Retire With Style

Episode 229: How to Leave More Wealth to Your Children After Taxes

This episode of Retire with Style continues the Retirement Planning Guidebook series by focusing on how tax planning changes when legacy and estate considerations are incorporated into the retirement planning process. Wade and Alex break down key estate planning concepts in a practical way, including step-up in basis rules, Roth conversion decisions tied to beneficiaries’ future tax brackets, inherited IRA distribution rules under the SECURE Act, gifting strategies, estate tax exemptions, and how trusts and life insurance can be used to manage estate taxes and liquidity needs. The conversation emphasizes that retirement tax planning is not just about maximizing your own after-tax income, but also about improving the after-tax outcomes for heirs and charities. Listen now to learn more.
 
Key Takeaways
Retirement tax planning changes significantly when leaving a legacy becomes a priority, especially regarding how different account types are spent down. 
Taxable brokerage accounts receive a step-up in basis at death, allowing heirs to avoid capital gains taxes on appreciation that occurred during the original owner’s lifetime. 
Roth conversions can become more attractive if beneficiaries are expected to inherit assets during their peak earning years and face higher tax rates than the retiree. 
Equal inheritances before taxes do not always produce equal inheritances after taxes, making asset location across heirs an important estate planning consideration. 
In 2026, the federal estate tax exemption is $15 million per person, but future legislative changes could lower those limits substantially. 
Several states impose their own estate or inheritance taxes, meaning some households may face state-level estate planning concerns even if they avoid federal estate taxes. 
Annual gifting rules allow individuals to transfer up to $19,000 per recipient each year without reducing their lifetime estate tax exemption. 
Life insurance can provide liquidity for estates and, when structured through irrevocable trusts, may help move future appreciation outside of the taxable estate. 
The SECURE Act replaced many lifetime “stretch IRA” strategies with 10-year distribution windows for most non-spousal beneficiaries. 
Inherited Roth IRAs still require distributions within the required timeframe, but those withdrawals are generally income tax-free to beneficiaries. 
Chapters
00:00 Introduction to Retirement Planning Guidebook03:10 Tax Planning and Legacy Considerations05:55 Strategies for Tax-Efficient Inheritance09:11 Understanding Estate Taxes11:55 Gifting Strategies and Limits14:49 Life Insurance and Estate Planning18:00 RMDs on Inherited Accounts
 
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

Episode 228: Is Your Family Prepared If Something Happens to You?

In this episode of Retire With Style, Wade Pfau and Alex Murguia walk through the foundational elements of estate, legacy, and incapacity planning from Chapter 11 of the Retirement Planning Guidebook. They discuss why estate planning is about far more than drafting a will, including how to organize important financial and personal documents, avoid common beneficiary designation mistakes, understand the role of trusts and probate, and prepare powers of attorney and healthcare directives before they are needed. The conversation emphasizes the importance of making life easier for loved ones during emergencies or incapacity, while also highlighting why professional estate planning guidance can help retirees avoid costly and emotionally difficult mistakes. Listen now to learn more!
 
Takeaways
Beneficiary designations override your will, making regular reviews critically important after major life changes.
Estate planning is not just about distributing assets; it is also about preparing others to manage your affairs during incapacity.
Organizing financial accounts, insurance policies, passwords, and important documents can significantly reduce stress for loved ones.
Living trusts can help avoid probate and maintain privacy while providing more control over asset distribution.
Testamentary trusts may be cheaper to create, but they generally do not avoid probate.
Financial powers of attorney should be established before cognitive decline or incapacity becomes an issue.
Banks may still create obstacles for powers of attorney, which is why proactive setup and verification are important.
Healthcare directives and living wills should be discussed openly with family members, not simply stored away in a folder.
Estate planning should include practical details like pet care instructions, funeral wishes, and emergency contacts.
DIY estate planning mistakes can unintentionally disinherit family members or undermine years of careful financial planning.
Chapters
00:00 Introduction to Retirement Planning01:01 Estate Planning Essentials06:08 Organizing Personal Information11:18 Insurance Policies and Their Importance15:04 Understanding Beneficiary Designations20:01 The Role of Trusts in Estate Planning23:43 Power of Attorney Explained28:11 Healthcare Directives and Final Wishes
 
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Episode 227: Can $1 Really Cost You $20,000 in Retirement? How to Avoid Tax Cliffs

In this episode of Retire with Style, Wade and Alex continue their discussion of retirement tax pitfalls. They focus on how small increases in income can trigger disproportionately large financial consequences through lost benefits and higher effective tax rates. The conversation highlights key risks such as Affordable Care Act subsidy cliffs, Medicare IRMA surcharges, required minimum distributions, and deduction phaseouts, emphasizing that careful income management is essential to avoid cascading tax impacts in retirement. Listen now to learn more!
 
Key Takeaways
Exceeding the ACA income threshold by even $1 can eliminate tens of thousands of dollars in health insurance subsidies.
Pre-Medicare retirees must carefully manage income to avoid losing ACA benefits.
Income at ages 63–64 can both reduce ACA subsidies now and increase Medicare premiums later.
Small increases in income can create extremely high effective marginal tax rates due to benefit cliffs.
Required minimum distributions can force unwanted income that triggers multiple tax consequences.
The RMD “cliff” is really a series of overlapping tax effects rather than a single event.
Roth conversions can help reduce future tax burdens by lowering tax-deferred account balances.
Qualified charitable distributions are more tax-efficient than taking withdrawals and donating afterward.
Deduction phaseouts can quietly increase effective tax rates beyond stated tax brackets.
Strategic income sourcing can help retirees avoid triggering costly tax thresholds.
Chapters
00:00 – Why Retirement Taxes Are More Than Just Tax Brackets
01:35 – The ACA Subsidy Cliff (The $1 Mistake That Costs $20K+)
08:35 – The Double Hit: ACA + IRMA
11:35 – The RMD “Cliff” and Forced Income Problems
17:55 – Smart Mitigation Strategies (Roth Conversions + QCDs)
20:45 – Hidden Tax Traps: Deduction Phaseouts
30:00 – The Big Picture: Managing Income to Avoid Tax Cascades
 
Links
 
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

Episode 226: 5 Tax Planning Mistakes That Can Reduce Your Retirement Income

In this episode of 'Retire with Style', Wade Pfau and Alex Murguia delve into the intricacies of tax planning as part of retirement strategy. They discuss the importance of asset location in retirement accounts, the pitfalls that retirees face regarding taxes, and strategies for effective tax planning. The conversation emphasizes the need for careful consideration of how different types of income can impact tax liabilities, including Social Security and Medicare premiums. The hosts also highlight the significance of rebalancing portfolios in a tax-efficient manner and the benefits of utilizing tax maps for better financial planning. Listen now to learn more!
 
Takeaways
Asset allocation should come before asset location in retirement planning.
Tax-efficient asset classes should be prioritized in taxable accounts.
Rebalancing in tax-advantaged accounts avoids generating taxable income.
Understanding the social security tax torpedo is crucial for retirees.
Roth conversions can be strategically timed to minimize tax impact.
Medicare premiums can significantly increase based on income levels.
Effective tax planning can lead to substantial savings in retirement.
Utilizing buffer assets can help manage tax liabilities effectively.
Tax maps can guide retirees in making informed financial decisions.
Regularly reviewing tax strategies is essential for optimal retirement planning.
Chapters
00:00 Introduction to Retirement Planning and Tax Strategies02:52 Understanding Asset Location in Retirement Accounts17:34 Tax Pitfalls in Retirement Planning30:02 Strategies for Effective Tax Planning
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Episode 225: 3 Tax Strategies to Improve Retirement Income Efficiency

This week on Retire with Style, Alex and Wade focus on how retirees can improve tax efficiency to maximize after-tax spending power. They walk through the structure of the tax system, emphasizing the importance of understanding adjusted gross income (AGI), above-the-line and below-the-line deductions, and how different tax rules interact. They also introduce the concept of tax diversification across taxable, tax-deferred, and tax-free accounts, explaining how each account type is taxed and how strategic use of all three can create more flexibility and better long-term outcomes. The discussion highlights that tax planning is not about loopholes, but about working within the rules to avoid unnecessary taxes and unintended consequences. Listen now to learn more!
 
Takeaways
Tax efficiency is about increasing after-tax spending power, not just minimizing taxes in a single year
Adjusted gross income (AGI) is a critical planning lever since many tax rules, phaseouts, and surcharges are tied to it
Above-the-line deductions (like retirement contributions and HSAs) directly reduce AGI and are especially valuable
Below-the-line deductions (standard or itemized) reduce taxable income but do not help with AGI-based thresholds
Many retirees default to the standard deduction, but itemizing can be beneficial in certain situations (e.g., high state taxes, charitable giving)
Tax diversification across three account types (taxable, tax-deferred, Roth) provides flexibility in managing taxes over time
Taxable brokerage accounts can be efficient for long-term investing due to favorable capital gains treatment and a step-up in basis at death
Tax-deferred accounts offer upfront deductions and compounding benefits, but create future ordinary income and required minimum distributions
Roth accounts provide tax-free growth and withdrawals, making them valuable for long-term tax control and legacy planning
Health Savings Accounts (HSAs) offer unique “triple tax advantages,” combining deduction, tax-deferred growth, and tax-free withdrawals for medical expenses
Chapters
00:00 Introduction to Retirement Planning01:19 Follow-Up on Reverse Mortgages04:58 Understanding Tax Efficiency in Retirement16:15 Tax Diversification Strategies24:26 Exploring Roth Accounts and HSAs
 
Links 
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

Episode 224: Reverse Mortgages: Misunderstood or Misused?

In this episode, Wade Pfau and Alex Murguia revisit reverse mortgages and explain why they are often misunderstood in retirement planning. Rather than a last-resort tool, they frame modern HECM reverse mortgages as a strategic asset that can enhance retirement outcomes when used properly. The discussion highlights how a growing line of credit can act as a buffer against market downturns, improve tax efficiency, and even provide reliable income, ultimately making the case that home equity should be actively coordinated alongside investments and Social Security in a well-designed retirement plan. Listen now to learn more!
 
Takeaways 
Reverse mortgages are often misunderstood and unfairly dismissed based on outdated myths
Home equity should be treated as a usable retirement asset, not just a legacy asset
A reverse mortgage line of credit can serve as a buffer asset to manage the sequence of returns risk
The line of credit grows over time, increasing flexibility even if unused
Loan proceeds are not taxable income, which can improve tax efficiency in retirement
Reverse mortgages are more reliable than HELOCs since they cannot be frozen during market stress
They can provide guaranteed income streams through tenure or term payment options
Using a reverse mortgage early as part of a strategy is typically more effective than waiting until it is a last resort
Chapters
00:00 Introduction to Reverse Mortgages02:30 History and Evolution of Reverse Mortgages05:51 Understanding the Myths and Misconceptions10:07 The Logic Behind Reverse Mortgages13:34 The Growing Line of Credit Explained16:45 Buffer Assets and Their Importance17:39 Exploring Buffer Assets in Retirement Planning20:11 Understanding Reverse Mortgages as Income Streams23:15 The Mechanics of Reverse Mortgages28:17 Cost Considerations for Reverse Mortgages30:09 Identifying Ideal Candidates for Reverse Mortgages34:09 Last Resort Options and Their Implications
 
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Episode 223: Downsizing in Retirement: When to Sell, When to Stay

In this episode of Retire with Style, Wade and Alex continue the breakdown of the  Retirement Planning Guidebook Third Edition. Focusing on one of the most overlooked but impactful retirement decisions: housing. Wade and Alex challenge the common assumption that retirees will downsize or relocate, showing that most people actually stay put and often even move into larger homes. The conversation then shifts to how to evaluate where you live through the lens of aging, covering practical considerations like mobility, social connections, healthcare access, and home design. They also introduce the financial implications of housing decisions, including whether carrying a mortgage into retirement adds unnecessary risk. Listen now to learn more!
 
Takeaways
Most retirees don’t move, and mobility declines with age
Downsizing is less common than expected and often doesn’t happen
Housing decisions should prioritize mobility, social connection, and support
Walkability and access to amenities become more important over time
Proximity to healthcare and transportation is critical
Aging in place requires home modifications and planning ahead
Technology can help extend independence and safety at home
Carrying a mortgage into retirement can increase financial risk
Paying off a mortgage is often about peace of mind vs. optimization
Chapters
00:00 Introduction and Retirement Income Challenge Overview03:00 Wade's Retirement Planning Guidebook Insights05:59 Housing Decisions in Retirement08:53 Characteristics of a Good Place to Live11:57 Considerations for Aging in Place14:45 Long-Term Housing Affordability and Community18:04 Health Care and Transportation Options21:02 Technology and Home Adaptations23:45 Carrying a Mortgage into Retirement
 
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

Episode 222: Do You Actually Need Long-Term Care Insurance in Retirement?

This episode continues the long-term care discussion by breaking down how long-term care insurance actually works, including benefit structures, coverage limits, and key policy levers like waiting periods and inflation adjustments. Wade and Alex explore why traditional policies have declined in popularity, how hybrid options and annuities can serve as alternatives, and why long-term care planning ultimately requires balancing trade-offs rather than expecting full coverage. Listen now to learn more!
 Takeaways
Long-term care insurance premiums can increase over time, making traditional policies less attractive.
Hybrid policies combine life insurance with long-term care benefits, offering more flexibility.
Benefit payment methods include reimbursement, indemnity, and cash, each with pros and cons.
Deferred annuities can serve as a non-traditional approach to funding long-term care.
Inflation adjustments in policies are often limited and may not fully keep pace with rising costs.
Chapters
00:00 Understanding Long-Term Care Insurance Options03:25 Navigating Claims and Payment Methods06:30 Exploring Annuities as Alternatives09:27 Evaluating Coverage and Benefit Structures12:32 The Importance of Inflation and Cost Management15:37 Assessing Qualifying Factors and Budgeting for Care
Links
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Episode 221: What Actually Counts as Long-Term Care?

In this episode of Retire With Style, Wade Pfau and Alex Murguia introduce the fundamentals of long-term care planning as part of their ongoing walkthrough of the Retirement Planning Guidebook. They clarify what long-term care actually is, how it differs from traditional healthcare, and why it represents one of the largest and most unpredictable financial risks in retirement. The conversation explores how long-term care is defined, the likelihood of needing care, early warning signs to watch for, and the full continuum of care options from informal caregiving to nursing homes. They also outline the four primary ways to fund long-term care and discuss how retirees can begin thinking about planning for this potentially significant expense.
 
Takeaways 
Long-term care is generally defined as needing help with at least two activities of daily living for more than 100 days.
Medicare does not cover long-term care, making it a critical planning gap for many retirees.
Long-term care is one of the largest and most unpredictable retirement expenses, potentially exceeding $1 million in extreme cases.
While many people will need care, much of it initially comes from unpaid caregivers like family members.
Early warning signs often show up in managing finances, driving, or household tasks before basic daily living needs decline.
Care exists on a spectrum, from in-home support to assisted living and nursing homes.
There are four main ways to fund care: self-funding, Medicaid, traditional insurance, and hybrid insurance solutions.
 
Chapters
00:00 Introduction to Long-Term Care01:38 Understanding Long-Term Care06:08 Statistics on Long-Term Care Needs11:39 Planning for Long-Term Care12:49 Options for Long-Term Care19:27 Funding Long-Term Care24:44 Medicare vs. Medicaid for Long-Term Care
 
Links 
📣 Want a heads up for the next Retirement Income Challenge?Join the waitlist and be the first to know when registration opens for this FREE 4-day event hosted by Retirement Researcher. Visit retirewithstyle.com/waitlist to learn more and save your spot.
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

Episode 220: Why Your Health Insurance Stops Working at 65

In this episode of Retire With Style, Wade Pfau and Alex Murguia walk through what actually happens when you enroll in Medicare and where people tend to make costly mistakes. They break down the enrollment timeline, clarify how Medicare interacts with Social Security, and explain why failing to enroll can leave you unexpectedly exposed to major healthcare costs. The conversation also explores how Medicare decisions fit into broader retirement planning, including healthcare cost estimates, risk preferences, and the role of Health Savings Accounts (HSAs) in preparing for future expenses.
 
Takeaways 
Medicare enrollment is not automatic if you delay Social Security, you must sign up yourself.
At age 65, Medicare typically becomes your primary insurance, and other coverage may not be paid without it.
Not enrolling in Medicare can leave you exposed to major out-of-pocket healthcare costs.
Many types of coverage (COBRA, ACA plans, retiree insurance) do not count as primary after 65.
A typical couple may need around $375,000 for healthcare in retirement (excluding long-term care).
Medicare choices reflect your risk preference: pay more upfront for predictability or less with more uncertainty.
Chapters
00:00 Introduction to Medicare and Health Insurance09:39 Understanding the Medicare Enrollment Process18:50 Financial Planning for Healthcare Costs
 
Links
📣 Want a heads up for the next Retirement Income Challenge?Join the waitlist and be the first to know when registration opens for this FREE 4-day event hosted by Retirement Researcher. Visit retirewithstyle.com/RIC to learn more and save your spot.
📘 New Release: The Retirement Planning Guidebook (3rd Edition)Wade Pfau’s must-read Retirement Planning Guidebook just got even better. The 3rd Edition is now available and packed with the latest updates to help you design your retirement strategy with confidence. Grab your copy on Amazon or your favorite book retailer: https://books2read.com/Retirement
This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips