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So, number one, having a plan that is designed not to run out of money, even when we have market volatility, okay. And we can talk about that a little bit more. Having a good tax strategy, right, making sure that when you are retired, you’re paying the least amount of taxes possible, which can be challenging to do without proper planning, because most people have retirement accounts that they’re putting money into that are tax deferred, but when they pull the money out, they got to pay taxes on it.
She’s not going to be able to take the deduction when she makes a contribution to the Roth component of the 401k. But listen, I do a conversion almost every single year on my money, I rip the band aid off, I pay the taxes. Why? Because you got to believe tax rates are going to be higher in the future.
A fixed annuity can do that for you, I don’t have to take income from it. So it just grows like a bank seed a matter of fact, it’s even better than a bank CD because it grows tax deferred.
Yeah, well, number one, and most importantly, is income. Because the income is the driving force behind the plan, you really can’t make decisions on what to invest in, how much to contribute to your plan, what rate of return you need, what level of risk you need to take, until you figure out how much income you’re going to need.
So, they created this thing called an income rider. Basically, what it does is it pays somebody an income stream for the rest of their life. But it costs money. Why would you pay money for something like this? Well, the benefit of paying the money for it is because if you’re taking that money out of the account, and the balance of that account goes to zero, while you’re still alive, the insurance company will continue to pay you the income.
Okay, I understand if you delay it, you’re going to get the most amount. Yeah. But when we look at the plan, and we run the numbers, if they were to delay taking Social Security, and they would still want to retire, they would spend down so much of their retirement assets.
