Important update on Kansas Social Security taxes: When this video was recorded, the information available indicated Kansas exempted Social Security for residents with adjusted gross income of $75,000 or less. That information was not current. As of tax year 2024, Kansas fully exempts all Social Security benefits for all residents with no income threshold. The former $75,000 AGI rule no longer applies. We have updated this page to reflect the correct law. If we get around to re-recording the video with the corrected information, we will update this page accordingly.
Why the 4% Rule Is Failing Kansas Retirees
For decades, retirees were told to withdraw 4% of their savings each year, adjust for inflation, and hope it lasted. In 2026, that advice is outdated. Here is what $300,000 actually generates under the old rules:
- Traditional 4% Rule: $12,000 a year, or $1,000 a month
- Morningstar 2026 Research Rate: $11,910 a year, or $993 a month
- Pfau and Dokken 2026 Conservative Rate: $8,800 a year, or $740 a month
These numbers are sobering. Even at the most optimistic figure, $1,000 a month is not much to build a retirement around. The 4% rule was built in the 1990s based on historical returns that no longer apply. Bond yields were higher, lifespans were shorter, and sequence of returns risk was less well understood. A healthy 65-year-old couple in Kansas today has a real chance of one spouse living into their 90s. The 4% rule was never designed for a 30-plus year retirement.
Four Real Scenarios: What $300,000 Can Do for Kansas Couples
All figures below are illustrative examples for married couples in Kansas, based on the age of the youngest spouse. Actual results will vary based on your age, health, product features, fees, and other factors. These are for educational purposes only.
Scenario A: Retire at 62 (Both Age 57 Today)
Act Now (PLI): $29,517/year ($2,460/month)
Wait Until 62 (PLI): $20,295/year ($1,691/month)
By Acting Now: $9,222 more per year… $769 more per month… 45.4% more income
vs. 4% Rule ($12,000/year): $17,517 more per year than the old rule… 59% more income
Scenario B: Retire at 65 (Both Age 55 Today)
Act Now (PLI): $45,117/year ($3,760/month)
Wait Until 65 (PLI): $23,040/year ($1,920/month)
By Acting Now: $22,077 more per year… $1,840 more per month… 95.8% more income, nearly double
vs. 4% Rule ($12,000/year): $33,117 more per year… 73% more income. Over a 20-year retirement, that gap represents more than $440,000 in additional lifetime income from the exact same $300,000.
Scenario C: Retire at 67 (Both Age 60 Today)
Act Now (PLI): $36,372/year ($3,031/month)
Wait Until 67 (PLI): $23,400/year ($1,950/month)
By Acting Now: $12,972 more per year… $1,081 more per month… 55.4% more income
vs. 4% Rule ($12,000/year): $24,372 more per year… 67% more income
Scenario D: Retire at 70 (Both Age 60 Today)
Act Now (PLI): $48,600/year ($4,050/month)
Wait Until 70 (PLI): $24,120/year ($2,010/month)
By Acting Now: $24,480 more per year… $2,040 more per month… 101.5% more income, more than double
vs. 4% Rule ($12,000/year): $36,600 more per year. That is a gap of $3,050 every single month, for life.
Wholesale vs. Retail Retirement Income
The most powerful idea in this entire topic is one most people have never heard: wholesale versus retail retirement income. When you start your PLI strategy five to ten years before you need the income, your income base grows during those deferral years. By the time you turn on the income, it is dramatically larger than if you had waited. You locked in the time advantage.
Retail income is what you get if you wait until retirement to fund the strategy. You still get guaranteed lifetime income, which is already far better than the 4% rule, but you leave a significant amount on the table. In Scenario B, that gap is $22,077 every year, guaranteed, for the rest of your life. Over a 20-year retirement that represents more than $440,000 in total lifetime income… from the exact same $300,000. Time did that. Not the market. Not luck. Just the decision to act a few years earlier.
Kansas Taxes and Your Retirement Income
Update on what you heard in the video: When this video was recorded, the information available indicated Kansas exempted Social Security for residents with adjusted gross income of $75,000 or less. That information was not current. As of tax year 2024, Kansas fully exempts all Social Security benefits for all residents with no income threshold. The former $75,000 AGI rule no longer applies. Every Kansas resident receives this exemption, regardless of income. We are noting this correction here while the video remains live. If the video is re-recorded with the correct information, this page will be updated accordingly.
The correct Kansas rule as of 2024: all Social Security benefits are fully exempt from Kansas state income tax for every resident, with no AGI threshold, no phase-out, and no age requirement. Federal taxes may still apply depending on your total income. This is a meaningful advantage for Kansas retirees building a PLI income floor alongside Social Security.
That said, smart income sequencing still matters at the federal level. A well-designed PLI strategy combined with careful Roth conversion planning and withdrawal timing can help keep more of your income out of higher federal tax brackets and away from Medicare IRMAA surcharges. See Does Kansas Tax Social Security? for the full current rules.
The 6-Link Tax Cascade
Even in a state with no Social Security tax, retirement income can be quietly eroded by a chain reaction called the 6-Link Tax Cascade:
- RMDs increase income — Required Minimum Distributions begin at age 73 if you were born between 1951 and 1959, or age 75 if born after 1959, and push your taxable income higher whether you need the money or not.
- Social Security becomes taxable at the federal level — As income rises, up to 85% of your Social Security check becomes subject to federal income tax.
- Medicare IRMAA surcharges triggered — The 2026 standard Medicare Part B premium is $202.90 per month. Go $1 over the first income threshold and that jumps to $284.10. Higher thresholds go higher still.
- Loss of deductions and credits — Higher income phases out valuable deductions and credits you were counting on.
- The Widow’s Penalty — When one spouse passes, the survivor files as single at a slightly lower income while typically facing higher federal tax rates on almost the same dollars.
- Inherited account taxes — Under the 10-year rule, most non-spouse heirs must fully distribute inherited pre-tax accounts within a decade, often during their highest-earning years.
Proactive Lifestyle-First planning helps you avoid or minimize all six links before they become expensive surprises. See How Taxes, IRMAA, and Market Drops Affect Retirement for a full breakdown.
Frequently Asked Questions
Is guaranteed retirement income from a PLI strategy really for life?
Yes. Protected Lifetime Income using a Guaranteed Lifetime Withdrawal Benefit (GLWB) feature continues paying you a set monthly amount for as long as you live, even if your account balance drops to zero. The guarantee is backed by the claims-paying ability of the issuing insurance company. All figures shown here are illustrative, and your actual income depends on your age, the product you choose, fees, and other factors.
Why does starting early make such a large difference in lifetime income?
With a GLWB feature, your income base grows at a contractual rate during the deferral period before you start receiving income. The longer that deferral period, the larger your income base and payout percentage when you turn on the income. A couple who starts at 55 and retires at 65 illustratively receives $45,117 per year. A couple who waits and starts at 65 receives $23,040 from the same $300,000. The only difference is when they acted. See the 10-year FIA + GLWB runway strategy for a full explanation.
What are the correct Kansas Social Security tax rules for 2024 and beyond?
As of tax year 2024, Kansas fully exempts all Social Security benefits from state income tax for all Kansas residents. There is no income threshold and no phase-out. The former $75,000 AGI rule that was referenced in the video no longer applies. See the update note at the top of this page and the full details at Does Kansas Tax Social Security?
How does this approach scale if I have more than $300,000 saved?
The same early-action principle that makes $300,000 work harder applies at any savings level. Starting your PLI strategy before retirement gives your income base time to grow, which is where the biggest difference comes from. See How Much Income Will $500,000 Generate in Retirement? to see how the approach scales.
Is Protected Lifetime Income right for my situation?
PLI strategies are not the right choice for every dollar or every goal. They tend to work best for covering the income you absolutely cannot cut in retirement. The best way to find out whether it makes sense for you is a free Retirement Income Blueprint Call where Kurt runs your specific numbers, shows you the options, and answers your questions with no obligation. See Are Annuities Ever a Fit? for a plain-English breakdown of when these strategies make sense and what the trade-offs look like.
Book Your Free Retirement Income Blueprint CallAbout the Author
Kurt H. Jackson is a Retirement Lifestyle Architect and the founder of KJ Financial. He has spent more than 16 years helping retirees and pre-retirees in Kansas and across the Midwest build income plans that start with their lifestyle, not a portfolio balance. He is Life and Health Insurance Licensed in MO, NE, KS, IA, and FL, and specializes in insurance-based, tax-optimized retirement income strategies including Protected Lifetime Income design, Roth conversion planning, and the 6-Link Tax Cascade. He does not manage investments or sell securities. Contact: 1014 E. 5th St., Maryville, MO 64468 | Direct: 816.582.5532 | kurt@kjfinancialonline.com | www.MaxMyRetirementIncome.com
Educational only… not tax, legal, or individualized investment advice. Guarantees rely on the issuing insurer’s claims-paying ability. Any figures shown are illustrative and may differ for your situation based on age, health, product features, fees, allocations, and market conditions.