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Benjamin, nearing retirement at 65, faces a familiar dilemma with his taxable account housing expensive mutual funds. Despite their underperformance, converting to low-cost index funds entails a significant tax hit due to long-held appreciable value.  James explains weighing the immediate tax consequences against the risk of holding onto underperforming assets. He also provides a framework for assessing risk, identifying options, and making decisions based on personal financial goals. Questions Answered:  How can you decide whether to sell underperforming mutual funds or continue holding onto them?   What factors should you consider in determining whether converting to low-cost index funds aligns with your financial goals and risk tolerance? Timestamps: 0:00 - Listener question from Benjamin 2:17 - Tail wagging dog? 3:52 - Benjamin’s situation 5:31 - WCS of selling vs not selling 11:17 - Be careful about tax drag 12:47 - Rethinking the break-even point 14:11 - Consider your goal for the money 17:17 - Identify the bigger risk 19:26 - Make your decision 20:26 - Will your tax situation change? 24:20 - Consider staggering sales 28:21 - Summary Create Your Custom Strategy ⬇️ Get Started Here.

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 pre-60 funds in early retirement, what factors should be considered? Timestamps: 0:00 - Question about early retirement 2:21 - Is early retirement possible? 3:30 - Why the 4% rule doesn’t apply 6:08 - Assessment of Juan’s situation 8:11 - The Sequoia system Step 1 - purpose 10:16 - Step 2 - retirement income 12:49 - Relying on SS benefit? 14:09 - Withdrawal strategy 15:32 - Sourcing funds from age 50-59 17:20 - Brokerage vs 401K 20:22 - A part-time income scenario 23:04 - Consider how expenses might change 25:14 - Step 3 - investment planning 28:09 - Steps 4 & 5- taxes and protection Create Your Custom Strategy ⬇️ Get Started Here.

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 - Assumption of 30 years retirement 7:51 - Misconception 2 - annuity distributions 10:01 - An example  12:33 - Misconception 3 - static cash flow 13:42 - Examples of changes 17:44 - Summary Create Your Custom Strategy ⬇️ Get Started Here.

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? How can retirement coaching help you find freedom and fulfillment in retirement? Timestamps: 0:00 - Arrival fallacy 1:25 - Retire…then what? 3:58 - Structure in 4 chunks 6:06 - Risks of no structure 7:59 - Procrastination 9:35 - Finding your passion 12:33 - Microsteps and consistency 14:32 - Prodding the brain 17:01 - Not just for retirement 20:33 - Passion follows commitment 22:43 - Experiment and be flexible 24:20 - Be careful of stereotypes 26:17 - Rewire retirement 28:08 - Advice and resources Create Your Custom Strategy ⬇️ Get Started Here.

Sammy, a 51-year-old retiree, is seeking advice on how much she should convert from her traditional IRA to a Roth IRA each year to avoid jumping tax brackets and minimize the taxation of her social security benefits.  James analyzes Sammy's current financial situation and offers guidance on approaching the tax planning aspect of her retirement strategy. Learn: How to determine how much to convert from an IRA to a Roth IRA  Why forward-looking tax planning is essential The potential consequences of certain financial decisions Questions Answered: What factors should you consider in planning Roth conversions? How can you avoid going into a higher tax bracket? Timestamps: 0:00 - Sammy’s Roth conversion question 2:29 - The Roth/tax rules today 4:58 - Tax on different types of income 7:24 - Some assumptions 10:19 - Figuring tax and making assessments 12:28 - RMD part 1 15:33 - RMD part 2 17:25 - Caution about tax bracket assumptions 21:58 - Important side note 23:45 - Takeaways Create Your Custom Strategy ⬇️ Get Started Here.

James addresses a common concern for a couple approaching retirement through a listener’s question. Listener Rob plans to collect Social Security early at 62, raising questions about his wife’s retirement. Understanding Social Security strategies to avoid potential losses during retirement is important. James explains the intricacies of spousal benefits, detailing how they are calculated based on the primary earner's full retirement age benefit. Key Takeaways: -Wait until full retirement age to maximize spousal benefits -Primary earner must start to start collecting for the spouse to be eligible -Nuanced calculations involving the spouse's own retirement benefit Questions Answered: When should a spouse collect Social Security spousal benefits? How are spousal benefits calculated? Timestamps: 0:00 - A listener’s question 3:00 - Two SS options 5:17 - Spousal benefit amounts 7:24 - When spouses can collect 8:55 - Spousal + primary benefits 11:59 - Implications of collecting early 14:16 - The good news 16:00 - The key takeaways Create Your Custom Strategy ⬇️ Get Started Here.

As one listener prepares for an early retirement, James discusses the situation, covering how to build a bond ladder based on non-retirement funds. James provides a different way of looking at the stock-to-bond conversation. Learn how to determine the appropriate amount to have a bond ladder and whether you should own individual bonds or bond funds as a part of that ladder. Questions Answered: How do you balance risk capacity and risk tolerance in portfolio allocation? How do you build an effective bond portfolio for retirement? Timestamps: 0:00 - Listener case study 2:37 - James’s perspective on bonds 7:42 - Considering purchasing power 10:18 - Balance of stocks and bonds 13:39 - Dividends are typically resilient 16:40 - All bonds not created equally 20:30 - Bond ladder 23:09 - Different types of bonds 24:51 - Withdrawal strategy 26:39 - More on bonds 30:09 - 3 questions to consider Create Your Custom Strategy ⬇️ Get Started Here.

James explores the concept of sequence of return risk in retirement planning. Most people are unaware of how risky this is, as it doesn’t become an issue until you begin living off your portfolio. Responding to a listener’s inquiry about early retirement, James dives into the potential impact of market timing on retirement outcomes.  Learn three actionable strategies: Ensure a reasonable initial withdrawal rate.Implement a suitable withdrawal strategy.Own a diversified mix of assets.Questions Answered: How does sequence of return risk impact retirement outcomes? How can early retirees protect against sequence of return risk? Timestamps: 0:00 - Ben’s question 3:19 - Sequence of returns matters 6:48 - 3 projections to consider 11:49 - The 4% rule 16:05 - Considerations for early retirees 18:57 - 3 protective takeaways 22:15 - Summary Create Your Custom Strategy ⬇️ Get Started Here.

Should you sell long-term stocks for a real estate investment? I walk through one listener’s question and explain what you need to consider before making such a decision.  Aside from the obvious–is it a good financial investment–you also need to consider if it's a good emotional decision. Learn: ➡ The tax implications: how are capital gains taxed differently? ➡ How to compare the dividends of a bond to those of a property investment ➡ What important factors and questions need to be carefully accounted for Questions Answered: When does it make sense to sell long-term stocks for real estate investments? How can you determine the “dividends” of a real estate investment? Timestamps: 0:00 - Trade stock for real estate? 2:55 - Calculate yield 6:39 - Consider net operating income 9:15 - Other considerations 12:36 - Calculate taxes 18:57 - Quick summary Create Your Custom Strategy ⬇️ Get Started Here.

When you’re doing well financially, paying advisor fees might seem unnecessary. So do you need an advisor if you’re already in a good place? Having a successful retirement isn’t just about not running out of money; it’s about what more you can do. Through a real-life client story, I explain how having an advisor’s perspective to implement the right strategy can be more valuable than the cost of their fee. Advisors can help you avoid biases in the way you invest and plan. They can ensure you have the right withdrawal strategy and don’t overpay on taxes. When handling finances for yourself, you may worry about what you could be missing. A good financial advisor will give you peace of mind, knowing you have all the right information. It’s important to reframe your thinking: Is the cost of your advisor justified by the value provided?  Questions Answered: What’s the opportunity cost of not having an advisor? What value does an advisor provide when you are stable financially? Timestamps: 0:00 Financial advisor vs DIY 3:37 Does an advisor add value? 8:30 Story of lost opportunity 12:27 Understand the bigger picture 13:41 Being ok vs optimizing 17:44 Risk of wrong withdrawal strategy 21:13 Risk of overpaying taxes 22:20 Continuity costs 23:27 The real goal 27:31 Appropriately compare Create Your Custom Strategy ⬇️ Get Started Here.

James addresses a listener's question regarding Social Security strategies in retirement. Sasha, aged 59, seeks advice on when to start collecting Social Security, considering her husband's benefits and their overall retirement plan.  James emphasizes the importance of considering spousal benefits, survivor benefits, and age gaps in making this decision. He explores the complexities of Social Security analysis, encouraging listeners to run break-even calculations based on the assumed age of the first spouse's death rather than just life expectancy.  James also shares a real-life example where delaying one's own benefit and collecting a survivor’s benefit early can be a strategic move. When choosing a Social Security claiming strategy, evaluate the broader impact on taxes, withdrawal rates, asset allocation, and legacy considerations.  Questions Answered:  How does the age gap between spouses impact the Social Security claiming strategy? What factors should be considered when deciding on your Social Security claiming strategy? Timestamps: 0:00 - Sasha’s SS question 2:19 - Analysis of Sasha’s situation 5:51 - The challenge 9:08 - When assumptions don’t pan out 12:29 - General principles 16:08 - Look at the whole picture Create Your Custom Strategy ⬇️ Get Started Here.

James explores the nuanced aspects of Roth IRAs, shedding light on intricacies that can confound even experienced investors.  Through a listener question from Manfred, a retiree contemplating a $50,000 conversion from a 401k to a Roth account, James dissects the crucial five-year holding period and the order in which contributions, conversions, and earnings are treated during withdrawals.  James also provides clarity on distribution rules, exceptions, and strategic considerations, offering a comprehensive guide to navigating the complexities of Roth IRAs for optimal retirement planning. Questions Answered: How does the timing of subsequent conversions impact the application of the five-year rule? In Roth IRA withdrawals, what is the specific order of operations, and what implications does that have?  Timestamps: 0:00 Manfred’s question  1:39 Get the cheatsheet 2:37 Understanding source nuances 7:01 The five-year rule 8:37 IRS’s order of operations 11:59 Exceptions to the rule 13:49 Only a small impediment 16:14 Back to Manfred’s example Create Your Custom Strategy ⬇️ Get Started Here.