In this episode of 'Retire with Style', Wade and Alex discuss the complexities of pension decisions with Jason Rizkallah from McLean Asset Management. The conversation delves into the critical choices retirees face regarding pension options, including whether to take a lump sum or annuity payment, the implications of each choice, the importance of comprehensive financial planning, and the potential benefits of external annuities. They discuss the importance of evaluating commercial annuities, understanding the structures and benefits of different annuity options, and the credit risks associated with pensions and insurance companies. The conversation also covers strategies for diversification, the significance of rate lock procedures, and the impact of income decisions on overall retirement planning. Listen now to learn more!

Takeaways

• Annuities provide reliable income but come with liquidity issues.
• Tax implications are significant when taking a lump sum.
• External annuities can be competitive with pension options.
• Comprehensive financial planning is essential for retirement success.
• The choice between lump sum and annuity should consider long-term goals.
• Market conditions can affect the competitiveness of annuities. Consider all options before deciding on a pension or lump sum.
• Commercial annuities may offer better income rates than pensions.
• Evaluate the structure of annuities for survivor benefits.
• Credit risk varies between pensions and insurance companies.
• Diversifying annuities can mitigate risk but may lower income.
• Rate lock procedures are crucial in securing favorable annuity rates.
• Understand the implications of income on Medicare premiums.
• Ask providers about the potential repercussions of retirement choices.
• Partial rollovers may be possible but are often all or nothing.

Chapters

00:00 Introduction to Pension Decisions 02:35 Understanding Pension Options: Lump Sum vs. Annuity 05:54 Exploring the Third Option: External Annuities 08:51 Pros and Cons of Taking a Lump Sum 16:17 Evaluating Annuity Options 25:49 The Case for External Annuities 27:23 Evaluating Pension vs. Lump Sum Options 30:53 Understanding Annuity Structures and Benefits 34:34 Assessing Credit Risks in Pensions and Annuities 38:18 Exploring Partial Rollovers and Diversification Strategies 42:09 Navigating Rate Lock Procedures for Annuities 47:11 Considering the Impact of Income on Retirement Planning

Links

Click here to download Retirement Researcher's free flowchart resource, "Should I take my pension as a lump sum?": https://retirement-researcher.ontralink.com/tl/474

We’re hosting another YouTube LIVE Q&A episode for RWS! Click here to submit your questions: www.retirementresearcher.com/ask

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

In this episode of 'Retire with Style', Wade and Alex delve into various aspects of tax planning, focusing on strategies such as front-loading taxes, tax loss harvesting, and deduction bunching. They discuss the implications of tax filing status changes, particularly for surviving spouses, and the impact of the Secure Act on inherited IRAs. The conversation emphasizes the importance of strategic Roth conversions and planning for future tax rates, providing listeners with valuable insights into effective tax management in retirement. The discussion also highlights the potential benefits of front-loading taxes and the implications of the SECURE Act on retirement accounts. Listen now to learn more!

Takeaways

• Front loading taxes can increase after-tax wealth.
• Inherited IRAs have new tax implications post-Secure Act.
• Roth conversions can be beneficial for beneficiaries.
• Tax planning should consider future income levels.
• Understanding tax liabilities is crucial for inheritance planning. Consider front-loading taxes to take advantage of current rates.
• Tax loss harvesting can add value to portfolio management.
• Deduction bunching can maximize tax benefits from charitable contributions.
• Donor advised funds offer flexibility in charitable giving.
• Appreciated shares can be donated to avoid capital gains taxes.
• Increasing after-tax spending power is a key goal in tax strategy.

Chapters

00:00 Introduction to Tax Planning Conversations 05:12 Reasons to Front Load Taxes 08:01 Implications of Filing Status Changes 10:28 Embedded Tax Liabilities in Inheritance 12:39 Strategic Roth Conversions for Beneficiaries 14:51 Planning for Future Tax Rates 18:11 Tax Strategies for Retirement Planning 32:10 Maximizing Charitable Contributions 43:34 Future Tax Planning and Legacy Considerations

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

In this episode of 'Retire with Style', Wade and Alex discuss the complexities of tax-efficient retirement planning, focusing on understanding preferential income, tax brackets, and the implications of additional income on tax rates. They explore the net investment income tax, strategic Roth conversions, and the significance of timing in retirement income planning. The conversation emphasizes the need for careful management of social security and Medicare surcharges, particularly during the fragile decade of financial planning leading up to and following retirement. Listen now to learn more!

Takeaways

• Preferential income includes long-term capital gains and qualified dividends.
• Understanding how income stacking affects tax rates is crucial.
• The net investment income tax can increase effective tax rates significantly.
• Roth conversions should be timed carefully to avoid higher tax brackets.
• Social security decisions can influence tax planning strategies.

Chapters

00:00 Introduction to Tax-Efficient Retirement Planning 02:46 Understanding Preferential Income and Tax Brackets 06:01 The Impact of Additional Income on Tax Rates 09:02 Navigating the Net Investment Income Tax 11:53 Strategic Roth Conversions and Tax Planning 14:55 The Importance of Timing in Retirement Income Planning 18:08 Managing Social Security and Medicare Surcharges 20:58 The Fragile Decade of Financial Planning 24:04 Conclusion and Future Planning Strategies

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”