With this software, the user (a would-be thief) types in a URL of a genuine website, and when a target visits a selected scam URL, the software loads up an invisible browser window to collect, in real-time, all of the genuine website’s information, which it then passes through to the victim’s browser window. In other words, from the victim’s perspective, everything looks exactly right, because it is literally the same thing showing in your browser.

But it gets crazier from there. Much crazier. The software also passes every keystroke and action from the victim back to the original website — including the MFA code. So from the victim’s perspective, everything is operating as normal, including all of the functionality after logging in, so as not to set off any mental alarms. But the software is collecting all of that information for the thief. And the thief is now logged in as well.

The software also has a full collection of other features, such as URL masking (i.e., making a fake link look genuine).

And it comes with customer support, regular software updates, and a community forum for users.

The takeaway, again: unless you yourself directly typed the appropriate URL into your browser (e.g., vanguard.com, schwab.com, chase.com, etc.), you might not be on the genuine website.

• Phishing Software as a Service (Complete with Customer Support) from Callie Baron and Piotr Wojtyla

Other Recommended Reading

• Retirees: Should You Take RMDs Early in the Year or Wait? from Christine Benz
• Better Conditions Did Not Yield Better Results for Active Managers in 2025 from Bryan Armou
• Some Things That Didn’t Happen from Ben Carlson
• Can You Live Off Your Dividends? from Ben Carlson
• Fear-Based Frugality Can Harm Your Financial Wellbeing from Rick Kahler
• The Truth About 529s and Financial Aid from Ann Garcia
• This Form of Mental Exercise May Cut Dementia Risk for Decades from Jon Hamilton
• Meta AI Alignment Director Shares her OpenClaw Email-Deletion Nightmare from Hendry Chandonnet
• The Rise of Bratty Machines from Elizabeth Spiers (NYT)

Thanks for reading!

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

I recently received a very clever phishing attempt by email. (In hindsight, I wish I had taken screenshots prior to deleting it.)

Here’s what it looked like in my inbox:

• From: Vanguard Brokerage Services
• Subject: Your Vanguard statement is ready

Looking at the email via my desktop browser, it was very easy to see that it was a phishing attempt.

Looking at the email on my mobile device, however, there was no immediately obvious sign that the email was not legit. Based on everything immediately visible via my mobile mail app, it looked exactly like a genuine Vanguard email.

Looking at the “From” Field

When I viewed the email on desktop, the “from” field was a dead giveaway. While the “name” of the sender was “Vanguard Brokerage Services,” the email address of the sender was complete gobbledygook. Something like “senderx34x3@xyzpayments.info.” Clearly, that’s not actually Vanguard.

On mobile though, the sender’s email address does not appear immediately (at least not on most mobile mail apps). You just see the name. When viewing the email, there will be somewhere you can tap to display the sender’s email address. But you have to go out of your way to actually do that. And of course the percentage of people who do that with every single email is vanishingly small.

Body of the Email

The text of the email was a character-for-character copy/paste of the real statement-notification emails that Vanguard sends, complete with the appropriate images, branding, etc. Everything looked exactly as you’d expect.

The only thing about it that was wrong is that the links that appeared to point to Vanguard’s login page actually pointed to a scam URL. (That is, the “anchor text” of the link was the appropriate URL, but that’s not where the link actually pointed.)

In other words, it was something like this:

https://vanguard.com/

If you look only at the text of the link itself (the “anchor text”) you’ll think the link is going to take you to Vanguard. But it doesn’t. The link points to ObliviousInvestor.com. On desktop, you can see that easily by hovering over the link. Your browser (usually in the bottom corner) will show you where the link points. (Though even this can be spoofed. So as with the email address, if it looks suspicious, it definitely should not be trusted. But if it looks normal, that doesn’t necessarily tell you that it’s genuine.)

On mobile, however, “hover over” isn’t an option. You can tap a link and hold your finger down, in order to see where the link points. But how many people actually do that for every link they consider tapping? Also, there’s the risk that you tap the link and accidentally take your finger off the screen too early — and now you’ve visited the scam link rather than activating the “preview” functionality.

Browser Location on Mobile

Of course, I did not visit the links in the spam/phishing email. But if I had, I’m confident that the destination page would look exactly like Vanguard’s real login page. Except, of course, it wouldn’t have actually been Vanguard. It would have been a fraudster’s website, set up to collect people’s usernames and passwords as they entered them.

On desktop, at the top of your browser window, you easily see the full URL of the page you’re on. That makes it at least somewhat easier to recognize whether you’re on a legitimate website or not.

On mobile, depending on your browser and device, you often don’t. You might see the first several characters or the last several characters. But you might, for example, have accidentally visited:

vanguard.com-payments-us-vanguard.com

If you only see the beginning or end of that URL, you might think that you’re on Vanguard’s website. But that’s not Vanguard’s website. The actual domain in that URL is “com-payments-us-vanguard.com”, which any old fraudster could have purchased. (The “vanguard” at the start of the URL is a subdomain.)

What To Do

There are a handful of ways to avoid falling for this sort of thing.

Firstly, it’s helpful to actually look at the email address of the sender, even if it’s not immediately displayed in your mobile app. But even that can be spoofed. So while a spammy email address tells you it’s spam, a legit-looking email address does not necessarily tell you it’s genuine.

Secondly, it’s helpful to generally be aware when using mobile that 1) you aren’t seeing as much information as you would via desktop and 2) sometimes the information that you’re not seeing would have been a clear red flag.

Thirdly, if you did end up falling for the email and visiting the link in question, you’d be in better shape if you use passkeys or a password manager (both topics for another day, which we’ll get to). Your passkey would not work on the fake domain. And a password manager would recognize that the domain in question was not actually Vanguard.

But the most effective way to avoid falling for this? It’s the same exact rule that we discussed in the first article in this series! (I promise I’ll move on to other topics soon. But I just want to drive home how critical and valuable this rule is.)

If you receive any inbound communication (whether email, text, or phone call) that purports to be from a company with which you have any sort of account:

• Do not reply.
• Do not give them any information whatsoever.
• Do not click on any links.

Essentially, don’t interact with inbound communications. Instead, if you think it might be genuine and require some sort of response, reach out directly, via trusted means (i.e., either typing the company’s URL directly into your browser or calling the number on the back of your credit/debit card) and ask the company in question about it.

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

Morningstar’s Amy Arnott recently shared the results of her research, together with other Morningstar colleagues, discussing which strategies would be expected to maximize total spending through retirement.

• Here’s How You Can Spend More During Retirement from Amy Arnott

Other Recommended Reading

• Iceberg Crashes from Ben Carlson
• The Midlife (Spending) Crisis from Ben Carlson
• You Should Quit Social Media for Good from G. Elliott Morris
• Why You Can’t Time the Market (Even When You Know the Future) from Nick Maggiulli
• Is Inflation Higher Than We Think? from Nick Maggiulli
• You Aren’t Giving Enough Money to Your Kids and Grandkids from Elliott Appel

Thanks for reading!

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

A long-time Oblivious Investor reader recently wrote in to share that he and his spouse had fallen victim to a fraud that resulted in a theft from one of their IRAs at Fidelity (which, as discussed below, was not reimbursed). The total loss was “only” about $4,000. But it absolutely could have been much worse.

Here’s how it played out.

John and Rachel (not their real names) had just returned from a trip abroad. Rachel received the following text:

If you can’t see the image, the conversation reads as follows:

Incoming text:
Fidelity ®: Did You Attempt A Transaction of $374.52 At MODERN FEMME FASHIONS 12/02/2025 (EDT).
Reply (YES) if Recognized.
Reply (NO) if Unauthorized, A Call Will Be Generated To You Momentarily

Outbound text:
No

Incoming text:
Fidelity ®: Thank you for confirming. Please hold for the next available agent to assist you.

After that text exchange, Rachel received a phone call as indicated. At the outset of that call, the agent said that, in order to confirm her identity, Fidelity was going to send her a 6-digit code and asked her to please read it back to them. Rachel received the code and read it back to the agent on the phone.

And that was it. As of that moment, the fraudster was able to access her Fidelity account.

The thief promptly initiated a few money transfers out of the account. Fortunately, John promptly noticed what was going on and contacted Fidelity. Fidelity was able to recover one of the transfers, but the other two (totaling ~$4,000) were not recovered. And because the theft involved the victim unintentionally sharing login information with the thief, Fidelity did not reimburse John and Rachel for the theft.

Why was it only $4,000 that was stolen, when there was much more in the account? (Even the cash balance at the time far exceeded $4,000.) I’m not entirely sure. I think the thief must have intentionally chosen a low amount to hopefully not trigger any alerts on Fidelity’s end. But the situation clearly could have been much worse.

How the Fraud Worked

When we log into an account (if not using a passkey, which is a topic for another day), we provide username, password, and the multi-factor authentication (MFA) code. So we might think of all three as being necessary.

But the thief didn’t need Rachel’s username or password at all. All they needed was the six-digit MFA code.

If that sounds surprising to you, take a look at the password-reset forms for any number of financial institutions. (Here’s Vanguard’s for instance. Here’s Fidelity’s.) Take a careful look at the information they ask for. For many financial institutions, the form requires:

• Name,
• Date of birth,
• Social Security number (or last 4 digits of Social Security number), and
• Zip-code.

After you enter that info, they send you a 6-digit code. And after entering that code, they let you reset your username and/or password, or perhaps they display your username on the screen in plain text and allow you to pick a new password.

And, unfortunately, for most of us, all of that information is available for purchase on the dark corners of the internet, due to large-scale security breaches that have already happened. In the 2017 Equifax breach alone, approximately 147 million Americans had their name, DoB, SSN, home address, and phone number stolen. That’s roughly 43% of the U.S. population in just one data breach. And there have been tons of other breaches.

In other words, for most of us, a thief has everything they need to get into our accounts, other than a 6-digit multi-factor authentication code.

We deal with MFA codes so often that they feel commonplace, mundane, disposable. But they’re the keys to the kingdom. It’s not an exaggeration to say that MFA codes should be guarded more closely than your Social Security number.

“We’re Contacting You About Fraud” Is Itself a Red Flag for Fraud

The readers targeted in this incident are not at all the only people to fall victim to fraud, via a fraudster pretending to be the financial institution, warning them of fraud. It’s a very common tactic. Here are two other examples, if you’re interested in similar stories:

• Imposters Stole $8,000. How ‘Money with Katie’ Got Scammed
• How My Coinbase Account Was Almost Stolen

“We’re contacting you about a suspected fraud” is itself a great way to defraud somebody, for two reasons.

Firstly, it gives the fraudster a plausible reason for the initial contact to the targeted person.

And secondly, it puts the targeted person in a mindset of wanting to take prompt action, in order to stop the supposed fraud — thus making it easier for the fraudster to get the target to follow instructions. It might even be effective enough to generate a panic/fear response in the target, thereby inhibiting clear thought.

What To Do When You’re Contacted

When a financial institution with whom you have a relationship reaches out to you (whether about a suspected fraud or about anything else):

• If it’s a phone call, take down whatever information they give you. (Or frankly just don’t answer the phone if it’s from a number you don’t know. Just listen to the voicemail, if they leave one.)
• Regardless of method of contact, do not give them any information. No information whatsoever. Not your date of birth. Not your Social Security number. And absolutely not a multi-factor authentication code. Give them nothing. Truly, nothing. If it’s a text, do not reply. If it’s an email, do not reply to the email.
• If it’s an email, do not click on any links in the email.
• Then reach out to a trusted phone number that you already have for that financial institution. If it’s your bank, call the number on the back of your credit/debit card. Or directly type in schwab.com (or whatever is the applicable website), and find the applicable phone number there. And once you know you’re actually in contact with the right organization, ask them for details on the situation.

To summarize:

• Don’t respond to any inbound messages that appear to be from financial institutions. Don’t give them any information.
• Separately reach out to a phone number that you know is genuine, to ask about what’s going on.
• Treat multi-factor authentication codes with the utmost security and caution. If you accidentally give one to a thief, that’s quite possibly all they need to get into your account.

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

First was a discussion of estate planning and Roth conversions, for the Advice-Only Podcast, which is hosted by Sarah Sprague Gerber of the Advice-Only Network.

• Mike Piper on Estate Planning Realities and Roth Conversion Strategies

Next was a discussion of Social Security, for the Ben with Benefits podcast, which is hosted by Ben Carlson of Ritholtz Wealth. (Ben also writes the blog A Wealth of Common Sense, which I frequently feature here.)

• Is Social Security Going Bankrupt? (interview by Ben Carlson for the Ben with Benefits podcast)

Other Recommended Reading

• How to Prevent Aging Parents and Relatives From Making Financial Mistakes from Paulette Perhach (NYT)
• Stop Chickening Out (regarding retirement spending strategies) from Jordan Grumet
• IRS Releases FAQs on Qualified Overtime Pay Deduction Under H.R. 1 from Martha Waggoner
• Preventing Double Grief: A Relocation Guardrail for Surviving Spouses from Kathleen Rehl
• Affordable Housing Requires Tackling Insurance Costs from Bloomberg News Editors
• Treating Hearing Loss With Hearing Aids for the Prevention of Cognitive Decline and Dementia from Lachlan Cribb et al.
• Intelligence Explosion: Navigating the High-Stakes AI Revolution from Darrow Kirkpatrick
• S&P 500 and Total Stock Market Funds Meet Technical Definition of “Non-diversified” from Jeff Sommer (NYT)

Thanks for reading!

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

• A ‘BETR’ [Break-Even Tax Rate] Approach to Roth Conversions by James Passman, Boris Wong, and Joel Dickson
• Roth Conversion Break-even Tax Rate Calculator

The paper is excellent. The gist of the paper is essentially:

• People often think of the Roth conversion decision as a comparison of the tax rate they’d pay on the conversion, as compared to the future tax rate that would be paid on those dollars later.
• But there’s more to the analysis than that, because Roth conversions also have other effects, such as the beneficial effects of using taxable-account dollars (rather than dollars from the IRA) to pay the tax on the conversion.
• And when you account for those other factors, it reduces the “future tax rate” that would be necessary in order for a conversion to ultimately be advantageous. That is, a conversion might actually be advantageous even if the “future tax rate” is actually somewhat lower than the tax rate you end up paying on the conversion.

That’s absolutely true. I agree with all of the above. (You can find me saying similar things in The 4 Effects of a Roth Conversion or in my Roth Conversion Deep Dive presentation from the 2024 Bogleheads Conference.)

The calculator is essentially an implementation of the examples the authors provide in the paper. I think the calculator is interesting — worth experimenting with — but frankly I don’t think this is the best way to do a Roth conversion analysis. Rather, I think it’s preferable to look at Roth conversions as part of a much broader analysis, modeling projected cash flows through retirement.

For example, in Figure 2 in the paper (or using the calculator with the same set of assumptions), they show a very low break-even tax rate if the tax on the conversion is paid with cash. But a critical assumption being made here is that, in the no-conversion scenario, the calculator is assuming that the cash sits there for the duration of the 20-year calculation.

More comprehensive planning software would be able to calculate whether (based on the household’s other projected cashflows), that cash is likely to be spent elsewhere in the near future. In other words, if we spend the cash on the conversion tax, but now (because we no longer have that cash available) we have to liquidate a bunch of appreciated taxable account assets to pay the bills for the next 12 months, it’s essentially as if we liquidated those appreciated taxable assets, rather than the cash, to do the conversion.

And, when considering liquidating taxable assets to pay the tax on the conversion, the calculator assumes that there’s no capital gain tax to pay. In real life, of course we have to bring that into the analysis as well. (In some cases, for instance, if the taxable assets are highly appreciated, it might be better to aim to preserve them for heirs who would receive a step-up in cost basis.)

To be clear, I don’t think that the above constitute flaws with the paper. The paper is excellent in raising important ways in which the analysis is affected by more than just the “current and future tax rate.” And the assumptions the authors use are reasonable for the examples given. But actually doing the analysis in exactly the way they discuss (or using the calculator that does exactly that) is in my opinion not as helpful as more comprehensive planning software that is going to account for much more.

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

• Exactly what asset allocation to use (beyond the basic stock/bond allocation),
• Exactly which funds to use to satisfy the chosen allocation (beyond “funds that have low expense ratios”), and
• Future required minimum distributions (RMDs).

It’s not that those topics shouldn’t be addressed. They should be addressed. But they are much less important than a range of other topics.

To the extent that RMDs are a problem it’s because they, in some cases, create tax planning inefficiencies. But, as Christine Benz discusses in a recent article, they’re highly unlikely to contribute meaningfully to portfolio depletion, for multiple reasons.

• Could Required Minimum Distributions Cause You to Overspend? from Christine Benz

Other Recommended Reading

• How to Fix the Housing Market from Ben Carlson
• How I Bought a Home Without an Agent After the NAR Settlement from Harry Sit
• Is Home Equity Fake Wealth? from Nick Maggiulli
• IRS Advisory Council Report Defends Workers, Criticizes Budget and Staff Cuts from Martha Waggoner
• Proposed Regulations Provide Guidance on Car Loan Interest Deduction from Martha Waggoner
• When Retirees Go Back to Work Is It a Sign of a Strong Labor Force or a Recession? from Geoffrey Sanzenbache

Thanks for reading!

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

Any rule of thumb is going to have some situations in which it doesn’t work well, but I think this rule of thumb is particularly bad.

Firstly, there are some households for which any conversions are likely to be unhelpful, due to their charitable plans (i.e., they plan to make extensive use of qualified charitable distributions, and they have charities named as the beneficiaries of their tax-deferred accounts). When that’s the case, any current conversions are largely money down the drain. Much of the dollars in question would face a 0% tax rate later, so why pay even a 12% tax rate right now?

And on the other side, there are a variety of factors that would make conversions beyond 12% likely to be beneficial (e.g., super large tax-deferred accounts, such that we’re likely to see a high tax rate on RMDs, or beneficiaries with very high income levels of their own, such that they’d likely pay very high tax rates on inherited tax-deferred accounts).

But the most fatal flaw with the rule of thumb in question is that, for many retiree households, the “up to the top of the 12% bracket” range often includes stuff that will make the tax rate paid on the conversion meaningfully higher than 12%. The most common such things are the unique tax treatment of Social Security benefits (i.e., each dollar of conversion income also causes some Social Security benefits to become taxable) and the phaseout of Affordable Care Act subsidies (i.e., conversion income is causing the premium tax credit to shrink/disappear and potentially causing the loss of cost sharing reductions).

For many retirees (in particular, households where somebody is buying insurance on the exchange or somebody is already receiving Social Security), their marginal tax rate in much of the 12% bracket actually exceeds 20%. And if that’s advantageous, then conversions into the 22% bracket are often likely a good idea as well (because in many cases, much of the 22% bracket doesn’t have those additional tax rate effects).

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

• Vanguard CEO Salim Ramji in Conversation with Christine Benz
• Key Investment Building Blocks & Asset Allocation Basics with Christine Benz
• The 11 Bogleheads Principles with Jim Dahle
• How to Use All-in-One Funds in Your Portfolio with Jon Luskin
• Tax Management and Tax-Efficient Investing with Valerie Rivera

If you want to get notified when new videos are posted, subscribe to the Bogleheads YouTube channel.

Other Recommended Reading

• Reducing ACA Health Insurance Premiums After The Expiration Of The ‘Enhanced’ Premium Tax Credit from Ben Henry-Moreland
• Second Circuit Denies SALT Deduction Cap Workaround from Matthew Tardif, Thomas Godwin, and John McKinley
• What’s a Safe Retirement Withdrawal Rate for 2026? from Amy Arnott, Christine Benz, and Jason Kephart
• Almost All Companies with a 401(k) Now Allow Roth Savings from Greg Iacurci
• A Fixed Sit-Stand Schedule May Boost Office Productivity (and Reduce Back Pain) from Monique Mita

Thanks for reading!

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

Disclaimer:Your subscription to this blog does not create a CPA-client or other professional services relationship between you and Michael Piper or between you and Simple Subjects, LLC. By subscribing, you explicitly agree not to hold Michael Piper or Simple Subjects, LLC liable in any way for damages arising from decisions you make based on the information available herein. Neither Michael Piper nor Simple Subjects, LLC makes any warranty as to the accuracy of any information contained in this communication. The information contained herein is for informational and entertainment purposes only and does not constitute financial advice. On financial matters for which assistance is needed, I strongly urge you to meet with a professional advisor who (unlike me) has a professional relationship with you and who (again, unlike me) knows the relevant details of your situation.

You may unsubscribe at any time by clicking the link at the bottom of this email (or by removing this RSS feed from your feed reader if you have subscribed via a feed reader).

Today’s article was inspired by a few recent online discussions (and one article) I encountered during open enrollment season, all of which made the same mistake when discussing what type of retirement account to contribute to each year. Specifically, they did not speak at all to the question of what the household’s retirement account balances already look like. It’s such a simple point, but it’s often left out.

People almost always ask about current income level, which is relevant. But we need to know more than that.

Example: Beth and Brian are married filing jointly, in the 24% tax bracket. Most of their income this year is in the form of W-2 wages.

Tim and Tiffany are also married filing jointly, in the 24% tax bracket. Most of their income this year is in the form of W-2 wages. In fact, everything about their income and deductions for this year is identical to Beth and Brian.

But Beth and Brian are age 60. They’ve been maxing out their tax-deferred accounts for 30 years. They’ve had a mostly-stock allocation this whole time, and now they have about $3.5 million in tax-deferred accounts.

Tim and Tiffany, on the other hand, are age 35. They’ve been making Roth 401(k) contributions and Roth IRA (or backdoor Roth IRA) contributions through their whole careers so far. They have a considerable amount of Roth savings and literally nothing in tax-deferred accounts.

Both households are in the 24% bracket, so they’d each get the same amount of tax savings this year from making deductible/pre-tax 401(k) contributions. But Beth and Brian, with their large tax-deferred balance, are already going to have a significant amount of taxable income in retirement, which makes Roth savings start to look better. Tim and Tiffany, on the other hand, will have almost no taxable income in retirement if they continue along their Roth-only path. At some point (perhaps now) it makes sense to start making tax-deferred contributions, so they have income to “use up” their low tax brackets in retirement.

Every decision should be made “at the margin.” When deciding whether to contribute to Roth or tax-deferred accounts, what we want to know is: if you make this contribution as tax-deferred, what would be the tax rate that you’d pay on these dollars and the associated growth when they come out of the account later. All else being equal, the more money you already have in tax-deferred accounts (and, to a lesser extent, in taxable accounts), the higher that tax rate will likely be — and the more sense it makes for this contribution to be made as Roth.

What is the Best Age to Claim Social Security?

Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less Click here to see it on Amazon.

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