Retirement Starts Today

Are you one of the many people still working from home due to the pandemic? What seemed like a phase that would last a few weeks has turned into a trend with no end in sight. While working from home creates exciting possibilities, especially for those considering retirement, it also has its downfalls. Many people have discovered that working from home means the lines between work life and home life are being erased. As long as you are conscious that burnout is a real risk then you can take active steps to keep your home life and work life in balance.

On this episode, I'll share an Inc. magazine article about avoiding burnout while working from home. We'll also take a look at a WSJ article on early retirement buyouts. Then we'll wrap up this episode with a listener question about strategies for those on the cusp of retirement. So, grab your Airpods or your favorite listening device and take a walk with me.

Outline of This Episode

• [1:02] How to avoid burnout while working remotely
• [6:30] Should you consider early retirement?
• [11:55] Are there any one-time financial strategies for those on the cusp of retirement?

Is working from home leading you to burnout?

While the work from home revolution that picked up momentum during the pandemic has opened many doors, it has also revealed its own set of problems. People spend more time actively working and it seems that the 40-hour workweek has gone out of the window. Employees are now spending 25% more time 'at work' than before the pandemic. Many have stated that they find they are often sending work-related messages and emails after traditional work hours. Their desire to be productive now puts them at risk of burnout.

Try taking a virtual commute

Microsoft has come up with a creative way to help its team avoid burnout while working remotely. Their solution is to bring back the commute. They don't recommend you jump in the car and drive to your workplace, but rather a virtual commute. The Inc. article recommends a 20-minute meditation commute. I love this idea. However, if you are not a meditator, a walk to work commute might be a better alternative. Before you start working each morning, head out your front door, and walk around the block. You can use this time to get in the right headspace for work and plan your day.

Working from home could extend your working life

Working from home can create amazing possibilities, especially for those of you considering retirement. The possibility of working from anywhere means that you could extend your work timeline. However, to take full advantage of the possibilities it is imperative to avoid burnout. As long as you are conscious that burnout is a real risk then you can take active steps to keep your home/work life in balance.

Have you been offered an early retirement package?

Press play and listen in to hear whether you should consider taking an early retirement package. And keep listening until the end to hear the answer to Frank's question about one-time financial strategies for those on the cusp of retirement.

Resources & People Mentioned

• Inc magazine article on the virtual commute
• WSJ article on early retirement buyouts

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

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Are you worried about the seemingly constant news stories which claim that Social Security may run out of money? These articles highlight any problems that the Social Security program is facing which can lead the reader to fret about the future of the guaranteed income source in retirement. Not surprisingly, there are companies out there that want to capitalize on this worry.

Does Social Security insurance sound like a good idea to you? On this episode of Retirement Starts Today I read from and discuss an article about Social Security Insurance. You'll learn what it is and how it works and hear my thoughts about this product.

Outline of This Episode

• [3:22] Make sure there is not a planning solution before rushing out to buy a product
• [6:37] How does Social Security insurance work?
• [9:48] What is my opinion on Social Security insurance
• [12:10] How to begin a migration into bonds

There is a product out there to solve every problem

Investors are always looking for less volatility in their investment portfolios, but oftentimes they don't realize that proper investment planning is the best way to achieve that. Those who don't approach their portfolios with an investment plan in place are often looking for a product to buy to solve their problems. The low volatility fund is one product for people who want to buy a risk solution rather than plan.

Is a low-risk fund all it's cracked up to be?

Does this low volatility fund end up raising risk in the short run while at the same time reducing risk in the long run? These low-risk funds often paint a distorted picture. While trying to reduce the downside they ultimately limit the upside which leads to less risk yet ultimately fewer returns. Zweig explains it beautifully, "the market loves to make monkeys out of people who think they've solved it."

Solve your investing problems with strategy rather than products

It is important to remember that in investing as well as in other areas of retirement planning there will always be someone there to charge you a fee for a product as a solution to your investment planning problem. So before you rush out to buy the first product that comes along, my advice to you is to think about your own behavior first. Consider if there is a planning or behavior management solution that could replace this product.

What is a good alternative to Social Security insurance?

If you think that Social Security will run out of money or that you may see your benefits reduced that's okay. But instead of rushing out to buy a product to hedge against the Social Security problem, be a prudent pessimist. A prudent pessimist doesn't take a cut on their Social Security benefit by filing early, they wait until age 70 to receive a 32% bonus. That way if there is a cut to your benefit, it will be a cut on the bonus rather than on the reduced benefit. Press play to hear more about Social Security insurance, investment planning, and a listener question about how to migrate into the bond market.

Resources & People Mentioned

• Jason Zweig's WSJ article
• Social Security insurance article

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

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If you are listening to Retirement Starts Today, you probably have retirement on your mind. You have probably given thought as to how you will spend your money, where that money will come from, healthcare, and plenty of other subjects.

But have you put any thought into how much notice you will give your employer? Do you have one of those jobs where you relish the day that you give your retirement notice? Or will your announcement be bittersweet? You may want to put some extra thought into how you want to present your retirement notice, especially during challenging economic times.

Outline of This Episode

• [1:12] How much notice will you give your employer of your pending retirement?
• [3:19] A cautionary tale
• [5:54] Real life examples for you to learn from
• [11:16] There is no one right answer

A cautionary tale

You may want to give your employer plenty of notice about your retirement. If you have a strong sense of duty, you may feel that it is the right thing to do. I talked to one person who did just that. He was an employee who deeply valued his work and wanted to leave his career better than he found it. But his thoughtfulness didn't pay off in the end. When the company offered early retirement packages he was passed over since he had already announced his retirement.

There are a number of different ways to make your retirement announcement

While there are disappointing stories such as that one, there are also positive responses to retirement news. When I asked readers of my Every Day is Saturday newsletter about how they plan to announce the news of their retirement I got several different answers. These answers vary based on the type of work they do and the type of employer they work for.

What factors should you consider when announcing your retirement?

One listener that has a technical job in IT plans to give 6 months' notice. He based this number on the amount the time it will take to train his replacement. You may also want to consider the size of the company you work for and your level of responsibility in the organization. Another listener's 1-month retirement announcement was well received. He also offered flexibility and it ended up paying off. Listen in to find out how that story worked out.

There is no right answer

So what can you learn from these examples? What is the right amount of notice to give? Unfortunately, like just about everything else in retirement, there is no one size fits all answer. However, we are generally rewarded when we make these decisions with careful due diligence and specific intentions. So how will you give your retirement notice?

Resources & People Mentioned

• Boomer Benefits

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

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Have you seen the news about Tesla and Apple lately? Their stock prices are surging to new highs after the announcement of a stock split. Is this what is supposed to happen with a stock split? Learn more about stock splits and what they mean for you by listening to this episode of Retirement Starts Today.

After we the Retirement Headlines I answer several listener questions. Have you been wondering about you and your spouse's Social Security timeline? Should you roll over funds if you are happy with your 401K? Which is better--to dollar cost average or to max fund your retirement as quickly as possible? You'll hear my take on the answers to these questions by pressing play now.

Outline of This Episode

• [1:32] Are stock splits good for stocks?
• [5:32] Should you run out and buy a stock upon the announcement of a split?
• [7:01] What factors should be considered when setting up a Social Security timeline?
• [9:23] Should you roll over your 401K if it is flexible and you are happy with it?
• [14:44] Should you dollar cost average over a year or max fund your retirement as quickly as possible?

What is a stock split?

Before I share my thoughts about the recent announcement of the Apple and Tesla split, I want to clarify what a stock split is. A stock split is simply dividing the price of a stock. When a stock split happens shareholders double the number of their shares but, essentially, they should hold the same monetary value. So if I own 1 share of Ben Brandt Industries at $10 per share before the split then afterward I'll own 2 $5 shares that also equal $10. The whole point of a stock split is to bring down the price so that it becomes more affordable for everyday investors.

Should you buy a stock upon the announcement of a split?

Recently Apple and Tesla both announced an upcoming stock split at about the same time. When they did so their share prices soared. This isn't a typical market response of a stock split and is actually a surprising outcome. Listen in to discover why you should stay well away from announcements like these and you'll even learn why stock splits should be obsolete in today's world.

What factors should be considered when setting up a Social Security timeline?

Are you wondering what the best timeline is for setting up your Social Security benefits? If you have listened to my show at all, you know by now that I am a fan of maximizing the largest of the Social Security checks by delaying those benefits for as long as possible. Grow the larger Social Security check for as long as possible to help you build the foundation of your retirement plan.

But what about the second Social Security check?

If you are married then you likely have 2 Social Security checks to look forward to. Should you delay taking that benefit until age 70 as well?

I recommend waiting until full retirement age to file for this benefit, but keep it in your back pocket as a contingency plan. So, in case of a market downturn, you can be ready to turn on this benefit rather than dip into your savings before the market bounces back.

If you enjoy staying up to date on the latest retirement news, make sure to sign up for the Every Day Is Saturday newsletter.

Resources & People Mentioned

• CNBC article about Apple and Tesla splits
• Fractional shares article from Robinhood

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

Subscribe to Retirement Starts Today on

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Have you been wanting to know a bit more about Biden's tax plan without all the political spin? Me too! That's why I dug deep to find the best information that I could share with you all. I promise, no politics here; just relevant information to help you best prepare for an amazing retirement.

In addition to learning how Biden's tax plan could affect your retirement, I'll answer a couple of listener questions. You'll hear questions about TSP's and Roth IRA conversions.

Outline of This Episode

• [2:15] Biden's first proposal is to repeal the tax cuts
• [6:41] Biden's proposal has some tax incentives as well
• [8:47] Takeaways from these proposals
• [11:02] The TSP in retirement
• [14:11] How to structure your Roth IRA conversions

What's the buzz about Biden's tax proposal?

There has been a lot of buzz about Biden's tax plans in the news, but it can be challenging to find what those plans are without all of the political mumbo jumbo thrown in. I had to do some research, but I used the least politicized source I could find, TaxFoundation.org. Joe Biden has planned to raise taxes in several areas for certain groups of people, however, he has proposed a variety of tax incentives as well. Listen in to find out what Joe Biden's tax proposal entails and how it could affect you.

How could Biden's tax plan affect your retirement?

At the end of the day, all you want to know is how the proposed tax changes could affect you and your retirement. What I want you all to understand is how important it is to build a flexible retirement strategy. You don't ever want to jump all in or all out of the stock market. The middle ground will save your retirement in times of uncertainty.

Your retirement is more important than what is going on in Washington. If you have a portfolio consisting of half stocks and half bonds then you can even live off your bonds for an entire presidential term.

Remember, the stock market doesn't care who is president. The top companies in the world will continue to succeed regardless of who sits in the Oval Office.

Taxes will always increase over time

Another key takeaway that I want you all to remember is to pay the devil you know. Both portfolio values and taxes will likely increase over time. So, if you are newly retired with some tax flexibility it makes sense to pay more taxes now to prevent yourself from paying a lot more later. Remember, pay taxes like a pessimist and invest like an optimist.

What will you learn from our listener questions?

Our listener questions today involve are about Thrift Savings Plans (TSP) and how to structure Roth IRA conversions. I'm not an expert in TSP's, but if you are a government employee you'll want to listen in to discover an excellent resource to help you plan your federal retirement. Stick around till the end of the episode to learn how to thread the needle and avoid a hefty tax burden with your RMD's.

Resources & People Mentioned

• Biden's tax proposal from TaxFoundation.org
• Taxes in Retirement Facebook group
• Micah Shilanski, federal benefits and TSP expert

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

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Have you ever hear of a bank bail-in? You read that right, bail-in, not a bail-out. I hadn't heard of this concept until recently and wanted to share it with you so that you understand how it works. Listen in to understand how this buzzword could be used to trick you into worrying about your savings. You'll also hear the latest about the Fed's plans for interest rates in the coming years. Stay informed of the latest in retirement headlines on this episode of Retirement Starts Today.

Outline of This Episode

• [1:22] Is bail-in a new buzzword?
• [6:04] What does FDIC insurance cover?
• [9:42] What protections are offered for investment accounts?
• [12:27] The Fed is planning to hold rates at zero for 5 years or more
• [15:11] What is a bond barbell?

What is a bank bail-in?

We're all familiar with bank bailouts. These government-funded cash injections designed to prevent the collapse of a failing bank. Bank bailouts are unpopular across the board, from democrats to republicans to everyone in between.

A bail-in is also a way to prevent the collapse of a failing bank. But rather than being funded by taxpayers, bail-in money comes from deposit holders and creditors. The bank is allowed to convert its debt into equity to increase its capital requirements. How does this affect your money? Listen in to hear why a bank bail-in isn't as worrisome as you may think.

What does the FDIC insurance cover?

The FDIC insures each bank account up to $250,000 per person per bank. This insurance covers checking accounts, savings accounts, money market accounts, CD's, etc. However, the FDIC doesn't cover stocks, bonds, annuities, and life insurance. Generally speaking, the FDIC doesn't insure anything that is considered to be an investment.

What is SIPC?

Now you know that investments aren't covered under FDIC, but are investments covered by any type of insurance? Similar to the FDIC for bank accounts there exists the SIPC for brokerage accounts. SIPC is the acronym for Securities Investor Protection Corporation. SIPC covers up to $500,000 in the event that your brokerage financially fails. It is important to remember that this insurance is not protection against poor investments. Did you know about SIPC?

What do zero interest rates mean for your portfolio?

The Fed announced recently that it was planning on keeping interest rates near zero for five years. So, what does this mean for you? Well, unfortunately, that means that bonds won't pay much interest in the near future.

Do you need to drastically change your investment outlook? Obviously I'm not here to give you investment advice, but if you have a Swiss Army Knife portfolio that is adaptable then you should be just fine. Learn why you may want to start using a dynamic withdrawal strategy and how that can help you weather any storm in retirement by listening to this episode of Retirement Starts Today.

Resources & People Mentioned

• Investopedia article about bank bail-ins
• Kiplinger FDIC article
• Nerd Wallet SIPC article
• Bloomberg article Fed Holding Rates at Zero

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

Subscribe to Retirement Starts Today on

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You may be wondering why I have invited Shark Tank star, Kevin Harrington on the show today. I often talk about how becoming a mentor in retirement is an amazing way to continue to get fulfillment while still enjoying the benefits of retirement. When I discovered that Kevin has a new book out called Mentor to Millions, I knew that my listeners could learn a lot from this interview. Kevin has mentored many business owners and can help you learn what it takes to become a powerful mentor.

Outline of This Episode

• [1:02] A mentor changed Kevin Harrington's business
• [5:52] How can you become an amazing mentor
• [11:10] How to decide on compensation?
• [13:20] What kind of calculations does he use to make deals on Shark Tank?
• [19:08] Is there any mentee he is particularly proud of?

A retired mentor changed Kevin's business

Kevin was already a successful business owner, but he couldn't figure out how to get banks to loan his business any money. He was struggling to stay on top of inventory since the profits he was making had to go directly back into the business to buy more inventory. He went to every bank he could think of to try to get a business loan, but none would loan him the money he needed for his business.

That is when he decided to seek the help of a mentor. A retired finance expert took him under his wing and showed him how to make bank presentations. This help changed the course of his business.

How can you become an amazing mentor?

The mentor-mentee relationship is a symbiotic one. As a mentor, you need to ensure that you find a mentee that fits. Make sure that your skill set matches what the student is looking for.

It's also important to clearly understand and define expectations. Ask yourself and your student these questions. What are the terms of this relationship? How often will you communicate? What are the terms of service? What are the deliverables?

What will you get out of becoming a mentor?

There are many ways of being a mentor. You could provide your services pro bono, you could charge a fee, or even use some combination of the two. If you do decide to charge for your services make sure that the terms of the service are crystal clear.

There are more than just financial benefits of becoming a mentor. In addition to the fulfillment that you get from helping someone out and passing on your expertise, you could create additional contacts and build key relationships. You never know where the role of mentor could take you.

Check out Kevin's new book

Kevin's new book is called Mentor to Millions and is coming out soon and it is now available for preorder. If you order his book through his website KevinMentor.com you can receive 30 days of free mentoring! His book will teach you how to develop a strong mentor-mentee relationship and you'll even learn about Kevin's role as a mentor.

Connect with Kevin Harrington

• KevinMentor.com - buy the book directly from his website and get 30 days of free mentoring!
• KevinHarrington.tv

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

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Have you thought about what you'll do with your life insurance policy in retirement? One listener is considering what he should do with his policy. Find out 3 options you have available as well as my opinion on whether you still need to carry life insurance in retirement. On this episode, you'll also hear a retirement headline about the entrepreneurial boom that's happening now as well as how you should calculate your home equity when using a retirement calculator. Press play to hear about all of these topics to help you prepare for an amazing retirement

Outline of This Episode

• [2:02] More people are working for themselves now
• [4:07] What is the best way to fund a trust for a special needs dependent?
• [9:32] A thought experiment
• [12:10] When using retirement calculators how much weight to put into home equity?

Would you delay your retirement to become an entrepreneur?

According to a recent article in Bloomberg, more Americans have started working for themselves during this pandemic began. Self-employment brings more flexibility so that you can have time for work and play. For those on the cusp of retirement, becoming an entrepreneur could mean extending your work life. The longer you work the less time you will have to live off of your savings. If you were able to have more flexibility in your work, how many more years would you work?

Life insurance in retirement

One listener has a question about his life insurance in retirement. He is considering using it as a trust for a special needs dependent. With life insurance in retirement you have 3 options:

1. Cancel the policy the day you retire. Term insurance has no cash value, so when you cancel the policy you are done.
2. Keep paying your premium until the end of the contract.
3. Convert the term insurance policy into a permanent insurance policy. If this option interests you, contact your insurance adjuster to see which kind of insurance would best suit your needs. Keep in mind that your premium will change but you may not have to go through a health screening in underwriting.

Do you really need life insurance in retirement?

Whether or not to keep your life insurance policy is a very personal decision. It's actually a decision that shouldn't be made by you. Your life insurance isn't for you. It's for your dependents. Since your dependents are the recipients of the policy upon your death they should have a say in this decision.

I personally don't recommend life insurance in retirement since being retired means being financially independent. If you have a hard time envisioning your life without life insurance, then listen in to hear my thought experiment that explains why I don't think that retirees need insurance.

How to use your home equity in a retirement calculator

When using retirement calculators, how much weight should you put into your home equity? While your home equity is a part of your net worth, you don't necessarily want to include it in your retirement plan. The value of your home functions differently in retirement. It can be used as part of a contingency plan if all else fails, but you shouldn't use your home's value as part of the calculations of your retirement funds. Instead, consider your home equity more like a multi-line insurance policy.

Resources & People Mentioned

• Bloomberg article about self-employment
• Reverse Mortgage episode with Dirk Cotton
• Reverse mortgage calculator
• Listener Survey

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

Subscribe to Retirement Starts Today on

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Welcome back to another exciting episode of Retirement Starts Today. I want to say thank you to everyone who has participated in the Listener Survey. There is still time until the end of August 2020 to participate in the survey and voice your opinion about what you would like to hear on the show next year. You can fill out the survey here. It will take just a few short minutes of your time. In this episode, we've got a couple of listener questions plus you'll hear about an interesting new addition to your 401K. Press play now to begin to learn how to make your retirement dreams a reality.

Outline of This Episode

• [2:07] A new lifetime income disclosure rule
• [7:46] Can you perform a Roth conversion while still contributing to a 401K?
• [12:32] A Roth conversion tax question
• [17:58] Don't forget to take the listener survey

Lifetime income illustrations may be a new part of your 401K disclosure

The Labor Department has just revealed a new rule for plan administrators of contribution plans like 401Ks and 403Bs. This rule states that the plan administrators must begin to demonstrate how your account balance can be used as an income stream. They will need to illustrate how the retirement plan could realistically provide the account holder with a lifetime income. The goal is to help people understand how their savings could translate to retirement income.

How will this rule help you plan for retirement?

I think this visualization will be helpful but it misses the bigger picture. Seeing the basic math laid out is helpful for general retirement planning, but it won't help you put the nuts and bolts together to build a comprehensive retirement plan. It's important to remember that your retirement income is rarely linear. It changes throughout retirement. These illustrations can simply help you get a birds-eye view of how your savings can turn into retirement income. If you are looking for something a bit more comprehensive, download my Retire Ready Toolkit.

Can you contribute to a Roth and a 401K at the same time?

John asks if he can begin contributing to a Roth while also contributing to a 401K. You can make Roth conversions at any time. A Roth conversion is when you send money from your IRA to a Roth IRA and pay the taxes on that money. You can do this at any time since the government is always happy to collect your tax dollars. Press play to hear why I suggest waiting until retirement to start converting your IRA.

A Roth conversion tax question

Greg has a question on maximizing Roth conversions now to save on taxes in the future. It may make sense for some people to make large conversions this year. My opinion is that it's better to pay the devil you know. The current tax cuts are set to expire soon so there will probably be tax hikes in the coming years. I like to call this the Golden Era of Roth Conversions. It's always a good idea to fill up your tax bracket with Roth conversions as well. Having a decent amount of your money in a Roth IRA adds tax flexibility

Resources & People Mentioned

• Annual Listener Survey
• Pensions and Investments article
• Taxes in Retirement episode with Andy Panko
• Andy Panko's Facebook retirement group

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

Subscribe to Retirement Starts Today on

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Do you have a lot of stuff? If you said yes, you are not alone. 60% of Americans think that they have too much stuff. We'll take a look at an article that addresses this problem in the Retirement Headlines segment today. I also have 2 listener questions that I will respond to. But before we get into any of that I would love it if you could help me out and take our annual listener survey. After you take the survey, press play to learn more to help you make the most of the only retirement you'll get.

Outline of This Episode

• [2:42] How to get rid of stuff
• [10:09] The 5-year conversion rule
• [15:39] Guyton-Clinger rules

We're ready to hear your voice with our annual listener survey

Before we get into our Retirement Headline, I would love it if you could help me out and take our annual listener survey. This 10 question survey only takes a few minutes and it helps me guide the topics of the show next year. You can tell me what you love and don't love about the show. You can also voice your opinion and let me know what kind of topics you'd like to hear more about. I'd love to hear all of your opinions, so please make your voices heard by responding to this survey!

Do you have too much stuff?

I am like most people in America, I feel like I have too much stuff. But with 6 kids at home, I'm just going to have to deal with it for a bit longer. Recently, I came across an article that had an interview with the author of Downsizing. The interview with the "King of Downsizing" highlights why we have so much and what we can do to get rid of it.

He remarks that early retirement provides a window of opportunity for downsizing and shedding away those things that you don't need anymore. Once people reach their 70s, 80s, and beyond the ability to stoop and crouch can be limited which can make downsizing much more difficult.

Tips for downsizing

When we finally decide to relinquish our possessions there is a hierarchy of ways to part with them.

1. Give it away - when we pass on a special object to someone who shares a similar attachment to the item it makes everyone happy.
2. Sell it - if the item still has some value then selling it is a great option.
3. Donate it - giving the item to someone who needs it more can still make you feel good.
4. Throw it away - this sometimes has an added cost to it. You may need to pay someone else to help you get rid of it.

Often the downsizing process takes between 2-6 months. The experts recommend giving yourself a deadline to complete the process. This article had some interesting ideas that I hadn't thought of. Press play to hear advice for receiving your parents' stuff.

A 5-year Roth conversion rule clarification

Gerry had a question about Roth contributions and conversions after age 59 ½. We all know that after age 59 ½ we no longer subject to the early withdrawal penalty, but what about the 5-year rule? What triggers the 5-year rule?

The 5-year rule can be a bit confusing, so here are the basics. At age 59½, you can withdraw both your contributions and your earnings with no penalty provided your Roth IRA has been open for at least five tax years.

The 5-year rule is triggered by three circumstances:

• You withdraw earnings from your Roth IRA
• You convert a traditional IRA to a Roth IRA
• You inherit a Roth IRA

Are you curious to find out what you can do to make sure that you have no issues with the 5-year rule? Make sure to listen in to hear the full answer to Gerry's question and you'll also learn what kinds of funds you can use to build a Guyton-Clinger model.

Resources & People Mentioned

• RetirementStartsTodayRadio.com/Survey
• BOOK - Downsizing by David Ekerdt
• Ed Slott tax expert
• Next Avenue article - How to Get Rid of Stuff
• Journal of Financial Planning
• Kitces article on Roth contributions and conversions

Connect with Benjamin Brandt

• Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
• Follow Ben on Twitter:https://twitter.com/retiremeasap

Subscribe to Retirement Starts Today on

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