The Wealth Navigation Podcast

Income Planning and Distribution Strategies (Ep. 3)

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Summary

In this episode, Scott Showers and Ryan Newton discuss income distribution strategies for retirement planning. They emphasize the importance of having an income strategy to manage the risk of running out of money in retirement. They introduce the concept of asset dedication versus asset allocation and explain how it can help manage risk. They also discuss immunization strategies and the benefits of insuring income. The hosts highlight the bucket strategy approach to manage point-in-time risk and tax planning strategies to minimize the impact of taxes on retirement income. They provide examples and resources for further information.

Takeaways

  • Having an income strategy is crucial for managing the risk of running out of money in retirement.
  • Asset dedication, where certain assets are dedicated to specific goals, can help manage risk and prevent knee-jerk reactions to market fluctuations.
  • Immunization strategies can neutralize interest rate volatility and ensure that money is available when needed.
  • Insuring income can provide a lifetime source of income in retirement and transfer longevity risk to an insurance company.
  • The bucket strategy approach helps manage point-in-time risk by allocating funds to different buckets based on timeframes and goals.
  • Tax planning strategies, such as utilizing Roth IRAs and taxable accounts, can help minimize the impact of taxes on retirement income.
  • Municipal bonds and cash value life insurance can provide tax advantages and protection in retirement planning.

    • Websites:

    www.versowealth.com

    www.frontporchfp.com

    www.focusfg.com

    Article Link:

    https://www.kitces.com/blog/understanding-the-mechanics-of-the-0-long-term-capital-gains-tax-rate-how-to-harvest-capital-gains-for-a-free-step-up-in-basis/

     

    Chapters

    00:00 Introduction

    00:33 Income Distribution Strategies

    03:27 Key Points: Income Strategy, Insuring Income, Bucket Strategy, Tax Planning

    04:26 Asset Dedication vs. Asset Allocation

    07:17 Immunization Strategy

    11:35 Insuring Income

    13:29 Creating a Plan

    15:05 Determining Wage Replacement Ratio

    18:00 Bucket Strategy for Point in Time Risk

    21:48 Determining Bucket Allocation

    24:43 Complex Calculations for Withdrawals

    25:38 Tax Planning Buckets

    27:08 Tax Implications of Traditional IRAs and 401(k)s

    29:27 Tax Implications for Inherited Retirement Accounts

    32:21 Utilizing Roth IRAs and Taxable Accounts

    35:39 Tax-Free Strategies: Municipal Bonds and Cash Value Life Insurance

    46:39 Conclusion

    ...more
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    The Wealth Navigation PodcastBy Scott Showers & Ryan Newton