al: Not six?

Joe: No.

Al: Okay.

Joe: That’s ri- no. No. Okay.

Al: Just

Joe: curious. One for me, one for the missus. We’re good.

Al: You know our buddy has six or eight.

Joe: Oh, god.

Al: Yeah.

Joe: Well, you have eight.

Al: No, I’ve got the two.

Joe: You got the two? nope, not a big car guy, just one for- Yeah. Yeah … you know. I do have two golf carts.

Al: Yeah. Well, that’s- Okay, that works.

Joe: So do

Al: I go next? And how

Andi: many Star Wars masks are you up to now?

Joe: no, I, got fixated on the Star War masks. Oh, wow. Couldn’t get behind those.

Al: Couldn’t… Yeah, you got-

Joe: I haven’t bought, like, the stupid big purchase in a while.

Al: That, that’s off the budget,

Joe: huh? That is, Yeah. You get married and then-

Al: Yeah

Joe: she says- Says no … “No, you can’t buy that” Stupid stuff anymore. but no.

Al: But doesn’t she have her own discretionary fund?

Joe: Well, I don’t… Yeah, she’s got whatever. Yeah, You know?

Al: And you don’t?

Joe: Yeah. What’s mine is hers, and what’s hers is hers, right?

Al: Got it. Okay. Just curious.

Joe: Yeah, I don’t, The, yeah, the only thing I really spend any money on is golf.

Andi: Fridges.

Al: Golf and-

Joe: Well- … and beer … and the refrigerator. But the refrigerator’s cost a couple hundred bucks. It’s nothing- Yeah. it’s not- Got it … like they’re Sub-Zeros or whatever they’re called.

Al: Got it. Okay.

Joe: They’re just kinda small little cheapos that instead of, like, packing a cooler-

Al: And we live in San Diego, so you don’t have a basement.

you’d have another two or three down

Joe: there. Oh, I would. Yeah, for sure. For sure I would. Oh, no, that’s where you have the big-ass freezer, in the basement. The

Al: freezer, okay.

Joe: The freezer’s- Freezer … in the basement.

Al: Oh, ’cause it’s so cold.

Joe: Yeah, where you put your Schwanns.

Al: Got it. I, wouldn’t know about such things.

Joe: You… What? Like, the delivery guy? You guys don’t know Schwanns?

Andi: I, at the-

Joe: Yeah. I mean, you get, like- My

Andi: first thought was bicycle and then mine, I thought, no, that’s Schwinn.

Joe: That’s Schwinn.

Al: Is that… Yeah. I do know Schwinn.

Joe: Yeah. You, if I could put your Schwanns in the- Got it … in the basement freezer.

Is that a beer?

Al: Got it. Got

Joe: it. And then you have your beer fridge in the garage.

Al: Yeah, you couldn’t have that in the ba- It’d get too cold, and-

Joe: Well, yeah. You don’t wanna walk downstairs to grab a beer. You’re outside- Yeah … grabbing a beer.

Al: Well,

Joe: yeah. You know, you’re doing yard work.

Al: Yeah.

Joe: You know?

You’re-

Al: Yeah …

Joe: you’re doing stuff.

Al: Yeah,

Joe: You don’t wanna keep going in the house. Got it. You just go to the garage. It’s the man cave.

Al: Got it. But the garage, I mean, half the year it’s too cold to go in there.

Joe: You in Minnesota?

Al: Yeah.

Joe: Oh, no.

Al: No?

Joe: That’s a man cave.

Al: Oh.

Joe: No. You don’t go- You’re always in the garage

you don’t have to care how cold it is. No. Okay. We’re… Yeah, we put-

Al: You got a

Joe: heater? Oh yeah, heaters. Got it. Yeah, we had, like, a kerosene heater in ours.

Al: Oh.

Joe: It… But you would have to open up the garage door a little bit. A bit. Otherwise- Otherwise you

Al: die …

Joe: it would… Yeah, it would fume you out, man.

It would s-

Al: That seems a little risky.

Joe: Yeah. Well, that was years ago. I haven’t lived in Minnesota in, like, 25 years.

Al: Got it, okay. All right.

Joe: but yeah.

Al: Cool.

Joe: But no, you’re always in the garage in Minnesota.

Al: Got it, okay. And

Joe: you- St. Elsewhere.

Al: Yeah.

Joe: That’s an old show.

Al: Very old. Yeah. you’ve seen

Joe: that?

From, like, the ’30s. No. That’s, well, that’s before my time.

Al: I don’t think even I watched that.

Joe: Who’s the star of St. Elsewhere? Like Mark Hamill? William H. Macy?

Andi: Let’s see.

Al: You know, that could be.

Joe: Oh, that was a good guess.

Al: That-

Joe: That

Al: was really

Andi: good … Ed

Al: Flanders … that for nothing.

Joe: Who?

Andi: Ed Flanders.

Joe: Ned Flanders

Andi: Ed- Ned No, Ed Flanders.

Joe: Oh.

Andi: Oh, hold on. Let’s see. Yeah,

Al: I, don’t know.

Joe: Well- Yeah … oh, yeah, he was… No, I was thinking, who was the older guy? That was Quincy.

Andi: Do you recognize this guy? This is apparently Ed Flanders- Quincy … in 19- in ’77.

Joe: Yeah, absolutely not. no. No.

Andi: Yeah. No, that doesn’t look familiar to me. That’s not St.

Joe: Elsewhere.

Andi: Yeah, St. Elsewhere. St. Elsewhere- St. Else- … it ran from ’82 to, ’88. Series stars Ed Flanders, Norman Lloyd, and William Daniels as teaching doctors at an aging, rundown Boston hospital who give interns a promising future in making critical medical and life decisions.

Joe: Oh. Ed Begley Jr.

Al: Oh, Howie Mandel was in that.

Joe: Oh, wow. Ed Begl- that name k- kinda sounds familiar.

Andi: Yeah, Ed Begley Jr. was… You’ll recognize him. He’s the blond guy with the glasses. Yeah, him.

Joe: Mm-hmm.

Andi: That guy.

Joe: Yeah.

Al: Oh, I remem- I remember him.

Joe: I remember him,

Al: yeah. Yeah. Okay, now I got it.

Joe: St. Elsewhere.

Andi: So- Okay … that’s Norman Lloyd.

Joe: They don’t make shows like that anymore.

Al: Do

Joe: you recognize him? No. The TV dra- oh, d- Yeah … well, sitcoms. yeah. The sitcoms are kinda gone, too.

Al: The- not too many of them.

Joe: Yeah. What was your favorite sitcom?

Al: When growing up?

Joe: Or just, in

Al: general.

Joe: Or just,

Al: oh, just generally.

Joe: Like Cheers.

Al: I would say-

Joe: Roseanne?

Al: I would say Cheers and, no, Che- Cheers and Seinfeld probably were the top two for me.

Joe: Oh, okay.

Al: Yeah.

Andi: That’s not really growing up, though.

Joe: Andi, do you have, you got anything?

Andi: You know what? When I was, my thing wasn’t sitcoms. I loved MacGyver. Do you remember the show MacGyver? Oh, I loved

Al: MacGyver. We

Andi: all loved MacGyver. Richard Dean Anderson, he was my guy. Yeah.

Joe: Got it. All right. did they make a movie just recently that was…

B- did they make a MacGyver remake? Yeah,

Andi: it, Well, and I think they did a reboot, and there’s a younger MacGyver now and all that, so yeah. Yeah, okay. I d- I didn’t catch the movie- Cool … or see the reboot.

Joe: All Right. What was your favorite medical-related show?

Al: House.

Joe: House.

Andi: Mine, too. I liked House.

I loved House. House was amazing. Yeah. And Hugh Laurie- That guy … being a British actor and using an American accent through that entire thing I thought was quite a, a, testament to his acting ability as well.

Al: Y- you know, I would agree. I didn’t even know he was British for- … like, a couple years. It’s, and then I heard him being interviewed, I go, what the heck?”

Yeah, who’s this guy? “Why is he talking normal?”

Joe: Yeah, I don’t know. I

Al: think- How about you?

Joe: Yeah, I would agree. That’s- Yeah … I think that’s the only medical show that I watched.

Al: Yeah.

Joe: I wasn’t into, any of, the others.

Al: I kind of

Joe: liked- my wife likes The Pitt.

Al: The Pitt? Yeah, I watched The Pitt, with Anne.

She, likes it more than I do.

Joe: Yeah, but I could, I lasted, like, five minutes- Yeah … then about it.

_______

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