How to spend all of your retirement funds, die broke, but STILL, provide tax-free funds for your children

                                                       

                            Retirement Planning Made Easy

                                           Author,: Randy Taylor, Lic. # 0643596,

                                            Calif.  Retirement specialist since 1983.                                         

                                           Published in financial periodicals since 1998.

                                           Copyright, Creative Commons Licensing. This article 

                                           may be copied or re-distributed as long as it is copied in

                                           it's entirety and not altered in any way.

The Problem: How Can I defer taxes on my retirement until needed, spend it all and still pass on a financial legacy to my children income tax free?

The solution: Combining the benefits of two safe financial vehicles to do all of the above.

Step #1: Making sure that you will accumulate saving tax-deferred without losing any of your current funds to bad investments, taxes, or stock market fluctuations.

Step # 2: Keeping the savings accounts safe while deferring taxes on future income received.

The closer that you get to retirement the more important it becomes to keep all or most of your 

nest egg safe so that it will be there when you are no longer working and need it the most.

Annuity savings accounts are often the best solution if your goal is future income payments.

Why choose an annuity savings account instead of a bank c.d. or possibly a bond?

 This is easy!  Annuities are designed specifically for retirement purposes and offer 3 major benefits for the retiree:

                   1.) Income tax deferral on all interest until it is received.

                   2.) Guaranteed safety of principal and a minimum interest rate if held 

                   3.) Any unspent funds pass to your heirs at death without the need of a will or trust.

There are approximately 1.200 insurance companies to choose from in most states. (1,274 in California for example) You will want to find a company that has minimal exposure to junk bonds so that they can stay competitive while you are growing your account. 

What type of annuities are best for retirement and which product features should you consider?

                 1.) Variable annuities are best suited for those that want maximum upside growth potential but may not offer safety of principal as a result

                 2.)  Fixed Indexed annuities have minimum interest rate guarantees and no exposure to decreases with the market drops if they are used specifically for retirement purposes.

#3)  How to provide  an income tax free account for your children after you have passed away.

A simple solution would be to buy a life insurance policy equal to the value of your retirement account projection payable to your children. This gives you "permission" to spend everything you own on your retirement since the children will still get theirs income tax free when you are gone.

Very important:

Both of above alternatives offer an option to have a guaranteed level & in some cases and increasing income payment for life that is often higher than bonds. For a 65 yr. old this could be in the 6% range for life, even if the entire account is spent. The variable annuities might pay out approximately 1% less but offer more money if you cash the account in in 1 lump sum. These alternatives involve paying from .75 of 1 % to 1.5 % approximately in exchange for lifetime payments should the product itself perform poorly.

Summary:  This is not meant to be specific legal, tax, or investment advice but is offered up rather for entertainment purposes and a different point of view. An honest and experienced multiple company insurance broker or financial planner can help you with this. Do not make any purchases or transfers of any type before sitting down with your advisors.

I personally am still accepting new clients in the California area for those that would like a second opinion of life insurance, annuity savings accounts, or legal shield/ identity shield programs.

I can be reached at the links below. If you find this article helpful; please share it in it's entirety without alteration via social media.

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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983
(916) 601-5270

Photo above from Sheboygonwidds.com

Retirement mistakes Baby Boomers Make

How To Get the  Most From Your Retirement Money With Safety

1. What is the most common mistake that people make in selecting investments? They often don't consider that there are 3 phases to investing money. Accumulation phase, distribution phase..spending, and Legacy phase.
   They let greed or excitement get them thinking too much about short term results, and invest too aggressively..instead of building a safe foundation first. The result is that they experience losses that they don't have time to recover from. Warren Buffett once said that there 2 main rules in investing. 1..Don't lose money....and #2..see rule #1. Investing should be a marathon and not a sprint!
2. Example trying to TIME when to buy and sell in the stock market instead.
3.  Peter Lynch who once ran the largest mutual fund in the world said: Marketing timing is impossible.

2. How does age enter into what types of savings accounts people should consider? The closer to retirement you are; the more conservative you have to be since you don't have time to recover from stock market losses. 1 rule of thumb that is a place to start is: To look at your age as a starting point for which what percentage of your savings would go into something with guaranteed interest , and the rest should be invested more aggressively.
   Younger people still need a foundation; but have MORE time to re invest and recover from losses.

3. How much money should someone put at risk?
   As much as you fell you can afford to lose and still recover.
   Other things enter into the formula too like..if you have insurance of different types, disability income etc.. Then you can take a little more risk. Getting back to age again, Baby boomers might have to be safer with their money because losing money when you are closer to retirement would create a life style change., They would have to put off retirement several years for example.

4.)There is the big rush now for Baby Boomers to retire. How can they best use their current IRA money? I like indexed annuities which offer safety, tax deferral on the interest and secondary guarantees that can pay as much as 6 to 7% out for life..

5.)What is the most commonly overlooked piece in a retirement puzzle?

Risk management while in the accumulation phase.. Retirement savings require income..Being able to set aside money for your childs college or a home purchase requires money. its lost if you disable or die.. Losing a law suit could bankrupt people..There are programs like legal insurance to help you..$19 month.

All so, simple insurance protection against income  loss

due to disability or death is often overlooked.

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Life insurance and I.R.A. Account Specialist
Serving clients and brokers since 1983

How to get guaranteed life time income from an annuity

How to get the safety, tax deferral, and guaranteed lifetime income tax deferred annuity savings accounts.

Older traditional annuities versus, the newer more flexible annuities with income riders

In the past and still offered now; are programs where you can take immediate guaranteed lifetime income
from a savings account backed by an insurance company or payment for a set period such as 10 years only. The payment amounts are based on your age and which payment option you choose...(10 years only, lifetime only; etc.)

With the traditional plans you can not change your mind if you want to get at any principal and interest that is not yet spent; should you need it. You trade access to the deposit in exchange for lifetime income payments.

Newer plans also offer lifetime guaranteed income but with other options

Tax deferred growth
Avoidance of the added expense of probate, a will , or trust in most cases. See your attorney.

You can get at cash in your account that has not been spent, should you decide to cash in any balances in stead of continuing to receive payments.. See policy for details.

The optional income rider is priced at about 3/4 of 1% per year.

The rider cost does not reduce your retirement payment and only applies to you accumulation account
which is available at death or at partial or complete surrender.

The income rider is very well suited for those that  want to take income payments rather than a a lump sum.

With some companies the guaranteed crediting for the account used for income payments can be as high as 6% until spent. Some companies only guarantee the crediting for the first 10 yrs. so you would want to see your advisor before making decisions on any annuity regardless of your goal.

For more details; see your financial advisor and/or insurance broker. For people that might want to defer
taking income until required by the IRS etc
, I have attached an example of a program well suited for many that want the option of a level income payment or one that increases with inflation below:

https://www.allianzlife.com/annuities/fixed_indexed_annuities/masterdex_x.aspx

With this and all financial decisions you should see  the advice of an experienced, insurance broker,
tax advisor, and/or an attorney experienced in insurance matters.

To contact the author, Randy Taylor, or to schedule as a speaker :
freeestimates71@yahoo.com
https://www.facebook.com/RandyTaylorFinancial
Linked in Recommendations:http://www.linkedin.com/in/randytaylorlifeandannuities

Creative commons copyright 2/28/2014
Randy Taylor
Licensed agent/broker since 1983
Ca. Lic. # 0643596

KEEPING YOUR FINANCIAL ADVISOR OR INSURANCE AGENT HONEST

Article #2 in the series:  How to evaluate and compare an insurance company for financial strength.
Ask your advisor for a "Vital Signs Report" for any insurance company you are considering.

A "Vital Signs" report is an objective spreadsheet that summarizes and compares up to 8 insurance companies on 1 page; for several important financial safety criteria. This can help protect you from a biased or commission driven advisor from offering a company to you that is considered less than acceptable by honest and client focused advisors. You can even specify which companies you would like to compare.

What kind of information is on a Vital Signs Report?
First of all, 5 different and qualified rating agencies analyze key criteria such as the relative risk inherent in any insurance companies investment portfolios, asset growth, bonds in default and what types of investments the carriers are holding.

How can a layman interpret the results?  This is made easy for you.
Each of the 5 rating services assigns a percentile rating to each carrier on the report.
The 5 ratings are then averaged and assigned a composite rating known as a "Comdex percentile"  The higher the number, the safer the company is considered to be. My opinion is that an insurance company should have at least an 80% Comdex rating.

Aren't all insurance carriers about equal?
Not really.  The example attached shows for example, that Transamerica Life has a strong Comdex rating of 93%; an elite number;while the well known AAA has only a 60% rating.


Are there safeguards for doing business with companies licensed in California?
Yes, there is a California Guarantee Association that protects the consumer up to certain limits for life insurance and annuity claims; but an agent is not allowed to discuss that with you prior to a sale since it is considered unfair marketing.
In summary, you should not only expect your advisors to make product recommendations from companies that are competitive; you should also ask for a financial safety comparison of the specific company recommended versus other companies that your advisor has researched. The vital signs report is an industry standard that is recognized and used by the more diligent advisors.
This article is not offered as investment advice; but is offered as a tool to help the layman compare insurance companies for financial strength. 
A sample report is available by calling the phone number below and leaving your email address.
Randy Taylor
1(916) 601-5270