Jennifer, 54, plans to retire soon. Her husband, 70, is retired, on Social Security, and dealing with some severe health issues. Jennifer worries about possibly becoming single in retirement, which could result in a higher tax bracket for her.  Jennifer is considering whether to convert her traditional accounts to Roth to lower future taxes or to change her contributions to Roth 403b, even if it means paying more taxes now. James walks us through several factors for her to consider and demonstrates why her future tax situation is likely not as dire as she thinks. Questions Answered: Ho ..read more

Joe is planning for retirement and wants to minimize his tax burden, especially on the interest earned from his three annuities. James explains that non-qualified annuities are purchased with post-tax money and offer tax deferral on growth until withdrawal. When taking out funds, the principal is tax-free, but earnings are taxed at ordinary income rates.  He explores strategies for tax-efficient withdrawals. He also touches on annuities, options like a 1035 exchange to transfer an annuity into a different product for improved performance, the tax implications for heirs, and early withdra ..read more

Deciding to work with a financial advisor is about more than how much you've stashed away. It's also about determining whether an advisor's benefits outweigh the costs.  In your higher earning years, finances become more complex. More money means more decisions and more chances to make mistakes or miss out on opportunities. That's where a quality advisor can come in handy. They help you steer clear of bad investments, seize the right opportunities, and keep financial stress at bay. Having more than one perspective to draw from is the key to well-informed financial decisions. Teaming up ..read more

Listener Ray is wondering what to do with his home as he embarks on a nomadic, van-life journey in retirement. Should he sell it to finance his travels or retain it for potential appreciation and cash flow?  James explores the nuances of home ownership as an asset versus an investment. He considers cash flow and leverage as he looks at Ray’s three options – sell, rent, or borrow – while emphasizing aligning financial decisions with personal goals and aspirations. Questions Answered: Why shouldn’t I consider my home an investment? What are the key financial considerations for retirees w ..read more

Listener Drew asks about a tax strategy for juggling capital gains and Roth conversions. While it can be a complicated question – especially when large accounts are involved – James provides some general guidelines that can be helpful for anyone with similar gnarly tax strategy challenges in retirement.  In this episode, we’ll cover the extent to which required distributions will be an issue, what you need to alleviate that issue, and the timeframe within which you have to do that. James explains how to work backward to project your various tax brackets and determine how to prioritize t ..read more

James responds to listener Jerry’s question about the optimal time to distribute inheritance or charitable gifts: before or after passing away.  James walks listeners through four important things to consider when it comes to gifting and inheritance: your gifting goal, whether you have a strong desire to see the assets gifted within your lifetime, the tax implications of various types of gifts, and what to do with assets you plan to retain for now but are intended for future generations. Questions Answered:  Should I give my children and grandchildren their inheritance before or af ..read more

The "Three Bucket Strategy" is a popular retirement income planning method. The first bucket covers immediate expenses in retirement. Listeners John and Donna are seeking advice on constructing their first bucket. With $1.6 million in assets and pension incomes, they aim to retire in 2026.  James analyzes their needs, income sources, and portfolio and lays a foundation for their Bucket #1. It's crucial to bridge the gap between expenses and income, considering risk capacity and tolerance.  Questions Answered:  How do you divide assets into the three buckets, and what is the pu ..read more

Typical retirement strategies assume a retirement age of over 60. With an earlier retirement goal, a careful look is required to determine what strategies will create the best outcome. James responds to a listener’s question about where to invest as he anticipates an early retirement. James walks through the steps of Root’s Sequoia System to explore options for early retirement scenarios. Questions Answered:  How does early retirement impact traditional retirement planning strategies, such as the 4% rule? When deciding between retirement accounts (e.g., 401k) or brokerage accounts for p ..read more

The 4% rule helps us understand how much we can safely take out of our portfolio each year without running out of money in retirement. Yet, as simple as the 4 percent rule seems, the practical implications are drastically misunderstood. I explore the three common mistakes people make when applying this rule and how to avoid them. Questions Answered: How do RMDs impact the 4 percent rule? Does the 4 percent rule account for changes in expenses and income sources? Timestamps: 0:00 - Questions from listeners 1:26 - Misconception 1 - RMD  3:27 - 4% rule applies to portfolio 5:51 - Assumpti ..read more

Retirement is not just about financial readiness; it's also about finding purpose, passion, and personal growth.  James and guest Cynthia Meyer debunk the arrival fallacy, the illusion that reaching retirement will bring lasting happiness.  Having structure in retirement and pursuing your passions is vital to feeling fulfilled. Although it's easy to fall into comparing our retirement experiences to those around us, this is a dangerous trap. Finding what's truly important to you and following that will lead to much greater happiness. Questions Answered: What is the arrival fallacy ..read more