Show Notes

• 00:00 – Intro: This Week on the YMYW Podcast
• 00:46 – Keep 0% Capital Gains or Convert to Roth? Should I Trust My Advisor? (Joe Momma, VA)
• 12:03 – I’m Converting My IRA to Roth. Should We Convert My Wife’s IRA Too? (David & Shannon, Poway, CA)
• 17:39 – How to Use Roth IRA Money in Retirement (Thomas)
• 25:34 – Can We Retire at in 7 Years at 62 and 65 on $3.5M? (Lizzy and Billy, TX)
• 29:33 – Outro: Next Week on the YMYYW Podcast

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Transcription

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

Intro: This Week on the YMYW Podcast

Andi: Joe and Big Al spitball Roth conversions, capital gains, and retirement readiness from every angle, today on Your Money, Your Wealth® podcast number 556. Joe Momma from Virginia wants to know if his zero percent capital-gains strategy is too good to be true, if he can trust his advisor, and if it’s finally time to start converting to Roth. David in Poway is already converting his IRA, but should they convert his wife Shannon’s too? Thomas wonders when to finally start using that Roth money instead of just admiring it. And Lizzy and Billy from Texas want to know if $3.5 million is enough for them to retire in 7 years at ages 62 and 65. I’m Executive Producer Andi Last, and here are the hosts of the Your Money, Your Wealth playgroup, Joe Anderson, CFP®, and Big Al Clopine, CPA.

Keep 0% Capital Gains or Convert to Roth? Should I Trust My Advisor? (Joe Momma, VA)

Joe: All right. We got, let’s keep on a trucking here. We got Joe Momma, in Virginia.

Al: Okay.

Joe: All right. Joe, Big Al, Andi love the show. Started listening about six months ago. Binge while in the car. Just bingeing away. I mean, he must have a commute.

Al: It must be a long one. Huh?

Joe: Wife’s 58. I’m 57. Both retired. Yes. I married an older woman one year. When I say that you call yourself Joe Momma. But she hates a lot of things that he says. We’re already two sentences in guaranteed.

I’ve already got a sense of what’s going on here. Guaranteed. Yeah. Married an old Hague, wife stopped teaching during COVID and I was able to convince her to let me stop working at the beginning. 2023. My BMW drive-in wife enjoys the occasional glass of white and I partake in a negroni. I like how he kind of worded that, wordsmith the two things here.

Yeah. He likes a little negroni, maybe a Manhattan or tequila meat with a wedge of lime. Not when I’m driving my new Porsche.

Al: that’s good. I’m glad you clarified.

Joe: Yeah. These are the first luxury cars we have ever owned as our entire marriage. We have drone used cars until the wheels fell off.

I wonder if he rotated those wheels every May. Maybe he didn’t. That’s why the wheels fell off by the wheels. Yeah. The kids are grown and self-sufficient, so we spoil our 1-year-old cava pool. Okay. Here’s the scenario. $1.1 million, house paid off, $250,000 rental property, paid off good investments, 4 million bucks.

Wow. Okay. Very good. Brokerage account, 2 million. Retirement, 1.75. of that we got 1.6. In a traditional IRA one 50 in a Roth cash of 200,000, we spent $18,000 a month. Wife’s pension is 1800, rental income is 1200. Income from investments, 15,000. The income from investments is broken down at $2,500.

Dividends from alternatives, REITs in 1250 from dividends in the sale of index funds by capital gains are 30% of proceeds. I can hear big Al in my head. It’s way too rich of a burn rate at your age. I know, but I don’t see that changing. We’ll have to see if that’s what I say. All right. We have about 30% of our money with a financial advisor.

One of the reasons for this is so we will have people, my wife, trust to assist her with the finances if anything happens to me. The financial advisor suggested that I begin taking a portion of my income from my 401k. I’m extremely reluctant as the taxes I would have incurred are too much to stomach.

This is why adjusted gross income is about $95,000 a year after the standard deduction. We have $65,000 in taxable income. That means the first $30,000 of capital gains is tax at zero. Very good, Joe Momma. Yeah, that’s true. If I begin taking some of that money from that 401k, I would lose $30,000 capital gain treatment at 0%.

I would still need to take some money from the brokerage account and that would all be taxed at 15%. Capital gains 401k money would be taxed at 12 on the first 30 and 22 after that. The way I see it, the first 30,000 would cost me 27%, 22 and 15. Am I thinking about this correctly? The financial advisor also wants me to do Roth conversions and transfer more money to the financial advisor’s firm.

Alright. For a similar reason, I’m apprehensive the 0% capital gains rate is too good to pass up once my wife and I start taking Social Security or if our taxable income increases, perhaps the Roth conversion numbers will make sense if I lose that 0% capital gains. But right now I just don’t see it.

What are your thoughts? Thanks, Joe. Momma in Virginia, Inia. Okay, so let’s see. He’s got one point. How old is Joe Momma? 57. 50 57? Yeah. I married the old lady. Older lady. 58? Yep. Okay. 1.7 million 58. So he doesn’t wanna touch any of the retirement accounts. He’s gonna take everything from the brokerage account at 1.9.

He’s taking $30,000 from the 1.9. So 30% or is he taking 30% of the 2 million? Is that what he is doing? I don’t understand the 30% number.

Al: I think he’s saying whatever he sells his capital gains, he 30 percent’s taxable. My capital gains are 30% of PROEs. I think that’s what he means. So you sell a hundred thousand dollars, you can tax on 30.

Joe: Got it.

Al: Seventies thousand spaces. I think that’s what he’s saying.

Joe: got it.

Al: let me do a little math first of all before you get too deep into this. So they got, they wanna spend about 216,000 before Social Security Joe. Fixed expense or fixed incomes, 22,000 shortfall is 194 in a 3.9 million.

That’s a 5% distribution rate at 57. Joe Momma, you’re right. I think that’s a little rich for your age, but you predicted I would say that. So anyway, but hey, but I said it. I know, but I don’t see that changing. yeah. So anyway, that’s, okay. The second point I would make is your thinking is exactly correct.

That’s exactly how it works. When you’re in the 12% bracket and you do, and you have 0% capital gains and you do a Roth conversion, yeah, you’ll have to pay that 15% tax on the Roth conversion or 12% to get up to the top of the 12% bracket. But it pushes the capital gains into taxable, which is 15%. And Joe, you and I have seen so many tax projections where that’s happened, where people are in the 27% bracket, not realizing it because their capital gains are now taxable and the Roth conversion’s taxable two different rates.

You add ’em together is 27%. So that’s a correct statement. So what do you do?

Joe: I mean, I agree with them. I mean, so you have to be thinking about, you have to run the numbers a little bit more here. He’s got $2 million. I’m just gonna rough call it. $2 million in retirement accounts at 57.

Al: Yeah.

Joe: He’s got, he’s taking, I don’t know, he might burn through his brokerage account by the time he reaches RMD age.

Al: yeah. If he needs 200,000 a year, now $2 million, that’d be growth. But that is that same number.

Joe: and so he does, so he’s going to pay zero tax. What he’s gonna do, let’s say if he did the, if he loves that 0% packet, So he’s gonna pay zero tax and he’s gonna run that brokerage account, down to a pretty low number over the next several years.

Yeah. And then the only dollars that he’s gonna have left is this $2 million in today’s value in $150,000 Roth, I think he’ll still have enough capital. But that $2 million Roth is the, I mean, that $2 million retirement account is now 4 million. Four and a half million. He’s spending 200. I don’t think the RMDs the issue, I think the spending number’s the issue because

Everything is now gonna come out at ordinary income.

And so you think the 20, the 27% rate’s bad? I don’t know what tax rates are gonna be. Yeah, I don’t know. This is an interesting case.

Al: I think what I might do, Joe, is maybe two or three years, forget the 0% capital gains convert even to the top of the 22 or even the 24% bracket, which you could, he could do about 300,000 of conversions maybe a couple years.

Get a lot of it done. Then go back to that 0% capital gains rate. Maybe try not to sell any stocks over those couple years. But I think that’s what I might do.

Joe: Yeah. I like that idea quite a bit because he’s only 57. They’re so, they’re really young. Yeah. The sooner that you can get the money into the retirement or in the Roth account, you take that, the uncertainty of taxes off the table, you’re gonna have compounding tax free growth.

Gives them more flexibility. You get a ton of flexibility and have a lot more tax diversification down the road. because if I spend down that brokerage and just let the retirement account blow up, I don’t know. I, guess he’s thinking, Hey, may, maybe when I take Social Security, that 0% bracket won’t be there, and then so be it.

Yeah. Which, is true. but I would wanna see how he’s managing that brokerage account as well. Are you doing any type of tax strategy from a tax loss harvesting perspective? Because that also creates a 0% tax bracket, even if you’re not in the 12% bracket, because those losses will offset gains.

You got $2 million in a brokerage account. There’s a lot of cool tax strategies from an investment perspective that you can do that we’ve talked about quite a bit today. But, you know, a again, I think some people just pick their stocks or pick their, their, ETFs and they don’t necessarily do anything with them, which is not a bad move. A lot of people gonna play with their money too much.

and if your situation, you kind of set it and forget it and then you’re just kind of carving out this 30% gains, You know, you might want to be a little bit more tax savvy or tax tactical with the brokerage account. that could potentially create 0% income, even if you’re over that 12% by offsetting, you know, losses with gains.

Yeah,

Al: wouldn’t it be cool to get two or three years of 300,000 out of the IRA into the Roth and then you’re set up well for life. You can manage the capital gains. Exactly how you said, how you want to try to avoid selling capital, gain stock as much as you can over that two or three year period.

Joe: There’s no way he’s gonna do that.

Al: No, I know, but I’m saying as much as you can. I mean, I, get He’s gonna

Joe: wait until he, they, claim Social Security, but I don’t think claiming Social Security at 62 is probably the right answer.

Al: No, I don’t think so either.

Joe: Probably claiming 62 at full retirement age or pushing that thing off as long as he can.

Yeah.

Al: And once he claims Social Security with future RMDs, without doing anything, he’s gonna be in that 24% bracket, 24%

Joe: tax bracket.

Al: And

Joe: I mean, that’s assuming that tax rates see.

Al: Right where they’re at. Yeah. So that, yeah, it’s a little tricky that the, what makes this kind of nice is there’s so much in a non-retirement account.

Which, so there’s a lot to work with. I would just like to see a little more balance in the tax deferred versus tax free. I think that would be really cool to do that.

Joe: Yeah. I got nothing left for you, Joe. Momma. Thanks for the question.

Andi: Whether to keep that sweet zero percent capital-gains window or to dive into a Roth conversion is just one tax trap, but there are so many others that could be waiting for you in retirement. Watch Your Money, Your Wealth® TV this week to learn to Escape These 11 Tax Traps and Save in Retirement. You’ll see how to dodge RMDs, outsmart IRM AA, avoid rollover mistakes, and even turn charitable giving into a tax-free power move. And don’t miss the free Tax Planning Guide. Click or tap the links in the episode description to watch “Escape These 11 Tax Traps” and to download the 2025 Tax Planning Guide. Unless you actually like paying more tax. But that would be weird.

I’m Converting My IRA to Roth. Should We Convert My Wife’s IRA Too? (David & Shannon, Poway, CA)

Joe: David and Shannon. Okay. In probably California. Hey Andi. Joe Al, here’s a simple question. This is a simple question. It’s like four pages long.

Al: No, it’s just one, one page.

Joe: Oh, okay. Alright. That’s another. Hey Andi, Joe and Al. Here’s a simple question and also a subtle correction. Ooh, oh God. That I hope you believe are worthy of included in YMYW. My wife and I have been doing strategic Roth conversions, however.

They all have been done within my IRA accounts since my broker makes it much easier to do. Okay, so here’s my question. Is there ever a reason why we should be doing Roth conversions? In my wife’s IRA accounts as well, we are both fully each other’s beneficiary. IE no TODs to anyone else, so I’m thinking it doesn’t matter, but what, see you also, here’s a little subtle correction, okay?

I’ve heard you say a few times that you must be 55 years old or older when you retire to take advantage of the IRS Rule 55, but that’s not exactly true. I am certain that you need only turn 55 years old in the same calendar year as the year you retire. Isn’t that the same thing?

Al: No, because you could be 54 and retire and be 55 later.

We probably have said that just to simplify it, but David, you are correct. That’s a correct statement,

Joe: right? It’s like the rule of 55. Just you just turned 55 in the year. That okay? yeah. That he’s split in here. It is subtle. Thank you. Yes, that’s what he said. It’s subtle. Okay. I got it. I’m stir because I did it.

All right. Very good. we retired at 54 and early 2021 and have successfully utilized the IRS rule 55 with no 10% penalties given. I left funds in the 401k of the employer I retired from and I turned 55 later in that same calendar year. That distinction, sorry, Joe might help someone. I early retirement.

Yeah, I early retirement. As much as a year if their birthday comes later in the year. Uhhuh. All right, cool. Thank you, David. Yeah, that’s true. Now for the important stuff, we’re empty nesters with all five kiddos. Fully launched in thriving, still driving a 2016 Mazdas, and we added a Frisbee catching puppy last year to our super lazy cat and box turtle.

We survived the sequence of withdrawal return risk of our first full year in retirement of 2022. Okay. That was a tough year to retire. It was. You got stocks and bonds Totally. Yeah. Going down same time. Yeah. So, then, so they did that by switching from Michelob Ultra to Coors Latte, and now we’ve learned from your money or wealth, but now we’re back to throttling our longevity with Mic Golden Ultras.

You all are the best years to keep up the great work. David and Shannon. Very cool. condolences big al in the fam to the loss of your mother. Yeah. Appreciate that. Yeah. And know, it’s been a while, but I caught the episode with the news, good friends with Todd and Donna. Yeah. My brother, sister-in-law.

All right. Uhhuh. Many years ago, our kids grew up in a playground together. play playgroup. No. Play

Al: a playgroup. Yeah. You know, kids don’t you do that? You, your wife does. You probably don’t. I’ve never heard of a playgroup. Oh my gosh. We’ve done that a million times. A playgroup. When the kids, are little?

No, there’s no playgroup. You get together with other kids in the neighborhood. That’s called a playgroup. Yeah. Oh, no,

Joe: I don’t think Aaron was involved in any play groups.

Al: and look how great he turned out. Yeah. It’s not required. I’m just telling you that’s a common thing. Got

it, Playgroups.

Joe: Andi, were you involved in any playgroups?

Andi: I think I was, yes. I was in a swimming group and I, yeah, there was all kinds of, I was put in all the groups.

Al: Got it. but see, when we were younger, they didn’t call it that that’s what current parents, somehow you missed this whole thing.

Joe: Yeah. No, I, we don’t have playgroups.

Al: What do you, call it? You don’t call it anything. I don’t call it anything. Yeah. Get together with neighborhood kids. No. And they play,

Joe: yeah, we don’t really have a lot of kids in the old neighborhood,

Al: so. Oh yeah. You’re in one of those, like exclusive? No. You’re in a senior community?

Joe: No, it’s just, I live in an old, retirement home, which will be, I live across the street from a nursing home.

Got it. So, I mean, the kids go to the nursing home and they think they’re kids, but, you know, 80,

Al: 85 years old, that’s the playgroup. That’s the playgroup. Got

Joe: it. Oh yeah.

Al: Okay.

Joe: What, so what’s the,

Al: oh, the question. Is there ever a reason why we should be doing rock conversions in my wife’s IRAs as well?

Joe: Yeah, if, your wife is older than you.

Al: Yeah. That’s the only reason. That’s all I got too. and the reason you think about it that way is if your wife’s older or you’re older, you want get to years first ’cause you’re gonna hit RMD age sooner. But otherwise it, other doesn’t really make that much difference.

Joe: Yeah. ’cause hers will roll into his and his will roll into vice versa. but yeah, the older person should do the conversions first. Yep.

How to Use Roth IRA Money in Retirement (Thomas)

Joe: Let’s go to Thomas. Have been, been building up a Roth IRA with annual conversions from my conventional, IRA each year staying within the 22 IRS tax brackets.

And under the first IRMAA threshold. I hear, I hear much about the importance of building up Roth IRA or Roth 401k, but I haven’t heard much about how to eventually use the funds in the Roth IRA when and why you take distributions other than to save in the Roth IRA to pass my heirs, Thomas.

Alright. We can straighten you out here. Okay. Background, I’m currently 66 and retired and we are living off of distributions from my traditional IRA with Social Security benefits soon to be added. I expect that my IRAs will last until age 95 to 100. I note that the tax cut and jobs act tax rates will be in effect for the foreseeable future.

I understand that in the case of a demise or either me or my wife, the surviving spouse would have to pay tax on one half of the current tax rate thresholds, which would put us in the 32% marginal tax rate. I understand that my Roth IRA conversions have a rolling five year limitation on withdrawal for each conversion.

My thoughts and distributions from the Roth IRA during my or my wife’s lifetime. First, Thomas, there’s no rolling five year because you’re over 59 and a half.

Al: Yeah. And that’s, a lot of people don’t get that. So if you’re under 59 and a half, yes. Every conversion, you gotta wait five years to access that principle.

But when it comes to being over 59 and a half, your good is gold. There’s as

Joe: long as you’ve had a Roth IRA for five years. For five

Al: years, yeah, let’s put that in there.

Joe: There’s no rolling five year, no, it’s just one five years. As long as you satisfy the five year clock on the Roth. On any Roth IRA, the conversions after 59 and a half don’t apply to the second five year clock.

That’s right. All right. So, and I bet all these questions have to deal with that. number one, save the Roth IRA for, so here’s this question about when to expand the, this, is what he’s thinking on how to spin the Roth. Okay. Alright, let’s, go. Okay. save the Roth IRA for potential large purchases such as real estate or motor vehicles or recreational VE vehicles, which we could otherwise require.

Taking a large distribution from my traditional IRA in a single tax year causing my taxable income to cross the higher marginal tax rate. None of these really apply to us. So why the hell you even brought? he’s thinking out loud. I buy a couple RVs and a boat. You know what, I would never ever do that.

So, I,

Al: don’t know about that, Joe. I mean, what if you wanna go on a big trip and he doesn’t talk about family members, but what if you want pay recreational vehicles? I recreational vehicle, but what motor vehicle? But what if he wants to go on a big cruise and invite the whole family? So that would be an extra expense.

That’s a big owl. That’s a big owl move. I know, but that’s, that could be expensive. is what?

Joe: Oh, yeah. You know, from,

Al: is what I’m saying? It’s God or, what If you move into like a retirement home, not a, nursing home. Retirement home. You could be my neighbor. Yeah, you could be your neighbor.

And, you know, the, you know, there, there’s independent living, assisted living and long-term care and independent living. There’s very little medical deductions, but it’s increased cost. So maybe you want the Roth for that. There’s a couple reasons there.

Joe: Alright. Save the Roth IRA for a possible future, time of increased taxes, including a surviving spouse pay, paying tax based on a single taxpayer income threshold.

The way to handle this would be take distributions from my conventional IRA through the 10 and 12% tax bracket each year, and then take Roth distributions for needs above that amount. Why waste a Roth to replace income that is taxed at the lowest rate? Exactly. So you’re right on point here. Yeah, I agree.

That’s perfect. Agree. That’s exactly why you want the Roth.

Al: Yes.

Joe: You wanna keep yourself outta those higher brackets as you’re creating income. You want control over your taxes as you’re creating income from the, different pools of money that you’ve accumulated over the years. So he has how much in the Roth?

Currently No. Did he even tell us? He doesn’t say so. He’s got a lot of money in the Roth and he doesn’t know because he is in the 32% tax bracket.

Al: he, will be a part of him dies or quantum of tax. Yeah. Yeah.

Joe: So yes, you don’t wanna take money outta the Roth if you’re in the 12 or 10, 12 or 22. But if you want more income or if you want go on the trip or if you wanna do other things, that will push you up into those higher brackets.

That’s when you start taking dollars from the Roth to keep that tax rate even instead of spiking up. You wanna also do the conversions to keep your income level as well. What we see is that if they don’t do the conversions, it’s gonna spike their income later in life. So you’re trying to just even out or control your tax brackets as much as you possibly can by looking at where rates today, where, rates are gonna be in the future, and using some assumptions.

In regards to go growth rates and what the demand for the portfolio is. So I think that is the best reason that he comes up with. Yep. So, please comment if this is correct or no, you’re right on point there. Agreed. So for your podcast chatter. Yeah. It drives a 2005 Buick LeSabre. Wow. When’s the last time you’ve seen a Buick LeSabre?

Al: probably the Buick opened was 20 years ago,

Joe: but 230,000 miles on it. Yeah. Good for you. Little Buick.

Al: Yeah. Yeah. That’s pretty good.

Joe: Ah, plan to keep it to the end. I paid $1,500 for it three years ago.

Al: take some money outta your Roth and buy a better

Joe: There you colors. Oh, my wife drives a 2015 Toyota RAV4.

And since she thinks that it’s old, we’ll replace it within a couple of years, with what we hope to be the last vehicle that we will ever buy.

Al: Wow. You’re 66. You’re not That’s it.

Joe: That’s it, man. He’s got the Buick, LeSaber, I think’s a beast.

Al: I can think of another reason why you do the Roth IRAs.

It’s because it’s for your kids, right? It’s a beneficiary account for your kids. It’s not your withdrawal, but it’s for your kids.

Joe: Yeah. That’s what he kind of mentioned that in the beginning. He is like, is there any other reasons for Yeah. Yeah. You leave it to the beneficiaries.

Al: Yeah. Yeah. I mean, that would be the third one, but

Joe: neither my wife nor I drink enough to have developed any preferences or ability to distinguish between drinks. Okay. So he could have a French 75 or, and drive something else on a Buick or like a whiskey sour and he wouldn’t be able to tell the difference.

Al: No.

Joe: Got it. Yeah.

Al: A, a, bitter beer or a sweet wine or French 75, like you say, French 75.

Joe: Yeah.

Al: All right.

Andi: Let’s talk about your year-end game plan. Thomas was wondering when he’ll actually use all that Roth money he’s been carefully converting – which is a great question for anyone thinking, “Wait, am I doing all this in the right order?” The truth is, the calendar is winding down, and your window for 2025 tax moves is closing fast. So now’s the perfect time to figure out whether your strategy still fits. Get your Free Financial Assessment with Joe and Al’s team of experienced professionals at Pure Financial Advisors. They’ll walk you through your income, taxes, and retirement goals to help you spot opportunities unique to your specific situation – before December 31st. If you’re not quite ready to meet, try our Financial Blueprint: it’s a free self-guided tool that shows how close you are to your retirement target. Either way, make sure you head into 2026 with clarity, confidence, and zero Roth confusion. Click or tap the financial assessment link or the financial blueprint link in the episode description to get started. Yours free, courtesy of Your Money, Your Wealth® and Pure Financial Advisors.

Can We Retire at in 7 Years at 62 and 65 on $3.5M? (Lizzy and Billy, TX)

Andi: I will say at the top of this one, I didn’t think you guys were gonna get to this email today, so I didn’t give you a recap. They’re 55 and 58. They got $3.5 million, 2.8 million in tax deferred, 720 in taxable, and $8K in their Roth. As you were.

Al: Good.

Joe: Hello. Great, Al, Joe, Andi, love your show. You guys make retirement planning entertaining. We are Lizzie and Billy from Texas. Texas, all right. Ages 55 and 58. We have two kids.

20, 22, 20 2-year-old is almost off the payroll, but the 21 or the 20-year-old. He was on the slow row train the slow train, Six years or so of college under grand plan. All right. Six years or so. It could be more. Could be. Could be less. Could be more. We have five cats in a snooky, doodle,

Al: schnoodle,

Joe: whatever the hell that is.

Andi: It’s a schnauzer poodle.

Joe: Okay. Everything’s a poodle nowadays. Everything. Yes,

Al: everything. Including our dog. We have a Cavapoo.

Joe: Cavapoo.

Al: yeah. Cavalier poodle. Actually, one of two questions ago, they had a Cavapoo.

Joe: Cava poodle. All right. We don’t really drink, but can always be convinced to drink a margarita or two when the occasion calls for it.

I drive a 2014 Honda Accord and Billy drives a 2025 MX seven hard top convertible. Okay. What is that mx? Is that a Mazda? Hard top convertible.

Al: that’d be my guess, but I don’t know.

Joe: My question is, can we comfortably retire at age 62 and 65? And when should we start our Roth conversions? You would like to spend $120,000 a year in today’s dollars.

Alright, so Lizzie, she’s got 175. Billy’s got 175. That’s what they’re making right now. Yep. Annual spending now is 168,000. Includes spending $48,000 to support the kids. Okay. Savings, pre-tax, 2.7 401k for Lizzie is 120. All pre-tax except for 8,000. Roth got a brokerage account, 700,000. They got cash of 20,000 5 29.

Plan is 90,000 house, 700,000 paid off. No plans to move. All right. Annual retirement income. Lizzie’s gonna have a pension of 12, so security’s gonna be 50. At 67, Billy’s Social Security’s gonna be roughly 50 at 67. not sure when to pull the trigger on Social Security. Depends on how we are doing once we retire.

Thanks for your thoughts. All right, so let’s just go to 67 to start big. Now, when do they wanna retire?

Al: So they want to, they wanna

Joe: retire 62, right?

Al: His her 62. His 65. Alright. Seven years. Seven years.

Joe: Seven years.

Al: They want to spend 120 in today’s dollars. Actually, here’s what I did, just to make it super simple. Okay? Like, what if they retired today?

Joe: Just, does it even work today?

Al: Alright, without doing a lot of math here, okay? Because I think it looks pretty good. They wanna spend one 20 pension’s, 12. That’s before Social Security. So the shortfall is 108. They got, three and a half, three and a half, 1 0 8 to three and a half. It’s that is what. 3.5%ish distribution rate. But I think they’re fine.

Joe: Of course right now there’s 3.1. Yeah.

Al: 3.1. They’re spending more than that ’cause of the kids. So I would put it this way. You could retire when the kids are off the payroll. How about that? I don’t really care if they’re off the payroll right now. I think you can retire. So, at, in seven years from now with more savings and the kids off to payroll, I think this looks golden.

Joe: Yep. All right. I would agree with that.

Al: Way to go, Lizzie.

Joe: Yeah. Good job. Alright. Okay, good day then, mate.

Andi: Yeah, G’day. Thanks very much.

Joe: We’ll see you all next time. Show’s called Your Money, Your Wealth®.

Outro: Next Week on the YMYYW Podcast

Andi: Next week’s YMYW isn’t even recorded yet, but I’m pretty sure sure it’ll get into tax planning around UGMA and 529 plan accounts for education for George in Torrance California and Suzanne in Detroit Michigan, respectively, the role of a health savings account in your overall pre-tax contribution strategy and at RMD age for Aaron in Cincinnati and Carl in Maryland, respectively. And there may be more, too. Make sure you’re subscribed so you don’t miss it.

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And if today’s spitballs got you thinking about when to make that Roth move, or if your savings are actually enough to hit your retirement target, now’s the time to find out, with a free financial assessment from Joe and Big Al’s team at Pure Financial Advisors. You don’t have to navigate all this alone. The experienced professionals at Pure will help you to see exactly where you stand today, find hidden tax traps, and design a plan to get you where you want to be, before the end of the year. Click or tap the financial assessment link in the episode description to book yours. You can meet in person at one of our nationwide offices, or online via Zoom – whichever fits your life best. There’s no cost and there is no obligation, so stop guessing and start planning with confidence.

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.

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