What to Do When You Get a Huge Pay Increase - 417
02/21/23 • 37 min
1 Listener
How should your financial strategy change when your income increases dramatically? We’re talking like $450K one year to a million and a quarter the next? (If you guessed Roth conversions might be in the answer you’d be correct!) Joe and Big Al also spitball strategies for when your income is too high to make Roth contributions, and can you use capital gains to contribute to Roth? Can “Alligator Joe” afford to retire early, or does he need to keep gutting it out at his current job wrestling alligators? Should Catherine contribute to her 401(k) or buy company stock before she quits her day job to start a business? The fellas also spitball retirement planning involving structured settlements, inherited assets, and ACA credits, and they discuss transferring annuities to a CD vs. deferring the interest into another annuity.
Timestamps:
- 00:58 - Income Increased Dramatically. Should Our Retirement Tax Strategies Change? (Cookie Baron, Texas)
- 08:59 - Can I Use Capital Gains to Make Roth Contributions? (Aaron)
- 12:12 - Early Retirement Spitball: Should I Keep Gutting it Out at My Current Job? ("Alligator Joe Frazier", The Sunshine State FL)
- 18:11 - Contribute to 401(k) or Buy Company Stock Before Quitting to Start a Business? (Catherine, TX)
- 20:32 - Retirement Spitball: Income is Too High for Roth Contributions (Kelly, Owensboro, KY)
- 25:10 - Retirement Spitball: Structured Settlement, ACA Credits, & Inherited Assets (Kara from PA)
- 29:42 - Should We Transfer Annuities to CD, or Defer Interest Into Another Annuity? (Norma, Chula Vista)
- 34:00 - The Derails
Access this week's free financial resources in the podcast show notes at https://bit.ly/ymyw-417:
- The Complete Roth Papers Package
- 10 Ways the SECURE Act 2.0 Changes Your Taxes and Retirement Planning (webinar)
- Episode Transcript
- Ask Joe & Big Al On Air
How should your financial strategy change when your income increases dramatically? We’re talking like $450K one year to a million and a quarter the next? (If you guessed Roth conversions might be in the answer you’d be correct!) Joe and Big Al also spitball strategies for when your income is too high to make Roth contributions, and can you use capital gains to contribute to Roth? Can “Alligator Joe” afford to retire early, or does he need to keep gutting it out at his current job wrestling alligators? Should Catherine contribute to her 401(k) or buy company stock before she quits her day job to start a business? The fellas also spitball retirement planning involving structured settlements, inherited assets, and ACA credits, and they discuss transferring annuities to a CD vs. deferring the interest into another annuity.
Timestamps:
- 00:58 - Income Increased Dramatically. Should Our Retirement Tax Strategies Change? (Cookie Baron, Texas)
- 08:59 - Can I Use Capital Gains to Make Roth Contributions? (Aaron)
- 12:12 - Early Retirement Spitball: Should I Keep Gutting it Out at My Current Job? ("Alligator Joe Frazier", The Sunshine State FL)
- 18:11 - Contribute to 401(k) or Buy Company Stock Before Quitting to Start a Business? (Catherine, TX)
- 20:32 - Retirement Spitball: Income is Too High for Roth Contributions (Kelly, Owensboro, KY)
- 25:10 - Retirement Spitball: Structured Settlement, ACA Credits, & Inherited Assets (Kara from PA)
- 29:42 - Should We Transfer Annuities to CD, or Defer Interest Into Another Annuity? (Norma, Chula Vista)
- 34:00 - The Derails
Access this week's free financial resources in the podcast show notes at https://bit.ly/ymyw-417:
- The Complete Roth Papers Package
- 10 Ways the SECURE Act 2.0 Changes Your Taxes and Retirement Planning (webinar)
- Episode Transcript
- Ask Joe & Big Al On Air
Previous Episode
Set-and-Forget Investing, Real Estate vs. Bonds, Pension, Social Security and Medicare - 416
Joe and Big Al spitball on set-and-forget brokerage investments for 30-something investors, real estate as a substitute for bonds in a diversified portfolio, and options for taking a state pension with or without sick time pay. The fellas also discuss how to bridge the retirement gap until collecting Social Security, strategies for claiming spousal Social Security benefits, and whether you need to sign up for Medicare if you’d rather keep the healthcare you already have.
Timestamps:
- 00:49 - Set-It-and-Forget-It Brokerage Investments for a 30-Something Investor? (Chris, Scottsdale)
- 07:56 - Is Real Estate a Substitute for Bonds in a Diversified Investment Portfolio? (Don, VA)
- 12:42 - State Pension Options: $21K at Age 55 Plus $13K Sick Time, or $30K at Age 62? (Rich, NY/NC - voice message)
- 19:35 - Which Funds Should We Use to Bridge the Gap Until Collecting Social Security? (Jeff, San Diego)
- 25:29 - When Will I Receive Spousal Social Security Benefits? (Sharon)
- 28:37 - Spitballing a Spousal Social Security Claiming Strategy (G, Philly)
- 33:50 - Do We Have to Register for Medicare If We Aren’t Going to Use it? (Jim Santa Cruz)
- 39:03 - The Derails
Access this week's free financial resources in the podcast show notes at https://bit.ly/ymyw-416:
- 10 Ways the SECURE Act 2.0 Changes Your Taxes and Retirement Planning
- Portfolio Tracker: How to Manage Your Assets at Any Age
- Social Security Handbook
- Medicare Checkup Guide
- Episode Transcript
- Ask Joe & Big Al On Air
Next Episode
“Will I Ever Be Able to Retire?” - 418
If you’ve got some retirement savings but can’t contribute any more, will you ever be able to retire? Joe and Big Al have three simple strategies to help you get there. Plus, how long does it take to get off of Medicare’s income-related monthly adjustment amount, or IRMAA, after your income decreases at retirement, and how do you take unknown future IRMAA income limits into account when setting up your financial plan? Can you “re-do” Social Security and stop taking benefits after claiming Social Security early? Do spousal benefits change after one spouse files for Social Security? And finally, the fellas address a few corrections they’ve received recently regarding Medicare and safe harbor 401(k) plans. What exactly is “top-heavy” anyway?
Timestamps:
- 00:00 - Intro
- 01:02 - Will I Ever Be Able to Retire? I Have Some Savings But Can’t Contribute More (Patty, NY)
- 06:38 - Retired, Income Dropped, Enrolled in Medicare. How Long to Get Off IRMAA? (Randy, Hb, Ca)
- 08:05 - How to Plan for Unknown Future Medicare IRMAA Income Limits?
- 10:53 - “Re-Doing” Social Security: Can You Stop Taking Benefits After Claiming Early? (Lauris, Volcano, Hawaii)
- 12:39 - Will Spousal Social Security Benefit Amounts Change When One Spouse Files? (Philip, Los Angeles)
- 15:09 - SECURE 2.0: When Must You Pay Taxes on Company Match Retirement Contributions? (Jim, Dallas, TX)
- 19:47 - CORRECTION: ACP Test for Safe Harbor 401(k) Plans, After-Tax Contributions (Debra, St Louis)
- 25:08 - CORRECTION - Medicare Test: Creditable Drug Coverage (Steve, Las Vegas)
- 28:56 - DUKE’s Medicare Enrollment Experience (DUKE (John Wayne), Knoxville, TN)
- 32:54 - The Derails
Access this week's free financial resources in the podcast show notes at https://bit.ly/ymyw-418:
- Retirement Readiness Guide
- NAPA-net: 401(k) After-Tax Contributions Are ‘Testy’
- Turbocharge Your Wealth! YMYW TV & Companion Guide
- Episode Transcript
- Ask Joe & Big Al On Air
- (Plus, YMYW Producer Andi Last video interview on the Audience Growth Podcast)
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