What Types Of Retirement Income Are Not Taxable?

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What Types of Retirement Income Are Not Taxable?

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Hi there, I'm Stan the Annuity Man, America's annuity agent,

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licensed in all 50 states and Puerto Rico. Please don't get mad about that.

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That's the only thing I can say. I can say a couple words in Spanish,

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but I got a full bilingual staff in my Las Vegas office. So, we're going to talk about taxes

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and what you should be looking at after this.

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So, what types of retirement income are not taxable? First of all,

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anytime that you're asking a tax question, please do not rely on ChatGPT or whatever

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AI thing you're using. Rely on your CPA and/or tax lawyer. Period. No exceptions to that. Not

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an agent who's been around like me, not an advisor who's been around like me. No, no,

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no. CPA and tax lawyer. You want all tax questions signed off on by them.

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So, we're talking about retirement income and what's not taxable. Couple things you can look

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at, but I'm going to lecture you in a little bit about taxes. But if you have a Roth IRA,

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you've already paid the upfront taxes on that. You've already paid the IRS the taxes. So, like,

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fine, you can pay us the taxes. Income coming from that is tax-free. Give you an example. If

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you have a Roth IRA, you want tax-free lifetime income. You buy an immediate annuity inside using

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those Roth IRA assets, and that lifetime income stream, at the time of this taping, is tax-free.

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I do think that Roth IRAs could go the path of Social Security

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when Social Security — hard to say — by the politicians, as they say, said,

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"I'm never gonna touch Social Security. It's never gonna touch it." Yeah, they touched it. Okay. So,

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I think there's a possibility of means testing or specific rules for Roth IRAs.

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I hope that doesn't happen. I hope that if you have it, you're grandfathered in. I really do.

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But there's not a lot of avenues out there for tax-free income. The only one that I

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personally like, that I used to do when I was at Morgan Stanley, and UBS, PaineWebber, Dean Witter,

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was tax-free municipal bonds. I'm not talking about bond funds. I'm talking

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about tax-free AAA insured municipal bonds. Those coupons are tax-free.

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I got a great story a long time ago when I was with Morgan Stanley. And, you know,

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I come from no money. So, one of the things is interesting. I always tell people, when you're

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going to get an advisor, there's advisors that grew up rich and there's advisors that

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grew up poor. Okay? Choose one that grew up poor because they can't believe that money

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can be saved and accumulated like that. If you're rich and money just comes and goes.

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I mean, like, for instance, if my daughters grew up to be advisers, you wouldn't want that because

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they grew up well. I'd already created this company and they live well. But, you know,

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when you're looking for an advisor, look for that advisor that has come up the hard

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way. Ask them where they came from. I mean, I came from rural North Carolina.

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So, one of the reasons I'm even in the business is that I couldn't figure out

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why there were some people with lots of money. I'm trying to figure out how did

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that happen. And that led me to Dean Witter, which then was acquired by Morgan Stanley,

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which led me to PaineWebber, which then they were acquired by UBS.

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But the bottom line is find that advisor that really

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cares about not losing your money. I go by the principle Warren Buffett:

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Rule number one, don't lose money. Rule number two, never forget rule number one. You know,

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for people that grew up rich that are advisers, hey, you lost. Who knows? For people,

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especially when you get close to retirement, you need to de-risk that portfolio.

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So, instead of you focusing on what types of retirement income aren't taxable,

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I'd rather you focus on retirement income or chapter 2 income or your income floor. What

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is that amount of money that needs to hit your bank account regardless of geopolitical issues,

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wars, politics, etc.? What is that amount of money that you need to live well on?

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And if you, you know, add it all up — Social Security, the best inflation annuity that

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you have; pension, that's an annuity if you're so fortunate to have one; RMDs from your IRAs,

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that's an annuity-type payment because you have to take it every year regardless;

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and then all the dividend stocks — what's all that amount of money that's coming

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into your bank account every single month regardless of what happens in politics?

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By the way, I'm not Republican or Democrat. I'm contractual. I'm not political. I'm contractual.

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I only look at contractual guarantees. I really don't care about politics. We're trying to put

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people in positions to where their lifetime income guarantees that they can never outlive,

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as long as they're breathing, in place so that they don't have to watch cable news,

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that you don't have to care about any of this.

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Yes, you know, you want to keep up with it, but you don't live and die by it.

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Don't be affected by it emotionally. If you have an income floor in place that you

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can get up every morning regardless of what happens and everything's going to be okay,

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then great. That's super. That's my job. That's my job, is to get you there.

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So, I'd rather you pivot from, you know, how can I not pay taxes on my retirement income? The problem

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with that goal is it will lead you down a path of products that are in the gray area. And there

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is no gray area with the IRS. They don't do gray. Okay? They do black and white. They don't do gray.

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So if you think, well, I think that's tax-free — no, no, no, no,

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no, no. If the IRS says it's tax-free, if your tax lawyer says it's tax-free, if your

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CPA says it's tax-free, then it's tax-free. Everything else internet-based, forget about.

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I just don't want you to get obsessed with the IRS. I don't want them living in your

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head for free. And people that are asking this question, you're trying to figure out how to

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beat the system. You can't beat the system. I know that you think, "Yeah, I can. Yeah, I can.

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I beat it. Everything I've ever tried, I beat it." You can't beat the IRS. Please don't try.

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And I'd rather you spend your time hitting a golf ball, on the boat,

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fishing, traveling with the spouse, going to see the grandkids, flying first class

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because your kids will, eating better food, eating at restaurants you wouldn't imagine

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eating at. I'd rather you do that than try to figure out how to thread the needle.

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Stan, I like threading the needle. In retirement,

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I'm threading the needle. I know I'm retired, but I got spreadsheets. I'm

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figuring this out. I think I can beat them. You can't beat them. And who cares if you can?

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I'll guarantee that your spouse looks at you with all these spreadsheets and trying to figure them,

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going, "Oh my God, can we just go see the grandkids? Can we just get

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the dessert at the restaurant? Oh, that dessert's pretty — that's incredible.

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That price for that slice of pie is crazy." Who cares? Who cares?

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Why have you been working all this time so hard to then continue to scrimp and save? Why? I mean, if

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your goal is to leave a legacy to your heirs and not spend a penny and live like a pauper, that's

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fine. Great. Super. But that's not what I want you to do. I want you to learn how to spend more.

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I want you to put that income floor in place. Now, that's where I come in. Annuities. Annuities

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solve four things: principal protection, income for life, legacy, and long-term care.

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You ask two questions: What do you want the money to contractually do? When do you want

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those contractual guarantees to start? From there, I can create lifetime income streams.

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And I can create lifetime income streams that's going to pay for both of your lives.

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And when you die, 100% of the money goes to the family, not the evil annuity company.

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So, don't sit out there and go, "I'd never buy an annuity, Stan, because when I die, the annuity

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company keeps the money." That's the dumbest — stop talking, okay? Just stop talking because that's

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stupid. And if you believe that, then you've been going to too many cocktail parties with Ernie,

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your neighbor. Because Ernie, your neighbor, doesn't know a thing about annuities.

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You can structure it so that it's lifetime income. Well,

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Stan, what happens if AI makes us all live longer and I live to like 127? It's going

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to pay. Which means that you probably should look at it now to lock in guarantees now with

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an A+ or better carrier. A+ or better, you don't need a sweater for lifetime income. Okay?

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So, just with retirement income, stop trying to be the spindle of taxes. Stop thinking

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that you're figuring something out that no one else has figured out. Okay? Been doing this for

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three decades. There's no shortcuts, player. You can't beat them. Don't try to beat them.

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I'd rather you spend the money. I'd rather you enjoy the money. I'd rather

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you put that income floor in place with a little bit extra so you can travel and

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eat out and do that stuff and buy the shoes that you never thought you'd buy.

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We all grew up in that. I mean, I grew up lower middle class, middle — I don't know — but we

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didn't have a lot of money, okay? You know, I think back to my house. It was brick,

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but it was kind of a trailer with brick. You know what I mean? It was like the long,

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skinny — best my parents could do. It was great. But I look back on it now and go,

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"Wow, that's crazy." And I didn't know I was poor, but I was poor. Okay?

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But going into chapter 2 with my wife, I'm like, "Buy the shoes. Buy those expensive

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shoes." Always when she walks out, I'm like, "How much did that outfit cost?" And she tells me,

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I'm like, "Cool. Can't take it with you." There's no U-Hauls behind hearses.

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So stop asking these questions. I'm glad you landed here because I get to yank you and go,

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"Come on, man. Come on. Stop it. Live your life. Live it today."

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Annuities can provide that lifestyle. But if you add up your income floor and it's sufficient,

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then you don't need an annuity. But if you add up that income floor and need a little bit extra,

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or inflation hits and you need a little bit extra, that's where I come in.

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Okay? Do me a favor. Above my head, there's a countdown to a video called

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Contractual Guarantees Only. I'm the pioneer in that in the industry. Started it. People

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are starting to follow it. Some people are actually trying to copy it word for

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word. I don't care as long as the industry follows what I'm saying.

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You buy an annuity for what it will do, not what it might do, not some hopes and

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dreams and unicorns chasing the butterflies and proposals and bonuses and shiny things

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for stupid people. Okay? You buy it for the contractual guarantees. That video explains it.

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Alright, see you next time.