Locking Up A Guaranteed Tax-Free Lifetime Income

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What’s your greatest fear about retirement?  What direction will taxes take in the coming years?  If your answers were “outliving my money” and “higher” you are in the majority. Given these two looming fears, would a guaranteed tax-free paycheck for life during retirement interest you?  As impossible as it may seem, it can be a reality without hassle and without risking the money you’ve earmarked for retirement. The only requirement is that you have “qualified” retirement money on which taxes have not been paid.  This could be an IRA or an employer sponsored retirement account like a 401(k) that can be moved now or at retirement. There are no age, income or wealth limitations and no minimum/maximum requirements.  The only hassle is making a phone call to who now holds your qualified retirement money and completing a one-page form.   Only two steps are needed to realize tax-free retirement income.

Step one is to reclassify some qualified retirement money as a Roth IRA (you choose how much and when). Once reclassified, future earnings (regardless of where the money is invested) and withdrawals (if needed) are tax-free.  Unlike a traditional IRA, the Roth IRA has no minimum required withdrawals and can be passed to a surviving spouse or beneficiaries for their tax-free use.  If you think your qualified money will not be needed for retirement or are sick of forced withdrawals you don’t need, the Roth IRA is an excellent way to leave your heirs a tax-free legacy.  Unfortunately moving money from fully taxable (IRA or 401k) to a taxfree Roth IRA has a “catch”. The  “catch”:  money  reclassified  to  a  Roth  IRA  is  taxed  as  ordinary  income  during  the  year  of  the reclassification.  But, if taxes are expected to rise, why not pay them today at a “discount” rather than tomorrow at a “premium”?  If not reclassified as a Roth IRA, taxes will eventually be paid because the government requires you to start withdrawals and paying taxes no later than age 70½.  The Roth IRA allows you to decide when taxes are paid and smart retirement-minded folks are opting to pay less now rather than more later.  What’s more, if the taxes are paid from other money more of your retirement money can be tax-free.  If you have $100,000 in a traditional IRA and pay 25% in taxes you’ll be left with $75,000 for investments on which future earnings will be taxable.  On the other hand, if the $100,000 is converted to a Roth IRA and the taxes paid from other money, the full $100,000 continues earning tax-free and helps keep you in lower tax brackets. The Roth also has a “Mulligan”:  money reclassified to a Roth IRA can be moved back to a traditional IRA without tax and penalty until October 15th of the following year.

If you are 59½ years old or more, you can withdraw the full amount reclassified as Roth at any time tax-free and without penalty; however, earnings are not available penalty free until the Roth has been open for five years.  Roth withdrawals are “first-in, first-out” so the freeze on earnings does not present a problem. Since Roth withdrawals are not taxable income it is easier to stay in lower tax brackets and thereby reduce taxes on Social Security and other income.  Roth delivers tax-free income but how about the lifetime guaranteed income?
Step 2 is changing where you keep your Roth IRA money.  While there is no need to switch investments when reclassifying to a Roth, only one option delivers a guaranteed lifetime income: an annuity.  A fixed index-linked annuity offers safety, pays competitive interest rates, has upside potential without downside risk, gives you lump sum access to your money if needed and permits conversion to a guaranteed lifetime income at your option.  These advantages are why I recommend you discuss fixed index-linked annuities with your financial advisor.  So if you want a guaranteed tax-free lifetime income it is available in a simple two-step process: first convert all or some qualified money to a Roth IRA and second is to purchase a fixed index-linked annuity with the guaranteed lifetime income option.  No more worries about market ups and downs, interest rates gyrations, higher taxes or running out of money in retirement: lifetime peace and end of story.

Call us today at 1-954-781-2220 or fill out this short survey so that you can set up an appointment with one of our top licensed agents who specialize in retirement income planning and learn potential ways to lock in a guaranteed* monthly cash flow in YOUR retirement! In addition, you will receive a copy of the publication “Is An Annuity Right For You”
We will help guide you in your retirement and find the best contractual annuity guarantees** that are most suitable for YOUR unique financial situation.
*Annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

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