Retirement Income Plan — Better Than a Pension?

April 6, 2021 By Jerry Golden in Income Allocation Tags: annuity payments, better than a pension, Income allocation, Income annuities, Jerry Golden, lower investment fees, lower taxes, retirement income

For two generations, people have been saving for retirement. Originally, indirectly by their employer; and then on their own.

After WWII, the middle class of the Silent Generation enjoyed a great economy and often also benefited from the company pension, which promised to guarantee secure income in the after-work years.

Baby Boomers began to lose pensions as an employer benefit but gained the IRA and 401(k), which required them to save on their own with in some cases an employer-matching contribution.

Now there are tens of millions of Boomers with trillions of dollars in these qualified savings accounts invested in stocks, bonds and cash, and several trillions of dollars of equity in their homes. Unlike the pension era, these Boomers have to decide how to convert those savings into a lifetime of retirement income.

A recent article in Employee Benefit News points out that “traditional retirement plans aren’t enough to secure a worker’s financial future anymore.” Instead, everyday employees need help not only with savings, but often with unexpected health care costs and other emergency expenses.

Name Your Plan – Select Both Retirement Income and Legacy Target

March 6, 2021 By Jerry Golden in Income Allocation Tags: annuity payments, income all, legacy plan, lower fees, lower taxes, Name your plan, Retirement Planning

You know how much income you need and what kind of legacy you want to leave, but what you don’t know is if you might be able to hit those targets. Here’s one way to find out.

Everyone has retirement goals, but the big question is, are they attainable?

Take the 70-year-old woman I wrote about recently. She has $2 million in retirement savings, and she’d like to use those savings to generate $70,000 in annual income increasing by 2% a year early in retirement, but still be able to leave her heirs a $2 million legacy at age 90. Can she do it?

That’s a question many financial advisers might have trouble answering, but after seeing the results of many, many plans over the years, I believe I’ve created a method that can answer her question using Income Allocation planning. While her legacy results will depend on market returns, this planning method incorporates annuity payments into the mix and lowers costs and taxes to deliver reliable income.

Study Says The Cost Of Retirement Has Tripled!

February 11, 2021 By Jerry Golden in Income Allocation Tags: annuity payments, Income allocation, Legacy Income Tool, Pay for retirement, retirement income, retirement trifecta

Don’t Panic, A New Legacy Income Planning Tool Helps You Manage Your Retirement

Advisor Perspectives magazine reported last month that you will need much more in retirement savings today to produce the same amount of retirement income. Three times more!

Current low interest and dividend rates simply make it impossible, the article said, to replicate the income of just a few years ago. For instance, historically it has cost $26,267 in savings to produce $1,000 of annual income with a 50/50 portfolio.

Today you need about $79,118 to reap that $1,000.

How to Turn Your Retirement Savings into Retirement Income

November 20, 2020 By Jerry Golden in Income Allocation Tags: annuity payments, Income allocation, retirement advisors, retirement income, retirement savings

Your retirement income plan starts here with a primer on Income Allocation planning, my method of creating a reliable stream of income big enough and steady enough to last you through retirement.

I have been working a long time on retirement planning that creates more and safer income for retirees. So long, in fact, that I sometimes forget the subject is new to most investors. They get much of their financial information from their advisers — who often simply treat these investors as “de-accumulators.” Another way to describe their message is, “Invest like you did when you were 55, only more conservatively.” In my opinion, that is not helpful guidance.

Jerry’s Retirement Ideas

November 10, 2020 By Jerry Golden in Income Allocation Tags: annuity payments, Income allocation, Income annuities, income for women, Jerry Golden, tax benefits

Women Generate High Retirement Income Nearly Tax-Free!

IRS Tax Rules Favor Females

One of the lessons that women learn as they make plans to convert their retirement savings into income is that they should plan for lower income than a man might take from an account of the same size.

That’s because women live longer, and they need to ensure their savings last longer.

The IRS, however, is not allowed to consider gender when it writes its tax rules. That means women can use some of their personal (after-tax) savings to buy annuity payments and benefit from their favorable tax treatment. Suddenly, gender is a plus, not a negative.

Payments from an income annuity purchased with personal savings receive a tax break because a portion of each annuity payment is considered a return of previously taxed principal, until the principal has been paid out. Looking at an annuity quote as of Nov. 7, a female aged 70 with $1 million can generate $66,712 per year in guaranteed lifetime annuity payments and be taxed on only $2,535 per year until age 85. After age 85, when payments become fully taxable, she is likely to have larger tax deductions from unreimbursed medical and caregiver costs.

In the example above, 98.5% of the income is received income-tax-free, translating to less than $1,000 a year in taxes.

While men receive a tax benefit, too, it’s not as large as the one for women.

In this environment, generating more income from annuity payments is crucial; paying fewer taxes is just icing on the cake.

Finally, a win for women everywhere.

Click here to get an annuity quote and the tax benefits you can get. Or contact me for a conversation about even more tax benefits.