The Retirement Question Every Couple Asks: Can We Afford It? - 578

Summary

Podcast Summary: Your Money, Your Wealth – Episode 578

Title: The Retirement Question Every Couple Asks: Can We Afford It?
Release Date: April 21, 2026
Hosts: Joe Anderson, CFP® & Big Al Clopine, CPA
Main Theme:
This episode explores some of the most pressing—and sometimes anxiety-inducing—retirement questions couples face: “Can we afford it?” Through detailed listener scenarios, Joe and Al deliver their trademark humor and actionable spitball analyses on retiring with (and without) big pensions, when to pull the trigger, Roth conversions, trust planning, and managing inheritances. The episode is a mix of financial insights, real listener stories, and tips for overcoming the psychological barriers to retirement.

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Key Discussion Points & Insights

1. Listener Scenario: Chase & Ryder – Pulling the Trigger With $5 Million and Huge Pensions

[00:58 – 09:20]

• Background:

  • Chase (56) and Ryder (55) have $5M in retirement savings, huge immediate pensions ($433k fixed income/year with Social Security), and still feel anxious about retiring in 2026.
  • "Am I crazy to think we can retire at age 57? I think you're crazy not to." – Joe (06:39)

• Financial Breakdown:

  • Income: Combined salary and bonuses around $880k/yr.
  • Pensions: $8,800/mo (Chase), $16,500/mo (Ryder).
  • Social Security: $2,500/mo each starting at 70, $60k/yr combined; $130k/yr after 70.
  • Assets: $4.7M pre-tax, $300k Roth 401k, $35k Roth IRA, $500k taxable.

• Key Concerns:

  • How to bridge income before SS eligibility.
  • Taxes, RMDs, and Roth conversion strategy.
  • The psychological hurdle of shifting from saving to spending assets.

• Advice:

  • Bridge to Retirement:
    • Use taxable accounts and Rule of 55 for early 401k withdrawals penalty-free (07:41).
    • “You're sitting in great, great shape” – Joe, reassuring their ability to retire comfortably.
  • Roth Conversions:
    • Don’t convert everything at once; stagger and stay within optimal tax brackets, ideally topping off at the 24% or 32% bracket (08:11).
    • “If they don't do anything, they're going to be in a super high tax bracket for life.” – Al (08:54)
  • Psychological Readiness:
    • “People with a lot of money, they get nervous about it. People with less money, they think they're okay…” – Al (09:20)
    • Reframe: It’s normal to worry about "pulling the trigger," but in their case, the numbers easily support retirement.

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2. Listener Scenario: Andy & April – Can We Retire Early and Do We Need a Trust?

[10:39 – 20:48]

• Background:

  • California couple, 46 years old, $2.4M saved, $400k household income, kids, no debt, aiming to retire in 10 years on $120k/yr (today’s dollars).
  • “I feel like it was time for me to graduate from the Save, Save, Save mindset.” – Andy (11:03)
  • Wondering about trust planning ("all my friends have one").

• Financial Breakdown:

  • Home: $1.3M, paid off.
  • Retirement: $1.8M in IRAs/401ks/HSAs; $600k brokerage; $220k in 529 plans for kids (not counted).
  • Savings Rate: Maxing 401ks + $175k/yr to brokerage, $80k/yr into retirement, $0 debt.

• Can They Retire in 10 Years?

  • At current savings rate, assuming 6% growth, “In 10 years they end up at $6.7 million… looks good.” – Al (15:43)
  • Projected spend in 10 years with 3% inflation: $160k/yr, which is only a 2.4% withdrawal rate—well within safe parameters.
  • “Really good job of saving money. You got no debt—you’re saving a ton. This looks good.” – Joe (16:57)

• Living Trusts—Should They Have One?

  • Main Reason: Probate Avoidance
    • “A living trust avoids probate, period.” – Joe (17:49)
    • No asset protection, but crucial for transferring non-retirement assets (like their home and brokerage) efficiently in California.
  • Children’s Inheritance:
    • While trusts can offer asset protection for heirs if assets stay in trust, “Very few people leave their inheritance sitting in the trust.” – Joe (20:07)
    • “But… there could be [protection] for the next generation.” – Al (20:02)

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3. Listener Scenario: Bert & Sally – Pensions vs. Portfolios, and Retirement Calculators

[21:36 – 33:27]

• Background:

  • Bert (49, education), Sally (47, nonprofit), household income $150k, expenses $6,500/mo (travel-heavy), ~$650k saved, solid pensions.
  • “I’ve manipulated the assumptions too much in my favor when using my online calculator.” – Bert (22:27)

• Pensions:

  • Bert: $3,400/mo (grows if retiring later), COLA, state tax-exempt up to $33k.
  • Sally: Social Security of $1,900/mo at 62, spousal benefits (thanks to WEP/GPO elimination).

• Retirement Feasibility:

  • If both retire in 2027: They’d need a 5.7% withdrawal rate—“a little tough.”
  • If only Bert retires and Sally works until 2031, their situation improves greatly as her salary covers living expenses and allows assets to grow.
  • “If you’re trying to dial this thing into the penny, forget about it. You’re going to have to work another 10 years.” – Joe (32:13)
  • Strong pensions act as a “surrogate” for larger portfolios—allows for flexibility and peace of mind.

• Cautions:

  • On retirement calculators: “They can be dangerous… they give you the best answer for that day, but it’s a living, breathing thing.” – Joe (32:59)
  • Always leave extra room for life’s uncertainties (unexpected expenses, lower returns, etc).

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4. Listener Scenario: Dolly – Social Security With Identical Benefit and Inheriting a Brokerage Account

[34:19 – 41:41]

• Background:

  • Dolly (62, Tennessee): She and her husband each have identical Social Security benefits, plan to wait until 70. She’ll inherit a $950k brokerage account, already has solid assets.

• Social Security Timing:

  • “We talk about spousal benefits, but both our projected Social Security is identical. Are there any tricks left?”
  • “Not anymore… One of you should wait until 70, at least, in case one survives the other. But there’s no spousal strategies left.” – Al (41:11)

• Inheritance Asset Mix:

  • Inherited account will be:

    • 37% Large Cap Value
    • 33% Large Cap Growth
    • 20% International
    • 5% Small/Mid Value, 5% Small/Mid Growth
    • 36% Fixed Income, 4% Cash

  • Advice:

    • “Globally diversified, I’m good with that. But don’t look at it in a vacuum… Include it with your whole portfolio, manage tax and risk holistically.” – Al (38:52)
    • Avoid emotional investing just because it’s inherited; optimize for your needs, not just legacy.

• Overall Situation:

  • With $2.2M pre-tax, $90k Roth, $80k HSA, $1.6M brokerage (after inheritance), and a pension—they’re in strong shape.
  • “You want to make sure you tax-manage the account as best you can… it’s also a really good way to create income very tax efficiently.” – Joe (39:25)

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Notable Quotes & Memorable Moments

• On Retiring With Big Pensions:

  • “He could blow every last dollar and still live better than most.” – Joe (06:41)

• On Psychological Barriers to Retiring:

  • “You spent your whole life adding to your portfolio, and now you have to take a little out… it just feels kind of weird.” – Al (09:37)

• On Trusts and Probate:

  • “A living trust avoids probate, period. There’s no asset protection.” – Joe (17:49)

• On Retirement Planning Calculators:

  • “Calculators are dangerous… [they] sometimes give people false confidence.” – Joe (32:59)
  • “Run it where you have extra, because you never know what’s going to happen.” – Al (33:27)

• On Viewing Inherited Assets:

  • “Don’t be emotional towards investments… think of it as your overall strategy, not as an heirloom.” – Joe (40:39)

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Timestamps for Important Segments

• [00:58] – Introduction and Chase & Ryder’s scenario
• [06:39] – Can we retire now? (Chase & Ryder)
• [07:41] – Early withdrawal strategies: Rule of 55
• [08:11] – Roth conversion tax strategy
• [09:20] – The psychological hurdle of retirement
• [11:03] – Andy & April: Transition from “Save” to “Plan” mindset
• [15:43] – Can Andy & April retire in 10 years?
• [17:49] – Do you need a living trust?
• [22:27] – Bert & Sally: Online calculators and manipulating assumptions
• [27:27] – Is early retirement feasible with pensions?
• [32:59] – The dangers of retirement calculators
• [34:19] – Dolly: Social Security and inherited brokerage
• [38:52] – How should you allocate an inherited account?
• [41:05] – Social Security "tricks" no longer available – must wait until 70

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Tone & Takeaways

The hosts blend deep financial insight with levity and real-world practicality, reassuring savers that most anxieties stem from the emotional side of retirement, not the numbers. Key takeaways include the critical importance of tailored tax strategies (Roth conversions and asset locations), the psychological shift from saving to spending in retirement, and the value of holistic portfolio management. Trusts, while useful for probate and estate planning, are not asset protection vehicles. Retirement calculators give you a snapshot, not a map—plan conservatively, keep flexible, and update often.

Useful For: Anyone grappling with the “Can we afford it?” retirement question, whether they have big pensions, are inheriting assets, or just want clarity in their planning.

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End of summary.

Transcript

[A]

Chase and Ryder are 56 and 55 with $5 million saved and huge pensions the day they retire. So why are they so nervous about pulling the trigger? That's today on youn Money, you, Wealth Podcast 578. Andy and April are 46 with $2.4 million saved and 10 years until they want to retire. Can they get there and do they need a trust? Bert and Sally are in their late 40s with solid pensions and a retirement dream. But is the math close enough to make it work? Finally, does Dolly have any for squeezing more out of Social Security when she and her spouse have identical benefits? She's inheriting a brokerage account, too, and wonders about the asset mix. If you're listening on Apple Podcasts, please do us a favor. Follow the show and leave your honest ratings and reviews so new listeners know whether YMYW is worth their time. 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]

See, we got Chase and Ryder. Oh, well. Paw Patrol. My son loves Paw Patrol.

[A]

I was gonna say. Have you been watching that?

[B]

Oh, yeah.

[C]

I fortunately don't know that show.

[B]

Paw Patrol. Paw Patrol. Wow, you're in trouble.

[C]

Oh, boy. You know. You know the whole thing.

[B]

We're coming on the double. Yeah, don't you worry about it.

[C]

Okay?

[B]

Okay. Hello, Joe. Big Al. I'll try to keep this comp. I'll try to keep the complicated words to a minimum. Thanks.

[C]

Gotta help Joe out, right?

[B]

Help me out. First of all, shout out to Andy. Kiss ass. As we all know, she is the one behind the success of the show. No shout out for Aaron?

[C]

No. Well, he doesn't get much time on the show.

[B]

Okay, the important stuff first. My wife, she enjoys a glass or two or three of Chardonnay in the evening, and I enjoy a good German lager. All right. My family owns Shell's Brewery in Minnesota.

[C]

I don't think we've ever had a brewer.

[B]

Wow. Right in Minnesota. Shells.

[C]

You don't know that one?

[B]

No, there's shells. Their Oktoberfest is the best. Okay, I'm gonna have to. I'll be in Minnesota this summer.

[C]

Well, that's perfect timing. Late summer.

[B]

I'll be. I'm doing a little Airbnb in on the good Lake of Minnetonka.

[C]

No fooling?

[B]

No fooling now.

[C]

Well, I feel like Oktoberfest usually starts in September.

[B]

Yes. So I'm gonna be a little late.

[C]

A little early for you. They'll make an exception.

[B]

I'm gonna be a little early there.

[A]

So. August Shell Brewing Company in Ulm. I guess New Alm.

[B]

Yeah, I know where New Alm is.

[C]

Okay.

[B]

That's a little.

[C]

I bet you they do a little part. Oktoberfest party for you when you show up.

[B]

Let's do it. Oh, thank you. To that brewery. Brewery looks cool.

[C]

It looks amazing.

[A]

It does. It's beautiful.

[C]

Really nice.

[B]

Oh, wow. That's like old school.

[C]

Yeah.

[B]

How old is that?

[A]

That's a good question.

[B]

Vacation rental. Maybe I should.

[C]

Yeah, once you rent there. Yeah, yeah, yeah.

[B]

Talk to Chase.

[C]

Get some good German beer.

[A]

1860.

[B]

Wow.

[C]

All right.

[A]

August Shell broke ground for the August Shell Brewing Company and paved the way for 157-year-old family tradition.

[B]

Wow, that's cool.

[A]

I am surprised you don't know about this place and aren't best friends with the company already. Joe.

[B]

I know.

[C]

He will be shortly.

[A]

Totally.

[B]

Okay. How much for $10. For a tour? Yeah, throw. Throw a little bone. He lives in San Diego now. He can just come down to the office.

[C]

Yeah, right.

[B]

I drive a little. What does he drive? A Chevy Equinox. My wife drives a Subaru Forester. We have a 2004 Honda Odyssey that we drive down to Rosarito, Mexico and where we have a condo on the water. This guy's just got everything going for him. Yeah, he's got his family owns German beer.

[C]

Yep.

[B]

Chevy Equinox.

[C]

Got the good life.

[B]

No, my question, am I going to retire in September, 2026? Here's the situation. I think it works, but very nervous about pulling the trigger. Appreciate the spitball. Currently it is October 31st, 2025. All right, so Chase and Ryder. I'm 56. Wife is 55. Both of us planning to retire at 57 a year from now. So he's got a couple months.

[C]

Yeah.

[B]

As we're getting nervous.

[C]

Yes. Yeah.

[B]

Perfect timing.

[C]

It is.

[B]

So My salary is 220,000. My wife's is $360,000. Bonuses, long term incentives. RSUs me 100 grand. Wife is 200,000. Total annual is $880,000. Pensions immediate upon retirement is $8,800 per month for me, 16,500 per month for my wife. 303 annually. What the hell do you guys do,

[C]

man?

[B]

They got.

[C]

They worked. They worked at the brewery.

[B]

No, she's got to be a judge. That's a badass pension right there. 16,000. I thought 8, 800. I was like, wow, that's a really healthy pension. And hers is double.

[C]

Yeah, yeah.

[A]

Their Fixed income turns out to be $433,000 a year. I think that might be a record on this show with.

[C]

With the Social Security. Yeah, yeah, but, but 300,000. Right away, Joe.

[B]

Yeah, immediately. He. Yeah, just. Yeah, okay. Social Security. Same for both of us. $2500. All right. $60,000 annually. $130,000 annually at 70. We have $5 million in 401k accounts. 4.7 and deferred 300 and Roth. $35,000 in a Roth IRA. $500,000 in a brokerage account. Why is this guy nervous? What is wrong with him? It's probably all the anxiety from the German beer that he's been drinking since he was. He's five years old.

[C]

Not drinking enough beer.

[B]

He's got to drink more. Yeah, you get nervous, just pour yourself a pint. We need to supplement our pensions with 401 withdrawals to meet our annual budget. We can adjust this when we turn a Social Security on. Concerned about taxes and rmd. So we'll need to conversion strategy in place, but we'll always be in a high tax bracket. Or should we just bite the bull in and convert it all right away? Am I crazy to think we can retire at what I think we can at age 57? I think you're crazy not to is what I'm saying.

[C]

I would agree with that.

[B]

My wife and I are done with corporate America, but can't complain at all. We have been blessed with incredible careers and compensated extremely well. Cheers. Chase and Ryder. Well, first of all, congratulations. You're the envy of all of our listeners here at your money, you, wealth. $300,000 of fixed income. He could blow every last dollar and still live better than most.

[C]

You know, I mean, this is an easy one, right? I mean, so you want to spend $336,000 and your pension's $300,000, right. So you got about $35,000 that you got to pull from your accounts. Now, I know you're not 59 and a half yet, but you got $500,000 in a taxable account and that's. And you're going to retire 57.

[B]

So here's one I would do a 72t on. You would want to start draining the money from the tax deferred. Anyway, you retire at 57, you only have to do five years. Or 59. Well, you still have to do five years, but after five years, it's going

[C]

to need it anyway. Right? Right. I agree. This, this is a.

[B]

But he's going to retire. It so he has full access to the 401 account. So you don't got to do something.

[C]

Oh, yeah, he's 401. Back to the rule of 55. You're right. You are right.

[B]

Yeah. You're sitting in great, great shape.

[C]

And as far as Roth conversions.

[B]

Yes, absolutely. Do the conversions. You're always going to be in a larger tax bracket. You're only going to be taxed more. Don't bite the bullet. And convert everything. Convert to the. Probably the top of the 24 or 32.

[C]

Yeah, that's what I think. So based upon just a quick Look, I think 100,000 conversion gets them to 24. I don't think that's enough. 200,000 gets them to 32. 450,000 gets them to the top of the 35. So I would consider all those. Because here's the thing. You're probably not going to spend your retirement accounts anyway with this income. And your account could double twice by the time you have R and D age. And even at 15 million, you have 5 right now. Even at 15 million, that's not doubling twice in 20 years. 4% of that, Joe, that'd be $600,000 of RMD income on top of your pensions. Right. So it's a big number.

[B]

Yeah.

[C]

Which is. And here's a case where. And we don't typically sort of talk about this, but this actually might be a case where it'd be okay to pay for the conversion dollars on a distribution because there's not a lot of taxable dollars. And this is a clear case where if they don't do anything, they're going to be in a super high tax bracket for life.

[B]

Yeah. I don't got much else to say here. Yeah.

[C]

I think, but. Well, what I would say is, and this. We've talked about this before, people with a lot of money, they get nervous about it. People with less money, they think they're okay. And we see all over the board.

[B]

Yeah. Because they got a lot more to lose.

[C]

Yeah. Right, Right. And I get it.

[B]

Yeah.

[C]

Well, and the thing is, you've all. You spent your whole life adding to your portfolio. Right. And now you've actually taken a little bit out. It just feels kind of weird.

[B]

Yep.

[A]

Here's the thing about Chase and Ryder, and honestly, a lot of people in their position, maybe even you, you're doing everything right, saving money. But the scary part is getting it out once you retire, whether that's age 57 or 73, pull it out too soon and you might run out of money while you're still healthy and still spending. Pull from the wrong accounts and you hand a huge chunk of it to the IRS that you didn't have to. Joe and Big Al walk you through exactly how that happens and how to avoid it this week on YMYW tv. And if you want something that you can actually sit down with and work through through for your own situation, download our withdrawal strategy guide. It'll help you figure out how to make your money last as long as you do and how to keep more of it in your pocket instead of Uncle Sam's. Click or tap the links in the episode description to watch retirement spending how much is too much on YMYW tv and to download the withdrawal strategy Guide for free. Tell a friend.

[B]

We got Andy and April.

[A]

That's from Parks and Rec. That's your buddy Chris Pratt.

[B]

Okay.

[C]

Yeah, Yep, yep.

[B]

We get a lot of Andy in April's.

[A]

We get a lot of Parks and Rec. Yeah, we're starting to get a lot of repeats. We get a lot of friends. Flintstone. Yeah, there's a number of people that age group.

[C]

They are exactly.

[A]

Yeah.

[B]

I'm guessing what this they're going to be 40s.

[C]

Yeah, you were right. 46.

[B]

Oh, look at that. Hi, Joe, Big Al. Andy, your show is by far my most favorite of all podcasts that I listen to. I came across your show on Pandora while looking for something to replace Dave Ramsey. I feel like it was time for me to graduate from the Save, Save, Save mindset and plan ahead mindset and I was hooked on your show from the first episode. During the last four months, I've listened to most, if not all of your shows from 2016 and on.

[C]

That's a decade in four months.

[B]

That is bad. Andy in April gonna get a life here. I listen to them on my way to work while I'm driving my 16 year old Mazda while I'm walking my dog, Elvis.

[C]

Okay.

[B]

Okay. That's cool, man. Oh, wow, this is a big one here. Let's get it is all right. By the way, my wife drives a much nicer 2024 infinity. My beautiful wife April and I live in California with two teenagers. April likes an occasional lager or pilsner or a margarita. Well, I prefer bourbon, scotch or a glass of Imperial stout. So April likes the beer. He's a bourbon, scotch and stout guy.

[C]

Yeah, that's what it says. All right.

[B]

We are both employed, earning around $400,000 in taxable income, including our 401 and HSA contributions, which we maximize every year. We are both 40 and would love to retire 10 years. Here's the assets. We got a house of $1.3 million. No mortgage, retirement accounts 401 s, IRAs, HSA $1,800,000. We got brokerage in cash, $600,000, $529,000. Plans $220,000. We are not counting on this money. It's for the kids. Well, yes, it's called a 529 plan. Our spending, investing, retirement accounts 401. We're maxing contributions plus employer match plus the HSA told us $80,000 a year. We are maximum to our retirement. No Roth yet. I feel we have plenty of time to convert. Currently spending about $80,000 per year, which does not include health insurance premiums or major purchases like a new car, for example. We have no debt. I like to mention that because I've been listening to Dave Ramsey before. The remaining 100 and $175,000 a year goes into the brokerage account when we retire. We would like to spend $120,000 or more per year in today's money, but we can scale back to $100,000 during a down market if needed. Our Social Security is estimated to be $50,000 per year for each at full retirement age. But that assumes that we work until the full retirement age, so it may be lower than that. I have two questions. Can we retire in 10 years or sooner? I'm going to say yes.

[C]

I think it looks pretty good. I'll do the math here in a second.

[B]

I like my work, but I also like the idea of being financially independent from my paycheck. The second question is about trust protection. I haven't heard much about trust protection on your shows, but I hear about trust from my friends who are talking about placing their house and other assets in a trust. And my wife keeps telling me that we need to do the same, but I don't see any reason to do it. None of these friends can explain why they have it, or then it is protection and it's good for you, just like broccoli. I read somewhere that it helps to avoid probate, but I don't know if that's a good enough reason to do so. Can you tell me if there's benefits to having a trust in our situation? Thank you very much. I really appreciate your opinions on this. P.S. english is my second language, so I hope it's not too hard to follow the writing. Sincerely, Andy and April.

[A]

Andy and April did a much better job speaking in English than we would have done in their language, guaranteed.

[C]

I think it was perfect. No issues.

[B]

We've had some letters that have come

[C]

in, and that was their first language.

[B]

English was their first language, and you would think it was their third. So this was very well written. A lot of really good stuff going on here. And why don't you tackle the retirement? I'll tackle the trust.

[C]

Okay. Love it. Okay, so let's start with the retirement. So 2. $2.4 million. I just ran it at 10 years. Just because that was what you first asked. 6% rate of return, adding $180,000 a year.

[B]

Right.

[C]

$80,000 in retirement accounts. I did the lower number on brokerage account of 100, and guess what? In 10 years, Joe, they end up at 6.7 million. It's a big number.

[B]

Huge.

[C]

Now, if you look at their spin, they want to spend 120,000 in today's dollars. Let's go forward at 3% inflation rate for 10 years. That's about 160. 160,000 divided by 6.7 million. That's a 2.4 distribution rate at age 56. I'm good with that. That's without even considering Social Security.

[B]

Yeah. Or the other 75,000 that they're probably putting in a brokerage account.

[C]

Yeah, exactly. Yeah. I just went the more conservatively. I mean, you could run this at 7%. Right. You could also add 175 per year in the brokerage account set of 100. So, yeah, no, this looks good. And you could probably retire a little bit sooner if you want to, but before you retire. I think we've said this before in other shows. It's nice to know that you can retire in 10 years or sooner. But before you do, rerun the numbers and make sure it still looks good at that point, because no one knows exactly what the market's going to do or if you continue saving at the same rate. So. But Joe, on paper, this looks very good.

[B]

Yeah. Really good job of saving money. You got no debt. You're saving a ton of cash. Yeah. You'll have a lot of diversification. They must have just started making some of this money is they're saving roughly 100 to $200,000 a year, and they have $600,000 in a brokerage account. So what they probably the last four or five years.

[C]

Yeah.

[B]

I'm guessing that's when they really put the gas on.

[C]

I'm guessing that, too. They were probably like a lot of us when they were younger. They didn't make a lot.

[B]

And so they, what are they, 45? So I guess they started saving pretty aggressively at 40.

[C]

Yeah, probably 40. I mean, they're probably Dave Ramsey, you know, making sure they don't go into debt, which is a great message for younger people. And now it's time to. Time to plan ahead. So I, I commend him.

[B]

All right, so a living trust.

[C]

Do you have one?

[B]

First of all, I do have a living trust.

[C]

Al and I do too. So we both have them.

[B]

All right, so protection, there's a living trust is to avoid probate, period. It's to transfer non retirement assets to loved ones without going through the court system. That's basically what a living trust does. There's no asset protection in a living trust. It's a see through, look through trust. Right. It's revocable living trust, all of that. If they have irrevocable trust, which is outside of your taxable estate, where you have very little control over those assets and everything, you know, then those are a little bit more complex. Well, they're a lot more complex and those can provide some sort of protection from creditors. But I'm guessing you're talking about in your situation, a living trust makes sense. You live in the state of California. You have a lot of non retirement assets, such as your home of $1.3 million plus a brokerage account of $600,000. You're adding a lot of money to that account. You want to have it titled in the name of a trust. You and your wife would be. Or the wife and your husband. I'm not sure if Andy or April's writing in would be the trustees of that trust. So you have full access, you have full control. You can do whatever you want with those assets. But then when you pass away, then the successor trustee takes over and then they can distribute those assets to your beneficiaries without going through the court proceeds or proceedings. So it avoids time lengthiness. What, public record?

[C]

Yeah, public record, probate cops. And it's passed. Yeah. Yeah. So that's really why most people do it. And my parents passed away, my mom, last year. They had a living trust that I had her get. I'm the successor trustee. It made it so easy to distribute the assets without waiting months and months, sometimes years, to get these things done.

[B]

Yep.

[C]

Yeah, that's reason enough right there. There's no protection for you, just like Joe said. But when you pass away and your kids inherit the trust, if they keep the assets in the trust, they do have protection there. So no protection for you. But there could be for the next generation once they get the assets, if they keep it in the trust. So that. That's.

[B]

How many people do you think keep it in the tr.

[C]

Few.

[B]

Very few. But I. I guess if it was

[C]

million, if it was a lot. Yeah, right. Yeah, exactly right.

[B]

But in it, you know, and I'm saying, like tens of millions.

[C]

If.

[B]

It's got to be a pretty big number.

[C]

Well, yeah, but that is a benefit for. In some cases, even a few million could be a good benefit.

[B]

But the kids are going to like, hey, I just inherit a couple million dollars. I'm not going to keep it in mom and dad's trust. I'm doing that in my own. I'm going to buy a new house.

[C]

But maybe mom and dad, professional trustee, so they. That wouldn't happen.

[B]

Oh, yeah. Now you gotta talk to Uncle Al to get some cats.

[C]

I'm gonna be kind of stringent.

[B]

Yeah. Then that's kind of a pain, too.

[C]

It is.

[B]

Well, then. But you're controlling the money from the grave. If that's what you want to do.

[C]

Yeah.

[B]

All right. I don't trust my kids. I want to make sure that I divvy the money out or they're only going to use the money for things that I would approve while I'm living.

[C]

Well, but, you know, and sometimes, I mean, let's. Let's be realistic. A lot of kids are very responsible. Not all are. And if you know that as a parent, you might want to protect them that way.

[B]

Look at short sleeves to short sleeves and two gym generations or three generations.

[C]

It's. I think.

[B]

And then cobbler choose to.

[C]

Yeah, it. In other words, I guess the saying is that inherited money doesn't last long. I think maybe even one generation, but certainly by two, it's gone. Yeah.

[B]

Yeah, yeah, yeah. All right, cool. All right, Moving on. Okay, we got Burton Sally from None Such Kentucky.

[A]

And, you know, obvious you get the Burton Sally we've been talking about smoking the Bandit and Cannonball Run and all that. It's Reynolds and Sally Field.

[C]

Oh, yeah. It's got to be. Yep.

[B]

But they were just lumbers in a movie. I don't think they ever dated in real life, did they?

[A]

I think they actually did at that time.

[B]

They really. They did?

[A]

Yeah.

[B]

To get married.

[C]

No, I don't think so.

[B]

Was Bert ever married? I don't know, but probably Lonnie Anderson. Wasn't he married to Lonnie Anderson?

[C]

I think maybe you're right.

[B]

Stroker ace.

[C]

I think you're right.

[B]

Yeah.

[C]

I don't think he ever married Sally, though?

[B]

No. Okay. But I think Lonnie.

[A]

He was married to lonnie Anderson from 88 to 94 and Judy Karn from 63 to 65.

[C]

Okay.

[B]

Yeah. Look at me, Lonnie.

[C]

It's just. You're like.

[A]

This is like, pulled that right out of there.

[C]

Of celebrities.

[B]

I am. I am just locked in. All right, Andy, Jonelle, great podcast. Appreciate all the information you provide about retirement preparation and the calculations. I'm listening to the podcast, trying to figure out all that. I've manipulated the assumptions too much in my favor when using my online calculator. I can see that happens every single time people use those online calculators. They're just going to keep tweaking the

[C]

assumptions until I get it right.

[B]

Yeah. All right, so I'm eligible to retire in 2027. Can I really retire, or should I keep working for the good old American life? For the money, for the glory, and for the fun? Mostly for the money. Here's our info. Thanks for the spitball. We have three dogs. A pipita pit.

[A]

Pita.

[B]

A Chihuahua www. A dosh.

[A]

Dachshund.

[B]

Thank you.

[C]

I'm enjoying this.

[A]

Actually, here in Australia, they pronounce it dash hound.

[B]

Dash hound.

[C]

But we do dachshund here. You're right.

[B]

Yep. Okay.

[C]

All right.

[B]

All right. And then we have a regular dog.

[C]

Not with a weird name.

[B]

Yes. Plus, we really have a foster and.

[A]

Or phosphus. So they foster a hospice dog.

[B]

A phosphus.

[C]

Hospice.

[B]

What the hell is Phosphus?

[A]

That's where you take care of an elderly dog until it passes.

[B]

Really? There's such a. He's not making that up. That's a real thing.

[A]

He's not making that up. That's a real thing. You can foster a dog at the end of its life so that it doesn't have to live in the pound.

[C]

Oh, okay. Well, I have to.

[B]

It goes to hospice, not hospice.

[C]

Make sure you don't get it mixed up. You got to find some.

[B]

All right. I usually drive our 23 Subaru Impreza, and Sally mostly drives a 19 Subaru Outback, but we switch in the winter since the Impreza has heated seats and the W goes to work with Sally every day. We enjoy beers, anything from a multi stout brown ale to a juicy New England IPA to a funky, wild ale. And we enjoy traveling around the country for Sally to run her half marathons. And I find the breweries in the bakeries.

[C]

Okay.

[B]

Bert, he's 49, works in education. Sally's 47, works for a nonprofit. Bert's income, 70. Sally's income's 80. Current expenses is $6,500 a month, including $1,200 a month for travel. But mostly include. But not including our savings to Roth Emergency Brokerage. Except similar in retirement, excluding healthcare. Debt free, thanks to Donald Ramsey.

[A]

I don't know who that is.

[C]

Now, he means Dave Ramsey.

[A]

I know.

[B]

All right.

[C]

I think he met Donald Rumsfeld. He mixed up with Dave Ramsey, I think.

[B]

All right. I didn't think Donald Rumsfeld gave financial.

[C]

No, but Dave Ramsey did.

[B]

Got it. All right. Sally, she's got a Roth IRA. She's got 40,000. Bert's got 130 in his. Sally's got a rollover IRA of 130. Sally's also got a simple IRA of 200,000. Emergency funds is 60. We got a brokerage account of 20. Emergency brokerage on the same accounts. All right. Expected income in retirement. Burke can receive a pension of $3,400 a month. Paying in June of 2027. It will be state tax exempt up to $33,000 a year. Pension amount increase of $100,000 a month for each additional year worked until age 55, then increases $150 a month till age 60. It also has a 1.5% annual COLA Social Security for salaries estimated at $1,900 a month at age 62, but can receive spousal benefits thanks to the elimination of WEP and GPO.

[C]

Okay.

[B]

Expected expenses, $6,500 a month. Healthcare. Bert's insurance in retirement is $250 a month. Sally can be added for additional $1,100 a month retirement. Hopes and dreams. Bert retired 2027 or June 2029. Sally retired in December of 2031. All right, questions. Bert would like to retire in 2027. Is it feasible? What about June 2029? Sally would like to retire December of 2031. But is it feasible because of the health care cost? Maybe the marketplace has more affordable options. We will need to take Social Security as soon as possible. Or should we wait till full retirement age? Are the Bandit and Frog going to need another bootleg run for extra cash to retire early? Oh, that's funny. Or can we do it without the. Or can we do it with the pension and savings we've accumulated over the next few years? Thanks for your time, Bert and Sally. All right. Did you do some math, Big Al?

[C]

I did, since he first said 2027. That's close enough. I just took the current numbers.

[B]

All Right.

[C]

We can extrapolate from there. But what they currently have is about $650,000. They want to spend $78,000 per year. Okay. And they've got $41,000 of pension, which is great. So their shortfall is about $37,000 against $650,000 would be a 5.7% distribution rate.

[B]

That's the bridge to Social Security.

[C]

That's the bridge to Social Security, which would be a number of years. Yep.

[B]

So he'll retire at 50.

[C]

Yeah. And I know I'm oversimplifying because they will save for a few more years.

[B]

Sure.

[C]

But that. It just gives us an idea kind of where they stand, and they're not. I mean, if they both retired right now, they probably need 1.3, 1.5 million to get a 3% distribution rate for the bridge to Social Security, is what I would say. And they're. They're probably about halfway there. So I'm. I think that would be a little tough.

[B]

Okay.

[C]

What do you think?

[B]

Yeah, at 50, I think that's in.

[C]

And I. And I partly say that because if

[B]

Sally continues to work in.

[C]

Bert.

[B]

Retire. Because she wants to retire in 20, 30, Sally makes $80,000 a year. They want to spend $100,000 a year. $80,000 a year.

[C]

Yep.

[B]

So Bert. Ret. Because Sally can cover the living expenses until you bridge pensions and Social Security, I think you're fine.

[C]

You think they're fine?

[B]

Yeah, because I don't think they need to pull in the 2026. So what? 2031 is another five years from now. So five years, he's going to be 55. That's when they'll need to start drying at. Let's see, so they got 600. That's going to be, I don't know, close to a million.

[C]

Well, I think if they're living on her 80, they're not saving anymore, I don't think.

[B]

True.

[C]

So five years of growth of 650, they add a little bit more while he's still working. Maybe it's 700. Maybe it makes 2 million. I don't know. That might be a stretch, but let's just use a million.

[B]

The fixed income looks good.

[C]

Well, and it even looks better if he could work a little bit longer. Right. Because he gets a little bit more each year. He waits. If it were me, I'd work a little bit longer.

[B]

The pensions alone are going to give him, what,

[C]

41,000.

[B]

But $63,000 of fixed income with.

[C]

Yeah.

[B]

Not in Social Security.

[C]

Yeah. With her Yep.

[B]

So they need 80.

[C]

Right.

[B]

So they need 20,000.

[C]

Yeah.

[B]

I like this scenario a little bit better than the other ones that had millions of dollars because of that pension is, I mean, both of them have really good sized pensions.

[C]

Yeah.

[B]

And if. And they don't spend a ton.

[C]

That's right.

[B]

Right. And so if they can tone down the spending and let's say they spend a little bit too much, can they stop spending out of their liquid assets for a couple of years and just live off their pensions and bridge the gap to Social Security and then, I mean, there's a lot of options there.

[C]

Sure.

[B]

I think they could go back to work and make minimal dollars to still live the lifestyle that they want because of the pensions. Yep. I like this scenario. Probably the best out of all three that we saw today with. Even though this one doesn't necessarily have the liquid assets, but with the pensions that equates to very large, you know, like asset or net worth base.

[C]

And what, what makes this trickier is they're retiring at different ages and on a back of the envelope calculation, it's pretty hard to do. But yeah, I would say if, if you're, I, I just ran it at your booth. Retiring now, I think it's a little bit tough. But the fact that she could work longer and if her salary. Joe. Covers their payments so they can let their assets grow. I'm not sure they're saving a lot right now given the amount of their assets. So I think it would only be maybe a little assets and growth. But pension looks good.

[B]

Yeah. Bert retired 20, 27 or 29. 29 is probably the better answer. And let her retire at 2031 and kind of just see where you sit.

[C]

Yeah, I, like we say a lot of times, I think, you know, you rerun the. So let's say you work till 29, for example, you rerun the numbers before you retire and see how it looks at that point.

[B]

And I, I could tell. Is this the one that is playing with the calculators right online? Because it's close.

[C]

It's close. Yeah.

[B]

Then you just start dialing. All right, well, maybe inflation's going to be 2% and I'm going to get 8% on my money. And oh, look at how great this looks.

[C]

They all make eight and a half.

[B]

Yeah. Well, maybe I'm not going to spend 78. We're going to spend 70,000.

[C]

Yeah. Right.

[B]

So I could see. Be careful with, I mean, calculators are dangerous. Financial planning software sometimes is really dangerous too. It gives people like A some false confidence. It's an X ray right. In a point in time that can give you the best answer for what the strategy should look like that day. But it's a living, breathing kind of thing that you have to update, you have to change, you have to adapt, you have to do different things. So from a back of the envelope for you to be like, you know what, can I be confident enough to leave my job because I have these pensions? We've done a really good job of saving and I think we can kind of tone down our spend. Sure. But if you're trying to dial this thing into the penny, forget about it. You're going to have to work another 10 years.

[C]

Right. Well, and I guess the point you're trying to make is you can run this right on the margin, but you really want to run this where you have extra because you never know what's going to happen. Markets may not cooper, you know, one of you may have an expense for parent or a child or even yourself that you didn't expect. Right. And so just make sure you have some extra. That's when you're at the point where it could work. We get a little nervous. Right, because things don't always go according to plan.

[A]

Now Joe just called retirement calculators dangerous and he's not wrong. Plug in a rosy rate of return or shave a little off your projected spending and suddenly every calculator on the Internet tells you you're fine. Our financial blueprint is a little different. It's a free and self guided tool that instead of giving you one optimistic number to feel good about, it'll give you three scenarios so you can see the realistic range of how your retirement could actually play out. Just input your cash flow, your assets and your projected spending and you'll get a personalized report with your probability of retirement success, what your taxes could look like down the road, and concrete steps you can take right now to get on track or to stay there. Click or tap the financial blueprint link in the episode description and find out where you actually stand. And if you've got a friend who keeps tweaking their retirement calculator until it tells them what they want to hear, send the financial blueprint their way.

[B]

We got Dolly from Tennessee guessing Dolly Parton.

[C]

Now I'm guessing that too.

[B]

A great service you provide. How old is Dolly Parton? Like 80.

[C]

Oh, she's, she's in her 80s.

[B]

She still looks phenomenal.

[C]

She does.

[A]

Yeah, she does. Let me find out. Hold on.

[B]

Figure out what, what she did I don't know what that secret is.

[A]

Well, you know, it's a whole lot of plastic surgery. She doesn't try to hide that.

[B]

Yeah. But you know, you look at some people, most of them.

[C]

Most of them are horrible.

[B]

It's like, what. What is that? What are you doing? Oh, no, you didn't, did you? But, yeah, Yeah.

[C]

I think she is 80 years old.

[A]

She was born January 19th of 1946.

[C]

Oh, there you go.

[B]

80 years old.

[C]

Wow. Good for her. Yeah, she. I agree. She looks great.

[B]

Yeah. Traveling, being on the road. Country music singer.

[C]

Yep.

[B]

That's.

[C]

She's got a great personality and a great laugh. Yeah. And she's good at singing, too.

[B]

Hey, let's.

[C]

We love Dolly.

[B]

Oh, God. Great, great service you provide. And thanks for the laughs. I have two strategy related questions. Yeah, you always talk about taking advantage of spousal benefits with the Social Security, but in my situation, my husband and I are both 62 this year, only six months apart. We always talk about taking advantage of spousal.

[C]

Not always.

[A]

Every time Social Security comes up. How about that?

[C]

Maybe frequently. Yep.

[B]

Okay. And our projected benefits are identical. Unless there are some catastrophic events that wipe us out. We plan to wait until 70 years old. Are there any other ways to squeeze out more from the pot? Or did I make a mistake by not marrying a much older dude?

[A]

That's good thinking, Dolly.

[C]

Very, very poignant.

[B]

All right, number two. I'll be here in my mother's brokerage account with a new basis of around $950,000. Currently it's in probate. Right now it's around $60,000. Equity, 37% large cap value, 33% large cap growth, 20% international, 5% small in mid cap value, 5% small and mid cap growth, 36% fixed income. All right. 4% cash. Is this a good mix? Should I reallocate? Yeah, boy. Okay. I don't need this money for now. We have a total of about $400,000 in cash, 2.2 in pre retirement accounts, $90,000 in a Roth, 80,000 in HSA, and $600,000 in a brokerage account. Husband and I will work one or two more years and retire. I'm already retired and getting my pension right now. Our monthly take home covers our expenses. We both drive Toyota trucks and have two chocolate labs in sip bourbon. I'm the cfo, the family and listen to you and my car everywhere I go. Wow.

[C]

All right.

[B]

P.S. like Big Al's list on the older shows. Thanks again. Those were awful.

[C]

Those were amazing.

[A]

Don't we have them now. Come on.

[C]

I have a fan.

[B]

The list, remember the list?

[C]

Yeah, I go to Money magazine, remember? Someone called on me. They said, big Al just finds an article. Yep, that's exactly what I did.

[A]

Read it.

[B]

Yes, please use Dolly if read on the air. I live in a small town and can't even pass gas without everyone knowing.

[C]

That's a small town.

[B]

Okay. All right. So she's going to inherit some money in a fully globally diversified portfolio. Yeah. Yep, I'm good with that. Keep it there. That's fine.

[C]

Yeah, I'm good with that too. You know, with, with one.

[B]

I have no idea. I mean, you might want to change it. You may not. You know, when it comes to asset allocation with the spitball, it's almost.

[C]

Yeah, you can't. I mean, this is a, this is a normal allocation. The only thing I would add to what Joe just said is a lot of people, when they get an inheritance, want to put it in a vacuum. How should I invest this? Really? You should now put this on your entire portfolio. Look at your goals, figure out what the entire portfolio should be. And then you figure out, all right, the. As far as the stocks or the equities, what account should they go into? Probably more Roth and maybe non retirement, maybe the, the safer money, maybe that goes into your retirement account just because taxation, the stocks go up more in value over time. So you want them in a tax free environment like a Roth. You want them in the non retirement because you get capital gain. Now it's not as simple as that because you're going to have a lot more probably in a retirement account. But nevertheless, you look at things as a whole to do this. Right.

[B]

Yeah. Because they got a ton of money outside of this inheritance.

[C]

They do, Right.

[B]

You got a couple million dollars sitting in.

[C]

Yeah, they raised, they got over 3 million. So they're sitting good.

[B]

Exactly. So it's not like, here's my, here's, here's this brokerage account that I inherited and look at that separately. Just. All right, combine that with your $600,000 brokerage account and invest that appropriately, I think is what.

[C]

Right. That's what I'm saying. And until you get to that point, go ahead and keep it where it's at. But, but do that step to figure out what makes sense for you.

[B]

Yeah. Because you want to make sure that you tax, manage the account as best you can because you'll have now $1.6 million in a non retirement account, which is great for liquidity and creating income. Right. It's also a really good way to create income very tax efficiently.

[C]

Correct.

[B]

But you don't want to look at this in a bubble. We see this quite often. Is that all right? I inherited some money. I'm going to keep it exactly where it is. I have an emotional attachment to these funds because they were my mother's or fathers or grandfathers or whatever it is. And I totally get the emotional attachment. But don't be emotional towards investments. You know, have an emotional attachment towards an heirloom, you know, or something else versus the cash because you want to make sure that it's invested appropriately for your given goals. Your parents or your. Whoever you received that money from wanted to probably to make sure that you use it appropriately for your goals. Not necessarily just kind of sit there and look at a brokerage account as an heirloom. So invest it, right? And don't let it just keep growing on you. Don't touch it. And then all of a sudden you might need it. And then you have so much gains and you kind of get blown up with taxes. So just think of it as your overall strategy as you're thinking about your. Your upcoming retirement.

[C]

How about, how about Social Security?

[B]

Right? So 62, they both wait until age 70. That's fine.

[C]

And there's no other tricks that they

[A]

can play, are there?

[C]

No.

[B]

Well, not anymore. I mean, before, what we would probably say is have one of you file, then suspend at your full retirement age. And then you would take the spousal benefits based on the suspended, you know, benefit. But now those rules change.

[C]

That was like a decade ago. You can't do that.

[B]

Has that been that long?

[A]

Yeah, I think that changed in 2015, didn't it?

[C]

Something like that. The only thing I would say, and I don't know if this is a great strategy or not, but you could Both wait till 70. That's fine if you both have good longevity. But I would say the very least, one of you should wait till you're 70 in case one of you survives the other. So you got a bigger benefit. One could take it at 62, 64, 67. I don't really care. I want one of you to wait till 70. That's what I would suggest. Or that's what I would do in this situation.

[B]

Sounds good.

[A]

Next week on ymyw. Captain Morgan, Chloe Jopine, Brian in New York, and Kyle and Katie all need Roth conversion guidance. And Todd and Margot are hoping to retire this year. Tune in for the spitballs and stay for the lifestyle cravings that'll make sense next week. You know, a lot of you have been soaking up all this retirement and tax strategy on YMYW for months or even years, and I've got about 100 pages of questions from many of you who are still waiting for a spitball from Joe and Big Al. But here's the thing. We call them spitballs for a reason. They aren't exactly comprehensive. Skip the wait and schedule a free assessment with Pure Financial Advisors. The experienced professionals on Joe and Big Al's team at Pure will help you craft a robust retirement plan that accounts for every aspect of your financial life. They'll help you pay less tax in retirement, ensure your investments are aligned with your tolerance for risk, and show you how to ride out the uncertainties of the market and rising costs with confidence. Like a spitball, the cost is zero. The obligation is zero. Not only will you get a much deeper and more useful dive than a spitball, you'll probably get it sooner, too. Meet in person at one of over a dozen Pure locations from California to Tennessee. Or you can take your meeting over zoom from anywhere. It's only the rest of your life we're talking about here. What's holding you back? Click or tap the free financial assessment link in the episode description or call 888-994-6257 to book yours. Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this podcast and does not represent that the securities or services discussed are suitable for any investor. As rules and regulations change, podcast content may become outdated. Investors are advised not to rely on any information contained in the podcast in the process of making a full and informed investment decision.