Do I Need To Pay Taxes On My Retirement Income?

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Hi there, Stan the Annuity Man, America's annuity agent licensed in all 50 states. Today's question

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is a good one. You're asking it. Do I pay taxes on my retirement income? I'm going to go over the

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details and talk about our friends at the IRS and what you need to be prepared for in just a minute.

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Do you need to pay taxes on your retirement income? Let's think logically for a second.

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Let's think like we work at the IRS. I know what you're saying. And for the people at

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the IRS that are working there, my apologies, but it just isn't one of those things that is

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a goal. But I digress for a second. I just remembered one of my roommates in college,

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and I played college basketball. I'm very tall. I can see the markets better. But he actually,

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he was 6'9". He works for the IRS. And trust me, you do not want him showing up and saying,

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"Why didn't you pay taxes on your retirement income?" No, he's not a nice person. He wasn't

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even a good roommate. God bless him. I hope he's not watching this. I'll get audited. Anything from

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the standpoint of income is going to be taxed by our friends at the IRS. And I just call them our

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friends. Now, how is that going to be taxed? Depends on what type of account that you have.

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So, let's look at the sources for retirement income. For most of you out there, it's going

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to be Social Security, which is the best inflation annuity on the planet. Yes, you can't say, "Hell,

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annuity Stan. I hate them all, man. I hate them." Hypocrite much? Social Security is an

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annuity and it adjusts for inflation because it's not actuarial. It's political. Okay? So,

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the other source would be a pension if you are so fortunate. And when I say that, 91% of us,

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last time I checked the stats, do not have a pension. Most companies are like, "No,

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we don't do that. We don't do the Rolex gold watch anymore." Or if it's fake,

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it's a Frollex. Don't do that anymore. Okay? They give you this 401(k) or

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403(b) or 457. And what that means is tax deferred that somehow, when you retire,

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you have to turn into a lifetime income stream. That's where I come in. Stan the Annuity Man,

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America's annuity agent licensed in all 50 states, because we sell contractual guarantees.

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Annuities solve for four things. The acronym is PILL. P stands for principal protection. I

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stands for income for life. L stands for legacy. The other L stands for long-term

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care. And we only ask two questions every single time we talk to you. By the way,

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my office is in Las Vegas. Everyone's underneath that roof, and it's a big

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one. They're all licensed, but none of them are on commission. Why? Because they're not

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a hammer looking for a nail. So, we're going to ask you two questions: What do you want

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the money to contractually do? When do you want those contractual guarantees to start?

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In this case, we're talking about retirement income. So, you're going to have to take that

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401(k), 403(b), 457, IRA, Roth IRA, and say, "Okay, I've got this lump sum. I got

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stocks and bonds and mutual funds and ETFs and Bitcoin and all kinds of great stuff,

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but I need a lifetime income. I need to, what I call, build your income floor." What's your income

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floor? Social Security, your pension if you're so fortunate. But if you don't have a pension,

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you have to create a pension. How do you create a pension? Great question. You use annuities

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for lifetime income. There's four types that solve for that, and we'll quote all carriers

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and show you the best lifetime income products. The only caveat we say is the carrier has to be

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A+ or better for us to recommend it because you are marryinging — that's hard for a Southerner to

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say — marrying the carrier. So, you're going to be with them forever. So, they got to be

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solid. But that income coming out of that annuity is taxed at ordinary income levels.

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So, let's take an example. You have a 401(k). You got a big lump sum. Your wife's like, "Henry,

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we need a lifetime income. I'm tired of watching these mutual funds." And you say, "You're right,

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Eunice. We do. We do need a lifetime income." And you say, "Okay, we're going to quote a lifetime

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income annuity." In some cases, it could be an immediate annuity, a deferred income annuity,

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a qualified longevity annuity contract, an income rider. That's what we help with. But you can go to

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my site at theannuityman.com and run quotes till your heart's content for free. Yes, for free,

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quoting all carriers to see what the contractual guarantees are. But that

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income derived from that annuity for lifetime income — that income — is

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going to be taxed from your 401(k), IRA, 403(b), etc., at ordinary income levels.

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Now, you say, "Well, wait a minute, Stan. I'm going to keep that in the market. I've

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got all this cash in my checking account. What do I do with that? Can I turn that

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into a lifetime income stream?" You certainly can, and there's different tax ramifications,

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good and bad. What's you're using IRA or non-IRA? Now stop. Any tax question should be lobbed toward

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your CPA and tax lawyer. Agents, even though I'm like an old dude — I know you're saying,

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"No, you're not, man. You look young and vibrant." I understand what you're saying.

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But I don't do taxes. No agents do taxes. If it doesn't say CPA or tax lawyer, then you shouldn't

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get advice from Johnny Appleseed agent down the street. Okay? Any tax question has to be

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run past your CPA and tax lawyer, and we'd be more than happy to get on the phone with them

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and work with you and them to make sure that all I's are dotted and all T's are crossed.

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So, getting back to the original question: Do I pay taxes on retirement income? The answer

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is yes. Interesting point though: A long time ago, politicians stood at the lectern and said

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your Social Security is never going to be taxed as long as I'm in office. I'm going to guarantee

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that no taxes. Remember that? Spoiler alert: They're taxing Social Security. Okay? So, anytime

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the government says, "You know what? We're not gonna tax that. I'm gonna tell you that right now,

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son. You know, as long as I'm in office, we're not taxing it." They're going to tax it. Okay?

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Which kind of pushes me a little bit to the Roth IRA side. I know a lot of you have Roth IRAs. God

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bless you. You trust the government, etc. I hope that works out. But be prepared for them to pull

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the rug out from under, go, "You know what? Yeah, it's tax-free, but only if you're using

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it for education or health care," or whatever the politicians decide. But looking broadly at,

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"Do I pay taxes on my retirement income?" the answer for me and the IRS right here — see,

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here's the IRS — is yes, you have to pay taxes on that at ordinary income levels.

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The hope is, as you get older, your tax levels are going to go down a little bit — I hope — unless

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some politician steps up and goes, "You're the evil rich, and the evil rich have to pay taxes."

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And you're going, "I'm not the evil rich. Me and Martha are not the evil rich." To a politician,

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you are. When 65% of people that are baby boomers only have $10,000 to their name — yeah, that's it

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— or most of the people that you see on the road have their net worth in their front pocket. Which

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leads me to advise you not to flip people off when you're driving, because they have nothing to lose.

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Getting back to that, you are going to pay taxes on that income. You just have

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to factor that in. And you can't run some long spreadsheet to go, "Well, for the next 20 years,

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Stan, I know what my taxes are going to be on my retirement income." No,

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you don't. We have $37 trillion in debt, last time I checked. I think it's a little bit more

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than that if you got real about it. So, will taxes go up? Probably. But retirement income,

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which is what you need in chapter two of your life — I always say chapter one: accumulate,

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accumulate, accumulate. Chapter two is when you and your spouse say, "You know what? We're going

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to send the kids and the grandkids, and we're going to travel, and we're going to do nothing

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because we've earned it and we've worked hard for that." You still got to pay taxes on that income.

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What we can do at The Annuity Man — yeah, I am the top agent in the country,

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but I digress — I'm also the tallest agent in the country and I'm licensed in all 50

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states. We're going to be able to show you the highest contractual guarantees of any lifetime

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income stream out there with every single carrier. We don't care about the carrier,

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the name, the marketing name. All we care about is the guarantee. You always own an

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annuity for what it will do, not what it might do. The will-do is the contractual guarantees

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of the policy. Don't be convinced to buy hypotheticals, theoreticals, projections,

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back-tested, unicorns-chasing-the-butterfly proposals from agents. Buy the contractual

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guarantees. Why? It's because annuities are issued by life insurance companies.

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You're getting a contract between you and the life insurance company. Buy the contractual guarantees.

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Hey, one more thing. To get more information on Stan the Annuity Man,

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The Annuity Man as a company, what you can get from us and what we provide,

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click here, go to the video, watch it. It's going to be entertaining.

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You know that already. My name is Stan the Annuity Man, America's annuity agent,

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wearing the Stan the Annuity Man hat, sporting the Stan the Annuity Man gear. Everything Stan

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the Annuity Man but my underwear, but I'm working on that. I'll see you next time.