Jim and Chris discuss listener questions on Social Security timing rules, retroactive benefits for an ex-spouse, investment strategy philosophy, fraternal benefit societies, and Roth conversions.
(6:30) The guys address a listener’s question about whether applying for Social Security at 70 requires enrolling in Part B or if retroactive filing is an option without losing payments.
(16:00) A listener asks why their 75-year-old father was denied six months of retroactive spousal benefits while a widowed friend who applied at the same time received them.
(33:30) Jim and Chris respond to a listener who questions the “You won the game, why take the risk” from a previous episode and asks whether a high-equity portfolio still makes sense.
(53:00) The guys respond to a listener’s email about fraternal benefit societies that operates outside guaranty associations.
(1:12:00) Georgette asks whether converting to a Roth and then spending from it makes more sense than other withdrawal options.

The post Social Security, Risk Philosophy, Fraternal Benefit Societies, Roth Conversions: Q&A #2535 appeared first on The Retirement and IRA Show.

If you are not in the mood for Jim and Chris’s delightful banter, you can skip ahead to (5:45).

Chris’s Summary
Jim and I continue working through Ed Slott’s advisor quiz. After introducing the mandatory Roth catch up rule last week, we now focus on how W-2 wage definitions determine who’s affected, which plan types are exempt, and how administrative delays impact implementation. We also clarify rules around QCDs from inherited IRAs and debunk common errors made by ChatGPT when interpreting the 60-day rollover rule and plan eligibility.

Jim’s “Pithy” Summary
Chris and I keep going with the Ed Slott quiz, diving deeper into how the mandatory Roth catch up rule will actually work when it takes effect. We go through how wages are defined for this purpose—specifically Box 3 of the W-2, not Box 1—and why that matters for who’s subject to the rule. That single detail creates big carve-outs for groups like self-employed individuals and many state or local government employees who don’t pay into Social Security. We also highlight how a plan’s design matters. If your employer doesn’t offer a Roth option and you’re over the wage limit, you won’t be allowed to make catch up contributions at all. And we explain how the one-year look-back works, including why a job change can give someone a temporary exemption.

ChatGPT joins us again and gets several key questions wrong—like saying the rule applies to SIMPLE IRAs (it doesn’t), or insisting QCDs can’t come from inherited IRAs. Wrong again. If the beneficiary is over 70½, QCDs are allowed, and the IRS has even designated a code on the 1099-R for that exact scenario. Once it thought a little harder, Chat backed off and conceded. Smack talk retracted.

We close with a scenario on the 60-day rollover rule—what happens if a distribution check shows up while you’re out of town for months. Chat claimed the clock starts when it hits your mailbox. But that’s not how it works. According to private letter rulings, the 60-day window starts when you actually receive the check.

The post Roth Catch Ups and the 60-Day Rollover Rule: EDU #2535 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on Social Security retroactive payments and delayed retirement credit timing, share a listener PSA on horse speed, and answer questions on fixed indexed annuity default credits, a living benefit rider with a proprietary index, and RMD rules for an inherited account.

(15:45) A listener asks if the lack of a prior formal application affects eligibility for retroactive spousal benefits following the GPO repeal.
(27:30) The guys address a question about how delayed retirement credits are calculated based on specific months and what to consider when not claiming exactly at full retirement age or 70.
(37:45) Georgette shares a PSA on an earlier episode’s horse speed discussion.
(44:00) A listener seeks clarification on how a fixed indexed annuity with withdrawal benefits might outperform a DIA, particularly how default credits and fees interact.
(1:07:30) Jim and Chris respond to a listener who shares details about their nationwide annuity with a living benefit rider, its performance, fees, and expected income stream.
(1:25:45) George asks whether RMD rules for an inherited account require a distribution in the year of his mother’s death, despite the Vanguard calculator indicating otherwise.

The post Social Security, PSA, Annuities, RMD Rules: Q&A #2534 appeared first on The Retirement and IRA Show.

Jim and I review catch up contributions across IRAs and workplace plans using questions from the Ed Slott training quiz. We clarify the $1,000 IRA catch up (now indexed), explain the age 60–63 super catch up in 401(k)/403(b) plans, and outline the Roth mandate that will require high earners’ catch ups to go to the Roth side. I focus on what’s actually changing and where these rules create practical planning tradeoffs.

Chris and I dig into the latest Ed Slott quiz, focusing heavily on catch up contributions and how Secure Act 2.0 continues to reshape the rules. We start by clarifying what’s true and false about the standard catch up, then dive into the new super catch up available between ages 60 and 63. I explain why I find this provision frustrating, since adding a few thousand dollars so late in the game hardly moves the needle compared to what earlier compounding could have achieved.

And here’s the part that drives me nuts: Congress pats itself on the back for giving people in their 60s this special window, but where was that option decades earlier when it really mattered? If you let someone in their 30s or 40s make bigger contributions, you give compounding time to actually do its job. Instead, they created a rule that looks generous but, in practice, is mostly symbolic.

From there, we tackle the Roth mandate for higher earners. If your wages exceed the threshold, your additional catch up dollars must go into the Roth side of the plan. That’s going to be a big surprise for many workers who are used to putting everything pre-tax, especially in higher-cost states where salaries above the threshold aren’t unusual. The upshot is that many workers in this situation will find their catch up contributions directed into a Roth account, which takes away the immediate deduction but allows those dollars to grow and be withdrawn tax-free later in retirement.

The post Catch Up Contributions: EDU #2534 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on Social Security spousal benefits, filing logistics and spousal eligibility with a disabled child, an inherited Roth IRA, and IRMAA concerns.
(14:30) A listener asks why his spouse’s Social Security spousal benefit is less than half of his primary benefit amount.
(21:45) George asks about the process and documentation needed when filing for Social Security benefits that will also increase payments for his spouse and disabled adult son, and about eligibility for a spousal benefit while delaying his own claim.
(40:30) The guys review a ChatGPT summary of Inherited Roth rules and whether there are RMDs for a non-spouse beneficiary that inherited in 2023.
(1:03:30) Jim and Chris address a question about an IRMAA increase caused by a lump-sum Social Security payment.

The post Social Security, Inherited Roth, and IRMAA: Q&A #2533 appeared first on The Retirement and IRA Show.

Chris’s Summary
Jim and I continue discussing funding discretionary spending in Robert Merton’s three bucket retirement income framework from last week’s article, focusing on how his flexible and aspirational spending categories compare with our philosophy. We explore why annuities are insurance products, where TIPS fit into income planning, and why funding Go-Go years demands liquidity and principal protection. The conversation also examines how Minimum Dignity Floor expenses differ from discretionary goals and why tying those goals to high-risk investments can be problematic.

Jim’s “Pithy” Summary
Chris and I pick up where we left off last week, taking a closer look at Robert Merton’s second and third retirement income “buckets” and how they’re presented in the article we’ve been dissecting. While I can see value in some of the thinking, I have a hard time with the notion that your passions and big adventures should be considered optional spending that you cut when markets turn. These Go-Go years don’t last forever, and I’m not about to tell someone to shelve an elk hunt, delay a trip to see family, or skip the project that brings them joy because of a short-term dip. That’s not my idea of funding discretionary spending.

We also look at the tools Merton and the article highlight for flexible spending—TIPS, for example—and how those compare with keeping your discretionary funds liquid and principal-protected. On paper, some of these options sound flexible, but real life rarely plays out as neatly as a model suggests. If the market timing works against you, that “flexibility” can disappear fast.

Then we’ll get into the aspirational spending—the so-called extras—and the suggestion to tie them to higher-risk assets. We share our thoughts on matching the right investments to the right spending, why emotional comfort matters in retirement planning, and how your Go-Go years deserve a funding approach that lets you enjoy them while you can.

The post Funding Discretionary Spending: EDU #2533 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on Social Security timing strategies, Roth conversions in an RMD year, annuity return calculations, account sourcing for SPIA purchases, and Rule of 55 withdrawal rules.
(12:30) A listener asks whether his brother should delay claiming Social Security to age 70 for better longevity protection despite a narrow breakeven.
(35:15) George asks if he can complete a Roth conversion before taking his first RMD and when a QCD would fit in that sequence.
(58:15) Jim and Chris respond to a question on how to calculate the return on a lifetime income annuity.
(1:11:15) The guys address which account—IRA, Roth, or brokerage—is best for funding a future SPIA purchase.
(1:19:45) A listener asks if they can take penalty-free withdrawals from a previous 401(k) under the Rule of 55 while working elsewhere, and whether the rule would apply to both plans after leaving the current job.

Show Notes:

This is from the IRS final RMD regulations:

(f) Determination of whether a distribution is a required minimum distribution —(1) Determination for calendar year of distribution. Except as provided in paragraphs (f)(2) and (3) of this section, if a minimum distribution is required for a calendar year, then the amounts distributed during that calendar year are treated as required minimum distributions under section 401(a)(9) to the extent that the total minimum distribution required under section 401(a)(9) for the calendar year has not been satisfied (and accordingly, those amounts are not eligible rollover distributions). For example, if an employee is required under section 401(a)(9) to receive a minimum distribution for a calendar year of $5,000 and the employee receives a total of $7,200 in that year, the first $5,000 distributed will be treated as the required minimum distribution and will not be an eligible rollover distribution, and the remaining $2,200 will be an eligible rollover distribution if it otherwise qualifies. If the total section 401(a)(9) required minimum distribution for a calendar year prior to the calendar year of the distribution is not distributed in that calendar year (for example, when the distribution for the calendar year in which the employee reaches the applicable age is made on April 1 of the following calendar year), then the amount that was required to be distributed, but not distributed, is added to the amount required to be distributed for the next calendar year in determining the portion of any distribution in the next calendar year that is a required minimum distribution (and, thus, is not an eligible rollover distribution).

The post Social Security, Roth Conversions, Annuities, and Rule of 55: Q&A #2532 appeared first on The Retirement and IRA Show.

Chris’s Summary
Jim and I review a recent article featuring Robert Merton’s views on retirement income versus savings, using it as a springboard to unpack income planning fundamentals and annuity projections. While we agree with many of Merton’s framing points—especially the focus on secure income—we also note several key areas where academic theory diverges from real-world retirement dynamics.

Jim’s “Pithy” Summary
Chris and I dig into an article summarizing Nobel Prize winner Robert Merton’s take on retirement income, and I must say—it gave us plenty to talk about! We agree with the premise: retirement is about income, not just a pot of savings. But as always, I’ve got thoughts. Merton’s framing—that income matters more than assets—misses how closely tied the two actually are. You can’t generate income without savings, so they’re not distant cousins—they’re spouses, hand in hand!

We also explore his idea of guaranteed income and how it relates to our own Minimum Dignity Floor approach. His categories echo ours—he starts with guaranteed essentials like food, housing, and healthcare. Sound familiar? He even lists sources like Social Security, pensions, and annuities. But when he suggests a 3% inflation-adjusted annuity from a “highly rated insurer”? Well, good luck finding one. Those vanished after COVID. Today, most annuities with inflation protection are just fixed increases—and even those come at a steep cost.

That leads us into a deep dive on how we handle inflation during the delay period. I explain why projecting future income shortfalls isn’t about guessing—it’s about monitoring trends and setting up flexible reserves. Chris walks through how we model that gap using actual quotes from insurance companies to estimate how much a future retiree might need. Do we recommend buying now? Nope. We wait. Because retirement plans need recalibration every few years— and they’re far more effective when you understand the math and monitor the risks over time.

Show Notes:

Article: Why Retirement Income is More Important than Retirement Savings

The post Retirement Income Versus Savings: EDU #2532 appeared first on The Retirement and IRA Show.

Jim and Chris discuss Jim’s relocation experience to Ohio, a listener PSA on Medicare, questions about Social Security payment timing and divorce eligibility, Roth 401k withdrawals under the rule of 55, and close with an annuity comparison answer so long it practically qualifies as a mini EDU.

(17:00) A listener PSA reminds others that Medicare Part A only covers hospital costs and that Parts B, C, and D must still be actively enrolled in.

(24:30) A listener asks whether it’s normal for his Social Security payment date—initially based on spousal benefits—to remain the same after switching to his own record.

(31:45) Georgette asks what Social Security benefits she might be eligible for after divorce, given she’s receiving Disability and will have been married 11 years.

(39:15) Jim and Chris offer clarity on how the rule of 55 applies to Roth 401k withdrawals and confirm whether earnings would be taxable before age 59½.

(55:30) George asks whether it’s better to use a fixed indexed annuity (FIA) with living benefits or a deferred income annuity (DIA); the guys break it down in an extended segment that might even earn you CPE credit.

The post Ohio, Medicare, Social Security, Roth 401k, and Annuities: Q&A #2531 appeared first on The Retirement and IRA Show.

Chris’s Summary
Jim and I are joined by Matt Kaufman, Senior Vice President and Head of ETFs at Calamos Investments, to discuss buffered ETFs vs stocks and cash, focusing on AQR’s recent critiques. We examine the flaws in AQR’s methodology, the broader history of buffered products, and why these tools can offer certainty in retirement planning. Matt explains how buffered ETFs differ from accumulation strategies and why they may suit specific roles in a distribution-focused portfolio. We also touch on annuity comparisons and institutional adoption by endowments.

Jim’s “Pithy” Summary
Chris and I welcome back Matt Kaufman from Calamos Investments to talk through the controversy around buffered ETFs. AQR recently published two articles criticizing these tools, and I had some questions—not just about their numbers, but about their motives. If you understand how we use buffered products, especially in retirement distribution, you’ll see why I don’t think these critiques hold up.

We talk about the emotional side of retirement—how people freeze up when they’re supposed to start spending. My dad warned me about the Debbie Downers in his assisted living facility: folks who had money but waited too long and couldn’t spend it anymore. That’s why we look at buffered ETFs as a way to give retirees confidence, not as accumulation tools. When I saw AQR lumping these products together and treating them like they were all the same, it reminded me of the way Ken Fisher says “I hate annuities and so should you.” That kind of broad-stroke bashing doesn’t help anyone.

Matt walks through the technical flaws in AQR’s analysis—especially how they mischaracterized equity exposure and ignored how buffered ETFs are actually used. We compare them to annuities, explain cap rates, and look at why institutions like the University of Connecticut are dropping hedge funds for these products. There’s more nuance here than some people want to admit, and it’s worth taking the time to understand how these work—especially if you’re in retirement and trying to protect the money you spent 40 years building.

Show Notes:

For those who would like to read the AQR articles discussed in this episode you can find them here:

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