RETIREMENT MADE EASY

Today, in our 199th episode, I dive into some timely updates on Social Security and answered a batch of long-overdue listener questions. We kick things off with the newly announced 2.8% cost-of-living adjustment (COLA) for Social Security benefits starting January 2026. While that sounds like good news, I cautioned listeners not to celebrate too quickly.

Medicare Part B premiums are expected to rise by 11.6%, or about $21.50 per month, which will eat into that COLA, leaving most recipients with a net increase of only around $34.50. I argue that announcing the Social Security COLA a month before Medicare premiums is misleading and suggested both should be released simultaneously to give retirees a clearer picture of their actual income changes. I also highlight the increase in the Social Security earnings limit, which will rise from $176,100 in 2025 to $184,500 in 2026 (a 4.77% jump).

This means higher earners will contribute more to Social Security before hitting the cap. On a brighter note, the stock market has been performing exceptionally well in 2025, with major indices like the S&P 500, NASDAQ, and international markets all posting double-digit gains. At Retire Strong Financial Advisors, we're seeing more people seeking second opinions on their retirement plans, especially as their 401(k)s and 403(b)s hit all-time highs.

I wrap up the episode by tackling some fantastic listener questions and reminding everyone to check out our free resources and YouTube channel for more retirement planning insights.

• (00:00) Intro.
• (00:27) Social Security Updates.
• (11:28) Roth Conversions Explained.
• (19:53) 401k Management Fees.
• (21:14) Retirement Planning for Couples.
• (27:19) Annuity Product Warnings.
• (31:07) Retirement Withdrawal Strategies.

One listener, JB, asked a great question about Roth conversions, so I took the opportunity to break it down from the basics. A Roth conversion involves moving money from a pre-tax account like a traditional IRA or 401(k) into a Roth account, paying taxes on the converted amount now so it can grow tax-free in the future. This strategy can be especially powerful for those whose retirement savings are heavily concentrated in pre-tax accounts. However, it's not a one-size-fits-all solution. Roth conversions can trigger higher taxes on Social Security benefits, push you into a higher tax bracket, or increase your Medicare premiums.

There's also the five-year rule to consider, which can limit when you can access the converted funds. That's why I always recommend working with a fiduciary financial planner or tax advisor to determine if it's the right move. Another listener, Kelly, asked about paying Financial Engines to manage her 401(k). I explained that these services are optional and you can opt out and manage your own portfolio if you're comfortable. But if you're receiving personalized advice and planning, the fee might be worth it.

Then we heard from Gary, who's 60 and married to Linda, who's 52. He's saved over $2 million mostly in a pre-tax 401(k) and has a pension that won't begin until age 65. Linda works part-time, and with their eight-year age gap and no clear Social Security strategy, there are several risks they need to address. If something were to happen to Gary, Linda wouldn't be eligible for survivor Social Security benefits until she turns 60, and the tax burden on their pre-tax savings could be significant for the surviving spouse. Other unknowns like their debt, health insurance plans before Medicare, and pension survivorship options will add more complexity.

Life insurance and relocation plans are also critical factors that could impact their long-term financial security. I emphasized the need for a comprehensive retirement plan to help them navigate these issues. On a related note, I addressed a listener's question about annuity sales pitches at steak dinner seminars. While annuities can have a place in a portfolio, they're often sold with high fees, surrender penalties, and limited liquidity. I've seen too many people regret these decisions, so I always urge caution that if someone's buying you dinner, they're probably trying to sell you something.

That's why we do retirement education differently. Our seminars are held at local libraries, no fancy dinners, no alcohol, and absolutely no product pitches. We're there to educate, not sell. This approach ties into Cindy's excellent question about which retirement account to withdraw from first. She has a mix of accounts, 401(k), Roth, and a stock account she hopes to leave to her kids, and she's unsure how to begin her decumulation strategy. This is a crucial decision, and unfortunately, many people get it wrong.

The old "conventional wisdom" of spending taxable accounts first, then pre-tax, then Roth, no longer holds up. Tax laws have changed, required minimum distribution ages have shifted, and future tax rates are uncertain. Your withdrawal strategy should be customized based on your income sources, Social Security timing, investment types, and long-term tax impact. Some accounts may generate income through dividends and interest, while others are better suited for long-term growth.

In this episode of the Retirement Made Easy podcast, I delve into 401(k)s: how they work, why they matter, and how to maximize their benefits. I break down the basics in simple terms, just like I always aim to do, because retirement planning shouldn't be confusing.

I discuss the differences between good and not-so-great 401(k) plans, the pros and cons of keeping your money in a 401(k) versus rolling it into an IRA, and how changes in providers can impact your investment options.

I also share a helpful government site for tracking down old retirement accounts and explain why Roth conversions might be worth considering. My goal is to help you take control of your financial future with clarity and confidence.

You will want to hear this episode if you are interested in....

• (00:00) Intro.
• (00:27) Overview of 401(k) Plans.
• (01:40) Resources and Services Offered.
• (02:48) Deep Dive into 401(k) Plans.
• (05:13) 401(k) Rollovers and Conversions.
• (10:53) Employer Contributions and Vesting.
• (19:52) 401(k) Loans and Company Stock.
• (22:58) Mega Backdoor Roth and Final Tips.

I will explain how Roth conversions can be done while you're still working or after retirement, depending on your 401(k) plan's rules. Not all plans allow them, and some require a hefty 20% tax withholding, which could be a drawback. I also break down how employer matching works (some companies offer generous matches, others offer none, and vesting schedules determine how much of that match you actually get to keep).

I stress the importance of checking your vesting status before leaving a job. Then I dive into profit-sharing, which can be even more valuable than matching, but it's never guaranteed. I clarify a common misconception: rolling over funds from an old 401(k) or IRA into your current 401(k) won't earn you a match. Finally, I talk about the pros and cons of rolling old 401(k)s into either your current plan or a rollover IRA. Personally, I favor rollover IRAs for their flexibility, investment freedom, and ease of Roth conversions.

Unlocking 401(k) Opportunities and Avoiding Pitfalls

I caution listeners about 401(k) loans. If you retire or get laid off, that loan must be repaid quickly, or it becomes taxable. Once you leave your employer, you can't take out new loans from your 401(k) or IRA. I also touch on company stock in your 401(k); if you have a large concentration, talk to your financial planner about a tax strategy called net unrealized appreciation (NUA), which could work in your favor. Additionally, I introduce the "mega backdoor Roth," another beneficial strategy that allows high earners to contribute beyond the standard limits if their plan permits it (up to $70,000 annually). Not all plans allow this, but it's worth asking.

I also share my frustration that there's no standardized way to compare 401(k) plans across companies. The best thing you can do is request your plan summary document and review it with a fiduciary advisor. Lastly, I offer a tip: some employers let you use unused vacation or PTO payouts as 401(k) contributions, which could help reduce your tax bill. It's a smart move to look into before you retire.

Are you confident your retirement plan covers everything, or are there blind spots that could cost you down the road? In this episode of the Retirement Made Easy podcast, I reveal six commonly overlooked areas that can quietly sabotage even the most well-intentioned retirement strategy. From inflation shocks and healthcare surprises to tax missteps and market overconfidence, I'll walk you through the pitfalls I see time and again so you can learn how to avoid them. If you want a retirement that's not just comfortable but resilient, this episode is a must-listen. My goal is to walk you through these areas so you can strengthen your own plan and avoid costly mistakes.

Today, I break down six critical areas that often get overlooked in retirement planning. First, I highlight the importance of preparing for large, irregular expenses. Second, I stress the impact of inflation, reminding listeners that costs will rise steadily over time and must be factored into any long-term plan. Third, I caution against assuming past investment performance will continue, urging retirees to prepare for market downturns with a solid strategy.

Fourth, I explain how tax planning (especially Roth conversions) can significantly reduce your lifetime tax burden if done thoughtfully. Fifth, I dive into healthcare planning, noting that Medicare isn't free and doesn't cover everything, so understanding your coverage and out-of-pocket costs is essential. Finally, I emphasize the importance of proper beneficiary designations and asset titling to avoid probate issues and unintended consequences after death. Together, these six areas form the foundation of a resilient, well-rounded retirement plan.

• (00:00) Intro.
• (04:20) How to handle large, unexpected expenses on a fixed income.
• (09:25) Does your retirement plan include inflation?
• (13:30) Do you have realistic expectations for your investment performance?
• (17:02) Tax Planning is Retirement planning.
• (20:06) Healthcare planning impacts your retirement.
• (23:17) Beneficiary planning and asset titling.

Many people focus on monthly bills but often overlook big-ticket items, such as a new roof, HVAC system, or vehicle. These costs don't happen every year, but when they do, they can derail your financial stability if you haven't planned.

I share real examples from clients who face these challenges and emphasize the importance of building flexibility into your retirement budget to handle these inevitable expenses. Next, I highlight inflation's impact on your retirement.

The pandemic shows us how quickly prices can rise. I recall replacing our water heater and seeing the cost jump 150% in less than two years.

Inflation affects everything: healthcare, insurance, groceries, and dining out. Your retirement plan must include realistic inflation projections, as costs are expected to continue rising year after year.

Planning for Market Pullbacks and Tax Surprises

Then I turn to investment performance. Over the past decade, the stock market has performed exceptionally well, and many people assume that trend will continue. But that's not realistic. At some point, the market will pull back, and retirees need to be prepared (mentally and financially).

I stress the importance of having a strategy in place before a downturn hits, so you don't panic and make decisions that hurt you long-term. Tax planning is another critical area. Your income strategy in retirement should align with your tax strategy.

Roth conversions allow you to move money into accounts that grow tax-free and aren't subject to required minimum distributions. Timing and planning are everything here.

Getting Healthcare and Legacy Details Right

I also discuss healthcare planning, which many people misunderstand. Medicare isn't like your employer's health insurance, and it doesn't cover everything. Healthcare costs will likely be one of your biggest expenses in retirement, and you need to understand what's covered, what's not, and how to prepare for unexpected medical bills.

Finally, I wrap up with beneficiary planning and asset titling. This is one of the simplest yet most overlooked parts of retirement planning. I've seen too many cases where someone passes away and their assets aren't titled correctly, or beneficiaries aren't listed. The consequences are taxes, probate fees, and emotional stress that fall on the surviving family.

These are easy fixes that can make a huge difference. I urge everyone to take the time to get them right. Now that you know these six areas, you're better equipped to build a retirement plan that truly works.

Over the past few weeks, I've had several clients and prospective clients ask me the same question: "Should I keep my life insurance in retirement?" Life insurance is something we all tend to think of as essential when we're younger (when we've got a mortgage, kids at home, maybe only one working spouse).

But once you're nearing or in retirement, things change. So, the question becomes: Does it still make sense to pay for life insurance? In many cases, the answer depends on your goals and financial picture. I've seen cases where people are paying big premiums for small death benefits that won't make a meaningful impact in their overall financial plan. Life insurance is a tool. If you no longer need the tool, why keep paying for it?

That said, there are still some great reasons to have life insurance in retirement. I've worked with clients who maintain policies to fulfill charitable goals. That's their retirement vision. Others use life insurance for legacy planning, making sure a tax-free benefit goes to their children, a trust, or someone they care deeply about. Life insurance can also be part of pension planning, especially for folks using pension maximization strategies to leave something behind for a surviving spouse.

Now, if you've got permanent life insurance with a cash value, then you need to understand how it works. I always recommend talking to a fiduciary advisor first. These policies can be complicated, so it's worth reviewing them carefully to make sure they're still serving your needs. One thing I've seen time and again is that people misunderstand their policies.

So be cautious because life insurance contracts can have all kinds of fine print. If you don't truly understand how it works, get some help reviewing it. And finally, don't lose sight of your why. Your goals should drive all your financial decisions. So ask yourself, what do you want to protect? Who do you want to help? Whether it's your spouse, your kids, your church, or your community, life insurance can be a powerful tool when used intentionally.

• (00:00) Intro.
• (03:20) Do you need life insurance in retirement?
• (07:38) Does it make sense to pay for life insurance? What's the cost to benefit?
• (09:43) Problems with life insurance.
• (15:03) Benefits of having a life insurance policy in retirement?

Life Insurance in Retirement is Not for Everyone

When people ask me whether they still need life insurance in retirement, I tell them: it depends on your goals, your financial situation, and who you're trying to protect. If you're debt-free, your house is paid off, the kids are grown and financially independent, and your retirement accounts are in good shape, then you might not need it anymore.

I had a client recently ask, "Are we wasting money keeping this policy?" And for them, the answer was yes. But for others, the story's different. If you've got a mortgage, a spouse who would struggle financially without you, or anyone who relies on your income, then life insurance might still play a vital role even after you retire.

Is Permanent Life Insurance Serving You?

Another big topic I often see is confusion around permanent life insurance policies, whole life, universal life, variable universal life, you name it. These policies often have cash value, and many people don't fully understand how they work or what they're really worth. I've reviewed policies where the death benefit is only $10,000–$25,000, and the person is still paying high premiums.

In many cases, if you're over 59½ and you want to cash out, you can access the cash value with minimal tax impact, depending on your cost basis. For example, if you've paid $30,000 into the policy and the cash value is $45,000, that $15,000 gain would be taxable as ordinary income. I always recommend speaking with a CPA or fiduciary before making a move, but the key is understanding the numbers and whether that policy is still serving you.

How Your Financial Goals Direct Life Insurance Needs

Lastly, don't forget your goals, your why. Life insurance isn't just about replacing income; it can be a powerful tool to help you leave a legacy. I've worked with a couple who each carry a $1 million policy with their church as the beneficiary because that was part of their retirement vision. Another client is using her policy to fund a college scholarship because a scholarship changed the course of her own life.

These stories are reminders that your financial decisions should reflect your values and what matters most to you. Life insurance can still have purpose in retirement, but only if it's tied to something meaningful. As I always say: dream big, and make your money work for the life you want to live and the legacy you want to leave behind.