retirement savings Archives - Page 2 of 2 - Jerry Golden on Retirement

The power behind Income Power

November 10, 2017 By Jerry Golden in Income Power Tags: Deferred income annuities, Income power, Kiplinger, Learning about Income Power, retirement savings

It’s hard to avoid advertisements that knock annuities. In fact, once you start doing online research about retirement, the warnings and diatribes will follow you to your inbox.

Every time I see one of these, I think of the quote from Albert Einstein: “If at first the idea is not absurd, then there is no hope for it.” Or to put it another way, the stages of reaction to an idea follow the predictable pattern of reject, resist, embrace and, finally, self-evident.

Having spent my career in the insurance, annuity and retirement industries, I know that certain annuities are overly complex. On the other hand, some are elegantly straightforward in their purpose and design. So, it’s just wrong to dismiss a category like annuities without investigating and understanding all the products or services within that category. More

Blog re: End of Year Tax Planning – Yes, Again!

August 22, 2012 By Jerry Golden in Interesting Articles Tags: Dependable spendable income, retirement income, retirement savings, tax planning

Over the next few months, I’m sure you’ll see a lot of stories regarding year-end tax planning. (Here’s a link to a typical story: “What Some Investors Are Doing to Anticipate a Tax Increase” by Paul Sullivan). This year, these stories should be more numerous, mainly because of the uncertainty surrounding the so-called Bush tax cuts. Unfortunately, most of the advice reported on is likely to be based on a flawed approach: they’re likely to ignore the purpose for which these taxable investments are being held, e.g., supplemental retirement savings; part of wealth transfer program; college education fund; or short term expenditures such as a wedding, home renovation, travel plans, etc.

Each broad category of savings should have its own unique strategy in the current economic environment.

Let me deal with one I’m most familiar with – supplemental retirement savings. As the founder of the Savings2Income (S2I) planning method and sponsor of the www.Savings2Income.com website, my team and I studied this area considerably to develop what we consider the best approach to saving and investing for retirement.

While S2I is primarily focused on the middle market and mass affluent investor, the strategy works for HNW investors as well. Here’s how both types of investors ought to apply the strategy as part of their 2012 year-end tax planning, as well as longer term retirement planning.

Assuming you’ve identified a portion of your non-qualified financial assets (which excludes IRAs and 401(k) plans) that are long term and needed to generate retirement income, the year-end strategy is quite clear and simple if the Bush tax cuts expire for you:

Sell a portion of these taxable investments, realize any capital gains in 2012 at the lower capital gains tax rate, and establish a new cost basis for these net assets.
Invest these net proceeds into a no load Variable Annuity to be used as a future source of your retirement income.

If you follow the S2I planning method for converting savings to income, this strategy can produce a dramatic increase in after tax retirement income derived mainly from lower fees and tax deferral.

Almost as important, you’ll be able to tune out on all tax and investment timing discussions on this important part of your savings. And, you’ll only pay taxes on what you withdraw (even then, some of what you withdraw is considered a return of principal, not income) and not on what you earn each year on this part of your savings.

Even if the Bush tax cuts don’t expire and/or are continued for you, it is still a good strategy to consider.

Jerry Golden Founder of www.Savings2Income.com and CEO of GoldenRetirement.com
convert your retirement savings into dependable, spendable income

Debt Deal and Market Downdraft Got You Worried?

August 11, 2011 By Jerry Golden in Interesting Articles Tags: Deb Deal, personal savings, retirement, retirement savings, U.S. Debt Deal

What you can do to protect your retirement savings.

With mind-numbing stories coming out about who won and who lost the debt deal debate, and whether the debt deal really solved anything or only pushed it to a super committee, individual investors are still bewildered, frustrated and nervous. Now, with the stock market falling and interest rates behaving in seemingly irrational ways, Americans are skeptical as to the right strategy to adopt today in planning for retirement.

Here are some smart moves that you and other investors can consider making right now that will save you money and perhaps help you sleep a little more peacefully.

Save taxes on additional savings –
Statistics show that investors are on average increasing their savings, and while economists see that as a negative for the economy, I view this as a positive. However, if the savings are invested in accounts, funds, etc. outside a 401(k) or IRA, everyone should be tax-smart with these savings. While we don’t know what any “tax reform” might bring, I suggest you consider investing a portion of your retirement savings in a no load variable annuity (VA). Not only will that enable you to defer taxes on investment earnings until these funds are withdrawn, it could also help result in a lower tax bracket for you. That might be particularly helpful if tax reform eliminates or caps some of your favorite deductions.

In terms of timing, with the value of these taxable accounts taking a beating these past few days, now may be the time to sell a portion of those securities with little or no gain, and have any market recovery take place in a tax-deferred account. Also, with the tax benefits of annuity-investing in otherwise taxable fixed income options, this new VA account could be invested more conservatively.

In general, the time to move up in tax class, e.g., regular IRA to Roth IRA, or taxable to tax deferred, is on a market downturn.

Lower Fees – While the government is
doing some belt-tightening, as are those who may be increasing their savings, why not ask financial service providers to do the same? That means you should:

Look for no load products;
Invest in low cost index funds; and
Find an advisor (if you use one) that charges asset-based fees of .50% or less.

These lower fees make any additional savings even more valuable. If the provider argues that you’ll get more value from their higher fees, then I would counter by stating that in this environment, the economy and the government moves or non-moves trump whatever the provider offers.

These are just two of my Seven Golden Rules intended to dramatically increase sustainable retirement income from Personal Retirement Savings.

You can find the Seven Golden Rules, and more about saving and investing for retirement, at www.GoldenRetirement.com.

Jerry Golden
President
Golden Retirement, LLC
www.GoldenRetirement.com