52 • RUBY, WILDING & SWANSBURG It’s important to understand the different options for your retirement funds— I’ll show you why. Your Hidden Debt You’ve probably heard of Dave Ramsey. He’s an author, radio host , TV star, and popular purveyo r of financial advice. I f you’ve ever listened to his show, you know his most famous piece of ad vice: Get out of d ebt! Ramsey encourages Americans to pay off their credit card debt, car loans, medical bills—even their mortgages. In gener al, it’s good advice. Americans could use a lot less debt . But, I’ m alarmed Ramsey overlooks one of the biggest debts nearly every American carries. I call this your "hidd en debt, " since so few of us realiz e we ha ve it . And what is your hidden debt? The future t ax es you owe in your qua l ified a ccount. You may have paid off your mortgage. Student loans may be decades in your past. You may fully own your car and pay off your credit card bill each month. But, if you’ve saved for retirement in a tax-deferred vehicle like a 401(k) or IRA, you are not debt- free. Here’s a perfect example. I have a friend, Nick. Nick has been saving in an IR A for years, and now that retirement is on the horizon, he’s starting to plan income for himself and his wife. He’ s don e a g ood job of saving an d ha s aroun d $850, 000 saved in an IRA. A few years ago, Nick wanted to see how much income he could generate a year fro m his IRA. But, he was looking at the wrong number.
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