Chris’s Summary
Jim and I are joined by Steve Sansone as we discuss cash balance plans and explain how they function as hybrid defined benefit plans that present as account-based arrangements. We cover who these plans are designed for, including high-income business owners and professional groups, how age and employee demographics affect feasibility, and why allowable contribution levels can far exceed defined contribution limits. We also outline nondiscrimination rules and how they are applied, employer commitment requirements, and other general setup considerations.

Jim’s “Pithy” Summary
Chris and I are joined by Steve Sansone as we take a deeper dive into cash balance plans and why they show up in very specific situations, not as a one-size-fits-all solution. Steve explains how these plans sit in the defined benefit world but look like a defined contribution account, which is where a lot of confusion starts. We spend time on who they’re actually built for, why high-income professionals tend to be the ones asking about them, and why the contribution numbers can look startling if you haven’t seen the mechanics before.

We also talk through the tradeoffs, because these plans are not free money and they are not magic. Steve walks through how demographics drive everything, why age gaps between owners and employees matter, and how employer contributions to staff are part of the deal. We discuss why, in the wrong situation, these plans can pour fuel on the fire of a future tax problem, and why, in the right situation, they can make sense when paired with intentional planning during the retirement tax planning window before required minimum distributions begin. We frame that discussion around the same planning lens we use elsewhere on the show, including how the 2-1-0 Tax Ordering Number concept helps evaluate whether the front-end tax benefit is worth the back-end complexity.

The post Cash Balance Plans Explained: EDU #2552 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener emails on Social Security spousal eligibility and claiming coordination, a listener PSA on Social Security proof of marriage requirements, RMD planning while still working, money market earnings in brokerage accounts, and using QLACs for long-term care planning.
(16:15) Georgette asks whether the repeal of WEP and GPO affects her eligibility for a spousal benefit if her ex-husband worked for the federal government and she did not pay into Social Security.
(26:45) A listener asks how Social Security works when one spouse lacks enough work credits for their own benefit and only qualifies for a spousal benefit, including whether both spouses must claim at full retirement age to access that benefit.
(42:00) The guys address a PSA on why Social Security may already have proof of marriage on file for one spouse due to a name change but still requires documentation from the other spouse when benefits are claimed.
(49:30) Jim and Chris discuss whether maximizing pre-tax retirement contributions and rolling a SEP IRA into a 403(b) can reduce or eliminate RMDs under the still-working exception.
(1:06:45) A listener questions the statement that Money Market earnings are minimal, pointing to current yields in a fund they hold.
(1:12:00) The guys respond to feedback on whether a QLAC could be an effective way to address long-term care planning when self-funding alone does not feel sufficient.

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Chris’s Summary
Jim and I are joined by Jake Turner as we cover the Math Act and a set of shorter EDU topics Jim has been collecting. We start with an SSA-44 update, including listener and client feedback on submitting the IRMAA redetermination form online through an SSA.gov account. Jake explains how IRS “math error” notices work today, why they’re often vague, and what the new law requires for clearer explanations and response deadlines. Jim then walks through the Automatic IRA Act’s proposals, including an annuity-style “protected lifetime income solution” requirement over certain balances, and we close with a quick way to sanity-check MYGA rates using AnnuityRateWatch’s yield curve.

Jim’s “Pithy” Summary
Chris and I are joined by Jake Turner as we bounce from Social Security admin housekeeping to Washington trying, yet again, to make the IRS act like it’s talking to actual humans—starting with the Math Act. If you’ve ever opened one of those IRS letters that basically says “you owe us money” without showing you how they got there, you already know why this matters. Jake lays out what those notices are really doing behind the scenes, why clients forward them to preparers in a panic, and what the new requirements are supposed to force the IRS to include so you can actually understand what they’re alleging and what happens if you don’t respond.

Then we pivot into the Automatic IRA Act, and I’ll be honest: I’m less interested in the political theater than I am in what it signals. There’s the small-business auto-enrollment concept—opt-out, no match requirement, and all that—and then there’s the part that made me laugh out loud when I saw who was cheering it on. Once you cross a certain 401(k) balance, the proposal would require employers to offer a “protected lifetime income solution,” which is just a polite way of saying “annuities are trying to get a bigger seat at the 401(k) table.” That opens up all the practical questions: what counts, who defines it, and how this intersects with the slow drift of defined contribution plans trying to behave a little more like pensions.

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Jim and Chris discuss listener emails starting with PSAs about IRMAA and Social Security spousal benefit applications, then questions on IRMAA, QLAC-related RMD rules, and a Roth conversion involving a fixed indexed annuity (FIA).

(9:30) Georgette shares a PSA explaining that she successfully filed Form SSA-44 preemptively—before receiving an IRMAA determination letter.

(21:15) A listener offers a PSA describing issues with an online Social Security spousal benefit application that was denied after being submitted separately from the working spouse’s application.

(29:45) The guys discuss how the Social Security Administration determines IRMAA when a tax return is delayed due to combat-zone service and whether a significant drop in income qualifies for Form SSA-44 relief.

(38:45) Jim and Chris address whether overestimating income on Form SSA-44 results in a refund, how survivor benefits are affected if claimed early, and whether post-retirement employer coverage is treated as active employee benefits for Medicare Part B and IRMAA purposes.

(50:45) George asks whether payments in excess of the RMD from a QLAC can be applied toward RMDs for other IRAs, or only toward the non-annuitized portion of the same IRA.

(1:00:20) A listener asks how the pro rata rule applies to a Roth conversion when assets include a fixed indexed annuity (FIA) with a guaranteed lifetime withdrawal benefit.

The post IRMAA, Social Security, QLACs, Roth Conversions: Q&A #2550 appeared first on The Retirement and IRA Show.

Chris’s Summary
Jim and I discuss secure income as we review a Yahoo Finance article for middle-class retirees. We use it to highlight longevity considerations and the differences between guaranteed income approaches and traditional safe withdrawal rate or Monte Carlo methods. We also cover where spending-segmented planning and hybrid long-term-care annuities might fit in.

Jim’s “Pithy” Summary
Chris and I discuss an article titled “How Middle-Class Retirees Can Make Their Money Last 25 Years or Longer” to get into the parts of retirement planning that actually matter when you may be retired for far longer than the industry tends to model. The article leaves out the realities of aging, the changing ability to manage complex finances, and the specific expenses that follow you for life, which lets me lay out why the Minimum Dignity Floor needs to be treated differently from everything else rather than blended into one big withdrawal strategy that assumes stability where none exists.

I talk through why I push back so hard on traditional safe withdrawal rate thinking, especially the notion that retirees should simply trim spending whenever markets dip. I know you’ve probably heard me say it before – that approach ignores the reality many retirees face by not addressing what people cannot reduce and overstating what they can. It also glosses over how income behaves differently depending on its source, why some streams ratchet upward while others swing unpredictably, and how risk pooling creates stability that a portfolio alone cannot. The gaps in the article also give room to dig into long-term care, including why certain tax-driven situations make hybrid LTC annuities funded by non-qualified contracts worth considering. And underlying all of this is the point that the goal is not to react to markets for decades on end—it is to build a structure that supports the life you want to live. That is where secure income becomes essential.

Show Notes:
Yahoo Finance Article

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Jim and Chris discuss listener questions on Social Security family maximum and suspending benefits, a listener PSA on IRMAA premiums, a listener PSA on Medicare premiums, a listener PSA on Social Security claiming strategies, Roth contribution rules, and Roth conversion disadvantages.
(4:30) George asks how the combined family maximum benefit works when two retirement records are combined to increase the family limit for auxiliary benefits paid to a spouse and two minor children.
(16:00) A listener asks what additional factors should be considered when suspending a Social Security benefit at full retirement age and restarting at 70 after previously claiming early.
(30:15) The guys share a PSA in which a listener states that IRMAA is a premium rather than a tax because Medicare enrollment is optional.
(37:45) Georgette shares her objections to Chris describing the base Medicare premium as “free” and explains why she feels that is misleading.
(44:30) A listener offers a couple of PSAs, first sharing their thoughts on Nokbox, then sharing an article on a Social Security claiming strategy they believe could help people concerned about sequence of returns.
(51:00) The guys answer a question about how a 529-to-Roth IRA transfer affects the annual Roth contribution limit when part of the rollover is gains.
(56:30) Jim and Chris address what disadvantages exist when choosing a Roth conversion instead of a non-RMD IRA withdrawal when both would be taxable.

Show Notes:
NokBox

Social Security | Readjust your claiming strategy | Fidelity

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Chris’s Summary
Jim and I review the QLAC 1098-Q and walk through how this form reports premiums, fair market value, and contract status. We compare it to Form 5498, outline how the fair market value and excess annuity payments can be used under Secure Act 2 Section 205 with other IRAs, explore the age-85 and surviving-spouse reporting rules, and touch on listener PSAs about using QLACs as part of a broader self-funded long-term care approach.

Jim’s “Pithy” Summary
Chris and I use the QLAC 1098-Q as a way to show how the IRS keeps tabs on your QLAC and why that little form matters more than people think. I talk about it as the “kissing cousin” of Form 5498, walk through how box 3 tracks cumulative premiums against the current $210,000 lifetime limit, and explain how the fair market value and projected income give the IRS what it needs while also giving you the data to run the Section 205 strategy after Secure Act 2.

Then I get into the strange rule that says the company only has to send 1098-Qs until age 85 or death for the original owner, contrast that with the different rule for a surviving spouse, and spell out why it could be a real problem if the insurer stops providing a usable fair market value once income has been turned on. We kick around how that interacts with the prohibition on DIY fair market value calculations, the inability to get a QLAC quote after age 85, and why advisors and clients are going to care which companies keep sending this information even when they technically don’t have to. On top of that, I read listener emails about using QLACs alongside self-funding long-term care and push back on the idea that you only insure things you are “sure” you’ll need.

The post The QLAC 1098-Q: EDU #2549 appeared first on The Retirement and IRA Show.

Jim and Chris discuss listener questions on IRMAA brackets and several QLAC topics including RMD interaction, suitability, payout values, and purchase timing.

(19:30) A listener wonders if their lower 2024 income will automatically reduce their 2026 IRMAA even though it doesn’t qualify for an SS-44, or if they must contact the SSA.
(25:15) George asks whether going above certain income thresholds in 2025 could keep IRMAA lower in 2027 because of inflation adjustments.
(34:30) The guys weigh whether QLAC income, once it begins, can offset RMDs on other IRA holdings.
(54:00) Georgette wants to know who is a good candidate for a QLAC, how it is purchased, and which features to consider.
(1:05:00) A listener seeks guidance on determining early- and late-start payout values for a QLAC and whether those values are fixed or variable.
(1:10:15) Jim and Chris consider whether buying a QLAC earlier leads to higher payments at the same deferral age and what factors affect purchase timing.

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