Jerry’s Retirement Ideas

October 31, 2020 By Jerry Golden in Income Allocation Tags: Finding more cash, Income allocation, Income annuities, Jerry Golden

How to find $1 million!

Smart Income Planning Frees up Cash

I told my wife that I made $600,000 in a call I just had with my bank. As usual, she was incredulous.

No, I’m not a day trader, investing in commodities or oil futures.

I had called my banker to ask whether we could lower the interest rate on our home mortgage — without a lot of hassle. He said sure and our new monthly mortgage payment is now $1,000 lower. The only other riskless way to generate $12,000 a year in guaranteed cash flow is to invest money in U.S. Treasuries. But at today’s rates of about 2%, we would have to put aside $600,000 to generate that cash flow.

Annuity payments can also generate much more income than is possible by investing in bonds. So, when you include them in your Plan for Retirement Income, you may need only $1.5 million, while your twin who doesn’t include annuity payments needs $2.5 million to generate the same income.

You can use your extra $1 million to create even more income with different products, invest in more aggressive securities for your kid’s legacy, or buy that vacation home.

How much money can you find in your savings?

Click here to create your own plan for retirement income. Or contact me for a conversation about how to get the most out of your savings.

Jerry’s Retirement Ideas

October 31, 2020 By Jerry Golden in Income Allocation Tags: Income allocation, Income annuities, Income tax, IRS, retirement income

More spendable income!

Income Allocation Reduces Your income Tax Bill

Figuring out the U.S. tax code is no easy matter, but the key to understanding is the phrase “income tax.” You’re taxed on income, and not wealth (at least for now) or asset values.

Let’s consider the tax treatment of the major sources of retirement income:

Withdrawals from a rollover IRA are subject to federal and state income taxes.
Social Security payments (with some exclusions) are subject to federal and state income taxes.
Interest on corporate bonds are subject to federal and state income taxes.
Interest on Treasury bonds are free of state income taxes.
Interest on Municipal bonds are free of federal income taxes.
Qualified dividends are taxed at rates lower than on interest from corporate bonds.
Annuity payments (but only a portion for the first 15 or 20 years) are subject to federal and state income taxes.

Items 3 through 7 all have their unique payout rate, and when combined with their different tax treatments, can make the process to optimize your spendable income quite complex. Well, our Income Allocation planning does the analysis for you — and increases income and lowers taxes. You got it right: more income and lower taxes. By the way, by our selecting the right combination of income sources, you also have lower risk.

Let me give you one example. With Income Allocation, a 70-year-old male with $2. million in savings, (30% in Rollover IRA) plus $3,500 per month in Social Security benefits, can generate $162,000 in income while an investor who is advised to focus only on the asset side will generate $110,000 in income. And despite the $52,000 advantage in income, they will both pay the same amount in taxes — or $14,500.

To make up the difference, the asset allocator has to generate capital gains at the unrealistic rate of 6% per year on a consistent basis. Or liquidate savings at that rate.

Bottom line, a retirement income plan should consider income taxes.

Click here to create your own plan for retirement income. Or contact me for a conversation about how to find these tax benefits.

Find the Income to Insure Against Retirement Risks

October 13, 2020 By Jerry Golden in Income Allocation Tags: Income allocation, life insurance, long-term care, Retirement Income Annuity, reverse mortgage

You have probably seen TV commercials recently where:

A retired couple decides to drop their life insurance policy in order to create some extra cash
An ex-quarterback talks about health insurance to supplement basic Medicare;
A recognizable actor touts the advantages of tax-free cash through a reverse mortgage

Evaluating the products and the companies offering is absolutely critical before you make any decision.

However, the real challenge for you may be whether or not you can find income elsewhere to:

Pay the life insurance premiums instead of dropping the policy
Pay the higher healthcare premiums for the more generous Medicare Supplement plan
Purchase longevity insurance to complement the reverse mortgage drawdowns.

A Robo-Income Program Offering Human Touch in Retirement Income Planning

September 7, 2020 By Jerry Golden in Income Allocation Tags: Income allocation, Income annuities, Income Boost, retirement income, robo income planning

No matter how advanced robots have become, and how unhappy you may be with high advisor fees, you wouldn’t hand over your retirement income planning to a machine. I’ve been working on retirement innovations for 40 years, and while I may be able to program all my formulas into online tools, retirement income plans need a human touch in order to find the unique combination of plan elements that match each retiree’s objectives.

I will say, however, that compared with 40 years ago, artificial intelligence plays a much bigger role in planning. If you know how to use AI, or robo-income analytics as we call it, you can get the retirement income plan that fits you best.

That is why Go2Income.com announced the first robo-income tool that enables retirees and near-retirees to design their own Plan for Retirement Income. With our robo-income program, simply labelled a “Guide to Retirement Income” (Guide), you can identify the planning objectives that will best match your financial goals of lifetime income, liquidity and legacy. And you can figure out how that income should be allocated among dividends, interest, IRA withdrawals and annuity payments.

When Retirees Question More Retirement Income

July 26, 2020 By Jerry Golden in Income Allocation Tags: annuity payments, Income allocation, Income Boost, lifetime income

If your boss offered you an increase in pay totaling $450,000 from age 40 to retirement at 65, your first reaction would probably be joy, followed by relief knowing that your retirement finances would be in good shape. Then you might ask some questions. Like, what do I have to do to earn that money?

When Go2Income determined that an Income Allocation retirement income plan could produce an Income Boost of as much as $450,000 over a typical Asset Allocation plan, I expected to hear lots of joyful reactions. Instead, the possibility of such an improvement in retirement fortunes raised more questions.

Fair enough. When you count on your retirement savings, together with Social Security, to produce the bulk of your retirement income, it is wise to be careful.

On the other hand, it is smart to consider and investigate new approaches. Some of them might result in a much better retirement. Smart investors have lots of questions about new ideas. I will answer the questions regarding Income Boost in the sections below.