Today’s Prep:
Do you know the difference between a Roth contribution and a Roth conversion? What about individual bonds and bond funds? Eric explains the difference between these important financial terms so you can decide what should be included in your financial plan.
Equipping Points:
One of these things is not like the other so let’s play a game called, “What’s the difference?” Do you know the difference to these similar sounding but incredibly different financial terms? On this episode of Retirement Ready, you’ll learn the differences as well as some of the benefits of each financial tool.
What’s the difference between Roth contributions and Roth conversions? Start by understanding what a Roth contribution is and what your limits are. Can you do both a Roth contribution and Roth conversion in the same year? And while we’re talking about all things Roth, Eric explains the Roth 401(k), too.
It’s often important to have some form of life insurance. Should you have term life insurance or universal life insurance though? One is for a set period of time whereas the other is ongoing and paid out when needed. What are the pros and cons?
What are qualified accounts vs. non-qualified accounts? Qualified accounts are protected gains and not subject to income tax until you pull money out of those. Non-qualified accounts can be through a brokerage and you’ll pay taxes on it every year or sometimes even insurance products such as annuities. You don’t want all of your money in a qualified bucket, you want a balance.
When choosing between variable and fixed annuities, while they are both considered annuities, they can be very different. One is going to change with no guarantees and a lot of fees, while the other one has no fees but it’s a fixed rate.
Have you ever encountered the need to do a rollover? You can only do one 60-day rollover in a year and you only have 60 days to put it into an IRA. A trustee to trustee transfer can happen as often as you want in a year and doesn’t count toward a rollover. Why is that?
Finally, when you near retirement, you may have heard to have more of your money in bonds. Well, does that mean individual bonds or bond funds? Eric talks through the difference and helps you understand which will prove to be a better investment for you.
1:06 – What’s the difference: Roth contributions vs. Roth conversions?
5:08 – What’s the difference: term life and universal life insurance?
7:23 – What’s the difference: qualified account vs. non-qualified accounts?
9:12 – What’s the difference: variable annuity and fixed annuity?
11:26 – What’s the difference: 60-day rollover vs. trustee to trustee rollover?
13:59 – What’s the difference: individual bonds and bond funds?
Related Resources:
The Fool’s Gold of Retirement Planning
Making Home Renovations and Protecting Your Retirement Income
Dealing With The Death Of A Spouse
Today’s Takeaway:
[spp-tweet tweet= “In a planning process, you need to find the tools you can use to diversify away from the stock market to protect your money. You don’t want to have everything in the market because sometimes it goes down, a lot. –Eric Peterson“]
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Do You Have These Blind Spots In Your Retirement Plan?
Many people can have a couple of “blind spots” so to speak when it comes to their retirement plans. Do you worry you may not be accounting for everything you might need for your retirement? Then today’s episode is perfect for you!
Read MoreInside Out: How We Can Look at Finances Through the Characters of Pixar’s Latest Flick
There can be a lot of emotions when it comes to investing and planning for retirement. And what better way to discuss those emotions than through the characters of Pixar’s latest film, Inside Out 2?
Read MoreThe Importance of Preventative Care
Preventative care isn’t just for your health; it’s essential for your financial well-being too. By consulting a financial advisor early and often, you can avoid financial distress and make informed decisions that lead to a secure and fulfilling retirement. Many people will put it off for fear they will be told something they don’t want to hear or because of the perceived costs of financial advisors.
Read MoreRetirement Income
When planning for retirement, one of the most critical aspects to consider is your income. But what does this mean, and how can you ensure you have enough income to cover your needs and desires?
Read MoreFinancial Wisdom from Mark Twain
In the latest episode of the Retirement Ready Podcast, Eric invites us to explore the timeless wisdom of Mark Twain and how it applies to modern financial planning. Mark Twain, known for his wit and keen observations, offers quotes that are surprisingly relevant to today’s financial landscape. Eric takes these quotes and translates them into practical advice for those planning their retirement.
Read MoreUnderstanding Bonds in Today’s Market
Are bonds really the safe investment we’ve always been told they are? What percentage of assets should a retiree or pre-retiree hold in bonds? In today’s episode, Eric addresses some of his most frequently asked questions about the world of bonds…
Read MoreUnderstanding Your Financial Statements
Financial statements can often feel like a foreign language, filled with jargon and numbers that seem to have little relevance to your everyday life. However, understanding these documents is crucial for effective retirement planning. In the latest episode of the Retirement Ready Podcast, Eric breaks down the essentials of reading and interpreting your financial statements.
Read MoreFrom Graduation to Retirement
This one goes to the grads! Whether you know someone graduating high school, college, or even preschool, graduation marks a new stage and season in life. Similarly, retirement is a new chapter in life. It’s a time of change, celebration, and sometimes, uncertainty. On today’s show, we talk through the similarities between leaving school and entering retirement.
Read More