Retirement Finances Whether You're Married, Separated, or Single - 561

Summary

Episode Overview

Podcast: Your Money, Your Wealth
Hosts: Joe Anderson, CFP® & Alan “Big Al” Clopine, CPA (Pure Financial Advisors)
Episode: Retirement Finances Whether You're Married, Separated, or Single – #561
Release Date: December 23, 2025

This encore episode of "Your Money, Your Wealth" answers pressing listener questions about retirement planning in all kinds of relationship situations: married, separated, or single. Joe and Big Al combine upbeat banter with expert-level spitball analysis, covering questions about finances and marriage (including whether to tie the knot at a later age), navigating separation or divorce, retirement readiness for dual-income and single earners, Social Security strategy, handling unexpected home expenses, Roth conversion planning, and sustainable withdrawal rates. Notable for its candid, jargon-busting humor and financial wisdom, the episode offers tactical advice applicable to listeners at any life stage.

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Key Discussion Points & Insights

1. Should Old Bear Marry His Honey?

(Listener Question #1 – "Old Bear and his honey" in Northern Kentucky)
[01:09 – 08:31]

• Situation:

  • Old Bear (62), recently retired, $770,000 in taxable assets, $780,000 in retirement accounts, $1 million in Roth (tax-free), $200k mortgage, planning $440k remodel.
  • His girlfriend: 44, low income, two kids (14, 19), frugal, $20k in 401k, no debt.
  • They plan to live together, possibly marry after her child support ends (in 4 years).
  • Wants to know if marriage makes financial sense.

• Key Analysis and Advice:

  • On Marriage for Financial Reasons:
    “You never really want to get married for financial reasons, especially when you're holding all the cards here…” (Joe, 05:04)

    • Joe and Al both stress that marrying for love trumps financial reasoning; however, they acknowledge significant tax and Social Security benefits for marriage.

  • Tax Considerations:

    • With her low income, marriage could allow for joint filing, leveraging wider tax brackets (12% bracket doubles for couples).
    • Old Bear’s large Roth balance is rare: “How many people do you think … have over a million dollars in a Roth account?” “It’s very rare.” (Joe & Al, 02:18)

  • Social Security:

    • If Old Bear passes, spouse could claim his higher benefit.

  • Asset Protection:

    • With a large disparity in wealth, they recommend a prenuptial agreement or trusts to ensure assets go where Old Bear intends.
    • “At what dollar figure does it make sense to have a prenuptial agreement?” – “At any dollar amount, depending on your wishes… at the very least, a trust agreement.” (Andi & Al, 08:00)

  • Children and Timing:

    • Waiting until child support obligation ends before marriage to avoid jeopardizing that support is prudent.

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2. Navigating Separation and Divorce – Sebastian in Virginia

[08:40 – 15:13]

• Situation:

  • Sebastian is preparing for a separation and wants guidance on asset and debt division, protection, and long-term implications.

• Key Analysis and Advice:

  • First Steps:

    • “Inventory everything you have, what’s joint, what’s separate.” (Joe, 11:19)
    • Take stock of all financial assets, liabilities, and credit exposures.

  • Credit & Debt:

    • Separate joint accounts and credit cards where possible to minimize exposure.
    • Isolate responsibility for loans (especially the mortgage).

  • Division of Assets:

    • Most marital assets are divided equally unless inherited or clearly separate.
    • “Retirement accounts aren't equal to cash; you have to factor in taxes when splitting accounts.” (Joe, 12:17)
    • Cash is immediately accessible, while pre-tax retirement funds are not dollar-for-dollar equivalent due to future taxes.

  • Immediate Safeguards:

    • Secure documentation of assets (statements), separate credit, and open communication if possible.

  • Legal Help:

    • “Find an attorney that specializes in this because they're really the ones that generally do this…” (Big Al, 15:00)
    • A divorce attorney will ensure fair division, taking all variables into account.

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3. How Much Is Enough? Retirement Spitball for a Missouri Couple

[15:43 – 28:27]

• Situation:

  • Listener (52, “J.C. Penney and Laura Ingalls Wilder” reference) earns $170k, considering $120k less stressful federal job, plans to retire at 60.
  • Pension anticipated ($48k, survivorship for spouse, COLA), Social Security (combined ~$45k), $500k in TSP (some Roth), low mortgage, low cash reserves, $70k needed for home repairs.

• Key Analysis and Advice:

  • Overall Retirement Readiness:

    • “From a retirement perspective, he’s got $90,000 of fixed income. To generate that would require over $3 million (at 3% withdraw rate).” (Joe, 24:03)
    • Fixed income sources (pension and Social Security) set a solid foundation; TSP assets can fill remaining gaps.

  • Handling the $70k Home Expense:

    • Do NOT take a TSP loan:
      • “I do not take a TSP loan. I just take a conventional loan. 7% pay it, long period of time. That’s what I would do.” (Joe, 25:08)
      • TSP loans force you to repay with after-tax money, miss compounding in tax-advantaged accounts, and are limited to $50k.
    • Preferred option: Home Equity Line of Credit (HELOC) or other home loan; keep 3.25% mortgage intact, reduce TSP contributions temporarily if needed to accelerate payoff.

  • Spending & Withdrawals:

    • $17k annual retirement shortfall can be sustainably covered by existing savings at conservative withdrawal rates.

  • Health & Life Priorities:

    • “You gotta get your health. You’re young, 52. That’s the most important thing.” (Al, 28:04)
    • Given a recent health scare, reducing stress and not overworking is endorsed.

  • Memorable Moment:

    • “I’d find a new doctor, Big Al.” [re: doctor banning beer] (Joe, 20:30)

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4. “Paul with the Big Wallet” — Managing a Long Retirement "Gap"

[28:27 – 38:50]

• Situation:

  • Paul (59), wife also 59, income $500k (will drop to $250k for a year or two before retirement), $2M+ investment assets, $2M in home equity, plans to retire at 61, bridge years until Social Security at 70. Targeting $155k annual expenses.

• Key Analysis and Advice:

  • Sustainable Withdrawal Rate Concern:

    • “Burning down total savings during those years between is kind of freaking me out, but if we can end near 4% at age 66, I think we’ll be close.” (Paul’s letter, 33:03)
    • Joe and Al both express concern that a 6.7% to 5% drawdown rate (before Social Security kicks in) is too aggressive:
      “At age 60 … maybe a 4% distribution rate and you’re 6.7. … It’s just too far out of whack.” (Big Al, 35:04)

  • Mitigation Strategies:

    • Delay full retirement or keep working part-time longer than planned.
    • Seek to cut spending, if possible.
    • Consider claiming Social Security earlier or selling the vacation home to bolster savings.
    • “There’s really not much cushion here. In fact, I don’t think there’s quite enough to do it. But cutting spending would be one way to go. Working part time for a few more years would be a way to go. Selling your vacation condo, that would be a way to go…” (Big Al, 38:19)

  • Behavioral Take:

    • Liquidity can drop quickly in market downturns, especially when drawing large sums pre-Social Security.

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5. Aspiring Adventurer: Single, Ready to Retire Early in Oregon

[39:20 – 50:22]

• Situation:

  • 51, female, single, wants to retire at 58 (2032), $1.1M in assets, works in 911/public safety (eligible for $80k pension), hopes to travel and live off ~$100k/year initially.

• Key Analysis and Advice:

  • Retirement Readiness:

    • “Do I appear to be on track to retire at 58?” — “The answer is yes!” (Al, 44:28)
    • With $2M projected net worth at 58 and a large pension, shortfalls are minimal; 2.3% withdrawal rate pre-Social Security; will likely have a surplus once Social Security starts.

  • Roth vs Pre-tax Contributions:

    • Consider switching 457 contributions to Roth to increase tax-free income in retirement. At her current tax rate, this is advisable.
    • “I would totally flip, go to Roth. Now, her income is $128,000. You can do a backdoor Roth…” (Joe, 46:50)

  • Inherited IRA:

    • Does not count for pro-rata rule, so backdoor Roth is available.

  • Roth Conversion Ladder:

    • Depends on future tax brackets — "If you don't do that [Roth conversions], by the time you have Social Security and RMD, you’ll actually be in a higher bracket than you are now. That’s why you’re wanting to do this.” (Big Al, 50:03)
    • Continue Roth conversions after retirement, filling up to the 22% bracket if possible.

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Notable Quotes & Memorable Moments

• On Marrying for Financial Reasons:

  • “You never really want to get married for financial reasons, especially when you're holding all the cards here.” – Joe Anderson, [05:04]

• On a Giant Roth:

  • “A million dollars, that’s pretty impressive… We see millions and millions in retirement accounts… $0 in Roth.” – Joe, [02:36]

• On Divorce & Splitting Assets:

  • “Retirement accounts aren't equal to cash; you have to factor in taxes when splitting accounts.” – Joe, [12:17]

• On Home Repairs and TSP Loans:

  • “I do not take a TSP loan. … TSP loans, you have to pay back after-tax money… you never make it up.” – Joe, [25:08]

• On Sustainable Retirement:

  • “He can take his foot off the gas now because he needs $550,000 at a 3% distribution rate today. … And I believe he has more than that today.” – Joe, [27:02]

• On Uncomfortable Retirement Drawdown Rates:

  • “At age 60 … maybe a 4% distribution rate … you’re 6.7. … It’s just too far out of whack, at least for my comfort.” – Big Al, [35:04]

• On Single Retirement Security:

  • “You got a giant pension… By the time you claim Social Security, you'll probably be at a surplus.” – Joe, [44:30, 45:02]

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Timestamps for Important Segments

| Timestamp | Topic/Speaker(s) | |-----------|-----------------------------------------------------------------| | 01:09 | Old Bear’s marriage dilemma | | 05:04 | Joe on marriage for financial reasons | | 08:00 | Prenup/trusts for significant age/wealth gaps | | 08:40 | Sebastian’s separation/divorce spitball | | 11:19 | Taking financial inventory during separation | | 15:43 | Missouri couple: Retirement readiness, TSP, home repairs | | 20:30 | Joe jokes: “I’d find a new doctor” (about alcohol prohibition) | | 25:08 | Why not to take a TSP loan for home improvements | | 27:02 | Joe on sufficient retirement portfolios | | 28:27 | Paul with the big wallet: Withdrawal rate “bridge years” | | 33:03 | Listener unease about depletion before Social Security | | 35:04 | Big Al’s caution on high withdrawal rates pre-SS | | 38:19 | Solutions: cut spending, work part-time, sell second home | | 39:20 | Aspiring Adventurer in Oregon: Early retirement as a single | | 44:28 | Al: “The answer is yes!” (Can she retire at 58?) | | 46:50 | Joe: Flip to Roth 457 contributions for better future taxation | | 50:03 | Al: Continue Roth conversions to avoid future higher brackets |

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Podcast Tone & Style

“Your Money, Your Wealth” maintains a laid-back, highly conversational tone that blends comedy (and the hosts busting on each other) with practical, evidence-based advice. Listeners can expect both approachable explanations of complex topics and memorable zingers — e.g., Joe’s struggles with reading listener emails, Big Al’s quips about withdrawal rates, and asides about 80s TV reruns.

Joe and Al make finance accessible, candidly share trade-offs and "real world" perspectives (e.g., “Find an attorney…” “Take care of your health first.”), and always circle back to the importance of personal values, family, and health, not just dollars and cents.

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Summary Table of Key Listener Scenarios

| Caller(s)/Alias | Relationship Status | Main Issue(s) | Noteworthy Advice | |------------------------------- |------------------------|------------------------------------------|-----------------------------------------------| | Old Bear & Honey | Older man + younger woman | Whether to get married (financially) | Tax/social security benefits, manage asset risk, marry for love, use prenup/trust | | Sebastian (Virginia) | Separating | Navigating separation, asset protection | Inventory, split assets by type, separate debt, get legal counsel | | Missouri Couple | Married, midlife | Home improvements, early retirement move | Use HELOC, don’t tap TSP, focus on stress/health, fixed income > enough | | Paul with the Big Wallet | Married, high earners | Bridging to Social Security, withdrawal rates | Withdrawal rate too high pre-SS, delay retirement or reduce spending, consider condo sale | | Aspiring Adventurer (Oregon) | Single female, 51 | Retire at 58, optimize 457 and Roth usage| Yes, retire at 58; use Roth for 457 if possible, do Roth conversions, plan for inherited IRA |

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Conclusion

This episode delivers strategic, scenario-based retirement planning spitballs for a range of relationship and demographic circumstances. Whether you're contemplating marriage with an 18-year age difference, nervously entering retirement solo, or navigating a gray divorce, Joe and Big Al’s practical advice, humor, and engaging storytelling help demystify financial decision-making. The underlying message: There are always trade-offs, and expert advice can help you make choices aligned with both your wallet and your heart.

Transcript

[A]

Quick programming note before we get started. Just like 560 episodes, 561 and 562 are encores of shows from early 2025 that you might have missed. Now, you know we almost never do that, especially not three weeks in a row. So if you're curious, I'll fill you in after the disclosure at the end of the episode. Otherwise, enjoy this encore. Happy holidays. YMYW family. Financially speaking, should old bear in Northern Kentucky marry his honey? How can Sebastian and Virginia navigate his separation? That's today on youn Money, you, Wealth. PODC number 515 plus famous Missourians want to know how much is enough for retirement and when can you take your foot off the gas? Kim Paul with the big wallet bridge, the long gap between retiring and claiming his Social Security benefits, and can aspiring adventurer in Oregon retire at age 58? Click or tap Ask Joe and Big Al on air in the episode description to send in your money questions or to get your own retirement spitball analysis. I'm executive producer Andi Last, and here are the hosts of youf Money, you, Wealth, Joe Anderson, cfp, and Big Al Clopine, cpa.

[B]

All right, let's get right to it. We got old Bear and his honey, Big Al.

[C]

Okay. Northern Kentucky, huh?

[B]

All right. I discovered YMYW after I exited the workforce 15 months ago, and I've been binging your podcast ever since. It's the only podcast that I've listened to more than three times.

[A]

Dang, that's pretty good.

[C]

That's saying a lot, Joe.

[B]

Three times?

[C]

Yeah.

[B]

I can't believe how much I enjoyed listening to you while I'm working out trying to stave off the Grim Reaper as long as possible. In an older episode, Joe wanted to expand the range of questions, and he specifically mentioned relationship advice as a topic he wanted to explore. So here it goes. Should I marry this lady?

[C]

Oh, see?

[B]

I'm expanding our horizons.

[C]

Well, why not? This will be fun.

[B]

Yeah. Relationship advice. Okay.

[A]

Can't wait to hear this one.

[B]

I'm really good at it. Really good at it.

[C]

You are amazing.

[B]

All right, so here's the packs. He's 62, recently retired, no earned income anymore. Taxable assets is $770,000. He's got retirement accounts of $780,000, and he's got tax free assets of a million million dollars. Tax free assets. That's all Roth.

[C]

That's quite impressive.

[B]

In diversified stock funds, we see thousands of individuals. How many people do you think do we see that have over a million dollars In a Roth account.

[C]

I can't remember when. I mean, I'm sure we've had some, but it's very rare.

[B]

Yeah. Millions and millions in retirement accounts. Right? $0 in Roth.

[C]

Right.

[B]

Because they. Well, no, I don't. Never qualified.

[C]

Yeah, never qualified. Or, or maybe they just started doing something. They got 40,000, whatever.

[B]

Yeah, yeah, but a million dollars, that's pretty impressive. 62 years old, he's got a little debt, $200,000 mortgage. Soon will be spending $440,000 on a home reno. I anticipate about $50,000 in Social Security when I claim it at age 70. So the lady in question, all right, she's 44, works in a low income job. Most of what she earns goes to raise her two children, 14 and 19. She has full custody and receives child support from her ex husband. Savings is about $20,000 in a traditional 401. No debt. Very frugal. I love her so much because she is frugal. That is it. Love is the answer.

[A]

Yes.

[B]

We plan on moving in together when the home rental is completed this year. We intend to continue living in this sinful state at least until the children stop receiving child support in four years. Sinful sake. Does it make sense to get married? At this point, I will be 66 and on Medicare she'll be 48, probably still working for a bit, but not at full retirement age. Due to her career field, there's no expectation of a huge salary or an increase in her future. Our spending target will be about $90,000 a year. Today's dollars. We don't feel any pressure to get married. But from a financial perspective, does it make sense to do so at some point? And if so, when? The old bear and his honey. We like our margaritas.

[C]

Margaritas. Okay.

[B]

The old bear. I wonder if she calls him old bear and he calls her honey.

[C]

I'm guessing yes.

[B]

Oh, that's sweet. Isn't that cute?

[A]

I think this is the first time we've seen an 18 year age difference. That in itself is pretty impressive.

[B]

18 years.

[C]

Yep.

[B]

So what is he, 62? She's got a 14 year old and a 19. So when I'm 62, I'm gonna be like the old bear.

[A]

Yep.

[B]

I'm trying to have like a 14 year old.

[C]

That's about right.

[B]

This is.

[C]

Maybe this is you.

[B]

Yeah, this is just fast forward, right. You know, 12, 12, 13 years.

[C]

Not, not completely, but personally. So what do you think? Marriage advice, Marriage counselor?

[B]

Well, you never really want to get married for financial reasons, especially when you're holding all the cards here. But we, we, we've had this question in the past.

[C]

We have.

[B]

So does it make sense to get married from a tax perspective? I think yes, in a lot of ways it does because she doesn't have a huge income and you could double up the tax brackets as you're creating income of this $90,000 that you want to draw from. But on the other hand, he doesn't have that much tax deferred assets where he could draw and stay in the 10%, 12% tax bracket. Single. Because he's got such a giant amount in Roth.

[C]

Right. Although Social Security will add to it.

[B]

Sure.

[C]

Yeah. So first of all, I'm going to say you marry for love. Let's get that.

[B]

I wonder if Old Bear's ever been married before.

[C]

I don't know. But if you're strictly talking finances from a tax standpoint, yes, it's better to be married than not, because you have the same brackets when you're married, 10%, 12% and so on. But it's when you're married, you're much longer to get to the next higher income. To get to the next bracket.

[B]

Yeah. Like what? 12% is 50,000 roughly. Married to 100,000.

[C]

Yeah, at the 12% bracket. Right. And so, yeah, so. So from that standpoint, yes, it makes sense to get married. It also makes sense to get married from the standpoint that if you're older and you pass away, she would get your Social Security benefit, which would probably be greater than her own. So that would be a reason. Some of the cons financially is it's. It looks like old Bears got more money than honey. So make.

[B]

He's got two and a half million dollars.

[C]

Yeah.

[B]

20 grand.

[C]

Yeah. So. So make sure Old Bear, if you want the assets to go to her, great. But if you want them to go partially to someone else, make sure that you've got that figured out in a trust or will or something of that sort. But, yeah, financially, sure, why not? Except for waiting for the child support, which is. Yeah, once. Once she gets married, she probably wouldn't get the child support. So that makes sense. But I, I don't really ever want to say get married because of finances. You get married because you're in love. And in the financial part, Old Bear does make sense.

[B]

Yeah. It's two stepchildren right out the gates. Yeah.

[C]

Yeah.

[B]

And then he's going to do something and then they're going to say, you're not my dad, Old Bear.

[A]

Wow. This sounds like it's coming from experience.

[C]

They are going to say that, aren't they?

[B]

You can't tell me what to do. You're not my dad. Go find Honey Bear. All right. Well, yeah, I agree from a tax perspective, but I don't know. You got a lot of money. You've done really well. You love her so much, though, Bear, why don't you go for it? Just invite Big Al to the wedding.

[C]

To me, that was the key. I love her so much.

[A]

I've got a question. At what point or at what dollar figure does it make sense to have.

[B]

A prenuptial agreement at any dollar amount?

[C]

Yeah, it depends. Like, for example, let's say Old Bear has no beneficiaries and he wants it to all go to her, then great, no big deal. But as long as Old Bear has a beneficiary, then yes, you want a prenuptial or at the very least, you want some kind of trust agreement stating where those assets go to when you both pass away.

[A]

Thanks for that.

[B]

Yeah. At 62, he's not getting younger, but he's at the gym. He's grinding out at the gym, getting chiseled.

[C]

She's going to keep him young.

[B]

44.

[C]

Yeah. All right.

[B]

Okay, here we go. Hey, Joe. Al. Love the show. Been listening for the last few years. I'm currently in the process of preparing for a separation. It would appreciate your expertise in navigating the financial aspects of this transition. Specifically, I'd like your guidance on the following. So we got Big Bear was loving. And then we got Sebastian here from Virginia. He wants to go the other way. Yeah, he's going the other way. Specifically, he wants some guidance here. Big Al, number one, how shared assets and debts are typically divided and how can I protect my financial interests. Okay, where's he at? Virginia? Yep. All right. Immediate financial measures I should consider to safeguard my finances during this period. And third, potential long term financial implications such as taxes or impacts on retirement accounts and strategies for planning ahead. Any help in spitball would be extremely helpful. Okay. Not a lot here.

[C]

No.

[B]

I'm going through a separation, gone through a divorce. What are the steps I should be taking at this point?

[A]

Well, you know, something else to take into consideration. I've seen people who have gotten separated, been separated for six months, a year, something like that, and gotten back together, and so they never actually got divorced. So he says he's going into a separation. Do we know that? They're going to end up divorced. So what do they do in the interim time?

[C]

Yeah, good question.

[B]

I Think go to counseling and try.

[C]

To work it out.

[B]

Work it out.

[C]

I think, Joe, depending upon their relationship and how serious. I think you bring up a good point, Addie, how serious this separation is. Maybe you've got certain things that are joint credit, like loans and credit cards. Maybe you want to separate that. If you don't fully trust your partner, maybe you want to get your own credit cards, have her get her own credit cards and so forth. If there's joint loans, maybe try to work at separating those. Now joint loan typically is like a mortgage, for example. And so the mortgage would probably go with whatever spouse would get the property. Typically one spouse would get the property, the other one would get other assets or the property would be sold and the assets would be split. So, so I think maybe look at your, look at your joint credit, figure out what you want to do with the home, if you have one and if you want to sell it, it makes it easier. If you want, if you want to keep it, then it would be much better to get your name off the loan and just have your spouse or if you're in the loan, just have it be your name and so your spouse isn't on it.

[B]

I think number one is inventory. You want to take a look at exactly what you have, what she has or he has and she has. What do you have in joint? What do you have? Do you have a living trust? Do you have retirement accounts? So just take the inventory of exactly what you have. You know, al you touched on the debts, but assets in most cases get split evenly. Depending on how those assets came to be, did you inherit them, are they still in separate property or did you grow them together? But I would assume that, you know you're going to split those evenly. Couple things and couple mistakes that we've seen too. Is that retirement accounts, if they have a big IRA or 401, let's say you do or she does or vice versa, you can't look at that entire account balance because you have to pay taxes to get those dollars out. So I'm married and let's say I have a million dollar retirement account and we also have a million dollar home with no debt on it. It's like, okay, well you could take the home at a million dollars and I'm going to take the retirement account. Well, that's not necessarily a fair split just because I have to pay ordinary income tax to get out of my retirement account. Depending on what the growth is of the primary residence, you could get the 121 and it's capital gains tax. So I think you take inventory. You want to take a look at everything that you have and then kind of go from there to say, all right, well, if it's going to be split evenly, what should that look like moving forward?

[C]

I think, Joe, that's such a good point. Let's say you have $500,000. You got 250,000 in a cash account, checking account, and 250,000 in a retirement account. Those are not equal because the cash account you already paid tax on, the retirement account you have not. So you got to figure out the estimated tax from that to get an equivalent number.

[B]

Yeah. Or if you had $250,000 in a Roth versus a $250,000 retirement account, that Roth is worth way more.

[C]

Correct. Because there's no taxes to be paid.

[B]

And you paid a bunch of taxes trying to get it in there already. Right. All right. Immediate financial measures. So I think you do that. I mean, how to safeguard your finances? If you have an inventory of what you have and you have the statements, so that's your inventory. So that safeguards at least the spouse or the can't take the money and run.

[C]

Right.

[B]

There's record of that, but I think you said it right, too. With credit cards. It could run up credit cards on you. I know we've seen that in some terrible divorces, you know, long term financial implications. Yeah. You're going to lose half your assets.

[C]

Yeah. And what's typical? I'm not sure anything's typical. It depends upon the situation. What I've seen is either the house is sold or one spouse or the other gets the house. And if one spouse gets the house, the other house gets more assets. Right. Because they got to be compensated for the one partner or one spouse getting the house. So you just have to do the math. And when you do the math, as we said, the retirement account is not as valuable as a, like a non retirement account or a Roth, which is even probably better because that's all tax free.

[B]

Yeah. If you're miserable, though, you know, I don't know, I would go just start over.

[A]

You wouldn't go to counseling?

[B]

Oh, now, No, I would not go to counseling. I'm just punching. I'm just.

[C]

You're done. You're done. Well, I mean, so well. Right.

[B]

I mean, I know people stay married for a long time just because they don't want to pay their spouse dollars.

[C]

That's right. Yeah. I know it happens a lot.

[B]

I'll cut a check tomorrow if I was that, you know, My spouse cheated on me or something like that. I don't know. But that's just me, I guess. Yeah, there is significant financial implications.

[C]

I think the best thing I would say is find an attorney that specializes in this because they're really the ones that generally do this, the split, and they'll take care of all these things that we're talking about and make sure that you haven't missed anything.

[A]

So many retirement planning strategies are for married couples, but what if you're getting separated or you're divorced or you're single? Watch. Going navigating your financial future. Single. This week on youn Money, you, Wealth tv, Joe and Big Al empower you to map out your journey, create a budget, manage debt, and strategize for retirement on your own, whether you're a single baby boomer, Gen Xer, or millennial. Check it out and download the companion guide just by clicking or tapping the links in the episode description.

[B]

Moving on here, Big Al. Let's see. Famous Missourians, JCPenney and Laurel. Laura Ingall Wilder. That's Little House on the Prairie.

[A]

Yes.

[B]

Missouri.

[A]

Yes.

[B]

Iowa. Or that isn't it?

[A]

No. Well, Laura Ingalls Wilder is famous, is a famous Missourian. So at the end of this email, they say, we can't come up with a cute couple name, so we're asking you to do it for us. So they said they were from Missouri. So I found the two most famous people I could find in Missouri, but.

[B]

Laura Ingalls and her father's name was Charles.

[A]

Why do you know that?

[B]

Because it's Wilder was like James Wilder that Laura married and then she had a sister named God Debbie. Who's that? And then she turned blind. Come on, who's with me?

[A]

I'm shocked that you know all this.

[B]

Penny. Little Penny.

[C]

I think I saw this show. It was Penny's 40, 50 years ago. How do you remember that? You weren't even.

[B]

I have a steel trap. My memory is a steel trap.

[C]

I guess so.

[B]

No, my, my parents loved this show and they just would reruns over and over and over and over again. And then in Minnesota, they would play. When I was in high school, they would play Little House on the Prairie reruns on, you know, the local channel. Got it, Channel nine. You know, that wasn't ABC or CBS or NBC affiliates.

[C]

And that was your favorite show?

[B]

No, that was the only thing on. So I don't know. My parents loved it. And so I was like. But yeah, I don't know. I can't believe I just admitted that.

[A]

Me too.

[B]

Yeah, I knew the whole thing, but I thought it was Iowa. I think it was Missouri.

[A]

That might be the case for the actual TV show. But Laura Ingalls Wilder, the writer of Little House on the Prairie, is famous for being from Mansfield, Missouri.

[B]

Oh, see, I didn't know that there was an actual Laura Ingalls Wilder.

[A]

She's the author of the Little House on the Prairie books for children.

[B]

Oh, wow. Okay, there you go. There you have it.

[C]

All right. Do we have a question?

[B]

Yeah, we got Dear Joe, Big Alan, Andy. I'm 80 and have about $30 million. There you go. Laura Ingalls Wilder. Three personal houses, a city full of rental properties, and a trust fund. She's got a whole city, Al.

[C]

Yeah, whole city.

[B]

Oh, man.

[C]

In Missouri.

[B]

This is great. I was wondering if I have enough to retire. Yes, you're good, hun. Not really, but this is what I keep hearing on your show, and I just can't seem to relate to some of the content. I also wonder to myself, how much is enough? And at what point do I start to take the foot off the gas and do I actually have enough? Oh, all right. So here's the real deets.

[C]

Okay.

[B]

He's not 80 and has $30 million in three personal homes in a city full of rental properties.

[C]

What is the real deed?

[B]

Here's the deets, man. I'm 52, wife's 53. We live in KC, Missouri, and I'm the primary source of income as wife is busy with the grandkiddo who lives with us, and we take care of our aging grandparents who live nearby.

[C]

All right.

[B]

I drive a 2013 Corolla. My wife drives a 2020 Sienna minivan. I listen to your show while walking in the mornings and love it. Boom. I think you guys have great chemistry. And I like to hear Joe read the letters, which I'm. Why does everyone love me? Just bumble.

[C]

It's comic relief. They like it.

[A]

People love the authenticity, Joe, because just.

[B]

Learning how to read.

[A]

Along with your kid.

[C]

Yes, you are improving.

[B]

Oh, man. You should hear the stories. Once upon a time, you can start.

[A]

Reading the Laura Ingalls Wilder books.

[B]

Oh, love it. I like to hear Joe read the letters, which is why I'm writing and not recording this. I look forward to the new episodes each Tuesday and disappointed when there's not one. During the holiday season, there's always one.

[A]

It's just sometimes a compilation. But understood JCPenney.

[C]

Okay.

[B]

All right. We have three cats. My wife likes a good craft beer and a hard cider and I'm a big fan of Hefavison, but my doc has recommended no alcohol. And that sucks.

[C]

That does suck.

[B]

That sucks. That's terrible.

[C]

You're. Can you imagine being 52? And Doug says no more.

[B]

I'd find a new Dr. Big Al, easy as that.

[C]

Got a second opinion?

[B]

Second opinion. I'm in health care and I won't tell you what I do because those jokes just write themselves. Currently making about $170,000 a year, but will most likely be taking a lower job paying about 120 for less stress and write out my career with the federal government. I've been working for the Feds for about 22 years and plan to retire at age 60. I'll get a first supplement, 75% of my SS in addition to my pension for a couple of years from 60 to 62. Then start Social Security at 62 and my wife will start Social Security as well. My pension will be roughly $48,000, less 10% so wife can keep 50% of my pension after I kick it. Pension gets a diet cola annually. Oh, that's kind of cute.

[C]

I like that.

[B]

Yeah. Estimated Social Security for me is $30,000 and the wife would be half of mine. So 15,000 total. So we would have fixed income of about $90,000. I have roughly $500,000 in my TSP account with $100,000 of this in the Roth. Don't have a bunch of cash, but have about $10,000 in savings account and $10,000 in a separate IRA. Currently have about 24% going into my TSP with 18% of that going into the Roth. But we'll reduce that amount if I can do about 10% if I take that lower paying job.

[C]

All right.

[B]

We have a house that we owe about $115,000 on and we currently worth about $450,000. Not super interested in refinancing as it's 3.25% rate. One more wrinkle. I have about $70,000 worth of work that needs to be done at the home. I was not anticipating this. Do I take that out of the TSP loan at 3.4% payback over five years. Do I take out a conventional loan to pay it, but then interest is like 7% and pay it off over a longer time period. How do I approach this? I anticipate our future spending in retirement will be about $105,000 per year. So the shortfall will be $17,000. I have a couple of spreadsheets, but I'm not an engineer. I think this can work and even maybe have a bid for emergencies or extra travel if necessary. But was wanting to spitball to see if I'm on track or am I missing something or if there's a glaring detail that would derail my retirement plans. I can always work a couple more years to age 62 and that would increase my pension by about 10%. But I sure do hate trading away my life as I had a health scare. Almost took a dirt nap last year. That definitely made me rethink some things. Love what you guys do. Keep up the good work. Best regards. Can't think of a cute or funny name or funny couple name. So leaving it up to you. So there you go. You got J.C. penney and Laura Engle Wilder.

[C]

That's quite a name. Quite a combo.

[B]

I don't know if that's funny or cute.

[A]

Hey, I got a great story out of you though.

[B]

Yeah, true. There you go, man. Little health scare. Those are always. You know. That sucks too.

[C]

That does. Almost took a dirt nap. That. That doesn't sound good.

[B]

That doesn't sound fun. No, no.

[C]

That must be why you can't drink alcohol.

[B]

Yeah. A little health scare.

[C]

Yep. The more than little.

[B]

So. Okay, okay. Let's see.

[C]

So I get the question is how to fund $70,000 worth of improvements that need to be on the home.

[B]

Yep. Well, so $17,000 shortfall. At $17,000, let's. Oops. 17,000.03. So let's say at a 3% burn rate, that's $560,000. And he's got that. So I agree with him. I think from a retirement perspective, he's got $90,000 of fixed income. You know what, so $90,000 just. If I were to generate $90,000 of fixed income that was guaranteed Al, I would need over $3 million. Yeah. Right. You agree with that math?

[C]

I do. At age 60.

[B]

Yeah. When he's saying, oh, I don't know if I relate because everyone has all these dollars. I mean he's got the equivalent of several million dollars himself.

[C]

Right. So.

[A]

Right.

[B]

Anyway.

[C]

Yeah, yeah. No, I like this. But how do you pay for the loan? I mean, how do you pay for the home?

[B]

I do not take a TSP loan. No. I just take a conventional loan. 7% pay it over a long period of time. That's what I would do.

[C]

And why wouldn't you do the TSP loan?

[B]

I don't know. Because I'm paying after tax dollars to put back into pre tax.

[C]

It is tricky when you do that. Right.

[B]

I hate that. Yeah.

[C]

Because you get the money for tax tax free, but then you're paying it back. You have to pay tax on that money, and then the net you pay back and it seems like it takes forever to pay off.

[B]

Yeah. I've taken out a 401k loan long, long time ago. And I was like this. I. I don't want to touch that.

[C]

Unless it's an emergency.

[B]

Yeah. I think he could qualify for just a conventional loan.

[C]

I might get a home equity loan. Keep the conventional loan. Try to pay it off as fast as you can. Maybe. I hate reducing TSP contributions, but he's got so much fixed income. Maybe you reduce it a little bit. Try to get that thing paid off in five years with a HELOC. Keep your 3.25% rate intact. I'd also probably figure out this is 70,000. Is that a hard number? Can that be slow played? A little bit?

[B]

Yeah. Well, I mean, a TSP loan, he can only take off 50 grand anyway.

[C]

True. That's true. But I agree with you. I wouldn't do tsp. I get a home equity loan and I try to. I would just try to pay that thing off more quickly by probably reducing my money going to the TSP for a few years.

[B]

Yeah. The $70,000, gone. So you miss out on the compounding effect of the $70,000 growing in the overall account, and you got to pay that thing back with after tax.

[C]

You never make it up.

[B]

Yeah. Yeah. I'd much rather just take. Yeah, I like the heloc. That's what I would do, too.

[C]

Yeah. And plus, if. If you don't get that paid off by the time you retire, then it's all taxable. So that can be dangerous, too.

[B]

Yeah. If you take it out of the tsp.

[C]

Yeah.

[A]

So how much is enough for retirement? When can he take his foot off the gas?

[B]

He can take his foot off the gas now because he needs $550,000 at a 3% distribution rate today. So that means he needs $566,000, and I believe he has more than that today.

[C]

Yeah.

[B]

$520,000 today at $52,000.

[C]

But I bet you the pension doesn't really kick in until 60.

[B]

Yeah. So let's say if he stops saving entirely, that 522,000 at age 62 is going to be a million bucks. Roughly 7% over 10 years. Might be a little bit less, might be a little bit more, but on average, you know, 10 years. So now you have a million dollars. 3% on a million dollars is 30 grand. He needs 17. Let's say that 17,000. Give inflation over 10 years. Maybe he needs 25. 3% of a million is 30.

[C]

And by then he can probably get by with 3.5% distribution.

[B]

Sure.

[C]

Yeah. I think I would take the less stressful job. I would reduce the TSP contribution.

[B]

Yeah, you got to get your health. You're young man, 52.

[C]

That's the most important thing right there. And then get a heloc and then just reduce the TSP contributions. Try to get that thing paid off as soon as you can.

[B]

Yeah. Well, I'm glad you're still with us. And, yeah, just I have to booze for a little bit, get a little workout, take a less stressful job, and then you're right back in the game.

[C]

Then you can drink again.

[B]

Just right back there. Right back in it.

[C]

Hefenweizen.

[B]

You have a Hefenweizen? Let's get those on ice. Okay, we got Paul with the big wallet. Hey, Andy. Joe. Big Al. I asked a question that you answered in 2023 on Roth conversions. That's not the topic here. In Joe's reference to me as Paul with the big wallet has stuck as my new nickname with my kids. So thanks for that. Big Paul.

[C]

I wonder if that's good or bad.

[B]

Big Paul's got a giant wallet. Kids love it. They want to get into that wallet.

[C]

They probably do.

[B]

I look forward to the podcast each week, and I have learned so much over the last few years. Besides, the content highlight for me is Joe's reading. When rushing through the question and pronouncing words like Hyundai, Tucson is tucks in.

[A]

It's Tucson.

[C]

Exactly. Whatever you're still doing, it'll do it.

[B]

I'm still calling it Tucks Comedy gold for me.

[C]

See, whether it's intentional or not. Huh?

[B]

Even especially because it's unintentional. It's definitely unintentional, my friend. Do you think I come here every week just to sound like a complete utter?

[C]

It gets a laugh. Maybe you do.

[B]

People are like, your role at the firm is what again? I'm hoping for a little spitball on our situation that involves what I'm hoping to be relatively meet with these other firms. They're like, yeah, listen to your podcast. I was like, We got a couple. Joe Anderson's on staff. All right, back to Paul with the big wallet. Why did we call him Paul with the big wallet? He must have giant gaps.

[C]

He must have a lot. Well, we'll find, I guess, we're going to find out. He's going to tell us.

[B]

All right. He's hoping for a little spitball in our situation that involves what I'm hoping to be relatively long gap between me retiring and starting to draw Social Security and what kind of withdrawal rate makes sense during those years versus the years receiving Social Security. We call that bridging the gap, Paul. Bridge the gap. We got to build a bridge. Details. Wife and I are 59 and have a job that my wife no longer does. Kids launched. I'm looking to go halftime at 60, retire at 61 or 62. Current income is about $500,000 and halftime income for those one to two years is expected to be 250. I'm hoping it's one year instead of two years for the halftime work. All right. He's got conventional tax deferred accounts of $1 million, brokerage company stock of $1 million, equity in the home and vacation condo of about $2 million. Low interest loan on the home is $100,000. We're saving about $180,000 per year over the last several years and plan to maintain that until I go half time then saving about $50,000 that year or years. So by age 61 I'm expecting to have $2,300,000 saved. That's why he's got the big ass wallet.

[C]

That's a pretty good wallet.

[B]

I'm not going to wood as I type that we will have about $250,000 in inheritance coming, but hoping that will not be until around age 70. So I tend to ignore it. Social Security will be me at 60, 40,000 or at 70, 55. Wife at 66 will be 15 or 20. No pensions for either of us. Looking at expenses during retirement to be about $150,000 a year. Question finally. Thank you, Paul. What I'm looking for is spitballing. How do we evaluate the years between retiring and taking Social Security when ballparking withdrawal rate. If I use 61 to retire, which is what I'd like to do, we will have five years without Social Security and drawing down on what will be $2.3 million pretty quickly at $155,000 a year, at 6.7% burn rate at 66 when Social Security kicks in, I'm thinking we'll have $1,800,000 left in drawing down closer to 5 expenses at 155, lesser Social Security at 55. We can get that to 4% by selling our vacation condo at that point for about $550,000, which we will not have an issue doing. So to make our numbers work, if it looks like we need to do that. All right, ballpark spitball. Does this look like we're on track? We're on the right track. Burning down the total savings during those years between.

[A]

In those in between years.

[B]

Yeah, burning down the total savings during those in between years is kind of freaking me out. But if we can end up near 4% at age 66, I think we will be close. My last question to you in 2023 was related to Roth conversions as a high earner, you guys were split on doing it now with Al saying, I could do it, but he probably wouldn't only do a small amount. We didn't get a small amount to do, but we opened up a fund. Roth accounts. But we'll wait until we drop our income during the halftime working years to do more. Occasional Coors Light or a heavier craft beer for me, little red wine for the wife. No pets currently, but a spur of the moment decision to get a rescue dog is never too far away. Paul with the big wallet. All right, Paul, I don't know if I care for those numbers all that much.

[C]

They don't quite work out, do they?

[B]

Hold is big Paul.

[C]

Paul is. They're both 59.

[B]

Oh, yeah.

[C]

Yeah.

[B]

He wants to retire two years.

[C]

Yeah, he wants to. Let's see, at age 61, he wants to work halftime. Or let's see, I'm looking to go halftime at 60 and retire at 61 or 62. He goes from $500,000 of income to $250,000. I hate to say this.

[B]

So he wants an eight year bridge to get it to age 70.

[C]

Yeah, Paul with a big wallet. I, I would work halftime a little bit longer than one or two years, I think, based upon that spending. Now, if you could cut the spending, the numbers work better. But what I think what we're looking at at age 60, you know, maybe with Social Security coming, maybe, maybe a 4% distribution rate and you're 6.7, you know, maybe a 4.5% distribution rate, but it's just too far out of whack, at least for my comfort.

[B]

I mean, you could run scenarios all day long, right? You get the financial planning software out, you plug in the numbers, you put in the assumptions, and I think the numbers would say it would be fine. But I think Paul with the big wallet is smarter because he's already doing the spreadsheets himself. And he's like, man, I'm going to burn $155,000 from my account with no other fixed income for six to seven years until he takes Social Security. I mean, that's a huge amount.

[C]

I'd be uncomfortable, right?

[B]

That 2.3 million, he's running it as, like. Let's just assume I get a certain rate of return. How about if the market blows up.

[C]

Or goes down in that period of time? Which it could.

[B]

Well, that's what blows up. Me.

[C]

Yeah. Okay.

[B]

That means bad. The market's really bad.

[C]

Thanks for educating me.

[B]

I mean, right? He's like, oh, my God. Now, my big wallet is not a big wallet. It's like a purse wallet or it's like a coin wallet.

[C]

Right.

[B]

You don't know what that is? You know what a coin wallet is?

[C]

I know what a coin wallet is. You shouldn't know. You're too young.

[B]

Well, my parents used to play a lot of poker.

[A]

They were watching Little House on the Prairie.

[B]

Yeah. Well, as they were watching Little House.

[C]

On the Prairie play poker.

[B]

Yeah. And they had, you know, they built play for quarters and dimes, so they have these little coin wallets.

[C]

Well, I guess that's what I think. I think you either cut spending or you work part time for a few more years to make this work. That's what I would do anyway.

[B]

Well, how about claiming Social Security a little earlier?

[C]

You could.

[B]

So at 66, he's got 40,150. So he's 105.

[C]

Maybe you claim it on your wife first and let yours run a little bit more. I still would want to work a little bit longer, I think.

[B]

So let's say he claims at 66. He'll probably need about $2,700,000. At $66,000, if I'm looking at a 4% distribution rate, he's got $2,300,000 right now.

[C]

Right.

[B]

So he's got $2 million today. That $2 million at $155,000 burn rate. The equity in his home condo. $2 million. I don't know. He could.

[C]

Well, and he's got a potential inheritance, but you always hate to count on that.

[B]

Yeah. The vacation Home's worth 500.

[C]

Yeah. And I don't know, is that net of closing costs and taxes or. I don't know. It's tight enough that I would want to kind of run some scenarios with different things. Maybe if you take Social Security at 64, maybe this works better. I don't know.

[B]

I keep going back to the behavioral aspect of this, is he feels like he's got a Big ass wallet because he does. It's $2 million. But that $2 million after a couple years of retirement, taking 150 grand out. So over two, three years right now that's 300, 450, $500,000. The market doesn't cooperate with you now that 2 million is one and a half.

[C]

It can happen, right?

[B]

He's going to feel a lot more comfortable with that. Two in front of it versus a one.

[C]

I guess what we're saying is there's really not much cushion here. In fact, I think there, there's, I don't think there's quite even enough to do it. But cutting spending would be one way to go. Working part time for a little bit longer would be a way to go. Selling your, your vacation condo, that would be a way to go all these things. I think you kind of do all three simultaneously and then I would feel more comfortable. I not sure I'd feel comfortable with this scenario. Jim.

[B]

Yep. Tend to agree with you on that one.

[A]

Have you given our financial Blueprint tool a try yet? It's a free and self guided way to calculate the likelihood that you'll have a successful retirement. Click or tap the financial Blueprint link in the episode description. Input your current cash flow, your assets and your projected retirement spending and it will output a detailed report with three different scenarios that map out your possibilities with actionable steps you can take now to achieve your financial goals in the future. Get your financial blueprint for retirement. Click or tap the link in the episode description to get started.

[B]

Let's see, we got an Inspiring adventure. Oregon. That's the name. Inspiring Adventure.

[A]

Aspiring adventurer. Yes.

[B]

That's what this person put in.

[C]

Yes. Wow.

[B]

Greetings all. Really enjoy the show. I didn't know I liked financial podcasts until I came across yours. Oh wow.

[C]

How about that?

[B]

Live in Oregon. I'm 51 year old, female, single, no kids. No. I don't drive a Subaru. Oh, B.S. you had one before. Guaranteed. Guaranteed. You live in Seattle, you got a Subaru. I drive the 2019 Mazda CX5. With the girls, I drink a little pear ginger lemon drop. Oh, with the boys, I typically like an Irish mule. Oh, very good. I have no dependents, no family, financial responsibility as both parents are now deceased. I would like to retire in the spring of 2032 at age 58, which is when I'm eligible for my pension. I've worked in the 911 public safety industry for over 30 years and I'd really like to be done the 911.

[C]

I don't blame you.

[B]

Yeah. So is that like dispatch or police person? Fire person.

[C]

Doesn't say. But whatever it is, I don't know. It's stressful.

[B]

Yeah. 911. I would not want to do anything with the old 911 for 30 years.

[A]

Imagine that.

[B]

A lot of stories.

[C]

Yeah.

[B]

No wonder why.

[A]

Aspiring adventurer has built up some resilience.

[B]

I would be drinking these pear ginger lemon drops after every shift in an Irish Mule.

[C]

Both. Yep.

[B]

I'm looking forward to less trauma, less drama and more travels exploring with the dog. The rundown 128,000 current salary. Typical 3% COLA every year until I retire. 2032 $30,000 yearly contributions in the 457 can either do Roth or pre tax. Currently pre tax due to taking inherited IRA distribution. This keeps my MODGI low enough to fully contribute to the Roth IRA. Max contributions to HSA and Roth IRAs. My home is worth $350,000. Plan to retire in it. Here's the savings. $53,000 in cash emergency funds, $320,000 in a brokerage. $28,000 in HSA. $220,000 in the $457,000 pre tax. $100,000 in the Roth $61,000 in the Roth IRA. $182,000 the IEP account. Individual account that is part pension system. Pre tax money that will be rolled into my 457 at time of retirement. $154,000 in inherited IRA that needs to be emptied out in 2032 to the secure 2 point projected retirement income. $80,000 estimated pension. Okay, that's pretty cool.

[C]

That's great. And by the way, about $1,100,000 in assets.

[B]

Hell of a job you got. $3,300 a month in Social Security or $41,000 if she waits until age 70. I think I'll need about $100,000 to live in. My guarantee, you drive a Subaru. If you're saying go go years as I want to travel for the first five to 10 and then get closer to $80,000 in my slow go years. Alan, are you in your slow go years or are you in your go go years?

[C]

I'm still in the go go years.

[A]

He's in the hyper go go years.

[B]

I didn't do a great job saving early on, so I'm trying to do the best I can to make up for it. I know you like the Roth money, so here is my spitball question. What color Subaru should I be purchasing upon retirement?

[C]

That would be good.

[B]

Just kidding. Do I appear to be on track to retire at 58? Should I go back to Roth contributions in my 457 and not to worry about pushing myself out of the income window for Roth IRA contributions? Since the Roth contributions in the 457 would be more Roth dollars, then should I take the $8,000 I would normally put into a Roth IRA and put it into my brokerage account instead? Go roth in the $457,000. You can always do a backdoor Roth. You don't have any IRAs.

[C]

Yeah. And the inherited IRA doesn't count for your own IRA. So yeah, you don't have any IRAs. So the pro rata rule doesn't count. It doesn't. Aggregation, doesn't account.

[B]

Do I need to plan a Roth conversion ladder in retirement?

[A]

What is that? I've never even heard of that.

[B]

They're just converting dollars every year.

[C]

Yeah, just. Just one year after another. Like a little ladder. Yeah. Well, let's answer the first question. Do I appear to be on track to retire at 58? The answer is yes.

[B]

Absolutely. You got a giant pension.

[C]

And I'll give you some numbers. 1.1 million today, seven years, 6%. You're adding about 40,000 a year. You end up about 2 million DOL. At a 6% return, you're spending at that point. Seven years from now, $100,000 will be $125,000. Your pension is $80,000. Your shortfall is $45,000 into $2 million. That's a 2.3% distribution rate that doesn't even include Social Security. So this looks really good. So yeah, you're on track for sure.

[B]

Yeah. By the time you claim Social Security, you'll probably be at a surplus. You'll have more fixed income than what you're spending.

[C]

That's probably true. Yep. Yep.

[B]

So.

[C]

So this looks fantastic.

[B]

Yep. My income will dip from what it currently is. Plus the inherited IRA distributions. I might go down one tax bracket. I don't have millions of pre tax. So would be spending plan. So would a spending plan to spend down the pre tax money first be the way to go or do I need to think about doing Roth conversions? Thank you for any input. I've learned a lot from your podcast in a very short period of time. Much appreciated. Happy holidays. Happy New Year, aspiring advice adventurer.

[C]

You know, I just got back from Australia and they say adventure, adventure, adventure. So that's kind of like that word.

[B]

Got it. What's the cliche? What do people say? In Australia. Andy, aren't you from Australia?

[A]

Put another shrimp on the barbie.

[B]

No. There you go. Yeah, a little shrimp on the barbie.

[A]

But they don't actually say that. They call them prawns.

[B]

Prawns, prawns, prawns and prawns.

[C]

We were, we were on a tour and we. You keep hearing things like, look at the agriculture. It's like, okay, this is an adventure. Look at that structure. I got that, that part of the lingo down.

[B]

Wow. Man. I feel like I'm in Australia right now. Roth conversions. Let's see what does she. Here's what I would do. I would totally flip. Go to Roth. Now her income is $128,000. Current salary. Your salary is going to be $80,000 plus Social Security. I would not. You might be in the exact same tax bracket once your full fixed income is in retirement as it is today.

[C]

When you add the pension. Yeah. Actually probably be higher because you have the pension and Social Security and required minimum distribution if you don't do Roth conversions. Yeah, I would agree with you.

[B]

So she doesn't got a ton like she said. She's got $220,000 in the pre tax account. So I would flip everything to Roth at $128,000. You can do a backdoor Roth or you can just, you know. So yeah, you're getting more money into the Roth regardless because you're not fully funding now. Does she have a 403B as well?

[C]

Doesn't say she does.

[B]

I don't. Maybe it's just a 457. And then she's got the IEP account.

[C]

Right? Yeah. When. If you look at the 457 pre tax IP and inherited IRA, it's 600,000 of deferred. That all needs to come out, Right.

[B]

If you could do. 600,000. I don't see that.

[C]

Yeah. Yeah. Let's see. Pre tax, 457, 220, 182 IEP and 154 inherit. I had the inherited because it's got to come out too.

[B]

Yep. Yeah. I like flipping everything Roth and then looking even at doing conversions. If you can do interplant conversions at $128,000 of gross income. 30,040. So she's probably at what, 75,000 of taxable income?

[C]

A little more probably, but. Well, no, that actually you're probably pretty close. I'm probably right in that ballpark.

[B]

So 75, 80,000 of taxable income. $80,000 of taxable income as a Single tax bureau in the 22% tax bracket.

[C]

22% bracket goes up to single.

[B]

Probably what, 90 something?

[C]

Yeah, 100. Okay, we're waiting on it. Yeah, 100. 100 and 124% bracket goes to 192.

[B]

So 22. The 22 might go to 25. We don't know how long that's going to be. I would take advantage of the 22% tax bracket, as much as you can, and try to get as much Roth IRA dollars as possible. So let's say if you flip everything into Roth, you're not going to. Your taxable income switches from 75,000 now to probably 100,000 because of that 30,000, right? Yeah, maybe a little bit more. And so as long as I stay out of the 24 and stay in the 22, that's what I would be toggling.

[C]

Yeah. There's no reason to go into the 24.

[B]

So I would. If putting all the dollars into roth would have $1 go into the 24, then that's the dollar that you would want to go pre tax. And then you could do a backdoor Roth contribution with. I mean, you could take a distribution from the inherited Iraq, and then you could actually then put that distribution into an ira and then you could convert it.

[C]

You could. Yeah, there's different ways to do that.

[B]

Because that would still be an after tax contribution that would come from an inherited IRA that you pay tax on to go in after tax. And then you convert that, you put that into a Roth. So you're just paying taxes there. Because I don't think she's spending that. I think that's going into the brokerage count.

[C]

I think so. And I think. I mean, one of the things is then when you do retire, continue the Roth conversions, because you're going to be in a lower bracket still. Right. And by the time you get. If you don't do that, by the time you have Social Security and your required minimum distribution, you actually be in a higher bracket than you are now. That's why you're wanting to do this.

[B]

Well said, Al. Well said. Well, that's. It killed it. Mary. Mary. I don't even know what the hell I'm talking.

[A]

Were you gonna say Merry Christmas?

[B]

No, I was gonna say, I don't know, but Laura Ingalls Wilder's sister is named Mary.

[C]

Mary. Oh, there you go. You pulled it out of the hat.

[A]

Yeah. Or something.

[B]

Let's.

[C]

Let's do a fact check on. Yes. For next time.

[B]

I'm gonna. I'm gonna binge watch Little House on the Prairie.

[C]

Like it?

[B]

Keep you guys informed here. Very cool. That's it. Thanks for listening. We'll be back again next week with a little bit more your money and a little bit more your wealth.

[C]

I like it.

[B]

All right, we'll see you next week. Thanks, Andy.

[A]

Thank you.

[C]

Bye Bye.

[A]

Follow YMYW in your favorite podcast app. Leave your honest ratings and reviews in Apple Podcasts and all the other apps that accept them. Subscribe, watch us and join me in the comments on YouTube and tell a friend or a neighbor or a stranger that we're making fun of finance over here at yout Money, you, Wealth Schedule a free financial assessment with the experienced professionals on Joe and Big Al's team at Pure Financial Advisors to get an in depth look at how you're doing now to ensure you're prepared for a happy adventure in retirement. Click or tap the free assessment link in the episode description or call 888-994-6257 to schedule yours. Your Money, you, Wealth is presented by Pure Financial Advisors, 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. Okay, so why the back to back encores? As much as I'd love to say it's because of the holidays, it's actually more complicated than that. I'm recording this on Friday, December 5th, but by the time that you watch or listen to it, I will have had my right kidney removed and I should know whether it's because of cancer you may have seen in my bio on PureFinancial.com or heard in the derails of episode 468 that I have a rare genetic predisposition to developing cancer. It's called LI FR Many Syndrome, or lfs, and I do very rigorous annual screening every year to look for any weirdisms. Well, my full body MRI in November showed that my right kidney had stopped functioning and that there was a blockage in the ureter. That's the tube that connects the kidney to the bladder. Now, it never caused me any symptoms or any pain or anything, but leaving it all in there like that was not an option. So throughout November, Joe and Big Al and I recorded as many spitballs for you as we possibly could in preparation for my recovery time and the holidays. But now you've seen or heard them all. So thus the encores. We still have about 60 pages worth of your questions, so let's all meet back up here in 2026 and continue the spitballing where we left off. So if you're still paying attention after all that, I appreciate it. And I really appreciate you sticking with us through a little downtime too. Like I always say, you, money, you, wealth is your podcast, and this show truly would not be a show without you. So thank you, friends. May 2026 be a happy New Year for all of us.