Retire With Style

By Wade Pfau & Alex Murguia

The purpose of Retire With Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Your hosts Wade Pfau, PhD, ... more

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FAQs about Retire With Style:

How many episodes does Retire With Style have?

The podcast currently has 157 episodes available.

Retire With Style episodes:

November 05, 2024Episode 151: Financial Strategies for Early Retirement
In this episode of 'Retire with Style', hosts Alex Murguia and Wade Pfau with Jessica Wunder from McLean Asset Management delve into the complexities of early withdrawals from retirement accounts, specifically IRAs and 401(k)s. They discuss the penalties associated with early withdrawals, the Rule of 55, and various exceptions allowing penalty-free access to funds. The conversation highlights the differences between IRAs and 401(k)s, including specific exceptions applicable to each type of account. In this conversation, the speakers discuss the new exceptions introduced by Secure Act 2.0, including emergency withdrawals and disaster recovery relief. They delve into various early withdrawal exceptions, such as those for death, disability, and medical expenses. A significant focus is placed on the 72T approach, which allows for early withdrawals without penalties under specific conditions.

Takeaways
- The Rule of 55 allows penalty-free withdrawals from 401(k)s after age 55.
Public safety employees have unique exceptions for early withdrawals.
You can withdraw for medical insurance premiums if unemployed.
Educational expenses can be covered by early withdrawals from IRAs.
The 72(t) strategy allows for substantially equal periodic payments.
There are strict rules governing early withdrawals from retirement accounts.
Early withdrawal exceptions include death, disability, and medical expenses.
The 72T approach allows for substantially equal payments from retirement accounts.
Chapters
00:00 Introduction and Guest Introduction
01:38 Understanding Early Withdrawals from Retirement Accounts
04:02 Exploring the Rule of 55
11:09 Exceptions for IRAs vs. 401(k)s
15:57 Common Exceptions for Early Withdrawals
18:00 New Exceptions in Secure Act 2.0
22:00 Understanding Early Withdrawal Exceptions
30:00 The 72T Approach Explained
35:59 Planning for Retirement Cash Flow Needs

Links
Click here to download Retirement Researcher’s free resource, “Exception to Early Withdrawal Penalties“: https://retirement-researcher.ontralink.com/tl/476
We’re hosting another YouTube LIVE Q&A episode for RWS! Click here to submit your questions: www.retirementresearcher.com/ask
Watch this episode on YouTube: https://youtu.be/EzdIgudCkPQ?feature=shared
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”
...more
43min
October 29, 2024Episode 150: Lump Sum or Annuity: What’s Right for You?
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”
...more
55min
October 22, 2024Episode 149: The Various Aspects of Tax 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
...more
48min
October 15, 2024Episode 148: Tax-Efficient Income Stacking
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”
...more
29min
October 08, 2024Episode 147: Navigating Medicare and Tax Planning
In this episode, Alex Murguia and Wade Pfau delve into the complexities of tax planning related to healthcare, focusing on Medicare premiums and the implications of income on these costs. They discuss the Income Related Monthly Adjustment Amount (IRMA) and how it affects Medicare premiums, emphasizing the significant impact of seemingly small increases in income. The conversation also covers the Affordable Care Act subsidies, highlighting the double-whammy effect of income on both Medicare and ACA costs. The importance of holistic financial planning is underscored, as the hosts stress the need to consider these factors together to avoid costly pitfalls in retirement planning.

Takeaways
- Medicare premiums can increase significantly with small income increases.
IRMA can lead to extremely high effective tax rates on additional income.
Understanding the different parts of Medicare is crucial for planning.
Affordable Care Act subsidies can be impacted by income levels.
Planning for healthcare costs is essential in retirement.
There are specific life events that can help reduce Medicare premiums.
Holistic financial planning is necessary to navigate retirement income.
Software tools can help analyze the impact of income on healthcare costs.
It's important to monitor income levels to avoid unexpected costs.
Effective retirement planning requires integrating various financial factors.
Chapters
00:00 Navigating Medicare and Tax Planning
04:22 Understanding Medicare Premiums and IRMA
09:52 The Impact of Income on Medicare Costs
15:58 Affordable Care Act Subsidies Explained
22:04 The Double Whammy of Income and Healthcare Costs
29:59 Holistic Financial Planning for Retirement

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
...more
38min
October 01, 2024Episode 146: The Concept of the 'Tax Torpedo'
In this episode of 'Retire with Style', hosts Alex Murguia and Wade Pfau delve into the concept of the 'tax torpedo', a phenomenon affecting the taxation of Social Security benefits. They explore how increased taxable income can lead to a significant rise in the percentage of Social Security benefits that are taxed, particularly for middle-class retirees. The discussion covers the mechanics of the tax torpedo, the implications of provisional income, and strategies for effective retirement income planning to mitigate its effects. Through case studies and real-world examples, the hosts emphasize the importance of proactive tax planning to avoid unexpected tax burdens in retirement. Listen now to learn more!

Takeaways
- The tax torpedo refers to the taxation of Social Security benefits based on income levels.
Middle-class retirees are particularly affected by the tax torpedo.
Provisional income is a key factor in determining how much Social Security is taxed.
Taxation on Social Security benefits can range from 0% to 85%.
Roth conversions can help manage taxable income and reduce Social Security taxation.
The tax brackets can create significant jumps in effective tax rates due to the tax torpedo.
Understanding provisional income is crucial for retirement planning.
Tax planning before starting Social Security benefits can lead to significant savings.
The tax torpedo is a planning opportunity rather than just a snag.
Effective management of taxable income can lead to real tax savings.
Chapters
00:00 Introduction to the Tax Torpedo
02:29 Understanding the Tax Torpedo Mechanics
05:56 The Impact of Social Security Taxation
09:38 Provisional Income and Its Implications
13:09 Navigating the Tax Brackets
18:05 Case Studies and Real-World Examples
26:10 Planning Opportunities to Avoid the Torpedo

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”
...more
32min
September 24, 2024Episode 145: Mastering Tax-Efficient Withdrawals
In this episode of 'Retire with Style', Alex Murguia and Wade Pfau delve into tax-efficient withdrawal strategies for retirement. They discuss the importance of withdrawal order sequencing, the types of accounts available for withdrawals, and effective marginal tax rate management. The conversation highlights techniques for generating taxable income, including Roth conversions and long-term capital gains harvesting, while emphasizing the need to maintain asset allocation integrity throughout the retirement income distribution process. The episode sets the stage for future discussions on social security and Medicare implications in retirement planning. Listen now to learn more!

Takeaways
- Tax efficiency can significantly impact retirement income.
Withdrawal order sequencing is crucial for tax-efficient distributions.
Understanding account types helps in planning withdrawals.
Effective marginal tax rate management can save money.
Roth conversions can enhance after-tax wealth.
Long-term capital gains harvesting can reset cost basis.
Maintaining asset allocation is essential during withdrawals.
Short-term sacrifices can lead to long-term benefits.
Taxable accounts should be spent down first to minimize tax drag.
Future discussions will cover social security and Medicare implications.

Chapters
00:00 Introduction to Tax-Efficient Withdrawal Strategies
02:48 Understanding Account Types for Withdrawals
06:00 Withdrawal Order Sequencing Explained
08:54 Effective Marginal Tax Rate Management
11:51 Techniques for Generating Taxable Income
15:12 Roth Conversions and Tax Implications
17:53 Long-Term Capital Gains Harvesting
20:58 Maintaining Asset Allocation Integrity
23:50 Conclusion and Future Topics

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
...more
39min
September 17, 2024Episode 144: Understanding the Rules of RMDs
In this episode of 'Retire with Style', Alex and Wade delve into the intricacies of Required Minimum Distributions (RMDs). They discuss the calculations involved, the implications of RMDs on retirement planning, and the recent changes introduced by Secure Act 2.0. The conversation also covers the consequences of failing to take RMDs, the aggregation of RMDs across different accounts, and provides examples of RMD calculations using life expectancy tables. Additionally, they touch on the topic of RMDs for inherited accounts and introduce the concept of Qualified Charitable Distributions as a strategy to manage RMDs effectively. Listen Now to Learn More!

Takeaways
- RMDs are required to ensure taxes are paid on tax-deferred accounts.
The starting age for RMDs has changed to 73 or 75 depending on birth year.
RMDs do not apply to Roth IRAs or Roth 401(k)s.
Failing to take RMDs can result in significant penalties.
You can aggregate RMDs across multiple IRAs but not 401(k)s.
RMD calculations are based on the account value at the end of the previous year.
The uniform life table is commonly used for RMD calculations.
Qualified Charitable Distributions can help manage RMD tax implications.
Understanding RMDs is crucial for effective retirement planning.
RMDs can impact social security taxation and Medicare premiums.
Chapters
00:00 Introduction to Required Minimum Distributions
03:00 Understanding RMD Calculations and Implications
06:04 RMD Rules and Changes in Secure Act 2.0
09:10 Consequences of Not Taking RMDs
11:59 Aggregating RMDs Across Accounts
14:53 RMD Calculation Examples and Life Expectancy Tables
21:04 Exploring RMDs on Inherited Accounts
25:54 Qualified Charitable Distributions and Future Topics

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”
...more
32min
September 10, 2024Episode 143: The Importance of Asset Location and Asset Allocation
In this episode, Alex and Wade discuss the importance of asset location in addition to asset allocation. They explain that asset location involves strategically placing assets in different types of accounts based on their tax efficiency. They discuss the tax efficiency spectrum, with tax-exempt bonds being the most tax efficient and REITs being the least tax efficient. They also discuss the tax advantages of different types of accounts, such as Roth IRAs, 529 plans, health savings accounts, and non-qualified annuities. Listen now to learn more!

Takeaways
- Tax location is an important consideration in addition to tax allocation.
Assets should be strategically placed in different types of accounts based on their tax efficiency.
The tax efficiency spectrum ranges from tax-exempt bonds (most tax efficient) to REITs (least tax efficient).
Different types of accounts offer different tax advantages, such as tax deductions, tax deferral, and tax-free distributions.
Asset allocation should drive the decision of where to place assets for tax efficiency.
Chapters
00:00 Introduction to Tax Efficiency
05:49 Understanding Asset Allocation and Tax Efficiency
09:39 Exploring the Tax Efficiency Spectrum
18:45 Placing Assets in Taxable, Tax-Deferred, and Tax-Exempt Accounts
27:30 The Importance of Asset Allocation in Tax Location Decisions
33:58 Other Considerations: Annuities, Life Insurance, and More

Links
Spots are filling fast! Register now to attend a FREE Webinar with Retirement Researcher on 9/17 at 2:00 PM ET, 5 Must-Knows About Retirement Spending hosted by Christine Benz of Morningstar! Visit risaprofile.com/podcast to sign up now!
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
...more
41min
September 03, 2024Episode 142: Tax-Efficient Retirement Strategies
In this episode, Alex and Wade discuss tax-efficient retirement strategies, specifically focusing on tax diversification. They explain the three broad types of tax treatments in the tax code: taxable accounts, tax-deferred accounts (such as IRAs and 401ks), and tax-exempt accounts (such as Roth IRAs). They highlight the importance of having assets in each category to provide flexibility in retirement planning. They also discuss the characteristics and advantages of each type of account, including tax treatment, liquidity, and growth potential. Additionally, they touch on the different methods of tracking cost basis in taxable accounts. In this conversation, Alex and Wade discuss tax-efficient retirement distribution strategies. They cover the different types of retirement accounts, including tax-deferred accounts (such as traditional IRAs and 401(k)s), tax-exempt accounts (such as Roth IRAs and Roth 401(k)s), and taxable accounts. They explain the tax advantages and disadvantages of each type of account and discuss the importance of considering your current and future tax rates when deciding where to contribute. They also touch on the backdoor Roth contribution strategy and the concept of required minimum distributions (RMDs). Overall, the conversation emphasizes the importance of tax efficiency in retirement planning.

Takeaways
- Tax diversification involves having assets in taxable accounts, tax-deferred accounts, and tax-exempt accounts to provide flexibility in retirement planning.
Taxable accounts are the least tax-efficient but offer advantages such as preferential income treatment, step-up in basis at death, and liquidity.
Tax-deferred accounts, such as IRAs and 401ks, offer tax deductions on contributions and tax-deferred growth, but have required minimum distributions and early withdrawal penalties.
Tax-exempt accounts, such as Roth IRAs, offer tax-free growth and tax-free distributions, but contributions are not tax-deductible.
Tracking cost basis in taxable accounts can be done using methods like average cost, first in first out (FIFO), or specific identification of tax lots. Consider your current and future tax rates when deciding where to contribute to retirement accounts.
Tax-deferred accounts (such as traditional IRAs and 401(k)s) provide a tax deduction now but are taxed upon withdrawal.
Tax-exempt accounts (such as Roth IRAs and Roth 401(k)s) are funded with after-tax dollars but provide tax-free withdrawals in retirement.
Taxable accounts have no tax advantages but offer flexibility and liquidity.
The backdoor Roth contribution strategy allows high-income earners to contribute to a Roth IRA by making a non-deductible contribution to a traditional IRA and then converting it to a Roth IRA.
Required minimum distributions (RMDs) are mandatory withdrawals from tax-deferred retirement accounts starting at age 72 (or 70.5 for those born before 1960).
Tax efficiency is an important aspect of retirement planning and can have a significant impact on your overall financial situation.

Chapters
00:00 Introduction and Excitement for Tax-Efficient Retirement Strategies
01:26 Tax-Efficient Retirement Distributions as a General Theme
03:01 Understanding Tax Diversification and the Three Types of Tax Treatments
04:20 Advantages and Considerations of Taxable Accounts
15:11 Benefits and Limitations of Tax-Deferred Accounts
25:14 The Advantages of Tax-Exempt Accounts
26:04 Methods of Tracking Cost Basis in Taxable Accounts
00:31 Overview of Retirement Accounts
08:43 Tax-Deferred Accounts
18:30 Tax-Exempt Accounts
25:14 Taxable Accounts
28:47 Backdoor Roth Contribution
33:44 Required Minimum Distributions (RMDs)
38:26 Tax Efficiency in Retirement Planning
45:11 Retirement Tax Cliff
47:09 Conclusion

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”
...more
52min

FAQs about Retire With Style:

How many episodes does Retire With Style have?

The podcast currently has 157 episodes available.