How Close Are You to Retirement? Listener Questions Answered, Ep #199

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.

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

  • (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.

Breaking Down Roth Conversions and 401(k) Management Options 

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.

Big Savings, Bigger Risks: Why Planning Matters

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.

Retirement Education Without the Sales Pitch

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. The goal is to create a strategy that supports a successful retirement while minimizing your lifetime tax bill. Cindy’s question was so important, I even made a YouTube video on it, “Retirement Withdrawal Strategy”, which has become one of our most popular resources.

 

Resources & People Mentioned

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