The discussion below about investing $100,000 in an annuity has me a bit confused. The original post considered a deferred income annuity as a means to address longevity risk. The post states that a 65 year old could purchase an annuity today for $100K that would pay $5,500 per month, starting in 20 years, at age 85. The discussion below discussed the scenario of a 45 year old purchasing the same 20 year deferred annuity for $100k, and assumed the same $5,500 per month payout, but starting at 65. I just checked and a 45 year old purchasing a 20 year deferred annuity for $100K would receive $2,185 per month. This makes acturarial sense - a 65 year old should live much longer than an 85 year old, and receive many more payments. If the 45 year old had instead invested the $100K, and it grew to $768K, it could purchase an immediate annuity paying about $5,213 per month for life. If the now 65 year old wanted some additional fixed income, he could purchase the same $2,185 per month as above for about $321K, and have about $450K left to invest. I really like Dunn's framing of the scenario below.
John, thanks for an interesting article. The tax interactions are complex and challenging for many of us. I wondered how Dianne's modest conversion might impact the $6,000 additional senior deduction. Using Dinkytown's 1040 calculator I found that she could increase her IRA withdrawal to $51,200 and still get the full $6,000 deduction. At that point her taxable income is $400 over the limit for the 12% bracket (into the 22% bracket). So a $50,000 IRA withdrawal would keep her in the 12% bracket, remain eligible for the senior deduction, avoid 2028 IRMAA, and cause a total tax bill of $5,713, leaving $44.287 to convert to her Roth. One final thought that s beyond the scope of this article. This leaves her $28,000 to live on - equal to her total pre-tax SS benefits. I think Dianne would be a good candidate for a comprehensive retirement analysis, including understanding her situation and goals for retirement and legacy bequests. The Roth conversion might make sense, but it is not obvious without further information and analysis.
Andrew, thanks for an interesting story. Last month my wife and I were invited by one of her girlfriends, Kathy, to visit Saratoga Springs, NY. Kathy lives out side Boston and is part of a group of friends that does annual visits to historic places in the US, primarily with a military connection. This year we toured the National Historic Park with a local guide. The night before we did the tour, the group gathered for dinner, and than sat outside on the hotel balcony. As an icebreaker, and since it was close to July 4th, the leader of the Boston group asked each of us to tell our something of our family's Coming to America Story, and what part of the American Story resonates with each of us. There were 13 people and a variety of stories of immigration and assimilation. One person was a defendant of slaves, one descended from Russian immigrants who fled persecution, and one with descendants from Poland sho fled the Holocaust. Lots of first generation folks from Ireland and Italy. There were several of us who didn't have near-term stories - my family came primarily from Ireland in the early 1800s - Roscommon and Cork. I, and several others, felt our story was representative of the melting pot - how after several generations you have assimilated and tend to forget what your ancestors went through to come here. It's good to be reminded of their stories, and all our family stories. Thanks.
Adam, thanks for the excellent information. I've never understood why the Survivor FRA is not the same as the standard FRA. I researched it and it seems that it is a matter of timing and legislation. The increased FRA for retirement benefits and survivor benefits were transitioned on slightly different schedules, thus the difference. It appears that both FRAs will be 67 for people born in 1960 and later.
Bogdan, thanks for a great article. I'm aware of a few cases where complex family dynamics lead to what would seem to be bad decisions. I have a friend and colleague who grew up on her family's farm in western Pennsylvania. She had 5 siblings. All but one sibling left the farm and pursued successful careers. She and her siblings found out after the fact, that the sibling who remained on the farm had convinced the aging parents to gift the majority of the land to him and wife, effectively disinheriting my friend and the other siblings. The parents may have felt that their action was justified because the son who remained was taking care of them and the farm and deserved it. The siblings who left didn't quite see it that way. I also have a friend who, in her 80s, gifted her 2 sons her highly appreciated beach house, despite advice to the contrary. She passed away a few years later. The sons don't appear to be planning to sell anytime soon, but I'm still not sure why she made the gift. There were some interesting family dynamics that may have caused the sons to fear their mother would disinherit them, and they pressured her to gift the home before she passed to prevent that.
As a data point, I've been checking Vanguard and they do not currently have any of the July 15, 2036 TIPS available for purchase. ChatGPT recommends I check Vanguard several times a day, and if none become available, look at the September reopening. I'm a TIPS neophyte - does this make sense to our more experienced TIPS mavens?
Comments
This is very well framed. thanks
Post: For most retirees, the greatest fear is not death—it is running out of money before they die.
Link to comment from August 9, 2026
The discussion below about investing $100,000 in an annuity has me a bit confused. The original post considered a deferred income annuity as a means to address longevity risk. The post states that a 65 year old could purchase an annuity today for $100K that would pay $5,500 per month, starting in 20 years, at age 85. The discussion below discussed the scenario of a 45 year old purchasing the same 20 year deferred annuity for $100k, and assumed the same $5,500 per month payout, but starting at 65. I just checked and a 45 year old purchasing a 20 year deferred annuity for $100K would receive $2,185 per month. This makes acturarial sense - a 65 year old should live much longer than an 85 year old, and receive many more payments. If the 45 year old had instead invested the $100K, and it grew to $768K, it could purchase an immediate annuity paying about $5,213 per month for life. If the now 65 year old wanted some additional fixed income, he could purchase the same $2,185 per month as above for about $321K, and have about $450K left to invest. I really like Dunn's framing of the scenario below.
Post: For most retirees, the greatest fear is not death—it is running out of money before they die.
Link to comment from August 9, 2026
John, thanks for an interesting article. The tax interactions are complex and challenging for many of us. I wondered how Dianne's modest conversion might impact the $6,000 additional senior deduction. Using Dinkytown's 1040 calculator I found that she could increase her IRA withdrawal to $51,200 and still get the full $6,000 deduction. At that point her taxable income is $400 over the limit for the 12% bracket (into the 22% bracket). So a $50,000 IRA withdrawal would keep her in the 12% bracket, remain eligible for the senior deduction, avoid 2028 IRMAA, and cause a total tax bill of $5,713, leaving $44.287 to convert to her Roth. One final thought that s beyond the scope of this article. This leaves her $28,000 to live on - equal to her total pre-tax SS benefits. I think Dianne would be a good candidate for a comprehensive retirement analysis, including understanding her situation and goals for retirement and legacy bequests. The Roth conversion might make sense, but it is not obvious without further information and analysis.
Post: Roth Conversions and Taxes
Link to comment from August 8, 2026
Andrew, thanks for an interesting story. Last month my wife and I were invited by one of her girlfriends, Kathy, to visit Saratoga Springs, NY. Kathy lives out side Boston and is part of a group of friends that does annual visits to historic places in the US, primarily with a military connection. This year we toured the National Historic Park with a local guide. The night before we did the tour, the group gathered for dinner, and than sat outside on the hotel balcony. As an icebreaker, and since it was close to July 4th, the leader of the Boston group asked each of us to tell our something of our family's Coming to America Story, and what part of the American Story resonates with each of us. There were 13 people and a variety of stories of immigration and assimilation. One person was a defendant of slaves, one descended from Russian immigrants who fled persecution, and one with descendants from Poland sho fled the Holocaust. Lots of first generation folks from Ireland and Italy. There were several of us who didn't have near-term stories - my family came primarily from Ireland in the early 1800s - Roscommon and Cork. I, and several others, felt our story was representative of the melting pot - how after several generations you have assimilated and tend to forget what your ancestors went through to come here. It's good to be reminded of their stories, and all our family stories. Thanks.
Post: One Piece Of Paper
Link to comment from August 5, 2026
Bill, thanks - great info as usual. Best, Rick
Post: Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now
Link to comment from August 1, 2026
Adam, thanks for the excellent information. I've never understood why the Survivor FRA is not the same as the standard FRA. I researched it and it seems that it is a matter of timing and legislation. The increased FRA for retirement benefits and survivor benefits were transitioned on slightly different schedules, thus the difference. It appears that both FRAs will be 67 for people born in 1960 and later.
Post: Social Security
Link to comment from August 1, 2026
Bogdan, thanks for a great article. I'm aware of a few cases where complex family dynamics lead to what would seem to be bad decisions. I have a friend and colleague who grew up on her family's farm in western Pennsylvania. She had 5 siblings. All but one sibling left the farm and pursued successful careers. She and her siblings found out after the fact, that the sibling who remained on the farm had convinced the aging parents to gift the majority of the land to him and wife, effectively disinheriting my friend and the other siblings. The parents may have felt that their action was justified because the son who remained was taking care of them and the farm and deserved it. The siblings who left didn't quite see it that way. I also have a friend who, in her 80s, gifted her 2 sons her highly appreciated beach house, despite advice to the contrary. She passed away a few years later. The sons don't appear to be planning to sell anytime soon, but I'm still not sure why she made the gift. There were some interesting family dynamics that may have caused the sons to fear their mother would disinherit them, and they pressured her to gift the home before she passed to prevent that.
Post: $400,000 Mistake
Link to comment from August 1, 2026
Thanks Randy.
Post: Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now
Link to comment from July 30, 2026
Bill, As always, thanks for the useful information. I'll keep an eye on vanguard. Best, Rick
Post: Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now
Link to comment from July 30, 2026
As a data point, I've been checking Vanguard and they do not currently have any of the July 15, 2036 TIPS available for purchase. ChatGPT recommends I check Vanguard several times a day, and if none become available, look at the September reopening. I'm a TIPS neophyte - does this make sense to our more experienced TIPS mavens?
Post: Treasury Inflation Protected Securities (TIPS) are a Generational Bargain Right Now
Link to comment from July 30, 2026