Mailbag: Does It Matter Who Gets What Asset in My Legacy Plan?

Today’s Prep:

Think about the taxes! Eric answers three questions from the mailbag today that all involve financial decisions with tax implications.

(Click the featured times below to jump forward in the episode)

Equipping Points:

Allison in Johnston is about to turn 65 with plans to work another 2-3 years. She just found out that her previous employer’s pension requires her to take money as soon as she turns 65. Should she take the lump sum or monthly payment? Eric says to think about the tax implications. It all depends on your plan, how much income you have, and what you need to make your plan work. Getting a retirement review with a financial advisor may help as you make this big decision.

Larry in Ankeny has retirement savings, credit card debt, and a mortgage. Should he take out the retirement savings to pay off the debts? Eric says the answer really depends on your age, where your assets are, and the taxes. The credit card debt with the high-interest rate should be paid off sooner. Whereas the mortgage payment, you might want to consider if it is worth paying off just yet.

Renee in Des Moines does not have a complex legacy plan, but wants to leave something behind to her son, sister, and the church. She has life insurance, retirement savings, and then a house. Does it matter who gets what? Eric says, yes! Think about how things will be taxed and what will be more beneficial.

Listen to the entire episode or skip ahead to a particular question using the timestamps below.

[0:46] – Mailbag: Should I take the lump sum or monthly payment for my pension?

[4:55] – Mailbag: Should I use my retirement savings to pay off debts?

[9:57] – Mailbag: Does it matter who gets what asset in my legacy plan?


Today’s Takeaway:

What people don’t look at is: how about the tax nature of that pension? That pension is 100 percent taxable.

-Eric Peterson


More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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