Financial planning and taxes in your retirement years does not have to be a scary thing for baby boomers and retirees. In fact, there are very simple ways to safeguard your retirement income from both volatility and taxation. In this video Rob discusses where IRA’s, 401k’s, and 529 Plans fit in the spectrum of taxation and financial planning.

A few of the key topics in this video that you will learn are:

Capital gains versus ordinary income tax
Tax-free versus tax-deferred
Where annuities fit in your retirement plan
How a private pension is a viable alternative investment.

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28 replies
  1. Erik Haus
    Erik Haus says:

    What a wretched video. Full of inaccuracies. First, avoid life insurance as an investment. Period. Anyone who tells you otherwise likely makes money from selling.

    Second, if you'll be in a lower tax bracket when you retire, and almost everyone is, traditional IRA and 401k is better than Roth IRA and Roth 401k.

    The minute this guy mentioned 'private pension', is the minute you should realize he's a huckster. Avoid this advice.

  2. Peter G
    Peter G says:

    This seems like bad advice. The 401k money would be taxed otherwise in the highest bracket of your highest income years. By 401k'ing it you'll be taking it out and taxed at much lower levels in retirement after it grew tax free for decades. Plus the company match the first year. That's a really good deal.

  3. Tom Freer
    Tom Freer says:

    most people who work for a company that pays them $150k / yr, get a 100% match on the first 5 or 6% they contribute to their 401k. why does your example show a 50% match on the 401k? we are talking about people that work for companies that pay an employee $150k / year, not $15 /hour. you lost me there with your example because "the math" is skewed…

  4. Eric
    Eric says:

    This argument is flawed on so many levels I'm not even sure where to start. First of all, you've contradicted yourself already by saying "free money" is the optimal scenario and then later suggesting a 401k with "company match" is only a "push" or potentially a toss-up as to which is better. Well, first of all, it's a HUGE advantage to get a 50% immediate ROI. What you're really comparing is $7,500 out of pocket (401k) vs. $12,000 ($1k/mo) out of pocket AFTER-TAX… which is probably closer to $18,000 pre-tax equivalent.

    Second, I love the way you just brush-off the tax deduction. $7,500 put in tax free produces a nice sized deduction. And if you're truly maxing out your 401k, $18,500 produces an even NICER deduction. That's real money. You've simply eliminated it from the equation suggesting that it will be squandered away and have no material effect. Really? Well, hello – if that's the argument, you could just as easily ague that the tax savings on the BACK side is simply a rounding error, and it makes no material impact. Same argument, different ends of the equation.

    The reality is, many people will be in a higher tax bracket during their peak earning years than in retirement. Therefore, the more you can shave off the top in those years, the better.

    Bottom line, if you have a 401k with company match, there's no better vehicle for MOST people to save. You're getting the benefit of a tax deduction plus free cash (your bucket #1).

    Lastly, anything that suggests someone ELSE is going to manage your money is something I want no part of. Pile your money into as many tax advantaged accounts as you can, followed by normal taxable accounts. Invest it in a combination of low-cost index funds tracking the S&P 500 and total bond market in whatever allocation makes sense for your age/circumstance. Enjoy.

  5. Warren Peece
    Warren Peece says:

    Interesting…while working I was paying about $17K/year is fed and state income taxes. Last year, first year of retirement, it was $2K with income at about 40% of working income. Works for me!

  6. 4Layers OfStrength
    4Layers OfStrength says:

    👋🏼So if I contribute the tax I receive back from my government each year into my 401K than it’s better? How close to an ROTH IRA “tax deferred” approach is that? 🙏🏽🇦🇺🧘‍♂️

  7. Stuart M.
    Stuart M. says:

    What does "all of this is taxable" mean? Only the amount you withdraw from an IRA or 401k will be taxable every year. No one withdraws all of it at one time. Most people drop into a lower tax bracket when they retire than the tax bracket they were in when they put the money into the IRA/401k. With a Roth IRA, you are paying higher taxes now for tax-free withdrawals later. You are giving up current consumption for a future tax benefit. And a 25% tax bracket in retirement? I don't know about the new tax plan but in the old one, that doesn't kick in until one earns over $122,000 a year (married, filing jointly). That is unlikely for someone who only has $400,000 in an IRA/401k account. In your scenario, only about $17,000 is being taken out every year. Even with social security added in, that person will not be close to a 25% tax bracket, much closer to a zero tax bracket given taxable income doesn't even start until $22,800. This isn't the first video maligning traditional IRAs. One has to conclude someone wants to scare people into investing in something else.

  8. Samuel Branham
    Samuel Branham says:

    You’re crazy if you think Roth IRA is better as far as taxes go. Let’s say you are making 100k a year and putting in your Roth IRA, your money is being taxed at the 100k tax bracket. Same deal but putting money in a 401k, later on when you are retired, you have your house paid off and your kids are out of the house, you only need 50k. Then you only have to pay 50k in income taxes

  9. 220volt74
    220volt74 says:

    401k limit in 2017 is $18,000 a year + employer match + pre-tax + you get a tax break at the end of the tax season.
    Roth IRA is $5,500/year AFTER tax.
    How's Roth IRA superior again?
    I am maxing out both and there are no contests. 401k goes up more than quadruple in comparison. That is waaay more enough to offset ANY taxes at the end. Especially if you do gradual ladder withdraw from your 401k.

  10. Robin Smith
    Robin Smith says:

    What? You pay $$ taxes on the Roth money as you add it to the Roth at the HIGHER working tax bracket! It is not "tax free" it is as you say , "after tax"….. If I put $10 into the roth I pay taxes at say 25% while working; Same $10 into 401K I defer the taxes to a retirement time and lower tax bracket!!! This is ridiculous salesmanship. Listen to advice from people who will not profit from your decisions, not from sales people. (Insurance sales people especially)

  11. Jeff Everson
    Jeff Everson says:

    Do the 401k, Max it out to get the full match from the employer, however 5 years before you retire, transfer that and re-characterize to a Roth (In Service Transfer), Pay the taxes and invest in a Hybrid Annuity that allows growth and income for when you retire. You have to do it 5 years before because the IRS will look back and not allow the Tax free withdrawals in the Roth unless it's been sitting there for 5 years. Yes I'm a Financial advisor (RIA)

  12. Order of Merchants
    Order of Merchants says:

    About 5 or so minutes in the video, you say the value of a Traditional IRA would increase at the same rate as the Roth, however wouldn't there be more money deferred into the Traditional because it's before tax? This is of course without taking contribution limits into consideration. In other words, the amount actually being deferred to the account could be less for Roth because one may not be able to contribute the same amount since some of it would have to be reserved to pay taxes. Therefore, while there is an inherent advantage to having tax free interest for a Roth, one may be able to earn more money in a Trad since deferrals would be higher. The question is whether the tax free interest for a Roth would be more tax advantageous than the interest earned from being able to invest the pretax savings in a Traditional.

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