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What if everything you've been told about retirement tax planning is wrong?

In this eye-opening episode of Yield to Reason, host Brandon Roberts tackles the sacred cows of retirement planning head-on. Spoiler alert: that fancy tax footwork everyone's raving about might not be the game-changer you think it is.

What You'll Discover:

The Roth Conversion Controversy 🔥

• Why the "heretical" truth about Roth conversions might shock you
• Real-world data showing modest benefits (hint: it's not the wealth preservation miracle you've been promised)
• Which retirees actually benefit the least from conversions (the answer will surprise you)

The Withdrawal Sequencing Myth

• The standard "taxable first, tax-deferred second, Roth last" approach—and why it's leaving money on the table
• How a married couple can withdraw $53,850 from their traditional IRA and pay just 4.43% in taxes
• The simple strategy that beats complex tax planning every time

The Brutal Truth About Tax Optimization

• Why all that sophisticated software and complex analysis falls short in the real world
• The fatal flaw that undermines every tax strategy study
• What actually moves the needle in retirement (hint: it's not what the "experts" are selling)

The Episode's Biggest Bombshell:

A solid income plan that increases your withdrawal rate from 4% to 6% delivers a 50% boost in annual income—dwarfing the measly 5% bump you might get from perfect tax planning.

Perfect For:

• Pre-retirees drowning in conflicting tax advice
• Current retirees wondering if they're missing out on tax strategies
• Anyone tired of complex solutions that promise the moon but deliver pocket change
• DIY investors ready to focus on what actually matters

Key Takeaway:

Stop obsessing over tax avoidance and start building bulletproof retirement income. Your future self will thank you for focusing on the strategy that actually creates wealth—not just preserves it.

Listen now to discover why the retirement planning industry's favorite tax strategies might be keeping you from the retirement you actually want.

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Guest: Steve Selengut, Author of "Retirement Money Secrets"
Host: Brandon Roberts

Episode Overview

In this episode, we dive deep into a retirement income strategy that most people have never heard of but could dramatically change your financial future. Steve Selengut, who managed over $100 million for clients as an investment advisor, shares how he built substantial retirement income using closed-end funds - investments that have been around for 200 years but are largely ignored by Wall Street.

Key Takeaways

• Income First: Focus on generating actual cash flow rather than just growing account balances
• 10%+ Yields Available: Current closed-end fund portfolios can generate over 10% income annually
• Tax-Free Options: Municipal bond closed-end funds currently yielding over 7% tax-free
• 200-Year Track Record: These aren't new, risky investments - they've been around since 1825
• Quality & Diversification: Each fund contains 50-300+ individual securities for built-in safety

Chapter Breakdown

Chapter 1: The Foundation - Learning Income Investing Early (0:00 - 7:00)

Chapter 2: The Four Pillars of Safe Investing (7:00 - 11:00)

Chapter 3: Discovering Closed-End Funds (11:00 - 18:00)

Chapter 4: Why Closed-End Funds Beat Traditional Bonds (18:00 - 24:00)

Chapter 5: Building the Universe - How to Pick Winners (24:00 - 32:00)

Chapter 6: Making the Transition - From Index Funds to Income (32:00 - 36:00)

Chapter 7: Current Income Opportunities (36:00 - End)

Resources Mentioned

• Book: "Retirement Money Secrets" by Steve Selengut
• Community: Income investing community with monthly fund updates
• Coaching: One-on-one transition coaching (discounted for community members)
• Course: College-level income investing program in Q&A format

Bottom Line

If you're approaching retirement and worried about generating enough income from your investments, this episode offers a completely different approach than the typical "save more and hope for 4%" advice. Steve's strategy focuses on generating 10%+ income right now, using investments that have been around for centuries but are largely ignored by mainstream financial advice.

The key insight: Instead of worrying about your account balance going up and down, focus on the actual cash income your investments generate each month. With current yields over 10% for diversified portfolios, you might find you need a lot less money saved than you thought to maintain your lifestyle in retirement.

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In this episode of Yield to Reason Podcast, host Brandon Roberts tackles one of the most common arguments against income-focused investment plans: "Won't I have more money if I simply invest passively in the S&P 500?" Brandon breaks down the theoretical appeal of index investing versus its practical application in real-life retirement planning.

Key Points Discussed

The Perceived Perfection of Index Investing

• Index investing is often positioned as the ultimate investment choice
• Passive index funds/ETFs allow investors to capture U.S. stock market prosperity
• Requires minimal investment sophistication
• Market data largely supports this strategy on paper

The Reality Gap: Why Perfect Plans Sometimes Fail

• Well-conceived investment plans with solid data can break down when faced with real-life variables
• Similar to how engineering designs may face implementation challenges
• Index investing faces practical vulnerabilities despite its theoretical strength

Major Risks of Index Investing

Market Downturns

• Paper losses create psychological harm for investors
• Panic selling during downturns can convert temporary losses to permanent ones
• Market recovery timelines may not align with individual retirement timelines

Historical Recovery Periods

• Great Depression: 25 years to recover losses
• Dot-com bubble and 2008 recession: approximately 6 years to recover

Timing Risk (Sequence of Returns)

• Investors cannot control market return order
• Timing has dramatic impact on portfolio performance
• Particularly critical for those approaching or in retirement

Real-World Comparison: Index vs. Income Strategies (1999-2024)

• $100,000 initial investment with $5,000 annual contributions
• VFINX (Vanguard S&P 500 index fund) vs. CEF (Closed-End Fund) portfolio
• VFINX fell below CEF during dot-com crash and didn't catch up until 2018
• End of 2024: $385,000 difference between portfolios
• Distribution comparison: CEF generated $104,000 vs. VFINX's $15,400
• 4% withdrawal from VFINX would yield $54,000 - almost half of the CEF portfolio's income

The Income-Focused Advantage

• CEF distributions continued uninterrupted through market volatility
• Income remains stable regardless of share price fluctuations
• Investors aren't forced to sell shares during market downturns
• Option (not requirement) to sell shares for gains and reinvest

The "Good Enough" Philosophy

• Pursuit of more can sometimes be financially detrimental
• Recognizing when you have enough is key to retirement security
• Happiest retirees achieve adequate income to maintain their lifestyle
• Income investing provides both potential appreciation and reliable income

Conclusion

While index investing may theoretically produce more money in certain scenarios, income-focused investing provides stability and predictability that many retirees value. This episode challenges listeners to consider whether chasing maximum returns is worth the increased risk and uncertainty, especially when approaching retirement.

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Episode Description

In this episode, we're sharing five practical options for building reliable retirement income. Moving beyond the traditional "save and hope" approach, we explore various income-focused strategies that can help create a steady cash flow during your retirement years. Whether you're just starting to plan or are nearing retirement, these accessible options can help you build the retirement lifestyle you actually want.

What You'll Learn

• Why focusing on income generation is crucial for retirement success
• Five different ways to create retirement income streams
• The benefits and considerations of each approach
• How to start thinking about retirement from an income perspective

Income Options Covered

1. Closed-End Funds (CEFs) - These mutual fund-like investments are known for delivering higher income payouts compared to traditional funds. Brandon explains how they work, why their fees aren't as concerning as they seem, and how to evaluate them properly.
2. Annuities - Often misunderstood, annuities can provide guaranteed lifetime income. Brandon breaks down the different types available and explains why they excel at providing retirement income security.
3. Real Estate - Beyond direct property ownership, Brandon discusses various ways to generate income through real estate investments, including REITs and real estate syndicates.
4. Bank CDs - These traditional savings vehicles have made a comeback with rising interest rates. Brandon explains their benefits for conservative investors while highlighting some overlooked risks.
5. Options Strategies - For more advanced investors, writing covered calls or puts can generate additional income from existing investments. Brandon explains the basics and mentions fund options that use this strategy.

Resources Mentioned

• CEF Connect (cefconnect.com) - Tool for researching closed-end funds
• ImmediateAnnuities.com - Resource for comparing annuity options

Note: This podcast provides educational information only and is not offering personalized investment advice. All investment strategies involve risk, and you should research thoroughly before making any financial decisions.

About The Show

The Yield to Reason Podcast helps listeners build the most important part of their retirement strategy - reliable income sources. Because a retirement plan built with robust income streams is a retirement plan built for success.

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Episode Description

In this inaugural episode of the Yield to Reason Podcast, host Brandon Roberts introduces a fresh perspective on retirement planning that could transform how you prepare for your future. After nearly two decades in the financial industry, Brandon reveals why shifting your focus from simply growing your nest egg to building reliable income streams is the key to retirement success.

What You'll Learn

• Why retirement income planning is more important than just accumulation
• How traditional financial advice has missed the mark on preparing Americans for retirement
• The top 5 retirement concerns that Americans consistently worry about (and how they all connect to income)
• Why you might need significantly less savings than you think to achieve your retirement goals
• How an income-focused approach can provide peace of mind during market volatility

About Your Host

Brandon Roberts brings nearly 20 years of financial industry experience and practices what he preaches—building multiple streams of passive and semi-passive income. As a semi-advocate of the FIRE (Financial Independence, Retire Early) movement, Brandon focuses on the most practical path to financial freedom through income generation.

Key Takeaway

When you build your retirement strategy around creating reliable income streams rather than just accumulating a large account balance, you gain clarity about your retirement timeline and greater confidence during market downturns. Join us on this journey to build the retirement you deserve and truly want.