What is the WIDOW’S penalty? How to AVOID it!

[@foundryfinancial]

Did you consider the widow's penalty? (Quick Note: I had to re-release this video to fix an error -- if you feel like you're having Déjà vu.)

[@peaceofcake8464]

This is an important topic. I have run the numbers using the American Academy of Actuaries 2012 IAM Basic Table for the joint mortality of a couple who are both 62 years old. The average length of time that the surviving spouse outlives the first spouse to die is 10 years.

[@davida4771]

Kevin, you do something that is really smart and that separates your brand from others who offer retirement advice. You have a defined "elevator speech" and it is excellent!!. Short, easy to understand and memorabe: "This channel is dedicated to help one million people retire without worry." That precisely captures what your target audience wants to know. I know Phil and Clare are proud of you. 🙂 Thsnk you for what you do!

[@foundryfinancial]

Haha. Thanks so much!

[@chrisforker7487]

Doesn’t account for the taxes paid on Roth conversions and lost investment returns from the amount paid in taxes on the conversions. It’s not a complete offset by any means, but something that needs to be factored in.

[@foundryfinancial]

Of course. But it’s something that should be calculated.

[@challenger4992]

How much did they have to pay in taxes to fed and state when they did the Roth conversion?

[@flygirl5633]

Got the sense that whoever wrote the letter was not being very nice ... I appreciate you putting together these educational videos for free and think that if we like to learn more about a certain situation, we should ask nicely. For example, according to a 2022 Pew survey, 30% of the people over age 50 are single. We did not get nasty because most of your examples are for married couples.

[@foundryfinancial]

You’d be surprised at some of the nasty notes and comments. It always catches me by surprise. I should do more single content though! And thanks for the nice note.

[@sarashann]

I'm so sorry you receive the negative feedback. I think your content is very valuable. Thank you.

[@PraveenSrJ01]

So sorry about the negative and hate comments

[@jvolstad]

I am doing QCD's when the time comes, yet I still have financial planners trying to get me to convert to a Roth.

[@jennifermcnally8611]

This is a very helpful tip! Thanks!

[@gnd111]

Ive been single since 1996 and haven had any deduction since 2010...im well prepared for this and its common sense that people should think about as they get older.

[@stephengreen8986]

Whilst I don't disagree that there is a widows penalty some planners say spend half your money by age 75. After this age most people spend their time closer to home and spend less.

[@MB-M-zr7vr]

Thanks! Could you confirm if spouse passed away, survival spouse could use married filing jointly for total three years on filing taxes?

[@gbinman]

I have looked at Roth conversions several times in the last 5 years. Mostly I am too late as I see it. I retired at 54 and am 74 now with a defined benefit pension. I get social security but with WEP it's pretty trivial. The only way I see is to use withdrawals from my IRA but I would have to make excess withdrawals over my RMD to backdoor into a Roth. I also have a beneficiary IRA that I am on a 10 year distribution plan. I was hoping to convert it was told that I cannot. Gross income 133k and with RMDs 164k, not including my wife's income.

[@bernaclischurchill4463]

Can you do a Roth conversion if you only have SS and pension, without earned income from employment.

[@tahirisaid2693]

I plan to retire or reduce my work hours in five years, and I'm interested in how others allocate their income between savings, spending, and investments. I currently earn about $175K annually but haven't built up much in savings so far

[@randolphh8005]

The other reason to delay one check to 70, is that you can spend down the IRA and have potentially smaller RMDs! A win win, that requires no extra tax payments and increases the income that is taxed less, since the max of SS that is taxed is 85%. There are very few scenarios where a couple should not try for one large check.

[@randolphh8005]

@BlueSkiesDay If you are single your point makes some sense, if married none. Your spouse will get your PIA at age 67 as a survivor check. If you took early, she will get your small check for the rest of her life. Banking on dying early makes a lot of sense? Only if you are clearly unhealthy.

[@randolphh8005]

@BlueSkiesDay If both spouses have earnings records, then one early and one later, is usually a hedge, and just smarter.

[@samuelangel8898]

Do you have a website or a phone number where you could be reached at.? I feel that me and my spouse are in a fairly different situation, but this conversion is probably the route that we should be going.

[@foundryfinancial]

You can make an appointment on our firm website: foundryfinancial.org

[@jaynelson8304]

In my opinion the math doesn't make sense. You have them converting all $1.5M to get to zero RMD. That means converting $150,000/year for years 62-71 or ten years, paying an extra $9,800/year for the first five years, then taking SS, the next five years cost an extra $26,900/year. Total extra tax paid to convert is $183,000. All that to avoid paying $20,000/year at 80. Got to live to 90 for the math to work, and that's not considering the growth on the $183,000.

[@foundryfinancial]

Watch my video on Roth conversions to get a fuller picture. This is just one small sliver.

[@g.ajemian4968]

I am lol