June 02, 2021

Strategies to Create Retirement Income Without Utilizing Annuities

Having a holistic practice, what we first figure out is “What is your goal?”
Then develop a strategy then pick the right tools to utilize.

When it relates to Income Planning, there is more than just Annuities.
There is the 3 Legged Income Stool.
1. Social Security
2. Pension
3. Assets – utilizing investments and assets to create an income stream.

There are also other tools that you can utilize aside from Annuities.
We look at Cash Value Life Insurance, Life Insurance Retirement Plan, Portfolios, and of course Social Security and Pension.

When it comes to Income Planning there are a lot of different ways to structure it.
It’s really all about figuring out What is your goal? then the best strategies to help you achieve the goals then picking the right tools.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.

For more info visit:
https://castlewealthlegal.com/home
https://michiganestateplanning.com/

Episode Transcript

There’s More Than Just Annuities

This is Chris Berry, and today we’re going to talk about strategies to create retirement income without utilizing annuities. And if you like this information, please make sure to subscribe to our YouTube channel.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Forbes, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning, and has authored the Amazon bestselling book The Caregiver’s Legal Guide.

So, I had a call with a client or potential client the other day, and one of the things that he brought up as he was asking about our process and what we do, I mentioned how one of the most important things that we do for our clients is create a plan for income, and when I said this, I could tell that he was kind of taken aback a little bit, and the first thing he said was, “Oh, so you mean you sell annuities?” And I had to push back to say, “No, that’s the last thing we do. We always first figure out what is the goal, develop the strategy, and then only pick the right tools to utilize.”

And so, I think he had maybe attended a bunch of workshops with a lot of annuity or insurance salesmen where, really, all they’re trying to do is pitch annuity. And that’s very different than our approach, and that’s not the tool that we utilize all the time, right? So, there’s a lot of people out there that all they do, their only tool is annuity, but having a holistic practice where we’re not a vendor, we’re not salesmen, we’re trying to help clients first figure out what are their goals, develop the best strategies, and then, and only then, pick the right tools to help them achieve the goal.

So, when it relates to income planning, there’s more than just annuities. First, we look to what do we already have in terms of an income stream, that foundational income stream. And a lot of times, we’ll have Social Security, or we might talk about delaying when we take Social Security. And one of the things we can do is run a Social Security optimization report, figure out what is the best way to take Social Security to maximize Social Security.

Social Security

Now, we also need to see how that fits into the overall plan, because if we take Social Security early, maybe that’s going to create more income that will disallow us from doing things like Roth conversions or trying to lower the amount in our pre-tax accounts to minimize that ticking tax time bomb that’s going to hit when you have to take out your required minimum distributions with your IRAs and 401(k)s.

So, first we figure out, when are we going to take Social Security? Because almost everyone has Social Security as one of the legs of their income stool. And then the second piece of it is looking at the second leg, which would be a pension. Do we have the option to carry a pension from our employer, or do we have the option of doing a lump sum buyout where now we can take that pension money and have more control and create a plan that’s best for us, versus just relying on that pension that was created by the employer?

The third leg of creating that three-legged income stool is drawing down on assets, figuring out, how are we going to utilize our investments and assets to create that income stream? Because that’s really one of the foundations of retirement, is you’ve worked very hard to accumulate all this wealth, now we need to figure out, how do we preserve it and create a distribution plan? And there’s different tools that we can utilize. Social Security is a tool. Pensions are a tool. Annuities are a tool; they’re not the only tool. We look at cash value life insurance or LIRPs, life insurance retirement plans. We look at portfolios that are invested in such a way to create income. We look at portfolios that are created to accumulate wealth, so as we’re pulling money out, we can still be earning and growing our wealth at the same time.

Income Strategies

So, no, when we’re talking about income, the last thing we’re talking about is annuities, if at all. Really, what we’re doing is trying to figure out, what is your goal? How much income is it that we need per month? And then we develop the strategies to help you achieve that goal, that income goal. And maybe it could be achieved just through Social Security, or just through Social Security and pension. Or maybe we need Social Security, maybe you do a lump sum buyout, now we need to figure out, how are we going to create a distribution plan with those assets? And it might be just a income-based portfolio or a portfolio that’s really broken into two segments or two sleeves, one creating income for the next, say, five to ten years, and then the other sleeve is more geared towards growth and accumulation.

So, when we’re talking about income planning, there’s lots of different ways that we can structure it, and it’s really all about figuring out what are your goals, and then the best strategies to help you achieve the goals, and then we’re picking the right tool. So, hopefully this has been helpful. Make sure to like and subscribe. Thank you so much.

Castle Wealth Group has clients across the nation and helps families plan, protect, and preserve what is important by creating a retirement and legacy blueprint.