Ready For Retirement

What are the benefits of Roth conversions in retirement planning? James addresses questions about when Roth conversions become worthwhile.

This episode explores key factors:
Changes in tax bracket
Spousal scenarios
Impact of portfolio size on tax savings
Potential tax savings tend to increase with a higher portfolio balance but be careful not to take unnecessary Roth conversions. James explains different strategies to optimize tax planning.
Questions answered:
Is there a specific portfolio value at which Roth conversions should be considered?
Why might one choose not to do a Roth conversion, and what are the alternatives?
Timestamps:
0:00 Intro
3:14 Scenario
6:47 Tax bracket
11:15 Provisional income
14:27 Spousal scenario
16:45 Bottom line
20:29 Outro

Create Your Custom Strategy ⬇️

Get Started Here.
Join the new Root Collective HERE!

When we think of retirement, it often evokes dreams of leisure, relaxation, and the freedom to pursue one's passions. Yet, the decision to retire is not merely about leaving a career; it's about embarking on a new chapter filled with purpose and fulfillment. Joe Kuhn, a seasoned retiree and creator of the "Joe Kuhn Loves Retirement" YouTube channel, shares valuable insights gained from his personal journey.
Retiring to Something, Not Just From Something
Rather than focusing solely on leaving behind the stresses of work, Joe advocates for retiring to something meaningful. His emphasis on having specific plans, hobbies, and activities in retirement resonates with the idea that the transition isn't just a departure; it's an arrival into a new, purposeful phase of life.
Slow Travel and the Joy of Unplanned Adventures
James and Joe discuss the concept of "slow travel," an approach that involves savoring the journey rather than rushing to the destination. By embracing the beauty of unplanned adventures, he emphasizes that retirement opens up the possibility for individuals to explore at their own pace, fostering a deeper connection with the world around them.
Adaptability and Embracing Change
Joe shares the evolution of his retirement plans, demonstrating the importance of being open to change. Unforeseen events, such as the COVID-19 pandemic, forced him to reevaluate his consulting work, inspiring his YouTube channel’s transformation into a retirement coaching platform. Joe's story underscores the resilience required in retirement, encouraging individuals to navigate the uncertainties with flexibility and a willingness to explore new paths.
Slowing Down and Recognizing Stress
Joe reflects on the shift from a high-stress, task-oriented mindset to a more relaxed and balanced lifestyle. The act of slowing down, evident even in routine tasks like mowing the lawn, becomes a metaphor for the broader shift in priorities during retirement. Joe's candid revelation about being unaware of the stress he carried during his working years prompts listeners to reconsider their own well-being and the impact of stress on health.
Spending Less and Financial Realities
Contrary to expectations, Joe reveals that he is spending significantly less than initially estimated. Adjustments in car usage, changes in insurance, and a transition to streaming services contribute to this surprising revelation. It is important to carefully assess finances and the need to adapt spending habits in retirement based on changing circumstances.
Confidence to Spend and Seeking Support
Joe addresses a common fear amongst retirees – the confidence to spend money. Despite having sufficient resources, many individuals hesitate due to economic uncertainties. Joe advocates for seeking support, such as from financial advisors, to gain confidence in financial decisions. Retirement is not just about financial planning; it's about developing the confidence to enjoy the fruits of one's labor.
Joe Kuhn's journey through retirement offers unique insights for those contemplating or navigating this significant life transition. From the importance of retiring to something meaningful to the adaptability required in the face of unforeseen challenges, Joe's experiences provide a roadmap for creating a fulfilling retirement anchored in purpose, flexibility, and financial mindfulness.
Timestamps:
0:00 Emotional prep for retirement
1:34 Joe retires at 54
4:54 Fear versus time
10:04 Retire to (not from) something
14:57 Try different paths
19:44 Adjust to a slower pace
24:42 Release hidden stress
26:55 Spending in retirement
3

Create Your Custom Strategy ⬇️

Get Started Here.
Join the new Root Collective HERE!

For nearly 50 years after Social Security's inception in 1935, benefits were not subject to federal income taxes. That changed in 1983 when Congress introduced taxation on benefits for higher-income retirees, using a "provisional income" threshold of $25,000 for individuals and $32,000 for couples. However, these thresholds were never adjusted for inflation, leading to a significant increase in the number of retirees paying taxes on their benefits—now nearly 50%.
President Trump has proposed eliminating federal taxation on Social Security, a move that could benefit retirees financially but would accelerate the depletion of the Social Security Trust Fund, currently projected to run out by 2034. Removing taxes could shift the depletion timeline up by about a year, raising questions about alternative funding solutions. Potential fixes include raising payroll taxes, increasing the wage base, or pushing back the full retirement age. While tax relief sounds appealing, long-term sustainability remains uncertain.
Questions answered:
1. Why are Social Security benefits taxed, and how did this change over time?
2. What would happen if Social Security taxes were eliminated, and how could it impact the program’s future?

Submit your request to join James:
On the Ready For Retirement podcast: Apply Here
On a Retirement Makeover episode: Apply Here

Timestamps:
0:00 - SS payments are taxed?
1:25 - Provisional income
3:18 - Trump's plans for SS
6:17 - The downsides
8:06 - The SS Trust Fund
9:19 - The challenge
11:21 - In the meantime

Create Your Custom Strategy ⬇️

Get Started Here.
Join the new Root Collective HERE!

Direct indexing, an advanced investment strategy, allows investors to own individual stocks within an index instead of a mutual fund or ETF, offering greater control and flexibility. This approach is particularly valuable for tax-loss harvesting, where selling underperforming stocks and reinvesting can offset gains and reduce taxes without losing market exposure.

Ideal for high tax brackets, concentrated stock positions, or charitable giving, direct indexing can boost returns by 0.5%-1.85% annually over decades, a benefit known as “tax alpha.” Once reserved for ultra-wealthy investors, advances in technology now make it accessible to portfolios starting at $500K. However, success requires sophisticated tools and tax expertise, making it a powerful strategy for the right investors.

Questions answered:
1. How can direct indexing and tax-loss harvesting improve investment returns without increasing risk?
2. Who benefits most from using a direct indexing strategy?
Submit your request to join James:
On the Ready For Retirement podcast: Apply Here
On a Retirement Makeover episode: Apply Here
Timestamps:
0:00 - The strategy - direct indexing
3:57 - Tax loss harvesting
7:22 - More than locking in losses
9:36 - The research
11:38 - An involved process
13:05 - Criteria 1, 2, and 3
17:04 - Criteria 4 and 5
19:52 - More accessible due to technology

Create Your Custom Strategy ⬇️

Get Started Here.
Join the new Root Collective HERE!

Meet Sarah—a retiree with a multi-million-dollar portfolio, no mortgage, and all her income needs covered by Social Security. Yet, she hesitates to furnish her newly expanded home, fearing it would “waste” money. In this episode, James unpacks Sarah’s story to explore why so many of us struggle to spend, even when we're financially secure.
James explores concepts like:
- The Purpose of Money: Money is a tool, not an end goal—it’s meant to be exchanged for experiences and joy.
- Diminishing Marginal Utility of Wealth: More money doesn’t always bring more happiness, especially as wealth grows.
- Time vs. Money: Time becomes more valuable as we age, making it critical to use wealth meaningfully.
- Mindset Shifts: Frugality that builds wealth can hold you back from spending in alignment with your values.
- Future Self Perspective: Align today’s decisions with the life you want in retirement to avoid future regrets.
This episode challenges traditional views on retirement spending, encouraging listeners to shift their mindset, embrace their financial freedom, and focus on living a fulfilling life.
Questions answered:
Why do we sometimes struggle to spend our money, even when we have more than enough to meet our needs?
How can you reframe your mindset to align your spending with the life you truly want to live?
Submit your request to join James:
On the Ready For Retirement podcast: Apply Here
On a Retirement Makeover episode: Apply Here
Timestamps:
0:00 - Wasting $ on furniture?
1:59 - What money is
3:26 - A different view of "waste"
5:30 - Diminishing marginal utility
8:49 - Consider what serves you
11:45 - An example from Charlie Munger
14:58 - Audit your decisions
17:04 - Consider your future self
18:55 - Conclusion

Create Your Custom Strategy ⬇️

Get Started Here.
Join the new Root Collective HERE!