Retire With Style

Wade Pfau & Alex Murguia
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Retire With Style Podcast

The purpose of Retire With Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Your hosts Wade Pfau, PhD, CFA, RICP and Alex Murguia, PhD walk you through creating and implementing a retirement plan that will help you reach your goals, and that you’ll be able to stick with. Start by going to risaprofile.com/style and sign up to take the industry’s first financial personality tool for retirement planning.

  1. 1 DAY AGO

    Episode 145: Mastering Tax-Efficient Withdrawals

    In this episode of ’Retire with Style’, Alex Murguia and Wade Pfau delve into tax-efficient withdrawal strategies for retirement. They discuss the importance of withdrawal order sequencing, the types of accounts available for withdrawals, and effective marginal tax rate management. The conversation highlights techniques for generating taxable income, including Roth conversions and long-term capital gains harvesting, while emphasizing the need to maintain asset allocation integrity throughout the retirement income distribution process. The episode sets the stage for future discussions on social security and Medicare implications in retirement planning. Listen now to learn more! Takeaways Tax efficiency can significantly impact retirement income. Withdrawal order sequencing is crucial for tax-efficient distributions. Understanding account types helps in planning withdrawals. Effective marginal tax rate management can save money. Roth conversions can enhance after-tax wealth. Long-term capital gains harvesting can reset cost basis. Maintaining asset allocation is essential during withdrawals. Short-term sacrifices can lead to long-term benefits. Taxable accounts should be spent down first to minimize tax drag. Future discussions will cover social security and Medicare implications. Chapters 00:00 Introduction to Tax-Efficient Withdrawal Strategies 02:48 Understanding Account Types for Withdrawals 06:00 Withdrawal Order Sequencing Explained 08:54 Effective Marginal Tax Rate Management 11:51 Techniques for Generating Taxable Income 15:12 Roth Conversions and Tax Implications 17:53 Long-Term Capital Gains Harvesting 20:58 Maintaining Asset Allocation Integrity 23:50 Conclusion and Future Topics Links The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

    39 min

  2. 17 SEPT

    Episode 144: Understanding the Rules of RMDs

    In this episode of ’Retire with Style’, Alex and Wade delve into the intricacies of Required Minimum Distributions (RMDs). They discuss the calculations involved, the implications of RMDs on retirement planning, and the recent changes introduced by Secure Act 2.0. The conversation also covers the consequences of failing to take RMDs, the aggregation of RMDs across different accounts, and provides examples of RMD calculations using life expectancy tables. Additionally, they touch on the topic of RMDs for inherited accounts and introduce the concept of Qualified Charitable Distributions as a strategy to manage RMDs effectively. Listen Now to Learn More! Takeaways RMDs are required to ensure taxes are paid on tax-deferred accounts. The starting age for RMDs has changed to 73 or 75 depending on birth year. RMDs do not apply to Roth IRAs or Roth 401(k)s. Failing to take RMDs can result in significant penalties. You can aggregate RMDs across multiple IRAs but not 401(k)s. RMD calculations are based on the account value at the end of the previous year. The uniform life table is commonly used for RMD calculations. Qualified Charitable Distributions can help manage RMD tax implications. Understanding RMDs is crucial for effective retirement planning. RMDs can impact social security taxation and Medicare premiums. Chapters 00:00 Introduction to Required Minimum Distributions 03:00 Understanding RMD Calculations and Implications 06:04 RMD Rules and Changes in Secure Act 2.0 09:10 Consequences of Not Taking RMDs 11:59 Aggregating RMDs Across Accounts 14:53 RMD Calculation Examples and Life Expectancy Tables 21:04 Exploring RMDs on Inherited Accounts 25:54 Qualified Charitable Distributions and Future Topics Links The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

    31 min

  3. 10 SEPT

    Episode 143: The Importance of Asset Location and Asset Allocation

    In this episode, Alex and Wade discuss the importance of asset location in addition to asset allocation. They explain that asset location involves strategically placing assets in different types of accounts based on their tax efficiency. They discuss the tax efficiency spectrum, with tax-exempt bonds being the most tax efficient and REITs being the least tax efficient. They also discuss the tax advantages of different types of accounts, such as Roth IRAs, 529 plans, health savings accounts, and non-qualified annuities. Listen now to learn more! Takeaways  Tax location is an important consideration in addition to tax allocation. Assets should be strategically placed in different types of accounts based on their tax efficiency. The tax efficiency spectrum ranges from tax-exempt bonds (most tax efficient) to REITs (least tax efficient). Different types of accounts offer different tax advantages, such as tax deductions, tax deferral, and tax-free distributions. Asset allocation should drive the decision of where to place assets for tax efficiency. Chapters 00:00 Introduction to Tax Efficiency 05:49 Understanding Asset Allocation and Tax Efficiency 09:39 Exploring the Tax Efficiency Spectrum 18:45 Placing Assets in Taxable, Tax-Deferred, and Tax-Exempt Accounts 27:30 The Importance of Asset Allocation in Tax Location Decisions 33:58 Other Considerations: Annuities, Life Insurance, and More Links Spots are filling fast! Register now to attend a FREE Webinar with Retirement Researcher on 9/17 at 2:00 PM ET, 5 Must-Knows About Retirement Spending hosted by Christine Benz of Morningstar! Visit risaprofile.com/podcast to sign up now! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

    40 min

  4. 3 SEPT

    Episode 142: Tax-Efficient Retirement Strategies

    In this episode, Alex and Wade discuss tax-efficient retirement strategies, specifically focusing on tax diversification. They explain the three broad types of tax treatments in the tax code: taxable accounts, tax-deferred accounts (such as IRAs and 401ks), and tax-exempt accounts (such as Roth IRAs). They highlight the importance of having assets in each category to provide flexibility in retirement planning. They also discuss the characteristics and advantages of each type of account, including tax treatment, liquidity, and growth potential. Additionally, they touch on the different methods of tracking cost basis in taxable accounts. In this conversation, Alex and Wade discuss tax-efficient retirement distribution strategies. They cover the different types of retirement accounts, including tax-deferred accounts (such as traditional IRAs and 401(k)s), tax-exempt accounts (such as Roth IRAs and Roth 401(k)s), and taxable accounts. They explain the tax advantages and disadvantages of each type of account and discuss the importance of considering your current and future tax rates when deciding where to contribute. They also touch on the backdoor Roth contribution strategy and the concept of required minimum distributions (RMDs). Overall, the conversation emphasizes the importance of tax efficiency in retirement planning. Takeaways Tax diversification involves having assets in taxable accounts, tax-deferred accounts, and tax-exempt accounts to provide flexibility in retirement planning. Taxable accounts are the least tax-efficient but offer advantages such as preferential income treatment, step-up in basis at death, and liquidity. Tax-deferred accounts, such as IRAs and 401ks, offer tax deductions on contributions and tax-deferred growth, but have required minimum distributions and early withdrawal penalties. Tax-exempt accounts, such as Roth IRAs, offer tax-free growth and tax-free distributions, but contributions are not tax-deductible. Tracking cost basis in taxable accounts can be done using methods like average cost, first in first out (FIFO), or specific identification of tax lots. Consider your current and future tax rates when deciding where to contribute to retirement accounts. Tax-deferred accounts (such as traditional IRAs and 401(k)s) provide a tax deduction now but are taxed upon withdrawal. Tax-exempt accounts (such as Roth IRAs and Roth 401(k)s) are funded with after-tax dollars but provide tax-free withdrawals in retirement. Taxable accounts have no tax advantages but offer flexibility and liquidity. The backdoor Roth contribution strategy allows high-income earners to contribute to a Roth IRA by making a non-deductible contribution to a traditional IRA and then converting it to a Roth IRA. Required minimum distributions (RMDs) are mandatory withdrawals from tax-deferred retirement accounts starting at age 72 (or 70.5 for those born before 1960). Tax efficiency is an important aspect of retirement planning and can have a significant impact on your overall financial situation. Chapters 00:00 Introduction and Excitement for Tax-Efficient Retirement Strategies 01:26 Tax-Efficient Retirement Distributions as a General Theme 03:01 Understanding Tax Diversification and the Three Types of Tax Treatments 04:20 Advantages and Considerations of Taxable Accounts 15:11 Benefits and Limitations of Tax-Deferred Accounts 25:14 The Advantages of Tax-Exempt Accounts 26:04 Methods of Tracking Cost Basis in Taxable Accounts 00:31 Overview of Retirement Accounts 08:43 Tax-Deferred Accounts 18:30 Tax-Exempt Accounts 25:14 Taxable Accounts 28:47 Backdoor Roth Contribution 33:44 Required Minimum Distributions (RMDs) 38:26 Tax Efficiency in Retirement Planning 45:11 Retirement Tax Cliff 47:09 Conclusion Links This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

    52 min

  5. 27 AUG

    Episode 141: Tax-Efficient Retirement Distributions

    In this episode, Alex and Wade introduce a new arc on tax-efficient retirement distributions. They discuss the importance of tax planning and how it can add value to your bottom line. They explain the concept of marginal tax rates and how they differ from average tax rates. They also touch on state income taxes, filing options, and the different federal income tax brackets. Additionally, they mention other types of taxes, such as social security and Medicare payroll taxes. In this conversation, Wade Pfau and Alex Murguia discuss various aspects of income taxation and deductions. They cover topics such as ordinary income, non-qualified annuities, qualified dividends, long-term capital gains, above-the-line deductions, adjusted gross income (AGI), below-the-line deductions, standard deductions, itemized deductions, and preferential income stacking. They also touch on strategies like deduction bunching and gains harvesting. The conversation provides valuable insights into the complexities of the tax code and the importance of tax planning in retirement. Listen now to learn more! Takeaways Tax planning can add value to your bottom line and is an important aspect of retirement planning. Understanding the difference between marginal tax rates and average tax rates is crucial for making informed decisions. State income taxes, filing options, and federal income tax brackets all play a role in tax planning. Other types of taxes, such as social security and Medicare payroll taxes, should also be considered in retirement planning. Understanding the different types of income and how they are taxed is crucial for effective tax planning in retirement. Above-the-line deductions, such as contributions to retirement plans and health savings accounts, can lower your adjusted gross income (AGI). Below-the-line deductions, such as mortgage interest and charitable donations, can reduce your taxable income. The Tax Cuts and Jobs Act of 2017 increased the standard deduction, making it less likely for many people to itemize deductions. Preferential income, such as qualified dividends and long-term capital gains, have their own tax brackets and can be taxed at lower rates. Strategies like deduction bunching and gains harvesting can help optimize your tax situation. Understanding the nuances of the tax code and working with a tax professional can help you make the most of your retirement income. Chapters 00:00 Introduction to Tax-Efficient Retirement Distributions 04:28 The Basics of Marginal Tax Rates 15:44 State Income Taxes, Filing Options, and Federal Income Tax Brackets 23:38 Considering Other Types of Taxes in Retirement 27:11 Understanding Different Types of Income and Their Taxation 29:42 Exploring Above-the-Line Deductions and Adjusted Gross Income (AGI) 36:10 Utilizing Below-the-Line Deductions to Reduce Taxable Income 43:02 The Impact of the Tax Cuts and Jobs Act on Itemized Deductions 47:13 The Importance of Tax Planning in Retirement Links Join the waitlist for the next Retirement Income Challenge by visiting http://www.risaprofile.com/podcast The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

    54 min

  6. 20 AUG

    Episode 140: Are you ready for our Retirement Income Challenge? Join us as we begin next week.

    The Retirement Income Challenge is a four-day event that helps individuals create a retirement income plan. Day one focuses on the Retirement Income Style Assessment (RISA), which analyzes two factors: probability-based safety first and optionality versus commitment. Day two introduces the funded ratio, a balance sheet approach to financial planning that compares assets to liabilities. The funded ratio helps individuals understand if they have enough assets to meet their retirement goals. Day three explores how the RISA and funded ratio work together to fill income gaps and create a comprehensive retirement income plan. The conversation covers the Retirement Income Stacking and Spending (RISS) framework and the Retirement Income Stacking and Spending (RISS) Challenge. The hosts discuss the importance of reliable income to cover essential expenses in retirement and the role of the RISS framework in providing alternatives to fill income gaps. They emphasize that shooting for 100% on the RISS percentages is not necessary and that it’s important to have reliable income covering essential expenses. They also mention the non-financial aspects of retirement and the importance of planning for what you want to do in retirement. The hosts highlight the interactive nature of the Retirement Income Challenge and the value it provides in helping individuals gain clarity and confidence in their financial plan for retirement. Takeaways The Retirement Income Challenge helps individuals create a retirement income plan The Retirement Income Style Assessment (RISA) analyzes two factors: probability-based safety first and optionality versus commitment The funded ratio is a balance sheet approach that compares assets to liabilities to determine if individuals have enough assets to meet their retirement goals The RISA and funded ratio work together to fill income gaps and create a comprehensive retirement income plan The RISS framework provides alternatives to fill income gaps in retirement and ensures reliable income covers essential expenses. Shooting for 100% on the RISS percentages is not necessary; it’s important to have reliable income covering essential expenses. Planning for the non-financial aspects of retirement, such as what you want to do, is crucial. The Retirement Income Challenge is an interactive session that helps individuals gain clarity and confidence in their financial plan for retirement. Chapters 00:00 Introduction to the Retirement Income Challenge 09:57 Day One: The Retirement Income Style Assessment (RISA) 11:33 Day Two: The Funded Ratio 23:37 Day Three: Integrating the RISA and Funded Ratio 25:33 The Role of the RISS Framework in Retirement Planning 28:40 Shooting for 100% on RISS Percentages: Is It Necessary? 30:55 Planning for the Non-Financial Aspects of Retirement 39:25 The Value of the Retirement Income Challenge Links Registration for the next Retirement Income Challenge is OPEN: Learn more and join us for this LIVE 4-Day event starting on August 26th-29th, 2024 from 12:00 -2:00 PM ET each day by visiting risaprofile.com/podcast The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

    44 min

  7. 13 AUG

    Episode 139: What to expect in Retirement

    In this episode, Alex, Wade, and Jason discuss what to expect in retirement. They cover several major lifestyle changes that occur during retirement, including the loss of work identity, increases in unstructured time, changes in social connections, shifts in physical health, adjustments in daily routines, and the need for financial planning. They provide insights on both the positive and negative aspects of these changes and offer suggestions on how to navigate them. In this conversation, the hosts discuss the importance of structure and routines in retirement. They highlight the difference between structuring time and developing routines, emphasizing the need for both to maintain a sense of purpose and productivity. They also explore the challenges of spending more time with a spouse or partner in retirement and the importance of communication and finding a balance between shared activities and individual interests. The hosts also touch on the impact of social connections and the need to build new networks outside of work. Lastly, they discuss the health and aging process in retirement, emphasizing the importance of managing physical and mental health and avoiding negative feedback loops. Takeaways Retirement involves major lifestyle changes that can have both positive and negative impacts. Losing work identity and a sense of purpose can be challenging, but it also presents an opportunity to create a new identity based on personal interests and passions. Having unstructured time in retirement can lead to boredom and unhealthy habits, so it’s important to establish a new routine and pursue meaningful activities. Maintaining social connections and building new relationships is crucial for overall well-being in retirement. Physical health may change in retirement, and it’s important to prioritize self-care and engage in regular exercise. Adjusting daily routines and finding a balance between relaxation and productivity is key to enjoying retirement. Financial planning is essential to ensure a secure and comfortable retirement. Each individual’s retirement experience is unique, and the impact of these lifestyle changes will vary. Retirement is an exciting opportunity for personal growth and exploration. Structure and routines are essential in retirement to maintain a sense of purpose and productivity. Spending more time with a spouse or partner in retirement requires communication and finding a balance between shared activities and individual interests. Building new social connections outside of work is important to combat social isolation in retirement. Managing physical and mental health is crucial in retirement, and avoiding negative feedback loops is key. Creating a financial plan that addresses retirement income style and funded ratio is essential for a successful retirement. Chapters 00:00 Introduction and Overview 02:03 Chapter 1: Navigating the Loss of Work Identity in Retirement 11:39 Chapter 2: Managing Unstructured Time in Retirement 15:10 Chapter 3: Maintaining Social Connections in Retirement 18:13 Chapter 5: Adjusting Daily Routines in Retirement 20:47 Chapter 6: The Importance of Financial Planning in Retirement 26:38 Building New Social Connections in Retirement 32:58 Managing Health and Aging in Retirement 39:59 Creating a Financial Plan for Retirement Links Registration for the next Retirement Income Challenge is OPEN: Learn more and join us for this LIVE 4-Day event starting on August 26th-29th, 2024 from 12:00 -2:00 PM ET each day by visiting risaprofile.com/podcast The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/

    47 min

  8. 6 AUG

    Episode 138: The Meaning of Retirement

    In this episode, Wade, Alex, and Jason discuss the meaning of retirement and the factors to consider when deciding on a retirement date. They explore the idea that retirement is not just about leisure activities like golfing, but also about personal goals and relationships. They also touch on the possibility of working in retirement and the importance of financial independence. The conversation highlights the need for careful planning and consideration of health, financial, and personal factors when determining the timing of retirement. In this conversation, the hosts discuss the different factors that can influence retirement decisions, such as health, career changes, and financial stability. They emphasize the importance of asking the right questions and setting goals to create a comprehensive retirement plan. The hosts also mention the upcoming retirement income challenge, where participants can learn more about retirement planning. They end the conversation by teasing the next episode, which will focus on the changes that occur in retirement. Takeaways Retirement is whatever you decide it to be, and it can look different for everyone. Working in retirement or pursuing new ventures after retiring from a career is becoming more common. Retirement should not be solely focused on leisure activities, but also on personal goals and relationships. Financial independence is a key driver of retirement, as it provides the flexibility to do what you want. The timing of retirement should be carefully considered, taking into account health, financial, and personal factors. Retirement plans may need to be adjusted if health issues or unexpected circumstances arise. Retirement is a transition that requires planning and preparation to ensure a smooth and fulfilling experience. Retirement decisions can be influenced by factors such as health, career changes, and financial stability. Asking the right questions and setting goals is crucial for creating a comprehensive retirement plan. Investing in relationships and health is important for a fulfilling retirement. The retirement income challenge is a valuable resource for learning more about retirement planning. The next episode will explore the changes that occur in retirement. Chapters 00:00 Introduction and Small Talk 03:45 Working in Retirement 06:47 Beyond Leisure: Personal Goals and Relationships 09:38 The Importance of Financial Independence 12:25 Timing Retirement: Health, Financial, and Personal Factors 20:31 Adjusting Retirement Plans for Unexpected Circumstances 22:35 Retirement as a Transition: Planning for a Fulfilling Experience 25:15 Asking the Right Questions for Retirement Planning 28:01 Investing in Relationships and Health for a Fulfilling Retirement 37:40 Join the Retirement Income Challenge 41:21 Next Episode: Changes in Retirement Links The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/  This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

    44 min
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About

The purpose of Retire With Style is to help you discover the retirement income plan that is right for you. The first step is to discover your retirement income personality. Your hosts Wade Pfau, PhD, CFA, RICP and Alex Murguia, PhD walk you through creating and implementing a retirement plan that will help you reach your goals, and that you’ll be able to stick with. Start by going to risaprofile.com/style and sign up to take the industry’s first financial personality tool for retirement planning.

Information

  • Creator
    Wade Pfau & Alex Murguia
  • Years Active
    2022 - 2024
  • Episodes
    100
  • Rating
    Clean
  • Copyright
    © Copyright 2022 All rights reserved.
  • Show Website
    Retire With Style

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