Today’s Prep:
When should you use your IRA and how can it be best utilized? These three questions from the mailbag all mention their IRA as an option, but what does Eric have to say about all of these situations? Find out!
Equipping Points:
On today’s episode of the Retirement Ready podcast, Eric answers three questions from the mailbag. All three situations are different, but each person is considering what to do with their IRA as a part of the solution. What does Eric suggest?
Andy in Ames wants to quit his corporate job to start up his own landscaping business. To fund this new venture, should he take money from his IRAs or get a business loan? Eric recommends the business loan if you can get one. The money out of the IRA will be taxable, whereas the loan will create a deduction. Working with a bank on the business loan will then build a relationship that could provide future opportunities for you.
Jim in Johnston has been able to live comfortably on his pension and Social Security since retiring last year. He just realized though the pension will not adjust each year for inflation, so what should he do with the money in his IRA in the future? Eric shares ways to save money, even in retirement to help offset some of the cost of living increases. How can you trade your time for money? Having a coordinated plan will ensure you have the right balance investments that align with you risk tolerance, liquidity, and safe money.
Jan in Altoona is turning 70 at the beginning of next year and is annoyed that she has to start taking money out of her IRA. How can she circumvent this rule? Eric clarifies that you can reduce your taxes legally but not altogether avoid it. The SECURE Act did change the required minimum distribution age to 72. Eric shares a few different tax strategies you can implement though, such as giving to charity or doing a Roth conversion.
Listen to the entire episode or click on the timestamps below to skip ahead.
0:47 – Mailbag: Should I take money from an IRA or get a business loan?
4:08 – Mailbag: My pension won’t adjust for inflation. What should I do?
7:25 – Mailbag: I’m annoyed about taking money out of my IRA. How can I avoid that?
Today’s Takeaway:
“Inflation in retirement is a little bit different for retirees than it is for people who are working because you have time to trade time for money.“
-Eric Peterson
Related Resources:
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Mailbag: Moving To A State With Income Tax And More
In this episode, Eric is answering your questions! We’ll cover a range of topics today, including key considerations for income taxes when moving to a new state, how to initiate financial conversations with parents or grandparents, and whether using a life insurance policy to save for a college fund is a wise choice.
Read More
What Is Lazy Money?
What is lazy money and why do you want to not have too much of it in your retirement portfolio? Simply put, lazy money is money that isn’t growing as much as it could be. Having your money grow and work for you is a key part of building a solid portfolio, so Eric breaks down some strategies to help get the most out of your money in this episode.
Read More
Retirement Planning Today Is Harder Than It Used To Be
Retirement planning simply isn’t the same as it used to be. From changes in life expectancy, the lack of pensions, and getting caught in the sandwich generation, there’s a lot to keep in mind when putting together your financial plan. Instead of taking advice from others who may have retired in a different era, it’s important to understand what strategy is right for you.
Read More
Social Security Variables That Impact Your Claiming Strategy
After so many years of paying into Social Security, you might feel ready to reap the benefits. But before you get too eager, it’s best to have a thorough understanding of the different variables and how to best leverage them.
Read More
Retirement Real Estate Decisions: Downsizing, Snowbirding, and More
One of the key discussions you may have in retirement is what to do about the house. Should you downsize your home? Pay it off early? Buy a vacation home and become a snow bird? Eric emphasizes the importance of considering not just the financial implications but also the lifestyle changes each of these decisions entail. Weighing out the pros and cons of each decision can highlight what is right for you (which isn’t always the same as what your neighbor is doing).
Read More
Healthcare in Retirement
One major (yet often overlooked!) expense in retirement is healthcare. Especially if you are retiring early, healthcare can be a huge expense as you bridge the gap between your working years and when eligible for Medicare. Not only will you have an increased monthly cost, but you may need to budget for additional medical costs as time goes on or even long-term care needs.
Read More
Family Matters When It Comes to Finances
Today we talk about what happens in a family, particularly when someone has passed away and the financial impact that can have.
Read More
Water Wheels and Retirement Planning
Have you ever wondered how a water wheel can relate to your retirement planning? It might seem like an odd comparison, but in today’s podcast, Eric breaks down this fascinating analogy and its significance in maintaining a stable financial future.
Read More
Most Common Retirement Planning Mistakes
We all make mistakes from time to time. But what if your financial mistakes could be avoided with just a little insight? Eric shares some of the most common retirement planning mistakes people are prone to make and what you can do to save yourself from heartache.
Read More
Common Complaints About Financial Planning
When it comes to planning for retirement, the relationship you have with your financial advisor is crucial. Many people express common complaints about their financial advisors, from taking on too much risk to paying high fees or a lack of communication. In today’s podcast, Eric sheds light on these concerns and offers valuable insights to help you navigate your financial journey.
Read More