Updated: Jun 30
Retirement is something that we can all look forward to. A time to enjoy the fruits of our labor, take up hobbies, spend time with children/grandchildren and pursue our dreams. Like anything, it requires incredibly careful planning. Our retirement funds quantify the culmination of our life’s work and planning.
If you’re like most people, 76% to be exact, then you are worried you won’t achieve a secure retirement (Forbes). It’s normal and even healthy to be concerned about a such a major milestone. What’s unhealthy is going into retirement without proper planning. It is crucial to fund a plan that won’t be outlived and to understand how your money will be taxed in retirement. Creating a guaranteed income stream for life is something to be excited about. These are 4 ways to generate tax free retirement income.
1. Set up a Roth IRA
The Roth IRA is what is known as a tax-exempt account. It’s a tried and true vehicle for your retirement investments. Unlike the 401(k) that many employers offer, it’s paid with after tax dollars. The money will grow tax deferred and come out tax free.
2. Take advantage of an employer offered Roth 403(b)
Just like a Roth IRA the Roth 403(b) is a tax-exempt account which gives you access to all the benefits that come along with being tax exempt. However, the Roth 403(b) has several unique benefits. One of which includes a less restrictive contribution limit.
3. If you already have a tax-exempt retirement account, use it!
Employing the tools at your disposal is essential. An empty retirement account isn’t of any value.
4. Permanent life insurance
Yes, owning permanent life insurance can provide tax free retirement income and it’s not just for the wealthy either. This option is a great way to check two boxes at once. You’ll own life insurance and generate tax free retirement income.
Consult with a Professional
It is vital to seek the assistance of a qualified professional and put together a customized plan that works for you and your family. They will help you build wealth and ensure that proper precautions are taken.
No matter what stage you’re at on your journey through life, there are lots of tools at your disposal. It is important to recognize that the value each option provides is different for everyone and that enlisting the assistance of a certified professional is key for creating the best outcome. Live your best life to live your best retirement. Many have used this past year to restructure and create a better retirement. You owe it to your future self to develop a plan today. Click here to start planning your retirement by scheduling a complementary consultation