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Most people don't learn about WEP/GPO just for the fun of it. There are infinite tax and pension laws to learn and nobody becomes an accountant just so they can retire. Generally, people start getting older and they realize that they aren't going to have enough money to retire. Even Social Security recommends obtaining another pension among options to make up for the difference. States that have private pensions are attempting to fill very hard-to-fill positions such as teachers, corrections officers, police, etc. and are not at all anxious to tell these potential hires that their so-called "great" pension plan won't be so great after all. So these people are misled into thinking they've fixed their low income problem at retirement. Actually, very few people know about WEP for the first few years of their state job. But those of us that do find out are often quitting and getting our money back. Generally you can work for 5 years or less for the state and quit and get all your contributions back,and then not be penalized WEP/GPO. This is resulting in severe shortages of people on these critical jobs. You would not try to even out everybody's meat intake by controlling the amount of bacon they were allowed to eat. That is an oversimplified way to do that. Why would you adjust people's Social Security income based on your knowledge of only one other kind of ancillary income they have access to at retirement? For example, a military retirement does not come from income subject to FICA taxes. Yes, the related employment was FICA taxed, and the specific funds that _did_ get taxed will specifically fund that retiree's Social Security. However the pension itself comes from a totally different source, and *that source did not contribute to Social Security* because it was entirely employer (US Government) funded. If proponents of WEP/GPO actually believed in fairness, they'd tax a service person's military pay twice in order to make sure the funding that went to the pension portion of their retirement also contributed to Social Security, or else they would subject military pensions to WEP/GPO as well. After all, isn't the idea of tiered Social Security contributions meant to subsidize people who do not have other means to retire on other than just Social Security itself? And so it is with just about any other retirement supplement ranging from IRA profits, employer contributions to various retirement plans, private pensions, inheritances, and a host of other things that could potentially reduce need for subsidized Social Security benefits. Instead, they limit themselves to reducing Social Security based on state pensions only. The Social Security system needs to get out of the business of means-based wealth redistribution. It does a terrible job of Robbin Hood. Communist ideas just don't work and as you see here, they rely heavily on propaganda, misleading people, accounting trickery, and selective logic in order to fly. Social Security has no idea who really needs to have their benefits cut because it has extremely limited information about any beneficiary's exact situation.

Thank you for sharing. Financial education is crucial today to show incredible resilience and discipline in the volatile market, masterfully balancing strategy and insight for success. This dedication to continuous learning is inspiring...managed to grow a nest egg of around 200k to a decent 632k in the space of a few months... I'm especially grateful to Evelyn Infurna, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.

Don’t own mutual funds in taxable brokerage accounts. They are pass thru structured entities. Use ETFs (each investor is more properly assessed the capital gains due to them). Also good are individual stocks.

Great video, very simple to follow and helpful information!

Is this something seniors who retire will have to do for two years in a row? So submit again the next year until the taxes are reflecting the new income?

Jackson Amy Robinson Jason Lewis Steven

Lewis Angela Robinson Timothy Wilson Edward

Sensible Money has excellent content and many essential learning points in this discussion. I hope Dana revises her outstanding book in 2026 or 2027 when the upcoming changes or lack of them occur. Her ability to drill into the pertinent details of a financial plan is value-add par excellence.

What happens to escrow when you recast?

Regarding the strategy to pay the tax at the end of the year by taking an IRA distribution equal to the estimated tax due and withholding 100% of it: it is important to note that if you are younger than 59.5yo, the distribution is considered non-qualified and will be subject to a 10% penalty.

at 54:30. Saving taxes may not always be the best way to optimize at these scenarios especially if considering Roth conversions. The best thing to optimize is after tax account values.

I had to chuckle about the savy 'cash flow' couple. I am also in a (temporary 3 year) situtation where my cash flow is higher than my taxable income. My cash flow is at 125K, as my adjusted gross income is $66K. It does not get much better than this.

If Trump gets elected, and Senate / House, Social Security / Tips will not be taxed and expect an nice upward adjustment to the standard deduction, offset by a general 10% tariff on all non taxed internal goods. A tariff is just a value added tax, the most common form of taxation in the world.

Let's hope President Trump gets back in so the tax brackets do not revert back. If they do revert everyone will be affected not just those making 400k or more like the left wants you to believe

Stop saying 'utilized'. Just say 'used'.

With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family

Very helpful! Attended live and now listening again.

I converted a lot when the stock price was way down. The profit I have made since then in my Roth more then covers what I paid in taxes.

Retired and loving it.

Retired 1 year

Earnings test is wrong! We should be able to work and receive the benefit applicable to the age thereof . . Not full retirement age.

How to invest for decumulation - live off the acorns - income ladder 1- comprehensive retirement plan - assumptions are difficult Life is not linear / expenses / be as accurate as possible for ten years …variable expenses / income - expenses = portfolio / 3% for medical to use bond ladder - match bonds are cds to retirement account Spending within 12 months flexible Bond ladder approach matching to bonds to withdrawals - interest from bond and recurring principal

I like the simple way a Roth IRA can be passed to your kids-Tax Free. Not only would I benefit from lower taxes during my life, but my kids will get 10 years of tax free investments from the Inherited Roth IRA which will be the high, earning years of my kids.

Always great content from Dana and the team

Sensible Money is my favorite TH-cam channel for intelligent financial decision-making; Dana and her crew are top-notch!

Excellent help. THANK YOU!!!

I'm already 65 and I have no SS (though I do have retirement money from my State ret. fund). I hate to say it but..... Paying zero tax....living at or under the "standard deduction" (and extra, if you're above a certain age). LOL. It's not happening. Well, not for me. Besides, I have some REAL bills to pay. OK, Ok......IF.......all of my extra wealth (read as : retirement money) was in a ROTH?

One of the major problems with all 3 of these SS videos is that they fail to discuss the average age of life expectancy & how much you lose to SS even if you only get 1500 a month and/or penalized 1.00 for every 3 you make working on the side. Those videos and that guy are all full of shit. In most cases one has to live until between 83-85 to recoop SS benefits lost by taking them as soon as possible. There are many similar videos stating the same BS and all are for the government trying to dupe people into delaying taking their SS benefits. Truth is NOW, that the average life span for a white male is down to around 77 7 DELAYING YOUR SS BENEFITS WILL COST YOU UNLESS YOU MAKE TO 83 OR 84.

AND THIS DIDN'T START ANOTHER REVOLUTION!

Amazing video,A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $110k and in the first 2 months , my portfolio was reading $294,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

I don’t see the fairness in the IRMAA methodology. I am living off my IRA. Every withdrawal I need to withdraw an extra 20%. Then my SS is 85% taxable which then requires me to withdraw the tax amount + 20%. This year I had open heart surgery total out of pocket $9500 so need to pull out that amount + 20%. So like last year I may AGI may reach $160K but it wasn’t income when almost $40K was to pay taxes.

Because all these money managers are really about is ...eating your lunch

I have about 400K in a 401K plus multiple Roth IRA's. If I decide beginning converting the 401K to a Roth IRA, is there any advantage or disadvantage to doing a direct transfer to a trad IRA (to be set up)? Or should I direct any conversion amts directly into one of my long-established Roths?

I would rather pay tax now on contribution than to pay tax on contributions and growth 20yrs from now. At that point tax rates don’t matter.

Great explanation thanks!

I am 53 years old and consider myself to be a high earner. My job provides me the option to contribute the employer contributions to my Roth 401k. Should I do that or should I continue to direct that to my Traditional 401k ahead of retirement?

Would the bonds reside in a tax-sheltered account (IRA)?

Very clear. I have done significant Roth Conversions ages 59-62. I'm single. Is that a reason to appeal? I plan to keep my Magi under the limits. I am receiving a pension and working part time.

Question: what if I've already stopped working before age 65 and am living on savings and my only taxable income is large annual Roth conversions that will cause the irmaa premiums to apply to me? I'm guessing that I'll need to reduce the Roth conversion amount beginning in the year when I turn 65 so my Roth conversion amount will be lower than the lowest irmaa income limit...what reason would I choose on form ssa-44? Thanks.

If one has been receiving deferred compensation as the sole income and it dropped this year significantly compared to two years ago, would this reduced income scenario work to get IRMAA repealed? Retirement is not in the picture, it occurred 5 years ago. I cannot find this information anywhere. Would really appreciate anyone’s input. Thanks.

Thank you for your commentary, it is always a value add!

Any way to argue out Roth Conversion money since that's not really cash flow income?

I just looked at what I have paid (fees) my investment company that handles my IRA's. It is astronomical. I have only made 3% overall through the last 10 years combined. This is a no brainer to me.

I am not against converting for the right fact pattern but some things to consider before converting that make it less attractive. 1. State taxes. Will you move to Florida or another state with zero tax during retirement? 2. Time value of money. The taxes paid today are with dollars worth more than those paid many years in the future. 3. If you don’t convert, you won’t pay the tax all in one year. In fact, some of it is likely going to be paid after you die.

After retirement does nqdc considered earned income for ira contributions? ( when exercised)

Thank you Dana for this detailed information and for patiently answering all the questions, even the redundant ones. I've read your book and this filled in some of the gaps for me - especially regarding the 'bond ladder' concept. Thanks also to Nancy for carefully articulating the many questions and keeping the webinar moving along smoothly.

thanks, enjoyed this podcast. although I've been preparing for retirement, using DIY planning / readiness tools, the example future cash flow spreadsheets caught my attention. Many of the retirement planning tools focus on do you have enough but don't touch on the actual mechanics of managing the ebbs' & flows between accounts (and buckets). The one shown would be fairly straight forward to recreate, but any recommendations on good one to download (and tweak to my set of accounts and bucket strategy)?

You don't need buckets, you don't need a 60/40 allocation and you certainly don't need any financial planner the scammers mention in these comments. If you're retired, keep one year of living expenses in a high yield (~5%), stable fund or money market. The rest should be invested in index funds, S&P or total stock market. Most bear markets last less than a year. That's the basics! Track your portfolio in a spreadsheet. Make a budget and stick to it. If you're healthy and your parents lived a long life, delay Social Security to 67 or beyond. Make a spreadsheet to forecast your portfolio, S.S. snd spending to map out your projected net worth by year. This is your "financial road map". If you're leaving a legacy, consider a Roth conversion plan. It's not rocket science. If you take control of your own finances, you will feel empowered and won't be duped by unscrupulous sales people.

On his face, you should always try to become tax-free in retirement. The idea that the federal government will not become more pernicious given the debt level is Pollyanna thinking. You can spend 30 years in retirement and the idea that your subject to taxes or even means testing based upon income scares the heck out of me and does all of my clients.