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
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