Retirement Tips | IRA Rich and Cash Poor? Not Good in Retirement!

Another no-brainer for those looking to have a successful retirement. Now, last week, I gave you some insight into taking a simple approach to investing. Using a 730-year-old philosophical approach to keeping things simple and not complicating basics you should be doing leading up to or in retirement. Now, you can visit our website to look at that and a host of other great videos. Better yet, you can subscribe below and become the smartest person in the room when it comes to finances leading up to, again, or in retirement.

IRA, Roth, and Cash 4 seems to be the starting point for most pre-retirees. This is what we see on a regular basis in our offices weekly. Now, I know most of you watching will agree with me on this fact, and most likely, you’re in the same position. I’ll continue to hammer home these two major points in this area. One is for you to not put a dollar more into your company’s 401(k) than the company will match. Your mindset is, “I want to sock away as much as I can,” and I agree with that. However, you’re not thinking about, as we say, the road ahead. It’s taxes, dummy. Ask yourself this simple question: Will taxes go up or down in the future? Let me help you upon meaning in retirement. Almost 40 percent of your 401(k) will be going to Uncle Sam. In a lot of cases, I want to see more cash in your savings that has already been taxed. I have countless families come in with a million dollars in their IRA or tax-deferred accounts and less than $50,000 in cash. That’s not good. Think distribution instead of accumulation. Many will say this, but Dave, this forces me to save money because I don’t see it in my paycheck. Really? How old are you? After you cash that paycheck with those after-tax dollars, have your advisors sweep those dollars to your investment account so you won’t be tempted. Believe me, you will thank me later.

Secondly, once you have reached 59 and a half, move that 401(k) as soon as possible to your own IRA account. Now why? Because you can now have choices of investments that are unlimited, whereas your current 401(k) has a few and usually lousy choices. But the most important part of that is now you can protect that part of your nest egg from major market swings leading up to retirement.

Now, for those of you who have left previous companies, do not roll your old 401(k) into your new company’s 401(k). No, no, no. Again, you’re shooting yourself in the foot. No protection and no choices. You want to control your own destiny and not have some huge fund company making decisions on your behalf who have no idea who you are and could care less about what your future goals are.

In our field of wealth and income management, the investing side is the easy part. Dealing with individuals who have preconceived ideas and biases towards less than optimal solutions is usually where we have difficulty. Twisting arms for the do-it-yourselfers, make these moves as soon as possible, and you’ll be in a much better position to succeed when it comes to retirement. Cash is king. Remember, after-tax dollars or tax-free dollars are the best. Protecting those dollars in fast-moving markets is just plain smart. Understanding the simplicity of using options to do this is beneficial, just plain responsible.

I always hear from the man how their major concern is making sure the wife is set up if anything happens to them. And it is a fact that the wives outlive the husbands by an average of 12 to 15 years. Well, if that’s the case, then protecting these assets well into the future is just a prudent move. Creating income you cannot outlive is also a no-brainer. Today, there are great opportunities to continue to capture growth with protection and create income for life.

Now, listen, don’t forget to subscribe below and visit our website. Let us help you plan for the road ahead. Until next time.