Jeff - Thanks for your well written and thought provoking article. I'm hoping you would expand on this sentence: "We gifted our children, with hopes they would bolster their own long-term savings. "Some questions begged: Were your children following you and your wife's example of investing 25% of your income before your gifts? After your gift(s) are they hitting that level of investing? Have you shared your thoughts as to how you and your wife have invested -- and if so, how was that advice received? What percentage of your retirement investments were made into traditional 401(k) or 403(b) or IRAs, what percentage were made into the Roth accounts, and what percentage were made into a non-qualified brokerage account and have you talked with your children about these different accounts? Finally, and not directly related to the sentence quoted above, if you're OK "being one of the richest men in the graveyard" what have you done with regard to your estate plan? How involved is your wife in managing your wealth should you pre-decease her? And finally, to what extent are your adult children aware of and part of (as perhaps attorneys in fact) with managing your estate?
Edmund - It would be beneficial for me (and I think lots of others here) if you posted the questions the elders and deacons came up with for younger folks and those near or in retirement.
I whole heartedly concur with you regarding the right to end one’s life in a safe, loving, and caring way…aka assisted suicide. Many readers of HD are well prepared and have planned for longevity risk. That’s great. From a macroeconomic and demographic point of view, perhaps the upper quintile (20%) of baby boomers might have sufficient financial resources to “make it” to age 95. But that begs the question, what will happen to the bottom quintile of baby boomer (some or all of whom have a negative net worth)? And what happens to the million and millions of baby boomers (the middle three quintiles, 60%) who run out of assets long before they die? For the fortunate top quintile who can afford long term care, what will the long term care infrastructure (facilities and staff) look like in 10-20 years? It’s already severely stressed with the much smaller Greatest Generation. Society and our faith communities (along with policy makers) have significant issues to grapple with that are as problematic if not more so than coming to terms with assisted suicide. We’ve known for decades Social Security needs to be “fixed”. And from the policy makers…crickets. For them, since it’s more than an election cycle way, it’s not a problem they need to address yet. I worry not at all for HD readers who are in the top quintile (or top 10% or top 5%) of the population in terms of net worth. The problem is all the other baby boomers of which there are probably 70 million. Seems like this HD post is sort of the tip of the ice berg. With climate change, we won’t even have ice bergs upon which to put our elders (us). At any rate, I really appreciate your post here. Thank you very much.
Which is a shame. Allowing people (who typically want to make this switch because their health has declined) to move from Advantage to a Supplement without medical underwriting means EVERYONE who is covered by a Supplement plan will see their premiums rise. The "free lunch" those who take "advantage" of these laws is paid for by those who are in the Supplement plans.
Dennis - I always enjoy your well written and thoughtful articles. I will be 70 this year and similar to you, my wife is 5 years younger than me. We have been converting traditional IRAs to Roth the past several years at the rate of about $75,000-$100,000 per year. Last year we finished convert all of my wife’s traditional IRA to Roth. I inherited an IRA from my mother and in 2024 and 2025 (while the TCJA remains in place) we plan to take $40-$50,000 out of the Inherited IRA and have all of it withheld for state and federal tax (93% federal 7% state) and convert $175,000 to $200,000 of my Traditional IRA to Roth. Along with other income the IRMAA surcharge will be applied doubling the part B premium and the Part D premium will also be around $40 or $50 a month. Using the Inherited IRA as a way to pay the income taxes for much of the Roth conversions for the next couple years is a prudent way to utilize the gift of the inherited IRA. I’m not sure what Congress will do in a couple of years when the TCJA is due to sunset. But, given I am five year older than my wife, the actuarial odds are she has a decent chance of outliving me by perhaps for 7-10 years. It seems clear to me that wether the TCJA is re-upped or it sunsets, we will still have a progressive income tax system where the tax brackets for single taxpayers are about half what they are for married taxpayers. Same with IRMAA. By taking perhaps 2/3s of my Inherited IRA over the next three years before I have to start RMDs on my traditional IRA and withholding all of the Inherited IRA for income taxes, we should be able to significantly reduce my traditional IRA so that the RMDs from that along with my pension and our Social Security will be helpful in keeping our Taxable Income in what is currently the 12% bracket (so the qualified dividends paid in our joint brokerage account are taxed at 0%) and we have no IRMAA to worry about while we are both alive. Clearly, we have been blessed with extremely good fortune. Having to plan for how to minimize future income tax brackets and IRMAA surcharges are entirely different situations and fade away to nothing compared to worrying about if you’ll have enough income to make it to when the next Social Security check is deposited. Bottom line: we couldn’t be more blessed than to have good health, two well launched “kids”, 3-year old twin granddaughters, and thinking about how much of a Roth conversion should we do this year and next.
dl777 Only life insurance companies (all of which are regulated by the state in which they are domiciled) can offer annuity contracts. While not perfect, checking out the life insurance company's score from various Rating Companies, e.g. A.M. Best, Moody’s, Fitch, and Standard and Poor’s. I like to see how Weiss rates life insurance companies too: https://weissratings.com/en/insurance. So, go with high rated life insurance companies and then know that every state has a "Guaranty Association" to address what happens if a life insurance company that issued annuity contracts (except variable annuity contracts) "gets wiped out and go bankrupt through bad management or market conditions. See the following link for information about state guaranty associations: https://www.immediateannuities.com/state-guaranty-associations/ For retirees, SPIAs (single premium immediate annuities) can be appropriate -- pay a life insurance company $100,000 premium in in return that company promises to pay you (and if you name another person) an income for as long as you live. If you want to get a rough idea what sort of "guaranteed monthly income" $100,000 in premium will buy, you can use the "quote" feature at Immediate Annuities (https://www.immediateannuities.com/) or their Annuity Shopper's Guide:
(https://www.immediateannuities.com/pdfs/as/annuity-shopper-current-issue.pdf?arx=d) For what it's wroth, given state guaranty associations, I'd never purchase a SPIA for a premium in excess of the guaranty association maximum (usually $300,000). Two other sources about annuities for your consideration ate:
Wade Pfau, PhD, CFA -- either his comprehensive "The Retirement Researcher's Guide Series Retirement Planning Guidebook and/or his "Safety First Retirement Planning: An Integrated Approach for a Worry-Free Retirement; or
Stan G. Haithcock, AKA "Stan the Annuity Man" - who is a licensed (in all 50 states) insurance agent. His web site is: https://www.stantheannuityman.com/. He has written six booklets about annuities -- Annuity Owner's Manuals (AOM): ("Deferred Income/Longevity AOM; Fixed Index AOM), Income Rider Owner's Manual; SPIA AOM; Qualified Longevity Annuity Contract Owner's Manual; and MYGA - Multi Year Guaranteed AOM. Stan is a marketing guy for sure but he knows annuities, he know life insurance companies, and he really is "no pressure". He'll send you these booklets free: https://www.stantheannuityman.com/get-smarter/annuity-books
Given fewer and fewer retirees will have an employer provided pension for a monthly income they can't outlive, allocating a portion of their accumulated retirement assets into a SPIA premium so they have their own personal pension is worthwhile consideration. Hope this help...
The Pension Protection Act of 2006 granted employers a safe harbor encouraging them to both automatically enroll workers into 401(k) plans AND auto escalate deferrals. Plenty of small employers don't offer 401(k) plans (as they are very expensive to set up and maintain. However, traditional IRAs and Roth IRAs are available. Of course, people have to know they exist, make the effort to set one up, and then figure out how to "fund" them. Outside of Social Security, the US does not have a coherent retirement income policy at the federal level. Should be a bi-partisan issue but apparently it's not (individual responsibility vs. the nanny state).
Comments
Jeff - Excellent. Thanks very much.
Post: Taking It With You
Link to comment from September 8, 2026
Jeff - Very much appreciated. Thank you.
Post: Taking It With You
Link to comment from September 8, 2026
Jeff - Thanks for your well written and thought provoking article. I'm hoping you would expand on this sentence: "We gifted our children, with hopes they would bolster their own long-term savings. " Some questions begged: Were your children following you and your wife's example of investing 25% of your income before your gifts? After your gift(s) are they hitting that level of investing? Have you shared your thoughts as to how you and your wife have invested -- and if so, how was that advice received? What percentage of your retirement investments were made into traditional 401(k) or 403(b) or IRAs, what percentage were made into the Roth accounts, and what percentage were made into a non-qualified brokerage account and have you talked with your children about these different accounts? Finally, and not directly related to the sentence quoted above, if you're OK "being one of the richest men in the graveyard" what have you done with regard to your estate plan? How involved is your wife in managing your wealth should you pre-decease her? And finally, to what extent are your adult children aware of and part of (as perhaps attorneys in fact) with managing your estate?
Post: Taking It With You
Link to comment from September 7, 2026
Thank you for sharing these thoughtful and thought provoking questions.
Post: At Dave’s Request
Link to comment from August 6, 2024
Edmund - It would be beneficial for me (and I think lots of others here) if you posted the questions the elders and deacons came up with for younger folks and those near or in retirement.
Post: Unasked Questions
Link to comment from August 3, 2024
I whole heartedly concur with you regarding the right to end one’s life in a safe, loving, and caring way…aka assisted suicide. Many readers of HD are well prepared and have planned for longevity risk. That’s great. From a macroeconomic and demographic point of view, perhaps the upper quintile (20%) of baby boomers might have sufficient financial resources to “make it” to age 95. But that begs the question, what will happen to the bottom quintile of baby boomer (some or all of whom have a negative net worth)? And what happens to the million and millions of baby boomers (the middle three quintiles, 60%) who run out of assets long before they die? For the fortunate top quintile who can afford long term care, what will the long term care infrastructure (facilities and staff) look like in 10-20 years? It’s already severely stressed with the much smaller Greatest Generation. Society and our faith communities (along with policy makers) have significant issues to grapple with that are as problematic if not more so than coming to terms with assisted suicide. We’ve known for decades Social Security needs to be “fixed”. And from the policy makers…crickets. For them, since it’s more than an election cycle way, it’s not a problem they need to address yet. I worry not at all for HD readers who are in the top quintile (or top 10% or top 5%) of the population in terms of net worth. The problem is all the other baby boomers of which there are probably 70 million. Seems like this HD post is sort of the tip of the ice berg. With climate change, we won’t even have ice bergs upon which to put our elders (us). At any rate, I really appreciate your post here. Thank you very much.
Post: Long Odds
Link to comment from May 4, 2024
Which is a shame. Allowing people (who typically want to make this switch because their health has declined) to move from Advantage to a Supplement without medical underwriting means EVERYONE who is covered by a Supplement plan will see their premiums rise. The "free lunch" those who take "advantage" of these laws is paid for by those who are in the Supplement plans.
Post: Fully Committed
Link to comment from April 20, 2024
Dennis - I always enjoy your well written and thoughtful articles. I will be 70 this year and similar to you, my wife is 5 years younger than me. We have been converting traditional IRAs to Roth the past several years at the rate of about $75,000-$100,000 per year. Last year we finished convert all of my wife’s traditional IRA to Roth. I inherited an IRA from my mother and in 2024 and 2025 (while the TCJA remains in place) we plan to take $40-$50,000 out of the Inherited IRA and have all of it withheld for state and federal tax (93% federal 7% state) and convert $175,000 to $200,000 of my Traditional IRA to Roth. Along with other income the IRMAA surcharge will be applied doubling the part B premium and the Part D premium will also be around $40 or $50 a month. Using the Inherited IRA as a way to pay the income taxes for much of the Roth conversions for the next couple years is a prudent way to utilize the gift of the inherited IRA. I’m not sure what Congress will do in a couple of years when the TCJA is due to sunset. But, given I am five year older than my wife, the actuarial odds are she has a decent chance of outliving me by perhaps for 7-10 years. It seems clear to me that wether the TCJA is re-upped or it sunsets, we will still have a progressive income tax system where the tax brackets for single taxpayers are about half what they are for married taxpayers. Same with IRMAA. By taking perhaps 2/3s of my Inherited IRA over the next three years before I have to start RMDs on my traditional IRA and withholding all of the Inherited IRA for income taxes, we should be able to significantly reduce my traditional IRA so that the RMDs from that along with my pension and our Social Security will be helpful in keeping our Taxable Income in what is currently the 12% bracket (so the qualified dividends paid in our joint brokerage account are taxed at 0%) and we have no IRMAA to worry about while we are both alive. Clearly, we have been blessed with extremely good fortune. Having to plan for how to minimize future income tax brackets and IRMAA surcharges are entirely different situations and fade away to nothing compared to worrying about if you’ll have enough income to make it to when the next Social Security check is deposited. Bottom line: we couldn’t be more blessed than to have good health, two well launched “kids”, 3-year old twin granddaughters, and thinking about how much of a Roth conversion should we do this year and next.
Post: A Time to Spend
Link to comment from January 13, 2024
dl777 Only life insurance companies (all of which are regulated by the state in which they are domiciled) can offer annuity contracts. While not perfect, checking out the life insurance company's score from various Rating Companies, e.g. A.M. Best, Moody’s, Fitch, and Standard and Poor’s. I like to see how Weiss rates life insurance companies too: https://weissratings.com/en/insurance. So, go with high rated life insurance companies and then know that every state has a "Guaranty Association" to address what happens if a life insurance company that issued annuity contracts (except variable annuity contracts) "gets wiped out and go bankrupt through bad management or market conditions. See the following link for information about state guaranty associations: https://www.immediateannuities.com/state-guaranty-associations/ For retirees, SPIAs (single premium immediate annuities) can be appropriate -- pay a life insurance company $100,000 premium in in return that company promises to pay you (and if you name another person) an income for as long as you live. If you want to get a rough idea what sort of "guaranteed monthly income" $100,000 in premium will buy, you can use the "quote" feature at Immediate Annuities (https://www.immediateannuities.com/) or their Annuity Shopper's Guide: (https://www.immediateannuities.com/pdfs/as/annuity-shopper-current-issue.pdf?arx=d) For what it's wroth, given state guaranty associations, I'd never purchase a SPIA for a premium in excess of the guaranty association maximum (usually $300,000). Two other sources about annuities for your consideration ate:
- Wade Pfau, PhD, CFA -- either his comprehensive "The Retirement Researcher's Guide Series Retirement Planning Guidebook and/or his "Safety First Retirement Planning: An Integrated Approach for a Worry-Free Retirement; or
- Stan G. Haithcock, AKA "Stan the Annuity Man" - who is a licensed (in all 50 states) insurance agent. His web site is: https://www.stantheannuityman.com/. He has written six booklets about annuities -- Annuity Owner's Manuals (AOM): ("Deferred Income/Longevity AOM; Fixed Index AOM), Income Rider Owner's Manual; SPIA AOM; Qualified Longevity Annuity Contract Owner's Manual; and MYGA - Multi Year Guaranteed AOM. Stan is a marketing guy for sure but he knows annuities, he know life insurance companies, and he really is "no pressure". He'll send you these booklets free: https://www.stantheannuityman.com/get-smarter/annuity-books
Given fewer and fewer retirees will have an employer provided pension for a monthly income they can't outlive, allocating a portion of their accumulated retirement assets into a SPIA premium so they have their own personal pension is worthwhile consideration. Hope this help...Post: Financial Superpowers
Link to comment from August 19, 2023
The Pension Protection Act of 2006 granted employers a safe harbor encouraging them to both automatically enroll workers into 401(k) plans AND auto escalate deferrals. Plenty of small employers don't offer 401(k) plans (as they are very expensive to set up and maintain. However, traditional IRAs and Roth IRAs are available. Of course, people have to know they exist, make the effort to set one up, and then figure out how to "fund" them. Outside of Social Security, the US does not have a coherent retirement income policy at the federal level. Should be a bi-partisan issue but apparently it's not (individual responsibility vs. the nanny state).
Post: Smooth Moves
Link to comment from June 11, 2022