How to Get Tax Free Income in Retirement

Video transcript:

Hi Patrick here with Retirement Lifestyles advisory group where it’s all about having the health wealth and freedom to live your dream retirement. And today’s quick tip is all about… How to get tax free income in retirement

How would you like to get to retirement and pay no taxes on the income from your retirement plans? 

I’m not foolin… The Roth IRA is a favorite among savers who use it, and for good reason. Whether you’re 25 or 65, this retirement vehicle can offer major benefits and tax advantages.

You can still contribute the same amounts to a Roth IRA as a Traditional one, but the significant differences between the Roth and its traditional counterpart is when you pay taxes and how much money ultimately goes to Uncle Sam.

Financial planners routinely say younger people should invest in a Roth because they would benefit most from its many wonderful qualities. But the truth is, Roth IRAs are a good choice for people of all ages.

Here are three great reasons to consider the Roth IRA.

1)      You get tax-free income in retirement

With Roth IRAs, savers get a tax-free stream of income in retirement. And it's not just the contributions that come out tax-free. Uncle Sam doesn't lay a finger on any of the earnings or growth. That can make for a pretty sweet deal when you're talking about decades of your investments compounding.

The only catch is that you pay income tax on your contributions upfront.

Unlike the traditional IRA, which gives investors a tax deduction for the year the contribution is made, the Roth version lets savers contribute after-tax money today and withdraw principal and earnings tax-free later on. The roth lets you pay taxes on the seed instead of the harvest.

2)      No More RMD’s                                      

With a traditional IRA, when you turn seventy and a half years old, you’re forced to take RMD’s or required minimum distributions whether or not you need the money, and pay taxes on it. Depending on your other income amounts, you could potentially find yourself in a much higher tax bracket. Which means you pay higher taxes on all your income.

But, the Roth IRA has no required minimum distributions because you’ve already paid all the taxes. That means you can live to 120 without ever tapping your Roth IRA.

3)      Your heirs benefit

The hands-off approach the IRS takes with Roth IRAs is beneficial for your heirs as wellyou’re your plan is to leave behind an inheritance, how about leaving your beneficiaries a tax-free income that can be stretched over their entire lifetime.

**Let me give you an example. If you left a hundred thousand dollars to your 1 year old granddaughter and she only withdrew the minimum required by the IRS each year. That hundred thousand dollars would actually pay her over eight million dollars over her lifetime. And if it was a roth IRA… it would all be tax free.

Pretty cool huh? Thanks grandma!

Yes, the Roth IRA can be a really powerful planning tool.

But remember, all great Retirement Lifestyles begin with a plan. Do you have a plan, or just some ideas floating up inside your head? My dad always said, You can’t hit a target you can’t see. What you need is a written workbook that lays out all the steps to build the foundation for your successful retirement. Would you like to have a copy of that workbook?

I want to give you a FREE copy of my Retirement Lifestyle workbook to help you start laying your foundation. Click the link below or in the description to get your free copy today.

If you have any questions or feel like you want some personal help, click the link that says “I would like to schedule a call with Patrick” and it will bring up my personal calendar where you can reserve a phone call with me and we can discuss your situation and you can ask me any question you want.

There’s no charge for the call and you don’t need to worry about sending me any personal information or account statements.

Be sure to subscribe to my youtube channel Retirement Lifestyles Tv, you can click the logo button in the lower right corner of this video.

You can also check us out on facebook, at retirement lifestyles advisory group, be sure to follow and like our page.

And if you’re lucky enough to live in the north state, be sure you tune in to my radio show Retirement Lifestyles every Saturday morning at 9am on news talk 1057 KQMS.

Don’t forget to download your free copy of my retirement lifestyle workbook.

Thanks for watching today’s quick tip, be sure to click like button, feel free to share it and post any comments or questions that you have.

And I wish you the best in retirement!

** Hypothetical example, based on IRS life expectancy tables and 81.6 years of growth at 8% annual interest.

© 2017 McNally Patrick Daniel CRD #154642 is a Registered Investment Advisor in the State of CA, DBA Retirement Lifestyles Advisory Group. Advisory Services provided by Betterment LLC, an SEC Registered Investment Advisor, member FINRA/SIPC. Investments: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance never guarantees future results.
 
CA Insurance License 0C76421

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

How To Rollover Your 401k

Video Transcript:

Hi Patrick here with Retirement Lifestyles advisory group where it’s all about having the health wealth and freedom to live your dream retirement. And today’s quick tip is all about… How to rollover your 401(k)

When you change jobs or retire, you’ve got some choices to make when it comes to your current 401k.  I always like to say, if you’re not at your last job, your retirement plan shouldn’t be either. Today, the average person changes jobs on average 12 times during his or her career. So it’s not uncommon at all to start a 401k at one job only to find yourself moving to a new job a few years later. So what do you do with your old 401k? You typically have four choices when it comes to rolling over your 401k.

1)      Leave it at your old employer

2)      Move it to your new employer

3)      Cash it in… or

4)      Move it to your own IRA.

Let’s talk about the advantages and disadvantages of each one.

1)      Leaving it at your old employer. This is an option, only if the current plan will allow it, so assuming they do, the advantage is, you don’t have to do anything, just leave it alone. Here are a few disadvantages though…

·         You can’t make any additional contributions to the plan anymore. If you have other retirement accounts it may become difficult to manage all of them together. And any future changes to the plan may affect your returns.

2)      You can move it to your new employers plan. The advantage is that your retirement account continues to grow tax deferred and you can now start making contributions again. The downside is that your new plan may have limited investment options available to it. Maybe even less choices than your last one, so you may not be able to get the returns that you want.

3)      You can cash it in…. Let me say that again, you can cash in your retirement account..! First, Lets talk about the advantages

Now… Lets talk about the disadvantages. You’re going to set off a tax bomb of epic proportions. Not only are you going to be taxed at normal income tax rates, to may be subject to an early withdrawal penalty if you’re under the age of 59 and a half. Sometimes I don’t know why I even mention this option… but you need to know them all.

4)      Roll your 401k to your own IRA. This is typically the best option because it gives you the most access to the world of investments. It’s also a lot easier to consolidate multiple accounts, you know, like the five other 401ks you left at other jobs? Well, you can now pull them all into one account. There’s no taxes due, if the rollovers done correctly, so you can still continue to defer the account and also contribute to it.

The disadvantages… loans are generally not available against your IRA and you won’t get any employer matches.

So there’s the four main options you typically have when it comes time to rollover your 401k. Now, if your getting ready to retire, you pretty much only need one option… number four, roll it into your own IRA account, and then it’s time to do some income planning.

Be sure to download your free copy of my 401k Rollover checklist. There’s a link in the email you received and also in the youtube video description below.

A lot of times when it comes to rolling over a 401k, people feel really intimidated, because they don’t want to accidentally trigger a tax problem, which unfortunately happens more often than not.

So, if you feel like you want some additional help or have some more questions, I’d like to invite you to schedule a free strategy session phone call with me. Simply click the link below or in the youtube description that says “I would like to schedule a call with Patrick” and it will magically bring up my personal calendar where you can reserve a phone call with me and we can discuss your situation and you can ask me any question you want.

There’s no charge for the call and you don’t need to worry about sending me any personal information or account statements.

Be sure to subscribe to my youtube channel Retirement Lifestyles Tv, you can click the subscribe button below.

You can also check us out on facebook, at retirement lifestyles advisory group, be sure to follow and like our page.

And if you’re lucky enough to live in the north state, be sure you tune in to my radio show Retirement Lifestyles every Saturday morning at 9am on news talk 1057 KQMS.

Don’t forget to download your free copy of my 401k Rollover checklist

Thanks for watching today’s quick tip, like it, share it and post any comments that you’d like.

And I wish you the best in retirement!

© 2017 McNally Patrick Daniel CRD #154642 is a Registered Investment Advisor in the State of CA, DBA Retirement Lifestyles Advisory Group. Advisory Services provided by Betterment LLC, an SEC Registered Investment Advisor, member FINRA/SIPC. Investments: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance never guarantees future results.
 
CA Insurance License 0C76421

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

What's Your Retirement Lifestyle Plan..?

© 2017 McNally Patrick Daniel CRD #154642 is a Registered Investment Advisor in the State of CA, DBA Retirement Lifestyles Advisory Group. Advisory Services provided by Betterment LLC, an SEC Registered Investment Advisor, member FINRA/SIPC. Investments: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance never guarantees future results.
 
CA Insurance License 0C76421

 

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

 

Know Your Numbers

© 2017 McNally Patrick Daniel CRD #154642 is a Registered Investment Advisor in the State of CA, DBA Retirement Lifestyles Advisory Group. Advisory Services provided by Betterment LLC, an SEC Registered Investment Advisor, member FINRA/SIPC. Investments: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance never guarantees future results.
 
CA Insurance License 0C76421

 

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

Controlling Personal Debt

Retirement Lifestyles Weekly Quick Tip



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Subscribe to my YouTube Channel


Video Transcript:

Hi I’m Patrick McNally with today’s quick tip from Retirement Lifestyles.

This week I’m talking about controlling personal debt

Let’s start with the cold hard stats… 7 out of 10 Americans live paycheck to paycheck and are loaded with credit-card debt.

In fact, according to NerdWallet.com, the average American household has $134,643 in debt with credit card balances of $16,748. The average interest rate runs in the mid- to high teens at any given time.

Let me ask you a question, have you ever felt like you wanted to start saving and investing more, but just don’t have the extra cash to do it?

Once you learn how to control your personal debt, you’ll be able to get on track and accomplish your financial goals.  Here are 5 tips to get you started.

First, you need to understand that some debt is good.                

For example, borrowing for a home usually makes good sense. Especially because you can write off the mortgage interest on your taxes, thereby reducing your overall tax bill.

Second, you also need to understand that some debt is bad.

It’s usually not a good idea to use a credit card to pay for things you consume quickly, such as meals, it doesn’t make sense to finance your hamburger… the same goes for vacations, unless you can pay off your bill in full every month. Using a card for these items is the easiest way to fall into debt, so try putting aside some cash each month for these things so you can pay the bill in full.

Now, I can hear a lot of you saying, but Patrick I want to get the airline miles on my card… ok, look, if you want to use that card, fine, but at least save the cash for it first over a period of weeks or months, then charge it, and then pay it all off!

Number three… Get a handle on your spending.

Most people spend thousands of dollars without much thought to what they're buying. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or better yet, use it to pay down your debt more quickly.

Number four…Pay off your lowest balance credit cards first.

If you have multiple credit cards, add up the monthly minimum payments from each one. Whatever that number is, imagine of you could be investing that amount, instead of sending it to a credit card company.

The key to getting out of credit card debt efficiently is to pay down the lowest balance first. That way you get a small win each time you pay something off and your confidence grows. Now, whatever the minimum payment was on the last card… add it to the next one and you’ll snowball your way out of debt.

I’ve included a link below and in the youtube description for a free debt snowball worksheet. It will help you list out your credit cards and the balances. Go ahead and download it, put it to work and watch the debt melt away.

And finally number five, expect the unexpected.

Set up an emergency fund with a thousand dollars in it. You always need a cash cushion in case of an emergency. If you don't have an emergency fund, a broken air conditioner or damaged car can seriously upset your finances.

Thanks for watching today’s quick tip, like it, share it and post any comments that you’d like.

If you would like to learn more about how we help clients with retirement planning, click the link below that says “I would like to schedule a call with Patrick” and it will magically bring up my personal calendar where you can reserve a phone call with me and we can discuss your situation and you can ask me any question you want.

There’s no charge for the call and you don’t need to worry about sending me any personal information or account statements.

Be sure to subscribe to my youtube channel Retirement Lifestyles Tv, you can click the subscribe button below.

You can also check us out on facebook, at retirement lifestyles advisory group, be sure to follow and like our page.

And if you live in the north state, be sure you tune in to my radio show Retirement Lifestyles every Saturday morning at 9am on news talk 1057 KQMS.

Thanks again for joining me today, and I wish you the best in retirement!

Retirement Lifestyles Weekly Quick Tips

Weekly Update May 30th, 2017

This Week's Update is all about Asset Allocation..!

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