HOW TO SHRINK YOUR AT-RETIREMENT TAX BILL
Ways to Diversify—and Optimize—the 4 Types of Retirement Income
Here’s a question as you look ahead toward retirement: What will your “at-retirement” tax bill be?
In other words, how much will you pay in taxes throughout your retirement years, based on your financial portfolio strategies? Here’s the follow-up question: Do you need to “diversify” your at-retirement tax bill so your golden years don’t tarnish?
When it comes to rate of return, real estate income is often not optimized, depending on its location. We recommend 0% to 40% of your retirement income should come from this category. GUARANTEED INCOME Guaranteed income can include Social Security benefits, pensions, and certain types of annuities. These kinds of vehicles score high in safety but very low in liquidity. They typically do not score well on rate of return, and there are little to no tax advantages. Depending on your objectives, we recommend 10% to 80% of your retirement income should come from this category. TAX-FREE INCOME Tax-free income can include municipal bonds, Roth IRAs/401(k)s, and of course IUL LASER Funds. Tax-free bond funds don’t fare as well in rate of return as IUL LASER Funds, and most high-risk investments are not attractive to retirees because they score so low in safety. A properly structured and maximum-funded IUL LASER Fund can pass with the highest overall LASER score. Hence we recommend 30% to 60% of your retirement income should come from The IUL LASER Fund. Even if they’re close to retirement, we’ve helped people to strike a healthier balance with their portfolio, optimizing their strategies to minimize taxes and level up their liquidity, safety, and predictable rates of return. To learn more about how you can do the same, we invite you to explore your options by ordering a free copy of “The LASER Fund.”
Many people come to us because their financial portfolio is top- heavy with financial vehicles that will be taxable as they take out money for retirement income. They want to make changes for a more balanced approach during the distribution phase, because they realize it’s wise to use a blend of strategies so that all of their eggs (or nest eggs) aren’t in one basket.
There are essentially four different types of income that can be part of your financial portfolio:
• Investment income • Real estate income
• Guaranteed income • Tax-free income
How much of each category should you focus on for retirement income? Here’s what we recommend, based on their profiles in our LASER Rating System™, which analyzes financial vehicles based on liquidity, safety, predictable rates of return, and tax advantages: INVESTMENT INCOME Investment income usually results from investments in the market like stocks, mutual funds, and bonds, and most IRAs or 401(k)s are likewise invested in the market. Investment income can score high on liquidity and rate of return, but usually scores low on safety. We recommend 0% to 50% of your retirement income should come from this category. REAL ESTATE INCOME Real estate income typically comes from rental or lease income from real estate. Generally, real estate income can score well in tax advantages, but it often does not fare well in liquidity and safety.
Strike a better balance with your financial portfolio. Explore optimal strategies by ordering “The LASER Fund” today.
6 3DimensionalWealth.com
Made with FlippingBook Ebook Creator