Retirement Planning

You can generally collect a divorced-spouse benefit worth up to 50% of your ex-spouse's Primary Insurance Amount if the marriage lasted at least 10 years, you are currently unmarried, and both you and your ex-spouse are at least 62. If you have been divorced at least two years, you can claim even if your ex-spouse has not yet filed for their own benefit, an exception called independent entitlement that does not apply to current spouses. Your claim has zero effect on your ex-spouse's benefit or on what their current spouse might receive, Social Security calculates these entirely independently. If you were married more than once and each marriage lasted 10 years or longer, you can choose whichever ex-spouse's record produces the larger benefit. Remarriage generally ends eligibility for a divorced-spouse benefit while that new marriage lasts, though it does not affect your right to claim later if that marriage also ends. If your ex-spouse has since died, the rules shift to the divorced-spouse survivor benefit, which uses the same 10-year marriage test but can pay up to 100% of what your ex-spouse was receiving.

Arizona's nine most-cited retirement advantages in 2026: (1) no state tax on Social Security; (2) low 2.5% flat state income tax; (3) modest property taxes (0.5–0.7% of assessed value); (4) no state estate or inheritance tax; (5) warm dry winters with abundant sunshine; (6) world-class 55+ community infrastructure (Sun City, Sun Lakes, etc.); (7) strong healthcare access in Phoenix and Tucson metros, with major systems like Mayo Clinic and Banner Health; (8) lower overall cost of living than most coastal states; (9) outdoor lifestyle with hiking, golf, and dark-sky areas accessible most of the year. The honest counterweight is summer heat (Phoenix metro routinely 110°F+ from June to September) and longer-term water supply considerations.

Retiring at 50 with $2M is feasible for households with low fixed expenses and disciplined spending, but the safe withdrawal rate at a 40-year horizon is closer to 3.0–3.3% than the traditional 4%, so realistic spending is roughly $60,000–$66,000 a year before taxes, combined with no Social Security for 12+ years and no Medicare for 15. The plan typically requires a 72(t) SEPP or substantial taxable-account reserves to bridge to 59½, ACA marketplace coverage with deliberate AGI management, and Roth conversions to flatten the future tax curve. It is achievable. It is also the version of "can I retire" with the least margin for error, the most exposure to sequence risk, and the most discipline required.

To calculate a 401(k) RMD: take the account balance as of December 31 of the prior year, then divide it by the distribution period listed for your age in the IRS Uniform Lifetime Table (or the Joint and Last Survivor Table if your sole beneficiary is a spouse more than 10 years younger). For example, a $500,000 balance at age 75, with a distribution period of 24.6, produces an RMD of roughly $20,325. Unlike IRAs, which can be aggregated and withdrawn from any combination of accounts, each 401(k) must satisfy its own RMD separately. The first RMD can be delayed until April 1 of the year after you turn 73, but doing so means taking two RMDs in that same calendar year, both taxable.

Employees of nonprofit and tax-exempt health systems, Mayo Clinic and Banner Health among Arizona's largest, often have access to both a 403(b) and a 457(b) deferred compensation plan, and unlike combining a 401(k) with an IRA, these two accounts have entirely separate contribution limits, up to $24,500 each for 2026 (plus separate catch-ups), meaning a highly compensated physician can defer meaningfully more than double what a single account allows. The tradeoff is that a 457(b) at a private nonprofit employer is almost always a 'non-governmental' or 'top-hat' plan, fundamentally different from and riskier than a governmental 457(b): the assets remain the legal property of the employer and are exposed to its general creditors, the plan generally cannot be rolled into an IRA or another retirement account when you leave, and distributions follow a fixed schedule set by your original deferral election rather than your own timing. Understanding which type of 457(b) you actually have, and what happens to the balance if you leave or the organization runs into financial trouble, matters as much as the extra contribution room itself.

A 72(t) distribution (SEPP) allows penalty-free withdrawals from retirement accounts before age 59 1/2, but only if you follow a rigid IRS payment schedule for at least five years or until 59 1/2, whichever is longer.

Custodian platforms can genuinely help with RMD administration, but every feature is scoped to that one account at that one institution. Most major custodians, including Fidelity, Schwab, and Vanguard, offer automated RMD services that calculate the required amount each year and distribute it on a schedule you choose, while letting you elect federal and state withholding at the same time. The same platforms can flag deadlines for accounts held there. What a platform cannot do is reduce your RMD tax rate directly, since that's set by the tax code, not the custodian. What it can offer that actually helps is the ability to send a qualified charitable distribution straight from the IRA to a charity so that portion never counts as taxable income, an in-kind share transfer to satisfy the RMD instead of selling first, and a withholding election you can set above the custodian's default. None of that replaces the larger lever: shrinking the pre-tax balance itself through Roth conversions before RMDs begin, which is a planning decision made years in advance, not a feature toggled at withdrawal time. If your accounts span more than one institution, no single custodian's app or automation sees the full picture, so a basic calendar reminder for the December 31 deadline remains one of the more reliable tools available.

For retirees in 2026, the top-rated Arizona retirement destinations are Surprise, Scottsdale, Peoria, and Tucson, each with distinct tradeoffs. Surprise offers the lowest cost of living among the top tier with mature 55+ communities (Sun City Grand, Sun City West nearby). Scottsdale offers the strongest healthcare access and amenities at the highest cost. Peoria balances affordability and amenities with new construction and golf community options. Tucson provides the lowest cost overall, milder summers than Phoenix metro, and a different cultural feel. Other strong options include Chandler (high quality of life, family-adjacent), Gilbert (newer infrastructure), Prescott (cooler climate, smaller community), and Sun City (the original active adult template). The right city depends on housing budget, healthcare proximity needs, climate tolerance for summer heat, and whether you prefer master-planned 55+ versus mixed-age communities. Arizona's tax treatment is uniformly favorable across all of these, no state tax on Social Security, a 2.5% flat state income tax, and modest property tax rates.

A complete Arizona retirement plan covers: (1) state tax treatment (no Social Security tax, 2.5% flat income tax, no estate or inheritance tax); (2) the city decision (Scottsdale vs. Tucson vs. Surprise vs. Sun City have very different cost and lifestyle profiles); (3) housing, buying vs. renting initially, 55+ community vs. mixed neighborhood; (4) healthcare network selection, particularly Medicare Advantage vs. Original Medicare with Medigap; (5) timing the move relative to home sale and the tax year; (6) updating estate documents to reflect Arizona community-property law; (7) establishing Arizona residency cleanly if relocating from a high-tax state; (8) coordinating Roth conversions, QCDs, and other tax planning around the move year; and (9) social integration through community, church, hobby, or volunteer networks. None of these are independent. The retirements that go well treat the move as a multi-year project, not a single decision.

The Social Security Fairness Act, signed into law in January 2025, repealed two provisions that had reduced or eliminated Social Security benefits for people who also receive a pension from work not covered by Social Security: the Windfall Elimination Provision (WEP), which reduced a worker's own Social Security benefit, and the Government Pension Offset (GPO), which reduced or eliminated spousal and survivor benefits. The repeal is retroactive to January 2024, and the Social Security Administration began issuing lump-sum back payments and higher ongoing benefits in early 2025. As of 2026, most straightforward cases have been paid, but a significant dispute remains unresolved for people who were told years earlier by SSA that their spousal or survivor benefit would be reduced to zero under GPO and never filed a claim. SSA has generally limited their retroactive payment to six months from when they eventually filed or re-contacted the agency, not the full period since January 2024, and this is being actively challenged in Congress.