Retirement Answer Man

Curiosity is an important quality to nurture as you get older; it can even help you find your purpose in retirement. Today, I’ll help you explore how to use your curiosity to discover your purpose as you embark on the next phase of your life. 

This episode is packed with questions that could help you rock retirement. Listen in to learn how to know if an annuity is right for you in retirement, how to apply for social security, whether you can contribute to a Roth IRA if you are an independent contractor, how to choose healthcare alternatives before Medicare, and 401K alternatives for the highly compensated employee. 

Curiosity can help lead you to your purpose in retirement

Finding your purpose in retirement can be one of the most daunting tasks that you undertake in your retirement planning. Going from a career and a life that is essentially planned out for you to one that is completely open-ended can even bring on a bit of anxiety.

However, if you let it, your purpose will come to you. It simply takes a bit of curiosity. Pulling on the threads of curiosity will lead you down the rabbit hole to the crux of what is essential to you. Listen in to hear how you can use your curiosity to ignite your passions.

There is no way to completely remove the uncertainty of retirement

Annuities are guaranteed income sources that can remove some of the uncertainty that comes with retirement planning. However, they are not without their downfalls. 

Using an annuity as a guaranteed income source early on in retirement will help to smooth out sequence of return risk, but it will enhance your inflation risk later on.

Buying an annuity to turn on later in life will help with longevity protection, but what if you don’t need it? 

There is no way to completely remove the uncertainty that comes with retirement–there will always be the element of the unknown.

How to know if an annuity is right for you in retirement

There are two ways to consider an annuity to help fund retirement: qualitative or quantitative. On the quantitative side, it is easy to use calculators like the Schwab Annuity Calculator. While this can help you predict the math, it is important to remember that the best way to maximize guaranteed inflation-proof income is to fully delay claiming Social Security.

To ensure that you are making a decision that is right for you, you’ll want to build a feasible, resilient plan of record that does not include an annuity. Then build out a what-if scenario and compare the two plans side by side. This will give you the context to make the judgment call. Although you will never have a crystal clear answer, this is the best way to work through this kind of question. By using an organized process, you’ll understand what it takes to build a base great life and have the confidence to spend your money and rock retirement. 

Consider when to turn on the annuity

Next, comes the question of when you want to turn on the annuity. Will you want it today or later in life? Giving yourself optionality is important. As you age your priorities will change. It is important to do the research. First consider the quantitative aspects by using calculators and considering the rules, then consider the qualitative side of this decision. Then consider how much you want to go with a safety-first approach. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [6:10] How to know if an annuity is right for you in retirement
  • [13:50] How to apply for social security
  • [14:55] Can you contribute to a Roth IRA if you are an independent contractor?
  • [16:17] A backdoor Roth contribution clarification
  • [18:11] Healthcare before Medicare
  • [23:15] 401K alternatives for the highly compensated employee

TODAY’S SMART SPRINT SEGMENT

  • [26:37] Pull the thread and follow your curiosity

Resources Mentioned In This Episode

SSA.gov

Schwab Annuity Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM462.mp3
Category:general -- posted at: 2:00am CST

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