Episode summary
Die With Zero: Are You Giving Your Kids Too Much?
Your Money Your Wealth
· · 44 min · Hosts: Joe Anderson, Big Al Clopine
Summary
The hosts start with Lloyd and Diane, 50, who have about $8.4 million, a $1.5 million home, and a plan to spend roughly $250,000 a year in retirement. They conclude the couple can retire early, maintain that budget, and still have room to help their children, but the real issue is tax planning. The hosts argue that Roth conversions, careful withdrawal sequencing, and possibly working until at least 55 would make the plan more efficient, especially because future required minimum distributions could be large.
Kent, 73, has about $12 million, including $8.5 million in tax-deferred accounts, plus $85,000 in Social Security and a paid-up $2 million life insurance policy. He asks about buying an annuity and giving money to his children now. The hosts say he does not need an annuity for income, but they agree his bigger issue is taxes. They recommend focusing on Roth conversions, possibly up to the 24% bracket, and using qualified charitable distributions if he is charitably inclined.
The final case is John in the San Francisco Bay Area, who is retired and wants to provide for two daughters with special needs. The hosts say selling the home and moving to Nevada is not obviously better financially; staying in the Bay Area may preserve more long-term home appreciation. They also suggest he should not rule out long-term care coverage without underwriting, since some health issues can sometimes make coverage more favorable.
Key takeaways
- Lloyd and Diane can likely support a $250,000 annual retirement budget and still give to their kids, but the hosts say tax strategy matters more than spending capacity.
- For the 50-year-old couple, the hosts favor Roth conversions and income sequencing over holding too much tax-deferred money until RMDs hit.
- Kent does not need an annuity to generate enough income; the hosts say his main problem is managing future tax exposure in his $8.5 million of tax-deferred assets.
- John may not improve his daughters’ outcome by selling the San Francisco home, because the hosts think the Bay Area property could appreciate better than a Nevada replacement home.
- The hosts say long-term care insurance should not be dismissed just because of health history; underwriting could still produce a favorable result.
Notable quotes
“But I think you do Roth conversions all day long because that because you're going to retire young”
“You absolutely need to buy it in the tax deferred account because his RMDs are going to be what 300”
“I would go through underwriting at least”
How the episode opens
Join Big Al Spitball on how to build your own retirement and support your kids financially. Today on Your Money, Your Wealth podcast number 575. Lloyd and Diane in Montgomery County are 50 with $8.4 million.
Can they retire early and still be generous with their kids and T in Missouri are 34 and 31 with 255K and hopefully some big inheritances in the future? Can they fund the kids' college and help them buy their first homes and retire early? Kent in Kansas City is 73 with 12 million bucks and $2 million in life insurance.
Do join Big Al back up his plan to buy an annuity, gift money to his kids now and still spend freely in retirement, die with zero style? Finally, should John in the San Francisco Bay area sell the family home and move to Nevada or hold the house for his autistic daughters to inherit later? Follow us on YouTube and watch us do YMYW in person.
Turn on notifications so you don't miss a thing. And join me in the conversation in the comments. How are you juggling retirement planning with helping your kids?
I'm executive producer Andy Last and here are the hosts of Your Money, Your Wealth, Joe Anderson, CFP, and Big Al Copine CPA.
Let's go with um Hi guys, this is Lloyd in Diane. Oh, — And that one's from Say Anything. Dobbler. Yeah. — Oh, no. Really? — Yeah. — Say anything. That's uh that's the movie with the um Cusack, right? — Yeah. John Kusac and uh what was her name?
Holding up the boom box over his head in the rain. — Yes, that's the one. I own Sky. That was her name. Yes. — Yeah. Look at that picture of him with the boom box.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- retirement planning
- estate planning
- gifting to children
- college funding
- annuities
Companies and tickers mentioned
- Pure Financial Advisors
Watch the episode
Watch “Die With Zero: Are You Giving Your Kids Too Much?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Is a $400K Roth Conversion at Peak Income a Mistake? -
Should You Do Roth Conversions in a Down Market?
Your Money Your Wealth, this episode and its artwork belong to Your Money, Your Wealth. Octagon is not affiliated with the show; this page is an independent summary.
