Posts by Brandon Renfro, CFP®, RICP, EA
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Ask an Advisor: I’m 69 With $370k in Equities, But I’m ‘Getting Nervous’ About the Stock Market. What Should I Do?
I am a healthy, active 69-year-old with $370,000 in equities but I’m getting nervous that stocks are overvalued. My portfolio has no bonds. I am interviewing financial planners but due to a negative experience with a firm a few years ago, I am having a hard time trusting anyone else with my hard-won savings. What… read more…
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Ask an Advisor: My Wife Will Retire 2 Years Before Her Full Retirement Age (FRA). How Do We Calculate Her Spousal Benefit?
I am 76 and I have been receiving my benefit since age 62—four years before my full retirement age (FRA). My wife is now 61 and will retire at age 65—two years before her FRA. She will begin drawing her teacher retirement from the State of Texas, which is no longer subject to the Government Pension… read more…
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Ask an Advisor: Will the $500k in My Retirement Account Be Taxed When My Heirs Inherit it?
I have about $500,000 in a 403(b) account. I am writing my will and I do not know whether the money in my 403(b) will be subject to taxes when it is distributed to those I list in my will. Or, will the money just pass directly to those whom I have named? – Bill Bill,… read more…
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Ask an Advisor: We Sold an Investment and Our Medicare Part B Premiums Shot Up to $592. Can We Avoid This Increase?
I sold an investment property which made my income very high for that year. Medicare Part B premiums increased to $591.90 for both me and my wife. Is there any way to avoid that increase? Our Part D premiums increased as well. -Fred First off, congratulations on selling your investment property. Unfortunately, there likely isn’t… read more…
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Ask an Advisor: I’m 54 and Inherited a $100k Annuity from My Mom. Should I Take the Lump Sum or Monthly Payments?
I inherited a non-qualified annuity from my mom. I am on SSDI and I receive $1,800 per month. The annuity is worth $100,000. I am trying to decide whether to take monthly payments for the rest of my life, which should be about $450 a month, or take the lump sum (between $80,000 and $90,000… read more…
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Ask an Advisor: My Net Worth Is $3.76M and I’ll Collect $4,600 Per Month in Social Security. How Much Can I Afford to Spend on a House in Retirement?
How much can I afford to pay for a home and still maintain a comfortable retirement without worrying about running out of money? I’m 66 and I have about $1.78 million in a taxable investment account, $1.5 million in IRAs, $309,000 in a Roth and $115,000 in a deferred compensation plan. I also have a… read more…
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Ask an Advisor: I Have 2 Years Before I’m Eligible for Medicare. What’s My Best Option for Health Insurance?
What’s the best route for medical insurance without a work place option? I need two years of coverage before Medicare kicks in. – Robert Health insurance and its associated costs are an important consideration in retirement – even more so if you retire before qualifying for Medicare at age 65. I don’t think there’s any… read more…
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Ask an Advisor: Can I Invest My $10,000 RMD into an Annuity to Avoid Paying Taxes on It?
Here is my question, which uses hypothetical values for simplicity: My RMD for 2024 is $10,000. Can I avoid paying the IRS the tax on that $10,000 this year by investing the full $10,000 RMD or the value of the tax on the $10,000 into a qualified longevity annuity contract (QLAC). I just retired in… read more…
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Ask an Advisor: My Wife Did a $40K Roth Conversion in a Low-Tax Year. Does She Really Need to Wait 5 Years to Withdraw it?
I encouraged my wife to take a $40,000 Roth conversion in a lower tax year. Even though she has another Roth IRA at a different broker, she was encouraged to keep the money where she already had her 401(k), which we converted to a IRA and then to a Roth IRA. She is well past… read more…
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Ask an Advisor: Is There a Downside to Taking a Monthly Pension vs. Lump Sum?
Is there a downside to taking your pension on a monthly basis vs. taking a lump sum? The monthly payments would be higher than the return I would get on the lump sum. – Claudette There are certainly some downsides of taking monthly pension payments instead of a lump sum. But that doesn’t necessarily mean… read more…
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Ask an Advisor: Will Capital Gains and Dividends in My Brokerage Account Impact My Social Security Benefits at 62?
Does the interest, dividends and capital gains from assets owned in my taxable brokerage account count toward the Social Security earnings limit? Only wages from employment or self-employment count toward the exempt earnings limit for those who file for early Social Security. Investment income won’t result in benefit withholdings, but it can influence the taxation… read more…
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Ask an Advisor: I’m over 59 ½ and Did a Roth Conversion Over 5 Years Ago. Should I Worry About Taxes and Penalties?
I have had a Roth IRA and a Traditional IRA for well over five years and want to start converting the traditional IRA to the Roth IRA. My belief is that I could start withdrawing the converted funds without any penalty, since the Roth has been open for over five years and I am over 59… read more…
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Ask an Advisor: I’m 66 With $300k in My Old 401(k). What Are My Rollover Options?
I am a 66-year-old retired woman. I left my 401(k) with my old employer – roughly about $300,000 – but now I’m thinking about rolling it over and don’t know where to begin. Can you advise me? -Renee Rolling over a 401(k) after retirement is a decision many people face, and while the process isn’t… read more…
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Ask an Advisor: Social Security at 67 ($2,231) or 70 ($3,008). Will COLA Continue to Increase the Payout If I Wait?
I’m about five years away from 62 and wondering if my estimated Social Security benefits factor in inflation/cost of living increases? If I retire at age 62 and my benefit estimate ($1,708) is correct, I will get eight cost-of-living adjustments (COLAs) by the time I reach age 70. If we apply the historical average COLA… read more…
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Ask an Advisor: Will My Roth IRA Benefit from This Tax Loophole?
Do funds in a Roth IRA get the benefit of a stepped-up basis for my heirs when I die? – Ed No, the cost basis of the assets held within your IRA will not step up or reset to their current market value when you pass away. A step-up in basis only applies to assets… read more…
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Ask an Advisor: I Maxed Out My Roth IRA Earlier This Year and Then Got a New Job. Can I Participate in the Company’s 401(k)?
I am a new college graduate who had a part-time job and earned $8,000 with no benefits during my final spring semester. I put my first $7,000 of earnings into a Roth IRA. After graduation, I got a full-time job with benefits including a 401(k) plan with 50% company match. Am I allowed to participate in the… read more…
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Ask an Advisor: When Should I Work With a Financial Advisor versus a CPA?
With the exception of tax preparation, how do you determine when a certified public accountant (CPA) is needed versus a financial advisor for financial guidance? – Joyce In many cases, most people would benefit from having both a certified public accountant (CPA) or other professional tax preparer and a financial advisor. Each has their own… read more…
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Ask an Advisor: Can I Roll Over $120k in After-Tax 401(k) Contributions to a Roth IRA Without Paying Taxes?
I have $120,000 in after-tax contributions in my traditional 401(k) at work. Can I roll over just the after-tax money into my Roth IRA? I would like to avoid creating a taxable event. – Daniel Daniel, this is a great question. Your ability to roll over these after-tax 401(k) contributions to your Roth IRA may… read more…
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Ask an Advisor: Does a Military Pension Count Toward Income Limits for Roth Contributions?
Does a military pension count toward income levels for Roth contributions? – Gail Congratulations on earning your service pension. Whether it’s due to your own service or a spouse’s service, you’ve earned it. On one hand, military pensions don’t meet the “earned income” requirement necessary to qualify for a Roth contribution, meaning a pension alone… read more…
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Ask an Advisor: I Withdrew $60k from My Retirement Plan This Year Which Increased My Medicare Premiums. Is It Permanent?
I’m 71 years old and my current Thrift Savings Plan (TSP) balance is $315,000 after withdrawing $60,000 this year. This is putting me in a higher tax bracket and I must pay a large amount of federal/state taxes. In addition, my monthly Medicare premium will increase. Will the Medicare premium increase permanently or only the… read more…
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Ask an Advisor: Does the 5-Year Apply to My Beneficiary If I Do a Series of Roth Conversions Before I Turn 73?
I want to do three Roth conversions in the next three years before I turn 73 in 2027 so that my beneficiary doesn’t have to deal with taxes. If I should die soon after the last conversion, will my beneficiary be subject to the five-year rules? – Tom This is a good question. The five-year… read more…
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Ask an Advisor: When My Spouse Dies, Do I Get a Full Step-Up in Basis on My Home or Only the $250k Capital Gains Exemption?
What if a husband and wife own a home together that increases in value by $500,000. When one spouse dies and the other owns the property themselves, do they receive a step-up in basis? Or do they only receive a $250,000 capital gains exemption when they sell the property? – Samuel Your question deals with… read more…
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Ask an Advisor: Should My Wife Wait to File for Spousal Benefits or Claim Her Benefit Now?
I’m 63 and still working. My wife, who is 64 ½ and retired, spent most of her working life raising our children at home. She qualifies for Social Security at a current rate of $675 and $845 if she waits until FRA. I plan on working for another two or three years. My Social Security… read more…
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Ask an Advisor: We’re in the 35% Tax Bracket. At What Point Does It Make Sense to Start Converting Our 401(k) Into a Roth?
Although everyone is different from a tax bracket standpoint, at what tax bracket does it makes sense to start converting your 401(k) into a Roth 401(k) and pay the taxes upfront? For instance, I am 42 with a combined income of $560,000 between myself and my wife, putting us in the 35% federal tax bracket.… read more…
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Ask an Advisor: Can I Collect Social Security Survivors Benefits Now and Switch to My Own at Full Retirement Age?
I’m 62 and currently working but my spouse passed away when I was 60. He waited until age 70 to take his Social Security. Can I collect his Social Security now in addition to my paycheck? If I get more money under my account at FRA, can I switch? – Ellen I’m sorry to hear… read more…