So you think you know a thing or two about Social Security? Let’s put it to the test! I came across a Social Security Quiz from CNBC that I thought was fun, so I wanted to share it with you all. Stick around after the quiz to hear some listener questions. You’ll learn how to compare the 4% rule to a dynamic withdrawal rate. You’ll also learn about rolling over an IRA and the tax consequences. Let’s have some fun today, so listen in to find out just how much you really know about Social Security.
Sure, you are probably more educated about Social Security than the average Joe, but how much do you really know about Social Security? Take this Social Security quiz to test your knowledge. Let’s see how much you really know. Can you get 8 out of 12 correct? You’ll have to listen in to hear the answers.
I’ve mentioned in the past that by using the 4% rule, 96% of the time people will have more money left over than when they started. Pete is curious about how the dynamic withdrawal system compares to that 4% rule. The 4% rule is easy to assess because you can look backward in time to analyze the data. With a dynamic withdrawal system, the amount of money left at the end would depend on your sequence of returns. Since the dynamic withdrawal system looks forward rather than back, there isn’t the same kind of data to assess. The difference between the two systems is that one is looking backward and the other is looking forward.
One listener has money in tax-deferred accounts as well as in accounts that have already been taxed. He is trying to decide the best way to withdraw money from these in retirement. My advice is to think about what you are trying to solve. Are you interested in paying taxes now or later? When would you prefer to have the least tax burden? It is also important to note that Roth conversions are very appealing right now.
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