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Refinancing—Again

James McGlynn

James McGlynn, CFA, RICP, is chief executive of Next Quarter Century LLC in Fort Worth, Texas, a firm focused on helping clients make smarter decisions about long-term-care insurance, Social Security and other retirement planning issues. He was a mutual fund manager for 30 years. When not writing or planning, James enjoys playing pickleball and dreaming of European train travel after the pandemic.

Refinancing—Again

James McGlynn  |  Nov 9, 2021

I HAD A NEW HOME built in 2017. I financed it with a 30-year mortgage at a 3.875% interest rate.
Early last year, when interest rates dropped due to the pandemic, I suggested that readers refinance. I took my own advice, replacing my 30-year loan with a 15-year mortgage at 2.99%. The cost of refinancing seemed well worth the reduction in my loan interest rate.
Two months ago, I saw that mortgage rates had continued to decline,

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Triggering IRMAA

James McGlynn  |  Oct 27, 2021

THIS IS THE LAST year that my income won’t affect my Medicare premiums.
At issue is IRMAA, or income-related monthly adjustment amount, which is the premium surcharge for Medicare Part B and Part D if you exceed certain income thresholds. The surcharge is based on your modified adjustment gross income from two years earlier. Like almost all retirees, I’ll begin Medicare at age 65. That means IRMAA will be based on my income for the tax year when I reach age 63,

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Roth While You Can

James McGlynn  |  Sep 30, 2021

NEWS OF ENTREPRENEUR Peter Thiel’s $5 billion Roth account, which was funded with PayPal stock, has motivated Congress to look at restricting the growth and size of Roth accounts.
There’s talk of limiting Roth account balances to $5 million or $10 million. There are also proposals to limit both backdoor IRA conversions and so-called mega-backdoor conversions. The latter involves funding a nondeductible 401(k) and then immediately converting the money to a Roth. There’s even discussion of not allowing high-income workers to convert traditional IRAs to Roth accounts.

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Lounging About

James McGlynn  |  Sep 1, 2021

AIRLINE TRAVEL during the pandemic can be frustrating. There’s mask-wearing on all trips, and COVID test results are required before boarding international flights. Then there’s the spate of last-minute cancellations, leaving passengers unhappily stranded at the gate.
On that score, Spirit Airlines has recently made headlines. I’ve also personally endured last-minute cancellations by British Airways and American Airlines. Even when you finally board a flight, many domestic airlines have suspended serving alcoholic beverages, except to first-class passengers.

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Left Alone

James McGlynn  |  Aug 11, 2021

IF YOU’RE MARRIED, it’s almost certain that one of you will outlive the other—perhaps by many years. What are the financial implications? Here are 10 issues to keep in mind:
1. Social Security. For a married couple, their Social Security benefits can consist of two workers’ benefits or a worker’s benefit and a spousal benefit. On the death of either spouse, the remaining benefit is the higher of the two benefits. For instance,

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Fourth Time Lucky

James McGlynn  |  Aug 6, 2021

I HAD PLANNED a trip to Vietnam for 2020—which coincided with the start of the pandemic and got scratched. I naively rescheduled the trip for this summer. Unfortunately, countries that lack vaccines have been forced to lock down and keep out even vaccinated tourists like me, so that trip also got nixed.
Ever the optimist, I rescheduled for Europe in July. This time, it was the delta variant and changing travel restrictions that ended my third international trip before it even began.

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It’s Who You Know

James McGlynn  |  Jul 2, 2021

LEAVING BEHIND fulltime work leaves a void. How will you fill it? In my semi-retirement, I’ve found four communities.
I grew up in Fort Worth, Texas, but moved throughout my career. Fifteen years ago, I returned to Texas and—as part of my relocation—”pioneered” working from home. I’ve spent the past few years reconnecting with classmates from elementary school through high school, meeting them individually for lunch and using Facebook to arrange annual mini-reunions. I’ve known some of these folks for more than 55 years.

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Healthy Gains

James McGlynn  |  Apr 19, 2021

IT’S BEEN CALLED the stealth IRA. We’re talking here about health savings accounts, which offer a triple tax play. First, contributions are tax-deductible. Second, the accounts grow tax-deferred. Third, if the money is used to pay permitted medical expenses, there’s no tax on the sum withdrawn.
That might sound similar to an employer-sponsored flexible spending account for health care costs, but those are more restrictive. If much or all of the money isn’t spent by the end of the year,

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A Less Risky Life

James McGlynn  |  Mar 27, 2021

MANY FOLKS ARE do-it-yourselfers when it comes to home improvement projects. On that score, I have no skills, so I end up paying others. In fact, in high school, I was so anxious to avoid metal shop and woodshop that I opted for typing and four semesters of bookkeeping.
It’s a different story when it comes to my finances. Yes, I use an accountant to file my taxes. But helped by both a degree in finance and the Chartered Financial Analyst designation,

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Acquired Taste

James McGlynn  |  Feb 22, 2021

SPECIAL PURPOSE acquisition companies are hot. But will investors get burned?
Also known as “blank check” companies, special purpose acquisition companies (SPACs) are shell companies with no current business operations that raise investor funds through an initial public offering (IPO). The companies then seek a merger with a private company, allowing its new partner to go public without the delays and demands of a traditional IPO.
An additional advantage: The acquired companies are allowed to make projections about their business prospects,

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Change Gets Old

James McGlynn  |  Feb 16, 2021

RETIREMENT RULES seem to get revised almost every year. Whether it’s IRAs, Roth IRAs or Social Security, Congress is constantly rewriting the regulations.
Just think about what’s happened over the past half-a-dozen years. The Bipartisan Budget Act of 2015 eliminated the “file and suspend” option for Social Security recipients. Savvy financial planners would advise clients who had reached their full Social Security retirement age to file for benefits, so their husband or wife could receive spousal benefits.

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Retirement Gambit

James McGlynn  |  Jan 13, 2021

INSPIRED BY THE TV series The Queen’s Gambit, many people suddenly want to master the game of chess. But I’m more interested in mastering the practical world of retirement gambits—and that means matching wits with Congress and the IRS.
During my working career, I saved money in taxable brokerage accounts, IRAs and 401(k)s, but never focused on Roth accounts. At age 55, having left my last employer, I had two things that compelled me to begin—time and reduced income.

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He Gets, She Gets

James McGlynn  |  Dec 15, 2020

IF YOU DESIGNATE beneficiaries for your retirement accounts, that’s usually a surefire way to pass those assets directly to your desired heirs without going through probate—but not always.
Because those beneficiary designations are so important, you should verify your choices every year in case there’s a change due to, say, marriage, birth, divorce or death. Especially marriage and divorce. Which brings me to a crucial issue: When dealing with IRA and 401(k) beneficiary designations,

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The Taxman Cometh

James McGlynn  |  Oct 23, 2020

LATE LAST YEAR, Congress voted to kill off the so-called stretch IRA, which had allowed those who inherited retirement accounts to draw them down slowly over their lifetime. Many folks were surprised by the stretch IRA’s demise, but they shouldn’t have been.
When a tax break or some other government provision benefits only a few folks, Congress often changes the law. Think back to 2015. That year, Congress eliminated the ability to “file and suspend” Social Security—another strategy that tended to be exploited only by a privileged few.

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Back When

James McGlynn  |  Sep 25, 2020

I BEGAN MY CAREER in investments as a junior analyst at a public endowment fund. It was 1980 and I’d just finished my last investment class at college, where I learned about Modern Portfolio Theory. Why, decades later, is it still called “Modern”?
The Dow Jones Industrial Average was below 1000, versus today’s 27000. Men wore suits in 100-degree Texas heat. We had individual offices. We researched companies by reading brokerage reports, talking to brokers and requesting annual reports from companies.

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