Social Security Timing and When Family Wrecks Retirement - 564

Summary

Podcast Summary: Your Money, Your Wealth – Episode 564

Title: Social Security Timing and When Family Wrecks Retirement
Hosts: Joe Anderson, CFP® & Alan "Big Al" Clopine, CPA
Date: January 13, 2026

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Overview

This episode dives into the complex challenges retirees face with Social Security timing, supporting struggling family members, Roth conversions, and making big life decisions like hiring a financial advisor. With their signature blend of expertise and humor, Joe and Big Al answer listener questions, provide their "spitball" analysis on retirement planning scenarios, and discuss practical strategies to avoid pitfalls.

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Main Topics and Key Insights

1. When Family Members Drain Your Retirement Funds (Hannah's Story)

• Segment: [02:24–09:15]
• Scenario: Hannah's 92-year-old mother and her 74-year-old husband have seen their $1 million nest egg dwindle to $700,000, largely from supporting a nephew’s unsuccessful car business.
• Key Details:
  • Had three homes, $200K in art, and a $1M fund at 8% return.
  • Over a decade, they sold assets to pay for the nephew’s "career," who’s wrecked more cars than he sold.
  • Mom has dementia, stepfather continues the financial support.
• Key Insights:
  • Joe: “They’re down to $700,000. She’s 92; she’s got dementia. He’s 74. Maybe 5 or 6% withdrawal rate, but it depends. 35 to 40k, maybe.” ([06:14])
  • Big Al: “It doesn’t work. The garage itself is $36K a year!” ([06:41])
  • Boundaries: Honest discussions are critical, but complicated by dementia and family ties.
• Memorable Moment:
  • Joe: "So he’s going to counsel her mother with dementia and her stepfather, who’s spending all the money on wrecked cars... That’s gonna go over like a lead balloon." ([08:02])

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2. Social Security & Roth Conversion Strategy: Peter Parker & Gwen Stacy (from VA)

• Segment: [10:29–23:14]
• Scenario: Military retiree couple, healthy pension, $3.4M taxable, $1.2M retirement accounts, wondering about Roth conversions and when to claim Social Security.
• Key Details:
  • Living on $105K pension, $60K from cash/brokerage.
  • Waiting to take Social Security to maximize Roth conversions (avoid IRMAA).
  • Considering permanent tax brackets from “big beautiful bill.”
• Key Insights:
  • On Spousal Social Security: “She should take the spousal. At FRA, he gets $3,500, she gets $1,750 as spousal.” ([17:01])
  • Joe on Roth Conversions: “Is the RMD going to push him into a higher bracket? That’s the math. But with a $105K pension and sizeable taxable account dividends, I’d still convert while he can.” ([19:13, 22:08])
  • Al: "With all that income you can't do anything about—the more you can get into Roth, the better long-term." ([21:05])
  • Taxes: Brackets may change, permanent just means until Congress changes its mind.
• Memorable Quote:
  • Joe: "Every time there’s a change in the tax code, don’t they say ‘permanent’? It’s permanent until they change it again." ([23:03])

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3. Social Security Timing: Early Claim and Investing the Benefit? (Mr. & Mrs. Scarecrow, TX)

• Segment: [23:35–28:41]
• Scenario: Husband retired, wife still working ($200K+). Debating whether to take Social Security at 62 and invest it, or wait.
• Key Details:
  • Combined financial assets: $1.8M+ (IRAs, 401ks, Roths, brokerage, CDs).
  • Social Security possible ranges: $1,600–2,800 (him), $2,600–4,800 (her).
• Key Insights:
  • Big Al: “I’d wait until my wife retired and we actually needed the income. Each year you wait increases the amount. But it’s a personal choice; if the added cash flow makes you feel cozy, that matters too.” ([26:52, 27:41])
  • Joe: "If you’re not going to spend it and just invest, it’s all a game at that point—can you outperform the compounding Social Security benefit?" ([27:13])
• Memorable Moment:
  • Joe (on spirits): “I did have a Johnny Walker Blue over the holiday...”
  • Big Al: “Blue? Oh, you did! Someone brought it over to the house... and I had an IPA.”

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4. Should You Hire a Financial Advisor Before Retirement? (Rosie & Astro, PA)

• Segment: [29:55–40:44]
• Scenario: Married couple, 60 and 57, $1.3M in retirement savings, considering retirement in three years. Unsure about self-managing vs. hiring Baird.
• Key Details:
  • No pensions, ~$4,600/month Social Security at FRA, two homes (one to be sold after 10 years), historically managed money themselves.
• Key Insights:
  • Big Al: "Three years out, $1.3M could be $1.7M—supports about a 4.5% draw before Social Security and home sale. Tight, but could work." ([34:23])
  • Joe: "I just think… there’s so much ongoing that’s too much for the average person without tools, tech, or passion. But if she’s done it 10 years and is comfortable, keep going." ([35:43, 36:13])
  • On Interviewing Advisors:
    • “Ask how they get paid. Can you exit in a year or two if you want? Avoid being locked up in products with high fees or commissions.” ([39:55–40:44])
• Memorable Moment:
  • Joe: "Don’t look at fees as a bad thing. Just make sure there’s value. If not, walk."
• Advice to Listener:
  • Interview multiple advisors, seek credentialed planners (CFP, CPA, CFA) and avoid “free” plans with a hidden agenda.

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Notable Quotes

• Big Al, on family money drains:
  "I just think they need to be honest with the nephew and say, 'We tried to help for 10 years, but...'" ([07:11])
• Joe, on taxes:
  "Permanent tax law? Permanent until Congress changes their minds." ([23:03])
• Big Al, on Social Security timing:
  "It’s a bit of a personal choice. Don’t be upset either way—just don’t spend it all on double black." ([27:41])
• Joe, on advisors:
  "It’s more than just picking an allocation. It’s the maintenance, the ongoing risk and tax management, and creating the income stream. That’s what’s hard for the average DIY investor." ([37:30])

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Timestamps for Key Segments

| Segment | Description | Timestamp | |------------------------------------------|-----------------------------------------------------------|-------------| | Hannah’s Family & Bleeding Retirement | Family financial drain, withdrawal rates | 02:24–09:15 | | Peter & Gwen: Roths, Pension, SS Timing | Social Security, Roth conversion strategies | 10:29–23:14 | | Mr. & Mrs. Scarecrow: Take SS Early? | Claiming early vs. waiting, invest benefits? | 23:35–28:41 | | Rosie & Astro: DIY or Advisor? | Advisor value, withdrawal strategies, retirement timing | 29:55–40:44 |

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Tone & Style

• Conversational, humorous, and direct. Joe and Big Al use banter, pop culture references (“Peter Parker & Gwen Stacy,” “Scarecrow and Mrs. King,” “Rosie & Astro from the Jetsons”), and “spitball” financial analysis in plain English.
• They mix technical insight with accessible explanations, ensuring every scenario feels relatable.

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Final Thoughts

The episode showcases the real complexities of retirement planning—how taxes, Social Security, investments, family dynamics, and personal preferences all collide. Joe and Big Al stress the value of proactive planning, open family talks, and working with qualified professionals when needed. They encourage listeners to ask informed questions, understand their own numbers, and never be afraid to seek advice.

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For more spitball analyses or to submit your own question, visit: YourMoneyYourWealth.com

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End of summary.

Transcript

[A]

Hannah's mom is 92. Mom's husband is 74. And after years of trying to help a family member, nearly a million dollars is gone. How do they stop the bleeding before it's too late? And how much can they spend each year from what's left? That's today on youn Money, you, wealth podcast number 564. Plus, Peter and Gwen from Virginia have a pension, Roths and a shrinking ira. With the new tax law, IRMAA and Social Security decisions all colliding, should they keep converting to Roth? And when should they actually collect Social Security? Also, does it make sense for Mr. And Mrs. Scarecrow to claim Social Security early and invest it? Finally, Rosie and Astro from Pennsylvania ask if they can retire in just three years with $1.3 million and whether it's time to hire an advisor to help them get there. 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]

Been a while. Happy New Year.

[C]

Yes. Happy New Year to you.

[B]

Yeah, Big Al, Joe Anderson, Andy Last for hanging out. Andy, how was your holidays?

[D]

To be honest, it really kind of sucked. I mentioned in the last couple of podcast episodes towards the end of the year that I was out for kidney surgery, having my right kidney removed, and that I was waiting on the diagnosis.

[A]

For what that was.

[D]

And it does turn out that I have metastatic breast cancer, but I'm now on a treatment plan that hopefully should keep me alive for a good long time. And that means that nothing is going to change with the podcast.

[A]

So at least there's that.

[D]

There's that good news.

[B]

You look great. How do you feel so far?

[D]

I feel fine. Treatment just started about two days ago as of the time that we're recording.

[A]

This, and I don't have any symptoms.

[D]

Yet, so hopefully that'll stay that way. We'll see.

[B]

All right.

[C]

Yeah.

[D]

If I start getting a little bit of weird brain. Brain fog or anything like that, just blame it on the treatment.

[C]

Yeah, you're allowed. And we were talking before the show. I really admire your attitude and your willingness to fight this head on and live your best life. And hopefully that's still a very long life for you. So kudos to you and I'm happy you're still part of our podcast.

[D]

Thank you, Al. I appreciate it.

[B]

It's her podcast. We're just.

[C]

I know, we're just guests, right? You're right. Let me rephrase that.

[D]

All right, get to the emails.

[B]

Yeah, let's get after it. Okay, we have. Is this a voice message or am I reading this?

[D]

Why don't you go ahead and read this one?

[B]

All right. Well said. Hi, ymyw. I've been listening to your podcast for a few months since I'm retiring, but I'm really calling about my mom and her husband. She's 92, he's 74. She doesn't drink. He drinks a lot of whiskey. They live with my nephew, who they raised from a baby until he was five. Okay, so they took from a baby to age five?

[C]

Yeah, that's what it's saying.

[B]

Okay.

[C]

Yeah.

[B]

Then he lived with my mom, but he came back to them when he was 18, which was 10 years ago. @ that time, they had about a million of fund that paid about 8%. So they had a million dollars in a fund that paid them 8%. They had over $200,000 in.

[C]

Artwork. Wow. How much do you.

[B]

Have? Not.

[C]

$100. Me.

[B]

Neither. I did get some cool prints for the.

[C]

Holidays. Oh, there you go.

[B]

Okay. All right. They had three homes, their primary residence and two rental homes. In those 10 years, they've tried to help my nephew by paying for school to learn to do car wrapping in car protective.

[C]

Coding.

[B]

Okay. Yeah. You know what car wrapping.

[C]

Is? No. Do.

[B]

You? Not a.

[D]

Clue. I think it's where they put the cool designs or advertisements on the sides of people's vehicles. You can actually get paid to.

[A]

Have an ad on the side of your.

[C]

Car.

[D]

Okay. So I think that's what they mean by car car.

[C]

Wrapping. Okay, we'll go with.

[D]

That. And I think that's supposed to be car protective coating, not.

[B]

Coding. Oh.

[C]

Okay. Yeah. Makes more sense, I figured. Yeah, I did figure that one.

[B]

Out. All right, okay, so let's see. They rented the garage for about $3,000 per month, and they paid for cars for him to fix and sell. And at that time, he sold maybe two. He's wrecked.

[C]

Five. He's two for.

[B]

Seven. He's killing it. What about that protective coating that is.

[C]

Protected? Not enough. Not enough.

[B]

Yep. Just the ailments or.

[C]

The. That's right. Surface.

[B]

That. Yes, yes. All right. He spent almost all their money. My mom's pretty far into dementia, and my stepfather has sold both rental properties and all the.

[C]

Artwork. Oh.

[B]

Boy. They have about $700,000 left in their primary.

[C]

Residence. Oh, and their residence got it.

[B]

Yep. I've been trying to tell them to stop paying for the garage and to stop buying these cars, but I haven't been successful, so I thought maybe I should Try a different approach and find out how much money they can spend safely per month from the $700,000 so they don't outlive their money because maybe you can give me a little spitball amount. All.

[C]

Right.

[B]

Okay. That was a very interesting story. Picture everything.

[C]

There. I guess I can't.

[B]

Too. So what, they're. He's spending.

[C]

3,000. They've rented, well, a garage for his cars and he sold two out of seven. He wrecked the other five. So it doesn't, it's not a for profit.

[B]

Business. No. At this point, not even a profit.

[C]

Hobby? No, no. So they've got 700,000. They used to have more. So they're down to 700,000. She's 92, she's got dementia. He's 74, and we don't know about their health. Well, first of all, how much can they safely take from the 700,000? There's no great answer. I'll give you some rules of thumb. Okay. At least, because it depends upon the market, it depends upon a lot of factors and you kind of have to monitor it as you go. But maybe use this as a guideline. At age 74 and she's 92, I don't know, 5 or 6%, maybe.

[B]

35. Do you think he cares about him? Well, I mean, he's the one that's wrecking cars and drinking whiskey.

[C]

And. Well, about the, all this money about the nephew. No, but apparently he does because he's still paying for it. But I guess to answer the question, I think 35 to 40,000, that's what I would feel comfortable spending. But maybe you can spend more, but maybe it's less. It depends upon what the market does and how long you live and all that sort of.

[B]

Thing. How do you think that's going to go.

[C]

Over? Not well, because the garage itself is 36,000. So this doesn't work. It doesn't work. And Joe, I think they already know that because they went from a million dollars and two, three homes. They got one home, 700,000, and all the art's gone. So it's, it's slipping away is what's.

[B]

Happening. Yep, yep, yep.

[D]

Yep. Anyway, how do you set boundaries with that person that is staying in your home and spending your.

[C]

Money? Well, that's a great question. At 28. Depends how mature they are. Maybe. But I would just actually just sit down. You know, this is what we've talked to a financial planner. This is what we can spend and we will allocate whatever to you, whatever that may be. And maybe it's 5,000 a year. I don't know. But. Yeah, I just think they need to be honest with the nephew and just say, we tried to help you for 10 years, but.

[B]

Not. Yeah, but Mom's got.

[C]

Dementia. I. I.

[B]

Know. So she's got to convince her.

[C]

Husband. Well, I think they raised him together. Right. That's. That's. Well, I don't know how long they've been.

[B]

Married. Well, she's 92, 74, so.

[C]

Yeah. Yeah.

[B]

Yeah. I don't know. It's probably been a while. Calling for her mom. So this is Hannah's story about her mother and his.

[C]

Stepfather. I mean, I'm. I'm. Okay. So. So.

[B]

I'm. So he's going to go and counsel her mother, who has dementia, and the stepfather spending all the money on.

[C]

The cars just to counsel the stepfather. Because mom has got dementia. Right.

[B]

Yeah. So that's not gonna. That's gonna go over like a lead.

[C]

Balloon. Well, I mean, what I'm saying is they're already paying it, even though she has dementia. So in other words, the stepfather is okay with it, at least to the point. But stepfather, I think, needs to be honest with the nephew and just say, we can't do this.

[B]

Anymore. Why. Why are you putting the. Oh, okay. Because the nephew, that's his. The nephew's.

[C]

Hobby. Yeah. Well, apparently, nephew is the one.

[D]

That'S spending all the money and, And. And wrecking the cars and all of.

[C]

That. It sounds like they're trying to launch his career, and it's not. Not really working. That got.

[A]

It.

[D]

And. And they've been working on this for 10.

[B]

Years. Wrecking the.

[C]

Cars? No, no, it's the nephew. At least that's how I. That's how I see.

[D]

It. Maybe they raised him until he was about 5. Then he came back 10 years ago when he was 18. So they've had him for a good long time. The last 10 years, at the very least. In the five years from the time that he was a.

[C]

Baby. Yeah. Right, right. I mean, they kind of raised him, so I think they kind of feel responsible. So I get that as a parent, we're moving on. I get.

[A]

That. If you think the biggest threat to your retirement is a market crash or picking the wrong investment, think again. Small, everyday financial pitfalls can quietly drain your wealth, adding years to your working life and costing hundreds of thousands of dollars without you even realizing it. This week on a brand new episode of youf Money, you, Wealth tv, Joe and Big Al break down the six biggest financial pitfalls Americans fall into, and more importantly, exactly how to fix them. From the tax traps hiding inside your 401k, to lifestyle creep, credit card debt, missing emergency funds, health care blind spots, and investment mistakes that feel safe but are actually dangerous, this episode shows how everyday decisions can derail your retirement. Also, grab this week's special offer, our Retirement Readiness Guide. It walks you through income planning, Social Security taxes, health care investments and legacy planning so you can see where you stand and what to fix before it's too late. As soon as you're done watching or listening to this podcast, click or tap the links in the episode description to watch YMYW TV and to download the Retirement Readiness Guide. Avoid the pitfalls, get the roadmap, and start making smarter decisions with your money.

[B]

Today. Alrighty, so let's see. We got Peter Parker in Gwen.

[C]

Stacy.

[B]

Wow. I know. Peter Parker's Spider.

[D]

Man. Yeah, they're both Spider.

[C]

Man. Oh.

[D]

Really?

[B]

Yeah. Who's Gwen.

[D]

Stacy? She was the first romantic interest for Peter following his high school graduation before she was murdered by the Green.

[B]

Goblin. Oh.

[C]

Wow.

[B]

Wow. All right. The Green Goblin. Hello, Andy, Big Al and Joe. I've been listening to your podcast since.

[C]

2017. Dang, that's. That's. Is that a.

[B]

Record? That's. That's.

[C]

Legit. Might.

[B]

Be. Oh, man. And I found your banter and financial insights extremely helpful. Your financial discussions in spitball analysis prompt me to retire at the age of 60. Joe beating the drum on the Roth conversions in a nice cabernet helped me execute a Roth conversion strategy during my early retirement.

[C]

Years. All.

[D]

Right. Can't have a good drink to do.

[B]

That. Yeah, you gotta. Sometimes you.

[C]

Gotta. Well, because you gotta pay the.

[B]

Tax. You gotta pay the tax. That's why in April just buy bunch of.

[C]

Booze. You.

[B]

Do. All right. So my burning question is that with the big beautiful bill passage permanent tax brackets, senior discounts is continuing Roth conversions of my IRA, $239,000 remaining necessary in my financial position. I've been converting my IRA trying to stay below the IRMAA threshold in time Social Security withdrawals to minimize my taxes. The BBB only makes the equation more complicated. Okay, here's my particulars. After 25 years of military service and 13 years in the defense industry. My wife and I are 64. Thank you very much for your service. Yes, we have been living off my retirement pension $105,000 annually and drawing down $60,000 from our cash that's in our brokerage account bank accounts to cover our go go years. They're traveling Coco budget, $165,000. All right. Our Social Security payments at FRA, which is age 67, will be $3,500 for me, $1,000 for my wife. I'm debating on when to take Social Security. I'm currently. She should take the spousal. First off, there's a lot of meat in this. He's throwing out a lot of terms that most people are like, what the hell you were talking.

[C]

About? Well, he's been listening for eight years, since.

[B]

2017. That's the CFP. I'm debating on when to take Social Security because I currently do not need the income and wanted to maximize my Roth conversion since Social Security would only increase my taxable income. Bottom line, are Roth conversions worth the effort? Given the amount remaining in my IRA, my assets. Taxable account is 80% stocks, 10% cash, 10% bonds, 3.4 mil. Taxable account generates $50,000 in dividends for reinvestment or as budget supplement. Bank accounts are 15 grand. Husband IRA is 240,000. Husband's Roth is 716,000. Wife Roth 277. Retirement accounts total 1.2 million. Houses worth 500,000. No mortgage, no debt. I drive a 2015 Lexus RX 350. My wife drives a 2020 Toyota Corolla. That's a pretty popular.

[C]

Car. It is. That's kind of a US.

[B]

Standard. Yes, I like to drink beer. Cabernets.

[C]

Riesling.

[D]

Riesling. Riesling is a German sweet wine, White.

[C]

Wine. Ann likes.

[B]

That. Yeah, you can tell. I drink a ton of.

[C]

It. I will guarantee you you wouldn't like it unless you like.

[B]

Syrup. And enjoying an occasional Irish Buck on a hot summer afternoon, I look forward to a lively discussion about the bbb. Thanks for your insightful spitballs. Peter Parker and Gwen Stacy in lovely Chesapeake.

[C]

Virginia. All.

[D]

Right. So do you know the Irish.

[B]

Buck? I've never heard of an Irish.

[C]

Buck. Me.

[D]

Neither. Irish Buck is a simple, refreshing highball made from Irish whiskey, ginger ale or ginger beer, and a squeeze of lime juice often garnished with lime, mint or apple. It's essentially a whiskey ginger with Irish.

[C]

Whiskey. Okay, Whiskey.

[B]

Ginger. Isn't that. No, I'm thinking of something else. Ginger.

[C]

Beer. Ginger.

[D]

Beer. Ginger beer is an ingredient in.

[B]

This. Yes, yes. Well, ginger beer is different than ginger.

[C]

Ale. Yes, yes. That's a true.

[B]

Statement. Yeah, this is pretty good. This is the. But, no, I was thinking of Frank. What it was.

[C]

Called. I have learned more on this show. Okay, let me write that down. Ginger beer is different. Than.

[B]

Ginger. Alex, it is. Okay, I should shut up. Let's. Let's break this thing down. All right, so he's doing Roth conversions. He's got $240,000 left in his.

[C]

IRA.

[B]

Yep. He's got some questions in regards to permanent tax brackets and senior.

[C]

Discounts.

[B]

Yeah. All right. So he's been converting his IRA to stay below the IRMAA threshold. So, irmaa, you want to go over.

[C]

Irmaa?

[D]

Yeah. Income related monthly adjustment amount for.

[B]

Medicare. Well, that's pretty.

[C]

Cool. Oh, wow, thank you. You saved me on that one. What it is, irmaa, is so the amount of your income from two years earlier determines your irmaa, which calculates how much you have to pay for your health insurance once you're on Medicare. So that's where that. That's where that is. So when you're doing Roth conversions, that adds to your income, and it might push you over limits to where you'd have to pay more in two years from now for your health insurance benefits. So that's that.

[B]

One. All right. So he's staying below the IRMAA thresholds and time Social Security withdrawals to minimize the taxes. But he has not claimed a Social Security.

[C]

Benefit.

[B]

Correct. So his benefit at age 67. So his wife, Peter and Gwen, are both 64 years of.

[C]

Age. That's.

[B]

Right. So he's saying his benefit is $3,500 a month at.

[C]

65. And hers would be $1,000, but.

[B]

Her spousal would be more than.

[C]

$1,000. It would be.

[B]

1750. 1750. So, Peter, if you claim your benefit at full retirement age, she would then be eligible for the spousal benefit, which is half of your benefit or her benefit, whichever's higher. And in that case, it's half of.

[C]

Yours.

[B]

Yeah. So you can add that to the budget. Just gave them $750 a month. Right there, Big.

[C]

Al. Yeah, done. Right, check. But I guess the real question is about the Roth.

[B]

So. But let's continue on. So he's also thinking, you know what should. Because there's more than meets the eye here. Big Al. My point, okay, is that if he delays Social Security, as he mentions that, to keep his taxable income down, to do more Roth conversions, but if he delays his Social Security benefit more, he has to claim his benefit for his wife Gwen to claim the spousal.

[C]

Benefit. That's.

[B]

Correct. So she could claim her benefit on her own.

[C]

Record. She.

[B]

Could. At her age 67, but she would not be eligible for the spousal benefit until Peter claims his benefit, so there could be some money on the table there. You wouldn't have to run the.

[C]

Numbers. Yeah, it could be. It could be. So the question is claim at 67 or 70. If he claims at 67, wife uses spousal right.

[B]

Away. Right. Well, that's an extra.

[C]

750. That's right. If he claims at 70, she can claim on her own benefit, but then switch to the spousal at age 70 when he claims. So that. Yeah, got.

[B]

To. But her spousal benefit is not going to be on his age 70. It's going to be based on his age.

[C]

67. Oh, that's right. But it's still greater than.

[B]

Her. It's still greater than the thousand at.

[C]

1750.

[B]

Yep. All right, $240,000 left in Roths. He's 64 years old. He's going to be 74 roughly when he has a required minimum distribution, his 250 is going to be worth 500,000. Four times five is $20,000 distribution. Is that going to be enough to push him into a higher bracket? Is the math that he has to figure.

[C]

Out? Yeah. So his pension is $105,000. He's got $3,400,000 at.

[B]

Taxable. When is he taking his.

[C]

Pension? Pension? He's probably. I was thinking right now, he said that 13 years of military service or 25 years of military service, 13 years of defense industry. So I think he's taking it right.

[B]

Now. So in $105,000 pension. So he will receive some of the senior.

[C]

Credit. Yeah, probably. So because that's a married couple, it starts phasing out at.

[B]

$150,000. So we don't know what his interest in dividends.

[C]

Are. We don't, but let's just say 2%, maybe less. Call it 50 grand. So if it's 50 grand, he'd be at 155 right there. So he'd get most of it. There's a phase out.

[B]

Period. Yeah. He says 50,000 in dividends for reinvestment. So 105 plus 50,000. So he's going to receive that. Good question. Now, would you do Roth conversions? So I don't think the RMD is going to be. Is it going to push him into a higher.

[C]

Bracket? I think at least as the brackets that we know them right now, it doesn't really matter because it's the same.

[B]

Bracket. He's in the 22% tax bracket. You convert to the top of the 22%, maybe you do it one more.

[C]

Year. Yeah, I think me personally, I still might convert the whole thing and I'll tell you why. Because with a pension of $105,000, that's as if, if you do a 4% distribution rate, that's as if he had 2.5 million.

[B]

Ish. But I bet some of that's VA, that's tax.

[C]

Free. Well, yeah, good point, good point. Yeah. Well, if that's true, then the whole 105 is not taxable. Right, Right. So maybe. Yeah, so yeah, I probably would, I probably would just because there's a lot of other income that you can't do anything.

[B]

About. Yeah, this is a, this is where you get really, you have to put pen to paper. I think a lot of times we can spitball this and just kind of guesstimate, but there's so many different moving parts now because of the big bad, beautiful bill. And so he's in this weird zone because he has a pension. We don't know what's taxable, what's tax free. He has a lot of money that is in a non qualified account that is kicking out a lot of interest and dividends that he's just reinvesting. So that falls on the tax return. So this is a game of like how can I grow the portfolio but have the least amount of stuff, interest, dividends, show up on the return. How can I tax manage this a little bit better, sir? Because then a conversion might make sense depending on what is his taxable income.

[C]

Is. And then of course later there'll be Social Security then, which will add to the income as.

[B]

Well. Right. So he's got time. 64 through 67. I would still.

[C]

Convert. Yeah, that's what I'm thinking too, for all those reasons. And if he waits till age 70, you could convert even.

[B]

More.

[C]

Yep. And maybe you get it all done, you know. But I guess the point is if you don't convert, it's, it's not that big a.

[B]

Deal. It's not going to kill them, it's not going to blow them up into, you know, if it was $2 million, then of course you would say, yeah, you still want to.

[C]

Convert. But in fact, even right now, Joe, if you look at the spend and the pension shortfall, 60,000 into 4.6 million, that's a 1.3% distribution. Cash flow is great and I'm sure he's not worried about.

[B]

That. So that's another point to convert because he doesn't need the.

[C]

Money. Right.

[B]

Right. So the longer he keeps it in there, the more tax you're going to pay because you're just going to have compounding growth. And then at 75, you know, you're going to be required to take the money off. And who knows where tax rates are going to go. Anything. Every time there's a change in the tax code. Don't they say.

[C]

Permanent? They.

[B]

Do. Yeah, it's permanent until they change it.

[C]

Again. Yeah, I would say permanent in quotes because there's no such thing as permanent when it comes to taxes. That's lives right now. Yeah, until they change.

[B]

It. All right, good luck, Peter and Gwen. Why would. I'm still confused with Gwen. He must really get in the.

[D]

Weed. Okay, you know how comic book fans.

[A]

Are. They want to know every single.

[B]

Detail. All right? Yeah. All right, we're moving right along here. We got Mr. And Mrs.

[C]

Scarecrow.

[B]

Scarecrow. DFW, Dallas Fort Worth. Mr. And Mrs. Scarecrow. Wasn't that a TV.

[D]

Show? I think you're right. But wasn't it, like a long.

[B]

Time ago, a detective of some.

[D]

Sort? That was Scarecrow and Mrs.

[B]

King. Oh, maybe that was in the.

[C]

80S. Yeah, I. I remember seeing that.

[B]

One. All right, I'm.

[C]

Mr. Mom.

[B]

Okay. In the Mrs. Is still working. Remember that movie.

[C]

Mr. Mom. Oh.

[D]

Yeah. Oh, what was his.

[B]

Name? Michael.

[C]

Keaton.

[D]

Keaton. Thank you.

[C]

Yes. Yeah, yeah. Terry Gar. That's right.

[B]

Yeah. All right, Mrs. Income is $200,000 plus, plus a possible $30,000 bonus. We got IRAs of $1,400,000. Miss. Old 401 is $160,000. Current 401 s, $115,000. They got Roths of $24,000, a brokerage account of 4G. They also have some restricted stock of $60,000 that paid out in 26027. I can't remember what year. $32,000 in a CD, $32,000 in a high yield savings account, and $15,000 in a sinking.

[C]

Fund. You don't see that term much, by the way. That's an accounting term. That's when you put money aside for repairs, like home repairs or something like that, car.

[D]

Repairs. Because it's going to be sunk. Is that why it's called.

[C]

That? You're assuming it's a sunk cost. You're going to spend it eventually, but instead of having all this money, you have to come up with, you have an account for that.

[D]

Purpose. So basically an emergency.

[C]

Fund. Yeah, you could look at it that way.

[B]

Yep. All right, so we got. Mr. Social Security is going to be anywhere from $1,600 to $2,800. Mrs. Social Security is going to be $2,600 to $4,800. Okay, if I do take Social Security, what should I do with it? Put in a brokerage account, stick in a High Yield savings account, put in a cd. Any other.

[C]

Suggestions? Okay, those are all good.

[B]

Ones. We have a 20, 21 Lexus, 350. We'll be downsizing our house in retirement. The Mrs. Likes ital rum and Diet Coke. And I like the little Johnny Walker Double Black on the.

[C]

Rocks. That's.

[B]

Good. Double black. Never had a double black. I did have a Johnny Walker Blue over the holiday.

[C]

Blue. Oh, you did? Yeah. All.

[B]

Right. Someone brought it over to the.

[C]

House and I had an.

[B]

IPA. Yeah. So thank you, Mr. And Mrs. Scarecrow. We have two dogs, a 15 year old Cavapoo in a one and a half year old.

[C]

Frenchton. Frenchton. Okay. All.

[B]

Right. Okay. So should he start taking Social Security at 62 is his.

[C]

Question.

[B]

Yeah. So she's still working. He's like, I'll take it. I'll get 1600 bucks a month. They got plenty of money in IRAs, 401ks, kind of all over the board. What do they have a total liquid assets, about.

[C]

$1,800,000. Yeah.

[B]

Yeah. So we don't know what he's spending. He doesn't need the.

[C]

Money. Well, that's my guess because it would sound like they're living on her income right now. But if we had the spending amount, it would be a little bit easier to.

[B]

Answer. What'd you do, take it and invest.

[C]

It? No, I'd wait. I personally, I would wait until my wife retired and we actually needed the income and then I, you know, you'd have, you'd have an increased amount each year. That's what I would do. But Joe, I think it's a bit more of a personal choice. I don't think it matters that.

[B]

Much. No. If he's not going to spend any, if he invests, I don't know. It's all a game at that.

[C]

Point. Yeah, yeah. Can you beat, can you beat.

[B]

Whatever the Social Security is going to give you and you know you're going to go.

[C]

Broke. In a High Yield savings account, maybe not. That might be tight, but a brokerage account maybe. Yeah. The.

[B]

Market. Yeah. You put fifteen hundred dollars, you know, broker, don't spend it. I don't know. And then you wait 30 years and see who.

[C]

Won. Me personally, I just, I just wait till I actually needed it. That's what I would Do. But I. I wouldn't be upset with either choice.

[B]

Really. I think sometimes added cash flow, that makes you feel a little bit.

[C]

Cozy. I agree.

[B]

Yep. Maybe he's drinking double.

[C]

Black.

[B]

Yeah. On the rocks. That's not.

[C]

Cheap. That's. That's right. Maybe like a second.

[B]

One.

[C]

Yeah. You could afford it then. Yeah, that.

[B]

Like. Do you think he's saying is it like a double or is it. The brand is like a double.

[C]

Black. I'm gonna say it's a double. Oh, I don't.

[B]

Know. He likes Johnny Walker Black. Double on the.

[C]

Rocks. Like.

[B]

Double. Yeah, but is there a double.

[A]

Black? Yes, there is a double.

[C]

Black. Oh, there it is. Oh, okay. Well, stand corrected.

[B]

Then.

[C]

Okay. You as a former bartender, you should know.

[B]

That. Yeah, I know that's probably new. Put my time. I think it's been a.

[C]

Couple. A couple couple.

[B]

Years. A couple years since I was pouring cocktails, I suppose. All.

[C]

Right.

[B]

Okay. I like the little double black.

[A]

Double malt with a lingering.

[C]

Smokiness. Oh, I bet it's.

[B]

Good. Double mouth. Okay, Here you.

[C]

Go. We'll have to get some and try it on the show while we're answering.

[D]

Questions. That'll make the spitballs really.

[C]

Interesting. I think.

[A]

So. Deciding when to collect Social Security can make your head spin. Claiming at 62 at full retirement age or at 70 or somewhere in between can mean the difference between leaving 10 or even hundreds of thousands of dollars on the table over your lifetime. That is exactly why we put together our Social Security Handbook. It walks you step by step through how Social Security actually works, how benefits are calculated, and most importantly, how to decide when to collect based on your age, your health, your marital status, and your overall retirement income plan. It also covers spousal and survivor benefit, working while collecting, and how taxes factor into decision, all in plain English. There is no one or right answer for Peter Parker and Gwen Stacy, Mr. And Mrs. Scarecrow, or for you. But there is a right way to think through the decision. Download the Social Security Handbook right now by clicking or tapping the link in the episode description, start making a more informed choice about when to collect your Social Security.

[B]

Benefits. We got Rosie and.

[C]

Astronomy. Oh.

[D]

Okay. You know that reference.

[B]

Right? That's.

[D]

Jetsons. Jetsons, yes. Rosie's the dog. No, Rosie is the housekeeper and Astro is the.

[C]

Dog. Astro's the dog. Yeah. Oh, yeah. Rosie's a.

[B]

Robot.

[C]

Robot. Yeah.

[B]

Yeah. A little.

[D]

Skirt.

[B]

Yes.

[C]

Robot. Yeah, yeah.

[B]

Yeah. An Astro. Okay. They live in Pennsylvania. Drinks of choice are red wine and old fashioned. Okay, one of us is a podcast.

[D]

Listener. Probably Astro the.

[C]

Dog. Yeah, I think so.

[D]

Yeah.

[B]

Jigs. You know, they're coming out with a movie. The.

[C]

Jetsons. No, I didn't know. Yep.

[B]

Yeah. I forget who's playing George, but it's.

[D]

Someone. This is live.

[C]

Action. Learned.

[B]

Today. High quality. It's.

[A]

So. It's actual.

[D]

People. It's not a. It's not.

[B]

Animated. Yeah, it's.

[C]

Actual.

[B]

Okay. I don't know. Got to look that.

[C]

Up.

[B]

Okay. The tip of my tongue thinking, like, Tom Hanks of some sort. It's like. It's a. It's a big.

[C]

Deal. Well, he does that. He does every. So a big name.

[B]

Act. It's a big.

[C]

Name.

[D]

Okay. Jim.

[B]

Carrey. Jim Carrey. Damn it. I knew it was Jim Carrey. God, I'm so.

[C]

Upset. That's a big.

[B]

Name. Yeah, that is a big name. But he's kind of lost his mind, though, hasn't.

[C]

He? Is he. Is he. Is he the one doing prices?

[B]

Right? No, that's.

[D]

Drew. That's Drew.

[C]

Carey. You're right. Yeah, you're right. Never mind. No, no.

[B]

No. Care. He's lost some.

[C]

Weight. He's lost weight. You're right. Okay, so let me go back to Jim Carrey.

[D]

Yes. I believe he's gotten very.

[B]

Philosophical.

[C]

Yeah.

[B]

Yes. He's finding different paths of.

[C]

Life. Yes.

[B]

Yes. All right, here's this football request.458,000 in cash CDs, 53,000in Roth 403Bs, 515,000in traditional 401 IRA, $73,000 in a traditional IRA, $25,000 in I bonds, and $82,000 in a money market account. So if I add all that up, it's like $1.31 million $300,000. All right, $4,600 a month in Social Security between the two of us. Hubby wants to retire in three years. We are 60 and 57. No pensions, no debt. Two homes, one of which will be sold around year 10 of retirement, worth 400,000. Okay, can we retire then? You want to retire in 10 years, or do you want to retire now? Can we retire.

[D]

Then? Well, yeah, it says that the house will be sold around year 10 of retirement, and then can they retire.

[B]

Then? Retire in three years or 10 years? Well, we'll do both. How about that? Hubby.

[D]

Wants. Oh, okay, well, maybe hubby wants to retire in three years, and she wants to retire when he's in 10 years of.

[B]

Retirement. 57. She wants to retire at.

[C]

67. Maybe take Social Security.

[B]

Then. All right, let's.

[C]

See. Okay, that could.

[B]

Be. We'll have to cover healthcare. Two years for me and five for.

[C]

Him. Two years for me. So that means she's going to work to 63. So that's six.

[B]

Years. I have no idea what's going on. I'm being recruited by Baird and want your thoughts. Because they say, no problem, you can do it. We're also talking about.

[D]

Layman. No, you were talking about.

[C]

Lehman. You.

[B]

Were. Oh, you were talking about layman and then laughed and mentioned.

[C]

Baird. Actually Bear Stearns, I.

[B]

Think. Well, there's Baird Bear, and then there's also.

[D]

Bears. But the conversation that, that Rosie and Astro are actually talking about was when Mark Horner was on the show. And you and Mark. Joe, you and Mark had a conversation about bear versus Layman. And so that's what she's.

[B]

Referencing. Got.

[D]

It. How Bears deferred comp plan probably did better than Layman's, but that obviously doesn't necessarily have to do with her situation.

[B]

Here. Yeah, because they're both worth.

[C]

Zero.

[B]

Yeah. I'm concerned about turning over to them. I've been doing I'm a do it yourselfer for the last 10 years. Hubby's not interested in the financials. We've been at index funds with small international. Should we continue to self manage? I'm not sure about withdrawal strategies about here. You laugh over Baird's name. I'm seriously concerned. Help. I'm terrified of making the wrong decision. And I'm not sure we have enough funds to retire. All.

[C]

Right, so we'll start with three years, Joe. And if they got $1,300,000 today, 6% rate of return, being conservative, three years from now, add. I don't know what they're adding. I'll just say $20,000 a year. So that gets them to $1,700,000. They want to spend 78. I just took that straight number. I should have done inflation, but I just took 78. That's their spend. No other income at that point. That's a 4.5% distribution rate before Social Security and before selling the other home. So that likely works. But maybe hubby might want to take Social Security at 63 just to have a little bit more cushion. So I don't know. I mean, it's tight, but I think it could work. What do you.

[B]

Think? Hire a professional or going.

[C]

Alone? Personal choice. Yeah, if she's a do it yourselfer for the past 10 years, she's comfortable with it. They got 1.3 million. Yeah, just keep listening to the.

[B]

Show. Right. I don't know. I just think this is a biased opinion. Of course. Because I'm in the business. Yeah, yeah, but I'm in the.

[C]

Business.

[B]

I. We manage a lot of.

[C]

Money. We.

[B]

Do. 12.

[C]

Billion.

[B]

Yeah. Maybe more or.

[C]

Less. 12.

[B]

Million. 12.

[C]

Billion. Yeah. Well, not that much, but 11. 10 and a half or 10 point.

[B]

10.7. Yeah.

[C]

Okay. Yeah, that's with a.

[B]

B. B. Yeah. That's a big.

[C]

Number. It's a big.

[B]

Number. And just the amount of things that you want to make sure that you're doing on an ongoing basis, I think it's, it's too much for the average person that doesn't have the technology or the time or the.

[C]

Passion. Yeah, but she's done it for 10.

[B]

Years. But she's saving money for 10 years. No offense. God bless Rosie and Astro here. Only one of them listens, and.

[C]

Maybe the one that I think, I think Astro is the.

[D]

Husband. But Astro is not interested in the.

[B]

Financials. So they have $638,000 in a taxable brokerage account, $588,000 in retirement accounts. So she wants to retire in a couple of years. We don't know if it's 10, 6 or 3. First off with.

[C]

That. Well, I just.

[D]

Went. Rosie, figure out when you want to.

[B]

Retire. Or maybe it's all three. But now you have to, like, bridge the income for Social Security. You have to understand what the taxation is going to be. How much money should you pull from a tax deferred account to a taxable account to a tax free account? Should you be thinking about Roth conversions? How do you manage the risk? How do you tax manage it? How do you create the income? And there's a lot to.

[C]

This. Yeah.

[B]

True. So I would at least like. Baird's recruiting her. I thought she was like, applying for a job at Baird for a.

[C]

Second. No, they want her as a.

[B]

Client. Got it. Well, I would be thinking about, well, what are you going to do for me besides pick stocks and create an asset.

[C]

Allocation? All right, so.

[B]

I. You can do that.

[C]

Online.

[B]

Yes. Right. If I'm looking at creating an asset allocation, I could give you three funds right now that are almost free. But I think as you look at retirement, Retirement income strategies, in the things that you need to do with your portfolio, in my opinion, there's a lot more to it than picking an asset allocation. It's the maintenance of the account. It's creating the income and making sure that you're maximizing the return with the least amount of risk, with the Least amount of tax policy. And it's more than just picking a few funds or a few.

[C]

Stuff. All right, you talked me into.

[B]

It. All right. Yeah, here's my number, 888. But like, Baird's a great company, but that's a traditional big brokerage, Wall street firm. So when you're interviewing advisors, I think I would want to make sure that they're credentialed. Do you have a certified financial planner? Are you a cma? Are you a cfa, cpa? What type of strategies and planning are you going to do? And if they say it's free, then I'd be a little bit weary of that because it's free. Well, how much time and energy are they actually going to put into the overall planning if there's no cost to it? Because what it is, it's a sales pitch, then to get the assets, and they're going to charge you whatever percentage on the assets. Or it could be a brokerage account where there could be commissions and you have to find value. Don't, don't look at fees as a bad thing. As long as there's value there. If there's no value, if it's just an asset allocation, they're trying to pick some stocks. I don't know how much value that brings. So then you just want to pay appropriately. But I would absolutely interview the advisor and just to see. All right. Because I think she has the wherewithal or the knowledge of decent questions. I think when people sometimes interview advisors, they don't know what questions to.

[C]

Ask.

[B]

Right. And so then they're just kind of waiting and then they hear a sales pitch of some sort and they get a bad taste in their mouth or maybe they don't understand what the advisor's talking about and then they don't want to make the wrong decision. Hiring an advisor in most cases is not the wrong decision. As long as you do the research. If they're going to put you into a product that is high cost, high fees, you know, yeah, that could be a little bit of a mistake. But in most cases, you know, if you can do your homework and you know, and you have a little bit of knowledge to be dangerous, I mean, partnering with the professional, I think is the right.

[C]

Move. Yeah. So I'll add. So here's a couple questions to ask the advisor. First of all, how do you get paid? And find out how they get paid. And the second thing is, what if you want to self manage in a year or two, is that possible? What are the costs involved? Basically, you don't want to get stuck into something that's going to require you to be in some kind of product for 5 years or 10 years or something like that. Typically when you get locked up like that means that there was a commission up front and you probably want to avoid that, particularly if you're used to self managing. So maybe what so I'll piggyback off of what you I agree with everything that you just said. Maybe you want to try it for a couple years and learn what you can. Maybe you continue or maybe you say, you know what, I got it, I can do this on my own. That's up to you. But make sure you can get out of it whatever you may you want to get.

[B]

Into. All right. Looking forward to that Jetson.

[C]

Movie. Can't wait.

[B]

Yeah. All right, that's it for us. Andy. Great to have.

[D]

You. Thank you. Good to see you all again. It's been a.

[C]

While.

[B]

Yeah. Okay. We'll be back next week for Andy last Big Al, I'm Joe Show's called you'd Money you.

[A]

Wealth. Next week on ymyw, join Big Al spitball on whether Lucky Lou can afford to bridge the gap to early retirement at age 50, which retirement accounts Alexi and Anna and Jay and Gloria should save to whether Alexi and Anna or sleepless in Seattle's 28 year old daughter can buy a home and how Jennifer in Texas should invest in inherited IRA for the most growth and the least amount of tax. Subscribe Follow Join us in the YouTube comments and tell a friend about YMYW. The more the merrier when we're over here making fun of finance. So be honest. Do you have your own retirement plan figured out or are you just winging it and hoping a spitball is all you need? If it's the latter, then it's time to schedule a one on one financial assessment with Joe and Big Al's team of experienced professionals at Pure Financial Advisors. It's free, like a spitball, but it's tailored specifically for you and your needs in retirement. You can meet in person at one of our many offices around the country or online via Zoom. The Pure Team can help you build a retirement income plan, cut your taxes now and in retirement, and give you confidence about your financial future. Click or tap the free assessment link in the episode Description to book yours or call 888-994-6257. There's no obligation and it just might be the smartest step you take towards a stress free retirement. 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.