In this episode of 'Retire with Style', hosts Alex Murguia and Wade Pfau engage in a lively discussion about various financial strategies for retirement. They explore the differences between Health Savings Accounts (HSAs) and Roth IRAs, emphasizing the tax advantages of HSAs. The conversation also delves into the implications of investing in Real Estate Investment Trusts (REITs) and the importance of asset allocation. Additionally, they clarify common misconceptions about tax planning for individuals versus married couples, particularly regarding Medicare and Social Security. Alex and Wade also discuss various investment strategies, particularly focusing on Warren Buffett's investment guidelines, stock allocation for retirement, and the importance of preparing for the fragile decade leading up to retirement. They explore the transition to fixed income investments and the significance of understanding individual risk tolerance and retirement styles. The discussion emphasizes the need for a tailored approach to retirement planning, considering both mathematical and psychological factors. Listen now to learn more! 

Takeaways

• HSAs offer unique tax advantages over Roth IRAs.


• Investing in REITs can be beneficial in tax-advantaged accounts.


• Asset allocation should be prioritized over asset location.


• Understanding tax traps in retirement is crucial for effective planning.


• Married couples face similar tax implications as single filers.


• Collecting medical receipts can lead to significant tax savings.


• The investment strategy should align with individual financial goals.


• Communication about financial strategies is essential for clarity.


• Warren Buffett's investment advice should be contextualized for individual needs.


• Investing in the S&P 500 is generally more effective than picking individual stocks.


• The fragile decade before and after retirement is crucial for income planning.


• A balanced approach to stock and fixed income allocation is essential.


• Understanding personal risk tolerance is key to retirement success.


• Transitioning to fixed income should start 5-10 years before retirement.


• The sequence of returns risk can significantly impact retirement income.


• Diversification across different asset classes can mitigate risks.

Chapters

00:00 Introduction and Small Talk

12:02 Tax Planning in Retirement: Individual vs. Joint Filers

22:29 Understanding Stock Allocation in Retirement

35:38 Transitioning to Fixed Income Investments

43:05 Conclusion and Next Steps

Links

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

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”