A New Approach to Retirement Income Planning for Women

November 23, 2020 By Jerry Golden in Income Allocation Tags: Income allocation, Jerry Golden, retirement income, Retirement planning for women

I want to reinvent retirement income planning for women.

Women have a lot going against them — much more than men — when it comes to creating enough income to last through their retirement years. Set out below is a list of some of the impediments women must overcome, along with solutions that will provide a satisfying retirement. Now, while all women face actuarial obstacles, i.e., longevity and caregiving, not all face the financially related issues. However, without an approach that addresses all of the issues we may leave some important ones out.

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.

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.

When Rates on Money Market Account Approach Zero %

June 23, 2020 By Jerry Golden in Income Allocation Tags: annuity payments, Income allocation, Jerry Golden, retirement income, zero percent interest

A headline in the New York Times the other day caught my eye. It read: Rates at Rock bottom Are Expected to Linger in Fed’s Latest Forecast.

The question that would be worthy of an in-depth article is, What Do Low Interest Rates Mean to Current and Future Retirees?

Based on conversations I’ve been having about exporting our Income Allocation planning method to Japan, which experienced the “Lost Decade” of ultra-low (and even negative) interest rates, this is on the mind of investors around the globe. I tell them – and you – that an Income Allocation plan for retirement income that includes annuity payments, should address their concerns.

What to do with the cash in your retirement portfolio earning almost no interest?

End of Decade Closes with Three Surprises for Retirement

January 16, 2020 By Jerry Golden in Income Allocation Tags: Income allocation, Income annuities, Jerry Golden, retirement income, retirement savings, stock market

An impressive year in the stock market concluded the decade with a bang, which means it is a good time to ask yourself, “Are my retirement plans better off in 2020 than they were a year earlier?”

Along with a Dow Jones above 28,000, we have witnessed two other noteworthy events: Advisory firms are developing lower-cost strategies to help you spend that stock market windfall in retirement. And the government has made it easier for employees to turn their savings into pension-like lifetime income.