Retirement Income

Turning Your IRA/401K into a Lifetime Pension: A Cardinal Guide

Tomasina Hill

March 26, 2024

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Introduction

In the world of retirement planning, one of the biggest fears retirees face is the dread of outliving their savings. With traditional pensions becoming a rarity, the security that once came with retirement seems to be a relic of the past. However, Hans Scheil and Tom Griffith of Cardinal guide you through transforming your lump-sum retirement savings into a steady, pension-like income stream, ensuring financial stability through your golden years.

The Disappearance of Pensions and the Rise of Personal Retirement Planning

Pensions provided our parents and grandparents with a sense of security, a guaranteed income for life that is becoming increasingly uncommon. Today, most retirees are left to manage their retirement savings, often accumulated in IRAs and 401Ks, navigating how to distribute these funds throughout their retirement without the risk of depletion.

Addressing the Fear of Running Out of Money

The concern of running out of money is paramount among retirees. Hans and Tom delve into strategies that mitigate this fear, focusing on safe withdrawal rates and the utilization of annuities to create a consistent income that you cannot outlive, whether you’re single or part of a couple.

Annuities: The Key to Creating a Personal Pension

The guide discusses the role of annuities in retirement planning, emphasizing how they can secure a stable income for life. By exploring different types of annuities and providing examples, Hans and Tom illustrate how retirees can use these financial instruments to mimic the reliable cash flow once offered by traditional pensions.

Customizing Your Retirement Plan

Understanding that everyone’s financial situation is unique, the guide outlines how to tailor these strategies to individual needs. Whether you have $300,000 or $900,000 in your retirement account, the principles discussed can be adapted to fit your specific circumstances, ensuring your retirement funds are optimized to provide a lifelong income.

Ensuring a Secure Financial Future

Beyond just surviving retirement, the goal is to thrive. Hans and Tom stress the importance of integrating these strategies into a broader financial plan, taking into consideration factors such as taxes, estate planning, and the psychological aspects of spending down retirement savings.

A Guide Tailored to Your Retirement Needs

This blog serves as a comprehensive manual for those navigating the complexities of retirement planning. With detailed insights, practical examples, and a focus on creating a secure, pension-like income, Hans and Tom offer a roadmap for achieving a worry-free retirement.

Conclusion

We invite you to dive deeper into the strategies and examples discussed by downloading the show notes or reaching out for a personalized consultation. Whether you’re nearing retirement or planning for the future, it’s never too early or too late to explore how to secure your financial wellbeing in retirement.

Remember, planning for retirement is about ensuring peace of mind and financial security. Let Hans Scheil and Tom Griffith guide you through the process, transforming your retirement savings into the steady income you deserve.

Get In Touch

Contact us today with any questions, concerns, or just to stay connected.

Have questions? Contact us today.

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Retirement Income

Turning Your IRA/401K into a Lifetime Pension: A Cardinal Guide

Tomasina Hill

March 26, 2024

Share

Sign Up For Our Newsletter To Receive Weekly Updates.

Introduction

In the world of retirement planning, one of the biggest fears retirees face is the dread of outliving their savings. With traditional pensions becoming a rarity, the security that once came with retirement seems to be a relic of the past. However, Hans Scheil and Tom Griffith of Cardinal guide you through transforming your lump-sum retirement savings into a steady, pension-like income stream, ensuring financial stability through your golden years.

The Disappearance of Pensions and the Rise of Personal Retirement Planning

Pensions provided our parents and grandparents with a sense of security, a guaranteed income for life that is becoming increasingly uncommon. Today, most retirees are left to manage their retirement savings, often accumulated in IRAs and 401Ks, navigating how to distribute these funds throughout their retirement without the risk of depletion.

Addressing the Fear of Running Out of Money

The concern of running out of money is paramount among retirees. Hans and Tom delve into strategies that mitigate this fear, focusing on safe withdrawal rates and the utilization of annuities to create a consistent income that you cannot outlive, whether you’re single or part of a couple.

Annuities: The Key to Creating a Personal Pension

The guide discusses the role of annuities in retirement planning, emphasizing how they can secure a stable income for life. By exploring different types of annuities and providing examples, Hans and Tom illustrate how retirees can use these financial instruments to mimic the reliable cash flow once offered by traditional pensions.

Customizing Your Retirement Plan

Understanding that everyone’s financial situation is unique, the guide outlines how to tailor these strategies to individual needs. Whether you have $300,000 or $900,000 in your retirement account, the principles discussed can be adapted to fit your specific circumstances, ensuring your retirement funds are optimized to provide a lifelong income.

Ensuring a Secure Financial Future

Beyond just surviving retirement, the goal is to thrive. Hans and Tom stress the importance of integrating these strategies into a broader financial plan, taking into consideration factors such as taxes, estate planning, and the psychological aspects of spending down retirement savings.

A Guide Tailored to Your Retirement Needs

This blog serves as a comprehensive manual for those navigating the complexities of retirement planning. With detailed insights, practical examples, and a focus on creating a secure, pension-like income, Hans and Tom offer a roadmap for achieving a worry-free retirement.

Conclusion

We invite you to dive deeper into the strategies and examples discussed by downloading the show notes or reaching out for a personalized consultation. Whether you’re nearing retirement or planning for the future, it’s never too early or too late to explore how to secure your financial wellbeing in retirement.

Remember, planning for retirement is about ensuring peace of mind and financial security. Let Hans Scheil and Tom Griffith guide you through the process, transforming your retirement savings into the steady income you deserve.

Understanding the Upcoming 2026 Income Tax Increase: What You Need to Know

A Brief History of the Tax Cuts and Jobs Act (TCJA)

In today’s Cardinal lesson, we’re discussing the significant changes coming to income tax rates in 2026. This isn’t a proposal but a law already set in motion. The Tax Cuts and Jobs Act (TCJA), passed in 2017 and effective from January 1, 2018, brought about substantial reductions in income taxes. However, these reductions were only funded for eight years, meaning they will expire at the end of 2025.

What Changes to Expect in 2026

As of January 1, 2026, the tax rates will revert to their 2017 levels, adjusted for inflation. Key changes include:

The 12% bracket will increase to 15%.
The 22% bracket will rise to 25%.
The top rate of 37% will revert to 39.6%.

Not Just a Proposal

It’s crucial to understand that this change is already the law. Many people mistakenly believe that the tax rate increases are still under discussion. However, unless Congress enacts new legislation, these higher rates will take effect as scheduled.

Implications for Your Financial Planning

Impact on IRAs and 401(k)s

With the current lower tax rates, now is the time to consider strategies like Roth conversions. By converting funds from a traditional IRA to a Roth IRA now, you can potentially save a significant amount in taxes over the long term.

Why Planning Ahead is Crucial

For individuals with substantial retirement savings, understanding these changes is vital for effective tax planning. The window to take advantage of the current lower tax rates is closing, and planning ahead can make a significant difference.

Case Studies and Planning Opportunities

Hans Scheil and Tom Griffith discuss specific case studies and planning strategies in our latest video. These examples illustrate how different scenarios can be managed effectively:

Case Study 1: A married couple with an adjusted gross income of $150,000 in 2024 can convert part of their IRA to a Roth IRA, taking advantage of the lower current tax rates.
Case Study 2: High-net-worth individuals with large IRAs can save substantial amounts in taxes by planning conversions over the next two years.

Estate Tax Considerations

The TCJA also doubled the estate tax exemption, which will revert in 2026. This change can significantly impact high-net-worth individuals, making estate planning more crucial than ever.

Action Steps to Take Now

Review Your Current Tax Situation: Analyze how the upcoming changes will affect your finances.
Consider Roth Conversions: Take advantage of the lower tax rates before they expire.
Plan for Estate Taxes: Assess your estate plans in light of the changing exemptions.

Conclusion

The changes coming in 2026 are significant, but with proper planning and informed decision-making, you can navigate these changes effectively. Watch our video for more detailed insights and personalized advice.

Get In Touch

Contact us today with any questions, concerns, or just to stay connected.

Have questions? Contact us today.

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