You Have Options

Beware of
What if some of the assets you had available during
retirement would not be subjected to income taxes?
Personal Financial
What if there was a strategy to create tax-free re- Hazards
tirement income while also fulfilling other important Part 3
planning needs that could protect your family’s future?
Retirement Accumulation Shortfalls: How Far
What if you could move low-yielding assets into an Will Your Retirement Assets Reach After
arrangement that allowed for tax-deferred cash accu- Taxes and Inflation?
mulation, and tax-free access later on?
What if your strategy eventually returned all the Retirement Income
dollars you put in, plus growth, while simultaneously
Many prudent individuals gradually and consistently
creating a legacy for your children or grandchildren?
accumulate assets as part of their plan to fund future re-
What if there was a way to create the dollars needed tirement income needs. However, failure to save suffi-
in the future for pennies on the dollar today? ciently toward future needs could lead to a delayed re-
tirement start date, lower-than-expected retirement
Let’s Talk lifestyle, or the possibility of simply not having sufficient
There are several powerful strategies that can ac- assets during your most financially vulnerable adult
complish these, and many other, personal financial years.
goals. Let’s sit down and talk and you can decide if you When do you want to retire? How long do you expect
feel these strategies would be of interest to you. to live? For how many decades will you be retired? How
Ardal Powell, MA, PhD much have you already saved for retirement? How much
of those savings belong to you, and how much will be
New York Life/NYLife Securities paid to the government in the form of deferred and as-
460 Temple Hill Rd yet-unpaid taxes? How much income will you need each
year to cover living and lifestyle expenses?
New Windsor, NY 12553
(845) 202-9722

apowell03@ft.newyorklife.com
New York Life Insurance Company, its agents and employees may not provide legal, tax or accounting
advice. Consult your own professional advisors before implementing any planning strategies. © 2018
New York Life Insurance Company. All rights reserved. Advanced Planning Group
SMRU 1778976 (exp. 06.30.2020)
 What income sources do you have today that you
will still have when you retire? Do expect to have other
income sources then? How much income can you relia-
bly produce each year from the assets that you already
have?
Many individuals have not considered how things
like inflation and taxes can impact assets they thought
would be available to create enough income for their
retirement needs.
Let’s look at a hypothetical example.
How much impact do inflation and taxes
have on whether the amount you are
saving will provide enough
income for your retirement?
John and Carol have household income of over
$245,000/year. Their total annual expenses are around
$210,000. They have retirement assets of $315,000 in
their 401ks and $135,000 in their IRAs. Despite rising
healthcare costs, and their plans to travel more in retire-
ment, John and Carol think their retirement living ex-
penses will be 25% lower than their current expenses.
If John and Carol retire today, they can only live off
their assets for a few years! And with inflation, their in-
come need could rise significantly over the next 20 years.
Let’s Look at the Numbers
Let’s look at how much retirement income John and
Carol might need to cover expenses, and how inflation
can impact the need for more of that income over time.
Retirement Income Needed:
$210,000 (John and Carol annual expenses)
-25% (hoped for reduction in
retirement expenses)
$157,500/Year (income needed to cover
retirement expenses today)
Retirement Assets Available Now:
$315,000 (401Ks)
+$135,000 (IRAs)
$450,000 (approximately 3 yrs. of retirement
income* - before taxes have been paid!)
*Social Security may also provide some retirement income.
Impact of 2% Inflation on Income Needed:
2% for 20 years increases income need to:
$234,037 (about 50% more income needed!)
2% for 30 years increases income need to:
$285,289 (about 80% more income needed!)
In other words, it takes a lot of assets to fund retire-
ment, but it can take far more when you account for
the impact that taxes and inflation can have on your re-
tirement saving and income needs.