Welcome back to Episode 31 of The Divorce the IRS Podcast.

In this episode, Jimmy Miller walks through the second retirement planning case study from Divorce the IRS. Unlike the first case study, this one follows a couple who are much closer to retirement and have already accumulated most of their wealth inside traditional pre-tax retirement accounts.

Meet Bob and Helen.

They're both 50 years old, earn solid incomes, have diligently saved for retirement, and have accumulated $1.5 million in traditional retirement accounts. Like many successful savers, they've done everything they thought they were supposed to do. But they also have a problem they don't yet realize: a future retirement filled with unnecessary taxes.

Jimmy breaks down the step-by-step strategy they use to gradually transform their retirement plan over the next 15 years, showing how thoughtful tax planning can dramatically improve retirement income, reduce lifetime taxes, and create far greater flexibility.

In this episode, you'll learn:

• Why traditional retirement accounts can become future tax liabilities
• How Roth 401(k) contributions can change a retirement plan
• When Roth conversions may make sense
• Using after-tax contributions to build tax-free wealth
• How a 72(t) strategy can create early retirement flexibility
• Why paying taxes today can sometimes save significantly more later
• Coordinating Social Security with Roth withdrawals
• Reducing or eliminating Required Minimum Distribution problems
• Charitable giving strategies using RMDs
• How surviving spouses can avoid the "widow's tax penalty"
• Why retirement tax planning should be viewed over a lifetime, not one tax year at a time

By the end of this case study, Bob and Helen have transformed their retirement from one heavily dependent on taxable income into one that generates substantially more spendable income while dramatically reducing what they pay the IRS. According to Jimmy's analysis, the strategy ultimately saves them more than $800,000 in federal taxes over retirement compared to staying on their original path.

This episode demonstrates one of the central themes of Divorce the IRS: retirement isn't just about accumulating assets. It's about deciding which accounts you'll spend from, when you'll pay taxes, and how to keep more of what you've worked so hard to build.

If you've accumulated significant savings in traditional IRAs or 401(k)s and are approaching retirement, this case study offers a practical framework for thinking differently about lifetime tax planning.

Listen now to learn how strategic Roth conversions, tax bracket management, and coordinated retirement income planning can potentially save hundreds of thousands of dollars over the course of retirement.

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In this episode of the Divorce the IRS Podcast, Jimmy Miller begins a new three-part case study series showing how the concepts discussed throughout the podcast can work in real life.

This first case study focuses on Mary, a fictional saver who starts making smart retirement planning decisions at age 30. By using Roth accounts, taking advantage of her employer match, and carefully managing withdrawals in retirement, Mary creates a strategy designed to keep her in the 0% tax bracket throughout retirement.

Jimmy walks through how Mary contributes to a Roth 401(k), receives a traditional 401(k) employer match, funds a personal Roth IRA, and allows those accounts to grow over 30 years. He then explains how Mary structures her income in retirement using Roth withdrawals, traditional IRA withdrawals, Social Security, the standard deduction, and required minimum distribution planning.

In this episode, Jimmy discusses:

• Why starting early can make a tax-free retirement much easier to achieve
• How Roth 401(k) contributions can build future tax-free income
• Why employer matching contributions usually go into a traditional pre-tax account
• How Mary saves 15% of her income each year for 30 years
• How her accounts grow to more than $2.2 million by age 60
• Why Roth accounts can provide flexibility in early retirement
• How the standard deduction can help offset traditional IRA withdrawals
• Why provisional income matters when Social Security begins
• How Mary keeps her Social Security benefits from becoming taxable
• What happens when required minimum distributions begin at age 73
• How QLACs and charitable giving may help manage future RMDs
• Why saving taxes while working may not be worth paying much more in retirement

Jimmy also compares Mary’s Roth-focused strategy to friends who followed conventional tax-deferral advice. While Mary gave up tax deductions during her working years, her retirement income was structured to remain tax-free, while her friends ended up owing significantly more in retirement taxes.

In the next episode, Jimmy will look at another case study involving a couple closer to retirement who already has more than their ideal amount saved in tax-deferred accounts.

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In this episode of the Divorce the IRS Podcast, Jimmy Miller discusses a retirement philosophy that has become increasingly popular: die broke, also known as die with zero.

The idea behind this strategy is to maximize retirement income and enjoy more of your money during your lifetime, especially when leaving a financial legacy is not a major goal. Jimmy explains why the concept can make sense in theory, but why trying to personally spend your portfolio down to zero without guarantees can create serious risks.

Jimmy also explains how the die broke philosophy can work together with the Divorce the IRS framework when lifetime income annuities are used properly, especially inside Roth IRA accounts.

In this episode, Jimmy discusses:

• What the die broke or die with zero philosophy means
• Why the concept appeals to many retirees and future retirees
• The danger of becoming too frugal and never enjoying your money
• Why aiming for exactly zero can be risky without the right structure
• How lifetime income annuities can support a die broke strategy
• Why guaranteed income may help reduce retirement stress
• The risk of running out of money before running out of life
• How annuities can allow retirees to spend both growth and principal
• Why Roth IRA annuities can create tax-free lifetime income
• The importance of understanding annuity rules before purchasing one
• How fixed index annuities may help address inflation concerns

Jimmy also shares why dying broke can be a reasonable goal for some people, but only when the plan is built carefully and includes the right guarantees. When structured correctly, the goal is not simply to spend everything. It is to create a retirement income strategy that allows you to enjoy your money with confidence while reducing the risk of outliving it.

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In this episode of the Divorce the IRS Podcast, Jimmy Miller continues the conversation from last week’s episode on the FIRE movement by taking a closer look at real estate investing and how it fits into the Divorce the IRS framework.

Real estate is one of the most common investment topics Jimmy gets asked about. How does it compare to the stock market? Can it work as a retirement income strategy? Does it help or hurt when the goal is to reduce taxes in retirement?

Jimmy gives his honest perspective on the appeal of real estate, including the ability to own something tangible and understandable, while also explaining why he does not view rental properties as an ideal primary investment strategy for retirement.

In this episode, Jimmy discusses:

• How real estate compares to long-term stock market investing
• Why home values and investment returns are not always the same thing
• The hidden costs of rental properties, including repairs, vacancies, insurance, HOA fees, and management
• Why being a landlord may not fit the retirement lifestyle many people actually want
• How rental income can affect the taxation of Social Security benefits
• Why provisional income matters in the Divorce the IRS framework
• How depreciation recapture works when a rental property is sold
• Why some investors underestimate the tax bill that can come at the end
• The difference between owning rental properties directly and investing in REITs
• How REITs can offer real estate exposure inside a diversified portfolio

Jimmy also explains why real estate investment trusts, or REITs, may be a more practical way to include real estate in a retirement portfolio, especially when used inside Roth accounts where income and growth can potentially avoid creating provisional income.

In the next episode, Jimmy will discuss another popular retirement philosophy: the desire to die broke.

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In this episode of the Divorce the IRS Podcast, Jimmy Miller breaks down the F.I.R.E. movement, which stands for Financial Independence Retire Early, and explains why the concepts in Divorce the IRS can be especially useful for people who want to retire before the traditional retirement age.

Jimmy discusses why Roth accounts can be such a powerful tool for early retirees, including how Roth IRA contribution withdrawals, Roth conversion withdrawals, and Roth growth are treated differently under IRS rules. He also explains why having access to tax-free and penalty-free sources of income can help solve one of the biggest challenges early retirees face: accessing retirement savings before age 59½.

This episode also looks at the lifestyle side of F.I.R.E. Jimmy shares why learning to be happy with less, avoiding lifestyle creep, and saving a high percentage of income can dramatically change the retirement planning equation. He also explains why a successful retirement is usually about retiring to something, not just away from something.

In this episode, Jimmy discusses:

• What F.I.R.E. means and why it has grown in popularity
• Why Divorce the IRS resonates with people pursuing F.I.R.E.
• How Roth IRA contributions can be accessed tax and penalty-free
• The order in which money comes out of a Roth IRA
• Why Roth conversions may help early retirees create future income
• How Roth accounts compare to Rule of 55 and 72(t) strategies
• Why lifestyle creep can make retirement harder to achieve
• The importance of retiring with purpose, not just escaping work
• Why real estate is often part of the F.I.R.E. conversation

Jimmy also mentioned his short video on the different types of F.I.R.E. You can watch that here:

https://www.youtube.com/watch?v=IcKHu8ygKg0

In the next episode, Jimmy will explore how real estate fits into the idea of divorcing the IRS.

Disclaimer: This podcast is for educational purposes only and should not be considered tax, legal, or financial advice. Please consult with a qualified professional before making decisions based on your personal situation.

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Welcome back to The Divorce the IRS Podcast.

In this episode, we build on the previous conversation about life insurance retirement plans and take a closer look at one of the most overlooked details in many index-based insurance products: dividends.

This is not an anti-IUL or anti-annuity episode. Fixed index annuities and indexed universal life policies can have a place for the right person when they are designed properly, funded properly, and fully understood. But when someone says you can “participate in the S&P 500 without market risk,” it is important to understand what that actually means.

Many indexed annuities and IUL policies are linked to the price return of an index, not the total return. That means the dividends paid by the companies inside the index may not be included. Over long periods of time, that difference can be enormous.

In this episode, we discuss:

• The difference between S&P 500 price return and total return
• Why reinvested dividends are one of the quiet engines of long-term wealth creation
• How missing dividends can impact compounding over decades
• Why indexed annuities and IULs are not the same as owning an S&P 500 index fund
• How caps, participation rates, spreads, and crediting formulas can affect growth
• Why tax efficiency alone does not automatically make a strategy better
• The key question to ask before using an index-linked insurance strategy

The goal of divorcing the IRS is not just to pay less in taxes. The goal is to build efficient wealth, grow more, protect more, and understand exactly how your money is working.

Before making any decision, review your situation with a qualified tax, legal, and financial professional.

And when someone shows you a strategy tied to the S&P 500, don’t just ask about upside and downside. Ask about the dividends.

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Many retirees and high-income earners are constantly searching for ways to build more tax-free income in retirement. One strategy that often enters the conversation is the Life Insurance Retirement Plan, better known as a LIRP.

Proponents often market LIRPs as a powerful way to create tax-free retirement income while maintaining life insurance protection. But are they really as good as advertised?

In this episode of The Divorce the IRS Podcast, we take an objective look at Life Insurance Retirement Plans, including how they work, who they're designed for, and the risks that are often left out of the sales presentation.

We explore the evolution of cash value life insurance from Whole Life to Universal Life, Variable Universal Life (VUL), and Indexed Universal Life (IUL), and discuss why IUL policies have become the most common structure used for modern LIRP strategies.

You'll learn how these policies generate tax-deferred growth, how tax-free policy loans are used to create retirement income, and why proper funding and ongoing management are critical to success. We also cover the potential drawbacks, including policy costs, surrender charges, underwriting requirements, Modified Endowment Contract (MEC) rules, policy lapse risks, and the limitations that come with indexed crediting strategies.

Most importantly, we discuss who should consider a LIRP and why, for many investors, there may be better tax-free options to explore first before turning to life insurance as a retirement planning tool.

If you've ever been pitched a LIRP, IUL, or cash value life insurance policy as a retirement strategy, this episode will help you understand the benefits, the risks, and whether it deserves a place in your financial plan.

In This Episode

• What a Life Insurance Retirement Plan (LIRP) is
• How cash value life insurance differs from term life insurance
• The evolution of Whole Life, Universal Life, VUL, and IUL policies
• Why Indexed Universal Life (IUL) is commonly used for LIRP strategies
• How tax-deferred growth and tax-free policy loans work
• The underwriting requirements needed to qualify for coverage
• Why LIRPs should typically be considered only after other tax-advantaged strategies have been exhausted
• The importance of fully funding a policy for long-term success
• Common mistakes that cause LIRPs to underperform
• How policy fees, insurance costs, and administrative charges impact returns
• What a Modified Endowment Contract (MEC) is and why it matters
• The tax consequences of policy lapses and excessive borrowing
• How insurance companies control participation rates and caps within IUL policies
• Why investors do not receive dividends from underlying index investments
• The impact of surrender charges and long holding periods
• Who may be a good candidate for a LIRP and who probably is not
• Why proper planning and ongoing management are critical to making a LIRP work

What's Coming Next

• Advanced retirement income planning strategies
• Tax-efficient withdrawal strategies in retirement
• Why dividends matter more than many investors realize
• Divorce the IRS and FIRE: Tax planning for the Financial Independence, Retire Early movement
• Real estate considerations in retirement planning
• Divorce the IRS and "Die Broke": Rethinking wealth, legacy, and retirement spending

Life Insurance Retirement Plans can be powerful tools in the right circumstances, but they are far from a one-size-fits-all solution. Understanding the costs, risks, and limitations before committing to a policy can help you avoid expensive mistakes and determine whether a LIRP truly belongs in your retirement strategy.

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Many people spend years building up money inside their 401(k), only to discover that accessing those funds before age 59½ can trigger a costly 10% early withdrawal penalty.

Fortunately, there are exceptions.

In this episode of The Divorce the IRS Podcast, we break down one of the most important retirement planning rules for early retirees: the Rule of 55.

This IRS exception allows certain workers to access money from qualified workplace retirement plans, such as 401(k)s and 403(b)s, before age 59½ without paying the typical 10% early withdrawal penalty.

We explain how the Rule of 55 works, who qualifies, and why understanding the timing requirements can save retirees thousands of dollars in unnecessary penalties.

You'll learn why the rule applies only to workplace retirement plans, why rolling your 401(k) into an IRA too quickly can create unexpected tax consequences, and how proper planning before retirement can preserve valuable flexibility during the early years of retirement.

We also discuss common mistakes retirees make, how the Rule of 55 compares to the 72(t) strategy covered in the previous episode, and the questions you should ask your employer plan before making any retirement decisions.

If you're considering retiring between ages 55 and 59½, this is an episode you won't want to miss.

In This Episode

• What the Rule of 55 is and how it works
• Who qualifies for penalty-free withdrawals before age 59½
• Why the timing of your retirement date matters
• The difference between the Rule of 55 and the 72(t) strategy
• Why the Rule of 55 applies to 401(k)s and workplace retirement plans, but not IRAs
• How rolling a 401(k) into an IRA can accidentally eliminate Rule of 55 benefits
• The importance of understanding your employer plan's distribution rules
• How old 401(k) accounts are treated under the Rule of 55
• Potential planning opportunities using roll-ins before retirement
• Why the Rule of 55 eliminates penalties but not income taxes
• How to evaluate the tax impact of early retirement withdrawals
• A real-world example showing how a simple rollover mistake could cost thousands in penalties
• Special Rule of 55 provisions for certain public safety employees
• An eight-step checklist for retirees considering early withdrawals
• Why retirement withdrawal strategies should be coordinated with a long-term tax plan

What's Coming Next

• LIRPs (Life Insurance Retirement Plans): What they are, how they work, and when they may fit into a retirement income strategy
• Advanced retirement income planning strategies
• Tax-efficient withdrawal strategies in retirement
• Why dividends matter more than many investors realize
• Divorce the IRS and FIRE: Tax planning for the Financial Independence, Retire Early movement
• Real estate considerations in retirement planning
• Divorce the IRS and "Die Broke": Rethinking wealth, legacy, and retirement spending

Retiring early can create incredible opportunities, but only if you understand the rules before you start moving money. The Rule of 55 can be a powerful tool for bridging the gap between retirement and age 59½, helping you avoid unnecessary penalties and keep more of your hard-earned savings working for you.

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