Secure Your Future with Strategic Retirement Investment Accounts
Explore diverse retirement investment options with Covenant Dominion Culture, your trusted partner for securing a prosperous future.
13 Retirement Investment Vehicles - Q&A
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1. What It Is
A workplace retirement account where contributions are made pre-tax, reducing taxable income. Think of it as a "tax-deferred growth capsule" sponsored by your employer.
2. How It Works
Contribute: Via payroll deductions (2024 limit: $23,000 + $7,500 catch-up if 50+).
Invest: Choose from selected funds (e.g., company stock, target-date funds).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL/Whole Life: Use cash value loans to supplement income if retiring before 59½ (avoiding 10% early withdrawal penalties).
No Policy: Max out employer match first, then fund Roth IRA.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Net Income: $50,000 after taxes
Employer Match: 5% of salary = $2,500/year
Your Contribution: $200/month → $2,400/year
Total Annual Savings: $4,900
5. Real-Life Scenario
*James (30, $60K salary) contributes 8% to his 401(k) with a 3% employer match. By 65, this grows to ~$1.2M (7% return). His IUL provides $2K/month in tax-free loans from ages 55–59½.*
6. Myth-Busting
❌ "You must leave your 401(k) with old employers."
✅ Truth: Roll over to an IRA or new employer’s plan for better control.
❌ "Company stock is the safest investment."
✅ Truth: Diversify! Enron employees lost everything by over-concentrating.
7. Pros & Cons
✅ Pros
• Tax-deferred growth
• Employer matches = free money
• Automatic payroll deductions
❌ Cons
• Limited investment options
• Early withdrawal penalties
⚠️ Common Mistakes
• Leaving employer matches unclaimed (e.g., contributing only 2% when match is 5%).
• Holding >10% in company stock (violates diversification).
8. Risk Management Tips
• Diversify across fund options (avoid overloading on company stock).
• Set up automatic contribution increases (1%/year).
9. Tax Implications
• Contributions: Reduce taxable income now.
• Withdrawals: Taxed as ordinary income later.
10. 401(k) vs. Other Accounts
11. Next Steps
1. Check employer match policy.
2. Invest in:
• Aggressive: VTI (100%)
• Balanced: VTI (80%) + BND (20%)
• Hands-off: VLXVX (Target-Date 2065)
12. Best For
• Employees with employer matches.
• Those in higher tax brackets now vs. retirement.
13. FAQs
Q: Can I access funds before 59½?
A: Yes, via Rule of 55 (if retiring at/after 55) or IUL cash value loans.
Q: What if my employer doesn’t offer a match?
A: Fund a Roth IRA first, then return to 401(k).
14. Key Concepts
• Vesting Schedule: How long until employer matches are 100% yours.
• RMDs: Required Minimum Distributions (start at age 73).
15. Biblical Insight
"The wise store up choice food and oil." — Proverbs 21:20 (NIV).
Scriptural Stewardship: "Automate your 401(k) contributions to ‘store up’ for future seasons. Increase contributions by 1% annually."
A workplace retirement account where contributions are made pre-tax, reducing taxable income. Think of it as a "tax-deferred growth capsule" sponsored by your employer.
2. How It Works
Contribute: Via payroll deductions (2024 limit: $23,000 + $7,500 catch-up if 50+).
Invest: Choose from selected funds (e.g., company stock, target-date funds).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL/Whole Life: Use cash value loans to supplement income if retiring before 59½ (avoiding 10% early withdrawal penalties).
No Policy: Max out employer match first, then fund Roth IRA.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Net Income: $50,000 after taxes
Employer Match: 5% of salary = $2,500/year
Your Contribution: $200/month → $2,400/year
Total Annual Savings: $4,900
5. Real-Life Scenario
*James (30, $60K salary) contributes 8% to his 401(k) with a 3% employer match. By 65, this grows to ~$1.2M (7% return). His IUL provides $2K/month in tax-free loans from ages 55–59½.*
6. Myth-Busting
❌ "You must leave your 401(k) with old employers."
✅ Truth: Roll over to an IRA or new employer’s plan for better control.
❌ "Company stock is the safest investment."
✅ Truth: Diversify! Enron employees lost everything by over-concentrating.
7. Pros & Cons
✅ Pros
• Tax-deferred growth
• Employer matches = free money
• Automatic payroll deductions
❌ Cons
• Limited investment options
• Early withdrawal penalties
⚠️ Common Mistakes
• Leaving employer matches unclaimed (e.g., contributing only 2% when match is 5%).
• Holding >10% in company stock (violates diversification).
8. Risk Management Tips
• Diversify across fund options (avoid overloading on company stock).
• Set up automatic contribution increases (1%/year).
9. Tax Implications
• Contributions: Reduce taxable income now.
• Withdrawals: Taxed as ordinary income later.
10. 401(k) vs. Other Accounts
| 401(k) | Roth IRA |
|---|---|
| Pre-tax contributions | After-tax contributions |
| RMDs at 73 | No RMDs |
11. Next Steps
1. Check employer match policy.
2. Invest in:
• Aggressive: VTI (100%)
• Balanced: VTI (80%) + BND (20%)
• Hands-off: VLXVX (Target-Date 2065)
12. Best For
• Employees with employer matches.
• Those in higher tax brackets now vs. retirement.
13. FAQs
Q: Can I access funds before 59½?
A: Yes, via Rule of 55 (if retiring at/after 55) or IUL cash value loans.
Q: What if my employer doesn’t offer a match?
A: Fund a Roth IRA first, then return to 401(k).
14. Key Concepts
• Vesting Schedule: How long until employer matches are 100% yours.
• RMDs: Required Minimum Distributions (start at age 73).
15. Biblical Insight
"The wise store up choice food and oil." — Proverbs 21:20 (NIV).
Scriptural Stewardship: "Automate your 401(k) contributions to ‘store up’ for future seasons. Increase contributions by 1% annually."
1. What It Is
A tax-advantaged retirement plan for employees of public schools, nonprofits, and churches. Functions like a 401(k) but often includes annuity options.
2. How It Works
Contribute: Via salary reduction (2024 limit: $23,000 + $7,500 catch-up).
Invest: Choose mutual funds or annuities (varies by provider).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL: Use cash value to supplement income during summer breaks (for teachers) or sabbaticals.
No Policy: Prioritize low-fee mutual funds over high-cost annuities.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Net Income: $45,000 after taxes
Employer Match: 3% of salary = $1,350/year
Your Contribution: $150/month → $1,800/year
Total Annual Savings: $3,150
5. Real-Life Scenario
*Ms. Rodriguez (45, $52K/year teacher) contributes $300/month to her 403(b) + $150/month to IUL. At 60, her IUL cash value covers healthcare costs while 403(b) provides steady income.*
6. Myth-Busting
❌ "403(b)s only offer expensive annuities."
✅ Truth: Many now offer low-cost index funds (ask your HR).
❌ "You can’t roll over a 403(b) to an IRA."
✅ Truth: Rollovers are allowed when leaving the job.
7. Pros & Cons
✅ Pros:
• Tax-deferred growth
• Potential employer matches
❌ Cons:
• Often high fees if annuity-heavy
⚠️ Common Mistakes
• Not asking HR about low-fee fund options.
• Missing rollover opportunities when changing jobs.
8. Risk Management Tips
• Avoid annuities with >1% fees.
• Diversify across 2–3 index funds.
9. Tax Implications
• Contributions reduce taxable income.
• Withdrawals taxed as ordinary income.
10. 403(b) vs. 401(k)
11. Next Steps
1. Ask HR about investment options/fees.
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (60%) + BND (40%)
12. Best For
• Teachers, nonprofit employees.
• Those seeking tax-deferred growth.
13. FAQs
Q: Can I have both a 403(b) and IRA?
A: Yes, but IRA deductions may phase out at higher incomes.
Q: Are annuities ever a good choice?
A: Only if fees are <0.50% and you need guaranteed income.
14. Key Concepts
• Salary Reduction Agreement: How contributions are made.
• TSA (Tax-Sheltered Annuity): Another name for 403(b).
15. Biblical Insight
"Let the wise listen and add to their learning." — Proverbs 1:5 (NIV).
Scriptural Stewardship: "Educators: Automate 403(b) contributions to ‘add to your learning’ about wealth-building. Start with 3% of each paycheck."
A tax-advantaged retirement plan for employees of public schools, nonprofits, and churches. Functions like a 401(k) but often includes annuity options.
2. How It Works
Contribute: Via salary reduction (2024 limit: $23,000 + $7,500 catch-up).
Invest: Choose mutual funds or annuities (varies by provider).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL: Use cash value to supplement income during summer breaks (for teachers) or sabbaticals.
No Policy: Prioritize low-fee mutual funds over high-cost annuities.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Net Income: $45,000 after taxes
Employer Match: 3% of salary = $1,350/year
Your Contribution: $150/month → $1,800/year
Total Annual Savings: $3,150
5. Real-Life Scenario
*Ms. Rodriguez (45, $52K/year teacher) contributes $300/month to her 403(b) + $150/month to IUL. At 60, her IUL cash value covers healthcare costs while 403(b) provides steady income.*
6. Myth-Busting
❌ "403(b)s only offer expensive annuities."
✅ Truth: Many now offer low-cost index funds (ask your HR).
❌ "You can’t roll over a 403(b) to an IRA."
✅ Truth: Rollovers are allowed when leaving the job.
7. Pros & Cons
✅ Pros:
• Tax-deferred growth
• Potential employer matches
❌ Cons:
• Often high fees if annuity-heavy
⚠️ Common Mistakes
• Not asking HR about low-fee fund options.
• Missing rollover opportunities when changing jobs.
8. Risk Management Tips
• Avoid annuities with >1% fees.
• Diversify across 2–3 index funds.
9. Tax Implications
• Contributions reduce taxable income.
• Withdrawals taxed as ordinary income.
10. 403(b) vs. 401(k)
| 403(b) | 401(k) |
|---|---|
| For nonprofits/educators | For private-sector employees |
| Often includes annuities | Rarely includes annuities |
11. Next Steps
1. Ask HR about investment options/fees.
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (60%) + BND (40%)
12. Best For
• Teachers, nonprofit employees.
• Those seeking tax-deferred growth.
13. FAQs
Q: Can I have both a 403(b) and IRA?
A: Yes, but IRA deductions may phase out at higher incomes.
Q: Are annuities ever a good choice?
A: Only if fees are <0.50% and you need guaranteed income.
14. Key Concepts
• Salary Reduction Agreement: How contributions are made.
• TSA (Tax-Sheltered Annuity): Another name for 403(b).
15. Biblical Insight
"Let the wise listen and add to their learning." — Proverbs 1:5 (NIV).
Scriptural Stewardship: "Educators: Automate 403(b) contributions to ‘add to your learning’ about wealth-building. Start with 3% of each paycheck."
1. What It Is
A deferred-compensation retirement plan for state/local government employees and some nonprofits. Unlike 401(k)s, allows penalty-free withdrawals when you leave your job (regardless of age).
2. How It Works
Contribute: Via payroll deductions (2024 limit: $23,000 + $7,500 catch-up).
Invest: Choose from plan-approved mutual funds.
Withdraw: No 10% penalty if separated from service (even before 59½).
3. How This Ties Back to Life Insurance
With IUL:
• Use cash value loans during mandatory 6-month waiting period between retirement and 457 access (e.g., $20K IUL loan bridges gap).
Without Policy: Build emergency fund equal to 6 months’ expenses.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Income → Minimum Recommended → Ideal Target
$50K → 5% ($2,500/year) → 10% ($5,000/year)
$60K → 6% ($3,600/year) → 12% ($7,200/year)
5. Real-Life Scenario
Officer Mark Davis (50, $65K salary) contributes $500/month to 457; retires at 55 with $180K; uses IUL loans ($2K/month) during 6-month wait.
6. Myth-Busting
❌ "457 plans have the same rules as 401(k)s."
✅ Truth: No early withdrawal penalty if you separate from service.
❌ "You can't roll over a 457 plan."
✅ Truth: Rollovers to IRAs allowed after separation.
7. Pros & Cons
✅ Advantages
• No early withdrawal penalties
• Higher limits than IRAs
❌ Drawbacks
• Funds owned by employer until withdrawal
• Fewer investment options than 401(k)s
⚠️ Common Mistakes
• Not realizing withdrawals are mandatory once you separate service.
• Forgetting about 6-month waiting period before access.
8. Risk Management Tips
• Maintain 6+ months of living expenses in liquid accounts.
• Never allocate >10% to employer securities.
9. Tax Implications
• Contributions reduce taxable income.
• Withdrawals taxed as ordinary income.
• Special catch-up provisions in final 3 years before retirement.
10. 457 vs. 401(k) vs. 403(b)
11. Next Steps
1. Confirm your eligibility (government/nonprofit).
2. Allocate investments:
• Growth: VTI (80%)
• Conservative: BND (20%)
12. Best For
• Police officers, firefighters, government administrators.
13. FAQs
Q: Can I contribute to both a 457 and 401(k)?
A: Yes if your employer offers both (separate limits apply).
Q: What happens if I quit before retirement?
A: Funds remain available with no penalties (taxes still apply).
14. Key Terms
• Deferred Compensation: Salary diverted pre-tax to the plan.
• Separation from Service: Trigger for penalty-free access.
15. Biblical Insight
"The prudent see danger and take refuge." — Proverbs 22:3.
Scriptural Action Step: "Public servants: Automate 5–10% of each paycheck to your 457 as 'refuge' for your future service years."
A deferred-compensation retirement plan for state/local government employees and some nonprofits. Unlike 401(k)s, allows penalty-free withdrawals when you leave your job (regardless of age).
2. How It Works
Contribute: Via payroll deductions (2024 limit: $23,000 + $7,500 catch-up).
Invest: Choose from plan-approved mutual funds.
Withdraw: No 10% penalty if separated from service (even before 59½).
3. How This Ties Back to Life Insurance
With IUL:
• Use cash value loans during mandatory 6-month waiting period between retirement and 457 access (e.g., $20K IUL loan bridges gap).
Without Policy: Build emergency fund equal to 6 months’ expenses.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Income → Minimum Recommended → Ideal Target
$50K → 5% ($2,500/year) → 10% ($5,000/year)
$60K → 6% ($3,600/year) → 12% ($7,200/year)
5. Real-Life Scenario
Officer Mark Davis (50, $65K salary) contributes $500/month to 457; retires at 55 with $180K; uses IUL loans ($2K/month) during 6-month wait.
6. Myth-Busting
❌ "457 plans have the same rules as 401(k)s."
✅ Truth: No early withdrawal penalty if you separate from service.
❌ "You can't roll over a 457 plan."
✅ Truth: Rollovers to IRAs allowed after separation.
7. Pros & Cons
✅ Advantages
• No early withdrawal penalties
• Higher limits than IRAs
❌ Drawbacks
• Funds owned by employer until withdrawal
• Fewer investment options than 401(k)s
⚠️ Common Mistakes
• Not realizing withdrawals are mandatory once you separate service.
• Forgetting about 6-month waiting period before access.
8. Risk Management Tips
• Maintain 6+ months of living expenses in liquid accounts.
• Never allocate >10% to employer securities.
9. Tax Implications
• Contributions reduce taxable income.
• Withdrawals taxed as ordinary income.
• Special catch-up provisions in final 3 years before retirement.
10. 457 vs. 401(k) vs. 403(b)
| 457 Plan | 401(k)/403(b) |
|---|---|
| No penalty if separated | 10% penalty before 59½ |
| $23,000 + $7,500 catch-up | Same |
| Limited options | Broader options |
11. Next Steps
1. Confirm your eligibility (government/nonprofit).
2. Allocate investments:
• Growth: VTI (80%)
• Conservative: BND (20%)
12. Best For
• Police officers, firefighters, government administrators.
13. FAQs
Q: Can I contribute to both a 457 and 401(k)?
A: Yes if your employer offers both (separate limits apply).
Q: What happens if I quit before retirement?
A: Funds remain available with no penalties (taxes still apply).
14. Key Terms
• Deferred Compensation: Salary diverted pre-tax to the plan.
• Separation from Service: Trigger for penalty-free access.
15. Biblical Insight
"The prudent see danger and take refuge." — Proverbs 22:3.
Scriptural Action Step: "Public servants: Automate 5–10% of each paycheck to your 457 as 'refuge' for your future service years."
1. What It Is
An individual retirement account where contributions may be tax-deductible, with tax-deferred growth. Think of it as a "tax-sheltered backpack" for your investments.
2. How It Works
Contribute: Up to $7,000/year ($8,000 if 50+) in 2024.
Invest: Choose any stocks, bonds, ETFs, or mutual funds.
Withdraw: Taxed as ordinary income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With Whole Life:
• Use policy loans to supplement retirement income, reducing taxable IRA withdrawals.
Example: Take $15,000 in tax-free loans instead of $15,000 IRA withdrawal (saving $3,300 in taxes at 22% bracket).
Without Policy: Prioritize Roth IRA if you expect higher future taxes.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Income → Deductible? → Recommended Action
$50K → Full deduction → Max out $7,000
$60K → Partial deduction → Contribute $5,000
$70K → No deduction (if covered by workplace plan) → Use Roth IRA instead
5. Real-Life Scenario
James (35, $55K salary) contributes $5,000/year to Traditional IRA; saves $1,100/year in taxes (22% bracket). By 65: $600,000 balance (7% returns). Uses Whole Life loans to minimize RMD taxes at 72.
6. Myth-Busting
❌ "Traditional IRAs are always better than Roth IRAs."
✅ Truth: Roths win if you expect higher taxes in retirement.
❌ "You can't contribute if you have a 401(k)."
✅ Truth: You can—but deductions may phase out.
7. Pros & Cons
✅ Advantages
• Tax-deductible contributions
• More investment choices than 401(k)s
❌ Drawbacks
• Required Minimum Distributions (RMDs) at 72
• No employer match
⚠️ Common Mistakes
• Forgetting about RMDs (steep 25% penalty if missed).
• Not realizing deduction limits if covered by workplace plan.
8. Risk Management Tips
• Keep 1–2 years' worth of RMDs in cash equivalents.
• Diversify across 3+ asset classes.
9. Tax Implications
2024 Deduction Limits:
• Single + workplace plan: Phase out $73K–$83K.
• Married + workplace plan: Phase out $116K–$136K.
10. Traditional IRA vs. Roth IRA
11. Next Steps
1. Open at brokerage like Fidelity or Schwab.
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (60%) + BND (40%)
12. Best For
• Those in higher tax brackets now vs retirement.
• Self-employed without workplace plans.
13. FAQs
Q: Can I contribute to both Traditional and Roth IRA?
A: Yes, but combined limit is $7,000 ($8,000 if 50+).
Q: When do I pay taxes on contributions?
A: When you withdraw in retirement.
14. Key Terms
• RMD: Required Minimum Distribution (starts at age 72).
• Spousal IRA: Allows contributions for non-working spouses.
15. Biblical Insight
"The wise store up choice food and oil." — Proverbs 21:20.
Scriptural Action Step: "Automate monthly Traditional IRA contributions as part of your 'storing up' for future needs. Start with just 2% of your income."
An individual retirement account where contributions may be tax-deductible, with tax-deferred growth. Think of it as a "tax-sheltered backpack" for your investments.
2. How It Works
Contribute: Up to $7,000/year ($8,000 if 50+) in 2024.
Invest: Choose any stocks, bonds, ETFs, or mutual funds.
Withdraw: Taxed as ordinary income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With Whole Life:
• Use policy loans to supplement retirement income, reducing taxable IRA withdrawals.
Example: Take $15,000 in tax-free loans instead of $15,000 IRA withdrawal (saving $3,300 in taxes at 22% bracket).
Without Policy: Prioritize Roth IRA if you expect higher future taxes.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Income → Deductible? → Recommended Action
$50K → Full deduction → Max out $7,000
$60K → Partial deduction → Contribute $5,000
$70K → No deduction (if covered by workplace plan) → Use Roth IRA instead
5. Real-Life Scenario
James (35, $55K salary) contributes $5,000/year to Traditional IRA; saves $1,100/year in taxes (22% bracket). By 65: $600,000 balance (7% returns). Uses Whole Life loans to minimize RMD taxes at 72.
6. Myth-Busting
❌ "Traditional IRAs are always better than Roth IRAs."
✅ Truth: Roths win if you expect higher taxes in retirement.
❌ "You can't contribute if you have a 401(k)."
✅ Truth: You can—but deductions may phase out.
7. Pros & Cons
✅ Advantages
• Tax-deductible contributions
• More investment choices than 401(k)s
❌ Drawbacks
• Required Minimum Distributions (RMDs) at 72
• No employer match
⚠️ Common Mistakes
• Forgetting about RMDs (steep 25% penalty if missed).
• Not realizing deduction limits if covered by workplace plan.
8. Risk Management Tips
• Keep 1–2 years' worth of RMDs in cash equivalents.
• Diversify across 3+ asset classes.
9. Tax Implications
2024 Deduction Limits:
• Single + workplace plan: Phase out $73K–$83K.
• Married + workplace plan: Phase out $116K–$136K.
10. Traditional IRA vs. Roth IRA
| Traditional IRA | Roth IRA |
|---|---|
| Deduct now, pay taxes later | Pay taxes now, tax-free later |
| RMDs required at 72 | No RMDs |
11. Next Steps
1. Open at brokerage like Fidelity or Schwab.
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (60%) + BND (40%)
12. Best For
• Those in higher tax brackets now vs retirement.
• Self-employed without workplace plans.
13. FAQs
Q: Can I contribute to both Traditional and Roth IRA?
A: Yes, but combined limit is $7,000 ($8,000 if 50+).
Q: When do I pay taxes on contributions?
A: When you withdraw in retirement.
14. Key Terms
• RMD: Required Minimum Distribution (starts at age 72).
• Spousal IRA: Allows contributions for non-working spouses.
15. Biblical Insight
"The wise store up choice food and oil." — Proverbs 21:20.
Scriptural Action Step: "Automate monthly Traditional IRA contributions as part of your 'storing up' for future needs. Start with just 2% of your income."
1. What It Is
An individual retirement account funded with after-tax dollars, allowing tax-free growth and withdrawals. Think of it as planting a money tree where you'll never pay to harvest the fruit.
2. How It Works
Contribute: $7,000/year ($8,000 if 50+) in 2024 (income limits apply).
Invest: Choose any stocks, bonds, ETFs (more options than employer plans).
Withdraw: Contributions anytime tax/penalty-free; earnings after 59½ (with 5-year rule).
3. How This Ties Back to Life Insurance
With IUL:
• Create a tax-free retirement stack: Roth withdrawals + IUL loans.
Example: Withdraw $30K from Roth + $20K IUL loans = $50K tax-free income.
Without Policy: Prioritize if income <$146K (single)/$230K (married).
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Monthly Income → Recommended Action
$3,000 → Start with $100/month → $1,200/year
$4,500 → Aim for $250/month → $3,000/year
$5,800 → Max out $583/month → $7,000/year
5. Real-Life Scenario
Maria (25, $45K salary) contributes $300/month to Roth IRA; invests in VTI (100%). By 65: $1.1M tax-free (assuming 7% returns). Uses IUL for early retirement bridge (ages 55–59½).
6. Myth-Busting
❌ "Roth IRAs aren't worth it if you're young."
✅ Truth: Best for young investors—decades of tax-free compounding.
❌ "You can't touch the money until 59½."
✅ Truth: Contributions (not earnings) withdraw anytime.
7. Pros & Cons
✅ Advantages
• Tax-free growth & withdrawals
• No Required Minimum Distributions
❌ Drawbacks
• No upfront tax break
• Income limits restrict high earners
⚠️ Common Mistakes
• Missing the 5-year rule (account must be open 5+ years for earnings).
• Not realizing income limits phase out completely.
8. Risk Management Tips
• Keep 1 year's contributions in cash equivalents for emergencies.
• Rebalance annually (e.g., 90% stocks → 80% as you age).
9. Tax Implications
2024 Income Limits:
• Single: Full contribution up to $146K; phases out to $161K.
• Married: Up to $230K; phases out to $240K.
• Backdoor Roth IRA: Available if income exceeds limits.
10. Roth IRA vs. Traditional IRA
11. Next Steps
1. Open at brokerage like Fidelity or Charles Schwab.
2. Invest in:
• Aggressive: VTI (100%)
• Conservative: VLXVX (Target Date 2065)
• Set up automatic monthly transfers.
12. Best For
• Young professionals in lower tax brackets.
• Those expecting higher taxes in retirement.
• Estate planning (passes tax-free to heirs).
13. FAQs
Q: Can I contribute to both Roth IRA and 401(k)?
A: Yes! They have separate limits.
Q: What if I exceed income limits?
A: Use Backdoor Roth IRA (contribute to Traditional then convert).
14. Key Terms
• 5-Year Rule: Account must be open 5+ years for earnings withdrawals.
• Spousal Roth IRA: For non-working spouses (subject to same limits).
15. Biblical Insight
"A good person leaves an inheritance for their children's children." — Proverbs 13:22.
Scriptural Action Step: "Start your Roth IRA this week with whatever you can—even $50—as a legacy of wisdom for future generations."
An individual retirement account funded with after-tax dollars, allowing tax-free growth and withdrawals. Think of it as planting a money tree where you'll never pay to harvest the fruit.
2. How It Works
Contribute: $7,000/year ($8,000 if 50+) in 2024 (income limits apply).
Invest: Choose any stocks, bonds, ETFs (more options than employer plans).
Withdraw: Contributions anytime tax/penalty-free; earnings after 59½ (with 5-year rule).
3. How This Ties Back to Life Insurance
With IUL:
• Create a tax-free retirement stack: Roth withdrawals + IUL loans.
Example: Withdraw $30K from Roth + $20K IUL loans = $50K tax-free income.
Without Policy: Prioritize if income <$146K (single)/$230K (married).
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Monthly Income → Recommended Action
$3,000 → Start with $100/month → $1,200/year
$4,500 → Aim for $250/month → $3,000/year
$5,800 → Max out $583/month → $7,000/year
5. Real-Life Scenario
Maria (25, $45K salary) contributes $300/month to Roth IRA; invests in VTI (100%). By 65: $1.1M tax-free (assuming 7% returns). Uses IUL for early retirement bridge (ages 55–59½).
6. Myth-Busting
❌ "Roth IRAs aren't worth it if you're young."
✅ Truth: Best for young investors—decades of tax-free compounding.
❌ "You can't touch the money until 59½."
✅ Truth: Contributions (not earnings) withdraw anytime.
7. Pros & Cons
✅ Advantages
• Tax-free growth & withdrawals
• No Required Minimum Distributions
❌ Drawbacks
• No upfront tax break
• Income limits restrict high earners
⚠️ Common Mistakes
• Missing the 5-year rule (account must be open 5+ years for earnings).
• Not realizing income limits phase out completely.
8. Risk Management Tips
• Keep 1 year's contributions in cash equivalents for emergencies.
• Rebalance annually (e.g., 90% stocks → 80% as you age).
9. Tax Implications
2024 Income Limits:
• Single: Full contribution up to $146K; phases out to $161K.
• Married: Up to $230K; phases out to $240K.
• Backdoor Roth IRA: Available if income exceeds limits.
10. Roth IRA vs. Traditional IRA
| Roth IRA | Traditional IRA |
|---|---|
| Pay now, withdraw tax-free | Deduct now, pay taxes later |
| No RMDs | RMDs at 72 |
11. Next Steps
1. Open at brokerage like Fidelity or Charles Schwab.
2. Invest in:
• Aggressive: VTI (100%)
• Conservative: VLXVX (Target Date 2065)
• Set up automatic monthly transfers.
12. Best For
• Young professionals in lower tax brackets.
• Those expecting higher taxes in retirement.
• Estate planning (passes tax-free to heirs).
13. FAQs
Q: Can I contribute to both Roth IRA and 401(k)?
A: Yes! They have separate limits.
Q: What if I exceed income limits?
A: Use Backdoor Roth IRA (contribute to Traditional then convert).
14. Key Terms
• 5-Year Rule: Account must be open 5+ years for earnings withdrawals.
• Spousal Roth IRA: For non-working spouses (subject to same limits).
15. Biblical Insight
"A good person leaves an inheritance for their children's children." — Proverbs 13:22.
Scriptural Action Step: "Start your Roth IRA this week with whatever you can—even $50—as a legacy of wisdom for future generations."
1. What It Is
A retirement plan for self-employed individuals and small business owners allowing contributions up to 25% of net earnings (max $69,000 in 2024). Like a "turbocharged IRA" for entrepreneurs.
2. How It Works
Contribute: As employer only (no employee deferrals).
Calculate: 25% of net self-employment income (after deducting ½ of SE tax).
Invest: Choose any IRA-eligible investments (stocks, bonds, ETFs).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL:
• Use cash value loans to maximize contributions in high-income years.
Example: Borrow $20K from policy to hit $69K limit when client payments are delayed.
Without Policy: Pair with taxable brokerage for liquidity.
4. How Someone Making <$70K Can Use It
📊 Contribution Calculator
Net Profit: $60,000 (after expenses)
Subtract: $4,590 (½ of 15.3% SE tax) → $55,410
25% of Adjusted Profit: $13,853 (max contribution).
5. Real-Life Scenario
David (40, freelance consultant earning $80K) contributes $20K/year to SEP IRA; invests in VTI (80%) + BND (20%). By 65: $1.4M balance. Uses IUL loans during downturns to maintain contributions.
6. Myth-Busting
❌ "SEP IRAs are only for sole proprietors."
✅ Truth: Available to any business with employees (must contribute equally).
❌ "You need consistent income to benefit."
✅ Truth: Contributions are flexible year-to-year ($0 in bad years).
7. Pros & Cons
✅ Advantages
• High contribution limits ($69K)
• Easy setup (no annual filings)
❌ Drawbacks
• No Roth option
• Must cover all eligible employees
⚠️ Common Mistakes
• Forgetting to reduce net earnings by ½ of SE tax before calculating 25%.
• Missing tax filing deadline for contributions (April 15).
8. Risk Management Tips
• Maintain 1 year’s contributions in cash equivalents.
• Never allocate >20% to your industry’s stocks.
9. Tax Implications
• Deduction: Reduces taxable income dollar-for-dollar.
Example: $20K contribution saves $4,400 (22% bracket).
10. SEP IRA vs. Solo 401(k)
11. Next Steps
1. Open at Schwab/Fidelity (takes <15 minutes).
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (70%) + BND (30%)
12. Best For
• Freelancers earning >$50K/year.
• Small business owners with few/no employees.
13. FAQs
Q: Can I have a SEP IRA and 401(k)?
A: Yes, but combined employer contributions can't exceed $69K.
Q: What if I have employees?
A: You must contribute the same % for all eligible staff.
14. Key Terms
• Net Earnings: Profit after expenses (Schedule C line 31).
• Compensation Limit: $345,000 (2024 max for calculations).
15. Biblical Insight
"The plans of the diligent lead to profit." — Proverbs 21:5.
Scriptural Action Step: "Freelancers: Dedicate 10% of each client payment to your SEP IRA as 'first fruits' of your labor.'"
A retirement plan for self-employed individuals and small business owners allowing contributions up to 25% of net earnings (max $69,000 in 2024). Like a "turbocharged IRA" for entrepreneurs.
2. How It Works
Contribute: As employer only (no employee deferrals).
Calculate: 25% of net self-employment income (after deducting ½ of SE tax).
Invest: Choose any IRA-eligible investments (stocks, bonds, ETFs).
Withdraw: Taxed as income in retirement (penalties before 59½).
3. How This Ties Back to Life Insurance
With IUL:
• Use cash value loans to maximize contributions in high-income years.
Example: Borrow $20K from policy to hit $69K limit when client payments are delayed.
Without Policy: Pair with taxable brokerage for liquidity.
4. How Someone Making <$70K Can Use It
📊 Contribution Calculator
Net Profit: $60,000 (after expenses)
Subtract: $4,590 (½ of 15.3% SE tax) → $55,410
25% of Adjusted Profit: $13,853 (max contribution).
5. Real-Life Scenario
David (40, freelance consultant earning $80K) contributes $20K/year to SEP IRA; invests in VTI (80%) + BND (20%). By 65: $1.4M balance. Uses IUL loans during downturns to maintain contributions.
6. Myth-Busting
❌ "SEP IRAs are only for sole proprietors."
✅ Truth: Available to any business with employees (must contribute equally).
❌ "You need consistent income to benefit."
✅ Truth: Contributions are flexible year-to-year ($0 in bad years).
7. Pros & Cons
✅ Advantages
• High contribution limits ($69K)
• Easy setup (no annual filings)
❌ Drawbacks
• No Roth option
• Must cover all eligible employees
⚠️ Common Mistakes
• Forgetting to reduce net earnings by ½ of SE tax before calculating 25%.
• Missing tax filing deadline for contributions (April 15).
8. Risk Management Tips
• Maintain 1 year’s contributions in cash equivalents.
• Never allocate >20% to your industry’s stocks.
9. Tax Implications
• Deduction: Reduces taxable income dollar-for-dollar.
Example: $20K contribution saves $4,400 (22% bracket).
10. SEP IRA vs. Solo 401(k)
| SEP IRA | Solo 401(k) |
|---|---|
| 25% of net earnings | $69K combined (employee+employer) |
| Simpler administration | Allows Roth contributions |
11. Next Steps
1. Open at Schwab/Fidelity (takes <15 minutes).
2. Invest in:
• Growth: VTI (100%)
• Balanced: VTI (70%) + BND (30%)
12. Best For
• Freelancers earning >$50K/year.
• Small business owners with few/no employees.
13. FAQs
Q: Can I have a SEP IRA and 401(k)?
A: Yes, but combined employer contributions can't exceed $69K.
Q: What if I have employees?
A: You must contribute the same % for all eligible staff.
14. Key Terms
• Net Earnings: Profit after expenses (Schedule C line 31).
• Compensation Limit: $345,000 (2024 max for calculations).
15. Biblical Insight
"The plans of the diligent lead to profit." — Proverbs 21:5.
Scriptural Action Step: "Freelancers: Dedicate 10% of each client payment to your SEP IRA as 'first fruits' of your labor.'"
1. What It Is
A retirement plan for businesses with ≤100 employees, requiring employer contributions. Like a "401(k) light" with mandatory matches.
2. How It Works
Employee: Defer up to $16,000 ($19,500 if 50+) in 2024.
Employer: Must choose either:
• 2% non-elective contribution OR
• 3% matching contribution.
Invest: Select from provider's fund options.
3. How This Ties Back to Life Insurance
With Whole Life:
• Use dividends to fund employer contributions during cash crunches.
Example: $2,000 policy dividend covers 3% match for $65K salary.
Without Policy: Ideal for side hustles earning <$30K/year.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for Self-Employed
Business Income → Employee Deferral → Employer Match → Total Saved
$50,000 → $10,000 → $1,500 (3%) → $11,500
$30,000 → $6,000 → $900 (3%) → $6,900
5. Real-Life Scenario
Lisa (35, bakery owner earning $55K profit) contributes $10K as employee + $1,650 employer (3% match). Uses Whole Life loans when equipment breaks. Retires at 62 with $480K balance.
6. Myth-Busting
❌ "SIMPLE IRAs are just like SEP IRAs."
✅ Truth: SIMPLEs require employer contributions; SEPs don't.
❌ "Only full-time employees qualify."
✅ Truth: Must include part-timers earning >$5K/year.
7. Pros & Cons
✅ Advantages
• Easy setup for small businesses
• Employees immediately vested
❌ Drawbacks
• Lower limits than 401(k)s
• 25% penalty if withdrawn <2 years
⚠️ Common Mistakes
• Missing the 2-year rule (25% penalty on early withdrawals).
• Not realizing all eligible employees must be included.
8. Risk Management Tips
• Keep 6 months of employer contributions in cash.
• Avoid high-fee annuity options.
9. Tax Implications
• Employee contributions: Pre-tax.
• Employer contributions: Tax-deductible.
• Early withdrawals (<2 years): 25% penalty.
10. SIMPLE IRA vs. 401(k)
11. Next Steps
1. Use Form 5304-SIMPLE to establish plan.
2. Choose investments:
• Growth: VTI (100%)
• Conservative: BND (100%)
12. Best For
• Small businesses with steady cash flow.
• Side hustles transitioning to full-time.
13. FAQs
Q: Can I roll over to a 401(k) later?
A: Yes, after 2 years of participation.
Q: What if I can't afford the employer match?
A: You must use the 2% non-elective option instead.
14. Key Terms
• Salary Reduction Agreement: Employee contribution form.
• Two-Year Rule: Penalty period for early withdrawals.
15. Biblical Insight
"Two are better than one… for if they fall, one will lift up the other." — Ecclesiastes 4:9-10.
Scriptural Action Step: "Business owners: Faithfully fund the 3% match as your commitment to ‘lifting up’ your team’s future."
A retirement plan for businesses with ≤100 employees, requiring employer contributions. Like a "401(k) light" with mandatory matches.
2. How It Works
Employee: Defer up to $16,000 ($19,500 if 50+) in 2024.
Employer: Must choose either:
• 2% non-elective contribution OR
• 3% matching contribution.
Invest: Select from provider's fund options.
3. How This Ties Back to Life Insurance
With Whole Life:
• Use dividends to fund employer contributions during cash crunches.
Example: $2,000 policy dividend covers 3% match for $65K salary.
Without Policy: Ideal for side hustles earning <$30K/year.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for Self-Employed
Business Income → Employee Deferral → Employer Match → Total Saved
$50,000 → $10,000 → $1,500 (3%) → $11,500
$30,000 → $6,000 → $900 (3%) → $6,900
5. Real-Life Scenario
Lisa (35, bakery owner earning $55K profit) contributes $10K as employee + $1,650 employer (3% match). Uses Whole Life loans when equipment breaks. Retires at 62 with $480K balance.
6. Myth-Busting
❌ "SIMPLE IRAs are just like SEP IRAs."
✅ Truth: SIMPLEs require employer contributions; SEPs don't.
❌ "Only full-time employees qualify."
✅ Truth: Must include part-timers earning >$5K/year.
7. Pros & Cons
✅ Advantages
• Easy setup for small businesses
• Employees immediately vested
❌ Drawbacks
• Lower limits than 401(k)s
• 25% penalty if withdrawn <2 years
⚠️ Common Mistakes
• Missing the 2-year rule (25% penalty on early withdrawals).
• Not realizing all eligible employees must be included.
8. Risk Management Tips
• Keep 6 months of employer contributions in cash.
• Avoid high-fee annuity options.
9. Tax Implications
• Employee contributions: Pre-tax.
• Employer contributions: Tax-deductible.
• Early withdrawals (<2 years): 25% penalty.
10. SIMPLE IRA vs. 401(k)
| SIMPLE IRA | 401(k) |
|---|---|
| $16K employee + 3% match/2% non-elective | $23K + $7.5K catch-up |
| Mandatory employer contributions | Flexible matching |
11. Next Steps
1. Use Form 5304-SIMPLE to establish plan.
2. Choose investments:
• Growth: VTI (100%)
• Conservative: BND (100%)
12. Best For
• Small businesses with steady cash flow.
• Side hustles transitioning to full-time.
13. FAQs
Q: Can I roll over to a 401(k) later?
A: Yes, after 2 years of participation.
Q: What if I can't afford the employer match?
A: You must use the 2% non-elective option instead.
14. Key Terms
• Salary Reduction Agreement: Employee contribution form.
• Two-Year Rule: Penalty period for early withdrawals.
15. Biblical Insight
"Two are better than one… for if they fall, one will lift up the other." — Ecclesiastes 4:9-10.
Scriptural Action Step: "Business owners: Faithfully fund the 3% match as your commitment to ‘lifting up’ your team’s future."
1. What It Is
A 401(k) for self-employed individuals or business owners with no employees (except a spouse). Combines employee + employer contributions for massive tax-advantaged savings.
2. How It Works
Employee Contribution: Up to $23,000 ($30,500 if 50+) in 2024 (same as a regular 401(k)).
Employer Contribution: Up to 25% of net self-employment income (capped at $69,000 total combined for 2024).
Invest: Choose stocks, bonds, or even alternative assets (real estate, crypto if provider allows).
3. How This Ties Back to Life Insurance
With Whole Life: Use policy loans to cover employer contributions during lean years.
Example: Borrow $10K from Whole Life to fund employer contributions when business income dips.
Without Policy: Ideal for freelancers earning >$100K/year (maximize tax deductions).
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for a Side Hustle
Business Income → Employee Deferral → Employer Contribution (20%) → Total Saved
$50,000 → $10,000 → $7,400 → $17,400
$30,000 → $6,000 → $4,400 → $10,400
(Employer contribution calculated after deducting half of self-employment tax.)
5. Real-Life Scenario
Carlos (40, freelance graphic designer earning $60K profit) contributes $23K as "employee" + $9K as "employer" (20% of net income). Uses Whole Life cash value to cover contributions during client droughts. Retires at 65 with $1.2M balance (assuming 7% returns).
6. Myth-Busting
❌ "Solo 401(k)s are complicated to set up."
✅ Truth: Online providers (e.g., Fidelity, E*TRADE) handle paperwork in <1 hour.
❌ "You need an LLC to qualify."
✅ Truth: Sole proprietors, gig workers, and independent contractors qualify.
7. Pros & Cons
✅ Advantages
• Highest contribution limits (combined $69K)
• Tax-deductible employer contributions
❌ Drawbacks
• No employees allowed (except spouse)
• Complex if hiring employees later
8. Risk Management Tips
• Keep employer contributions in stable funds (e.g., bonds) to avoid volatility.
• Set up a Roth Solo 401(k) option if expecting higher taxes in retirement.
9. Tax Implications
• Employee contributions: Pre-tax (traditional) or Roth (if offered).
• Employer contributions: Always pre-tax (deductible).
• Early withdrawals: 10% penalty + income tax (except Roth contributions).
10. Solo 401(k) vs. SEP IRA
11. Next Steps
1. Establish: File IRS Form 5500-EZ if balance >$250K.
2. Invest:
• Aggressive: 80% VTI (stocks) + 20% BND (bonds).
• Conservative: 50% SCHD (dividends) + 50% BSV (short-term bonds).
12. Best For
• High-earning freelancers (> $100K/year).
• Doctors/lawyers with side gigs.
13. FAQs
Q: Can I roll over a 401(k) from an old job into a Solo 401(k)?
A: Yes! Consolidate old accounts for easier management.
Q: What if my income varies wildly?
A: Contribute as "employee" first (fixed), then adjust employer % based on annual profits.
14. Key Terms
• Net Self-Employment Income: Profit – ½ SE tax – contributions.
• Designated Roth Account: Roth option within Solo 401(k).
15. Biblical Insight
"The plans of the diligent lead to profit as surely as haste leads to poverty." — Proverbs 21:5.
Action Step: "Self-employed believers: Prioritize ‘employer’ contributions as disciplined stewardship of your earnings."
A 401(k) for self-employed individuals or business owners with no employees (except a spouse). Combines employee + employer contributions for massive tax-advantaged savings.
2. How It Works
Employee Contribution: Up to $23,000 ($30,500 if 50+) in 2024 (same as a regular 401(k)).
Employer Contribution: Up to 25% of net self-employment income (capped at $69,000 total combined for 2024).
Invest: Choose stocks, bonds, or even alternative assets (real estate, crypto if provider allows).
3. How This Ties Back to Life Insurance
With Whole Life: Use policy loans to cover employer contributions during lean years.
Example: Borrow $10K from Whole Life to fund employer contributions when business income dips.
Without Policy: Ideal for freelancers earning >$100K/year (maximize tax deductions).
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for a Side Hustle
Business Income → Employee Deferral → Employer Contribution (20%) → Total Saved
$50,000 → $10,000 → $7,400 → $17,400
$30,000 → $6,000 → $4,400 → $10,400
(Employer contribution calculated after deducting half of self-employment tax.)
5. Real-Life Scenario
Carlos (40, freelance graphic designer earning $60K profit) contributes $23K as "employee" + $9K as "employer" (20% of net income). Uses Whole Life cash value to cover contributions during client droughts. Retires at 65 with $1.2M balance (assuming 7% returns).
6. Myth-Busting
❌ "Solo 401(k)s are complicated to set up."
✅ Truth: Online providers (e.g., Fidelity, E*TRADE) handle paperwork in <1 hour.
❌ "You need an LLC to qualify."
✅ Truth: Sole proprietors, gig workers, and independent contractors qualify.
7. Pros & Cons
✅ Advantages
• Highest contribution limits (combined $69K)
• Tax-deductible employer contributions
❌ Drawbacks
• No employees allowed (except spouse)
• Complex if hiring employees later
8. Risk Management Tips
• Keep employer contributions in stable funds (e.g., bonds) to avoid volatility.
• Set up a Roth Solo 401(k) option if expecting higher taxes in retirement.
9. Tax Implications
• Employee contributions: Pre-tax (traditional) or Roth (if offered).
• Employer contributions: Always pre-tax (deductible).
• Early withdrawals: 10% penalty + income tax (except Roth contributions).
10. Solo 401(k) vs. SEP IRA
| Solo 401(k) | SEP IRA |
|---|---|
| $69K combined | 25% of net earnings |
| Allows Roth + higher limits | Simpler administration |
11. Next Steps
1. Establish: File IRS Form 5500-EZ if balance >$250K.
2. Invest:
• Aggressive: 80% VTI (stocks) + 20% BND (bonds).
• Conservative: 50% SCHD (dividends) + 50% BSV (short-term bonds).
12. Best For
• High-earning freelancers (> $100K/year).
• Doctors/lawyers with side gigs.
13. FAQs
Q: Can I roll over a 401(k) from an old job into a Solo 401(k)?
A: Yes! Consolidate old accounts for easier management.
Q: What if my income varies wildly?
A: Contribute as "employee" first (fixed), then adjust employer % based on annual profits.
14. Key Terms
• Net Self-Employment Income: Profit – ½ SE tax – contributions.
• Designated Roth Account: Roth option within Solo 401(k).
15. Biblical Insight
"The plans of the diligent lead to profit as surely as haste leads to poverty." — Proverbs 21:5.
Action Step: "Self-employed believers: Prioritize ‘employer’ contributions as disciplined stewardship of your earnings."
1. What It Is
A pension-like retirement plan for federal employees & military personnel, offering ultra-low fees and unique funds (e.g., the "G Fund"). Combines 401(k)-style savings with government security.
2. How It Works
Employee Contribution: Up to $23,000 ($30,500 if 50+) in 2024.
Agency Matching: Up to 5% salary match (e.g., $3,500/year on $70K salary).
Invest: Choose from 5 core funds (G, F, C, S, I) or Lifecycle (L) target-date funds.
3. How This Ties Back to Life Insurance
With Whole Life: Use TSP’s pension-like stability to offset life insurance costs in retirement.
Example: A $500/month TSP annuity covers Whole Life premiums after age 60.
Without Policy: Ideal for federal employees prioritizing simplicity and low fees.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for a GS-7 Employee ($50K Salary)
Contribution Type → Amount (2024) → Notes
Employee (Traditional) → $10,000 → Pre-tax
Agency Match (5%) → $2,500 → Free money!
Total Annual Savings → $12,500 → 25% of salary
5. Real-Life Scenario
Marcus (30, postal worker earning $60K) contributes $15K/year (Traditional TSP + 5% match). Invests 100% in C Fund (S&P 500). Retires at 62 with $1.8M (assuming 7% returns).
6. Myth-Busting
❌ "The G Fund is the safest, so I should go 100% into it."
✅ Truth: G Fund (bonds) barely beats inflation—long-term growth requires C/S Funds.
❌ "TSPs are only for civilians."
✅ Truth: Military members can contribute (even while deployed tax-free).
7. Pros & Cons
✅ Advantages
• Lowest fees in the U.S. (0.04% expense ratio)
• 5% agency match (free money)
❌ Drawbacks
• Limited fund choices (only 5 core options)
• No Roth option for military tax-free combat pay
8. Risk Management Tips
• Diversify: Pair C Fund (stocks) with G Fund (bonds) for stability.
• Avoid loans: TSP loans have strict repayment rules (tax penalties if you leave federal service).
9. Tax Implications
• Traditional TSP: Pre-tax contributions (taxed in retirement).
• Roth TSP: After-tax contributions (tax-free growth).
• Early withdrawals: 10% penalty (exceptions for military/financial hardship).
10. TSP vs. 401(k)
11. Next Steps
1. Maximize match: Contribute at least 5% to get full agency match.
2. Allocate:
• Aggressive: 80% C Fund + 20% S Fund.
• Conservative: 50% G Fund + 50% F Fund.
12. Best For
• Federal employees (GS scale, postal workers).
• Military personnel (especially deployed).
13. FAQs
Q: Can I roll my TSP into an IRA after leaving government?
A: Yes—but consider keeping it for the G Fund’s unique benefits.
Q: What’s the best fund for long-term growth?
A: C Fund (mirrors S&P 500) for 20+ year horizons.
14. Key Terms
• G Fund: Treasury bonds with zero market risk.
• Lifecycle (L) Funds: Auto-adjusting portfolios based on retirement date.
15. Biblical Insight
"The horse is made ready for battle, but victory rests with the Lord." — Proverbs 21:31.
Action Step: "Federal workers: Faithfully contribute 5% to secure your ‘battle’ (retirement), but trust God for ultimate provision."
A pension-like retirement plan for federal employees & military personnel, offering ultra-low fees and unique funds (e.g., the "G Fund"). Combines 401(k)-style savings with government security.
2. How It Works
Employee Contribution: Up to $23,000 ($30,500 if 50+) in 2024.
Agency Matching: Up to 5% salary match (e.g., $3,500/year on $70K salary).
Invest: Choose from 5 core funds (G, F, C, S, I) or Lifecycle (L) target-date funds.
3. How This Ties Back to Life Insurance
With Whole Life: Use TSP’s pension-like stability to offset life insurance costs in retirement.
Example: A $500/month TSP annuity covers Whole Life premiums after age 60.
Without Policy: Ideal for federal employees prioritizing simplicity and low fees.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy for a GS-7 Employee ($50K Salary)
Contribution Type → Amount (2024) → Notes
Employee (Traditional) → $10,000 → Pre-tax
Agency Match (5%) → $2,500 → Free money!
Total Annual Savings → $12,500 → 25% of salary
5. Real-Life Scenario
Marcus (30, postal worker earning $60K) contributes $15K/year (Traditional TSP + 5% match). Invests 100% in C Fund (S&P 500). Retires at 62 with $1.8M (assuming 7% returns).
6. Myth-Busting
❌ "The G Fund is the safest, so I should go 100% into it."
✅ Truth: G Fund (bonds) barely beats inflation—long-term growth requires C/S Funds.
❌ "TSPs are only for civilians."
✅ Truth: Military members can contribute (even while deployed tax-free).
7. Pros & Cons
✅ Advantages
• Lowest fees in the U.S. (0.04% expense ratio)
• 5% agency match (free money)
❌ Drawbacks
• Limited fund choices (only 5 core options)
• No Roth option for military tax-free combat pay
8. Risk Management Tips
• Diversify: Pair C Fund (stocks) with G Fund (bonds) for stability.
• Avoid loans: TSP loans have strict repayment rules (tax penalties if you leave federal service).
9. Tax Implications
• Traditional TSP: Pre-tax contributions (taxed in retirement).
• Roth TSP: After-tax contributions (tax-free growth).
• Early withdrawals: 10% penalty (exceptions for military/financial hardship).
10. TSP vs. 401(k)
| TSP | 401(k) |
|---|---|
| 0.04% fees | 0.50%+ avg fees |
| G Fund (zero-risk bonds) | Broader investment options |
11. Next Steps
1. Maximize match: Contribute at least 5% to get full agency match.
2. Allocate:
• Aggressive: 80% C Fund + 20% S Fund.
• Conservative: 50% G Fund + 50% F Fund.
12. Best For
• Federal employees (GS scale, postal workers).
• Military personnel (especially deployed).
13. FAQs
Q: Can I roll my TSP into an IRA after leaving government?
A: Yes—but consider keeping it for the G Fund’s unique benefits.
Q: What’s the best fund for long-term growth?
A: C Fund (mirrors S&P 500) for 20+ year horizons.
14. Key Terms
• G Fund: Treasury bonds with zero market risk.
• Lifecycle (L) Funds: Auto-adjusting portfolios based on retirement date.
15. Biblical Insight
"The horse is made ready for battle, but victory rests with the Lord." — Proverbs 21:31.
Action Step: "Federal workers: Faithfully contribute 5% to secure your ‘battle’ (retirement), but trust God for ultimate provision."
1. What It Is
A hybrid insurance/investment product that guarantees principal protection while offering market-linked growth (based on an index like the S&P 500).
2. How It Works
Premium: Lump sum or installments paid to insurer.
Growth: Earns interest based on index performance (e.g., 3–6% cap rate).
Income Phase: Can convert to lifetime payments (like a pension).
3. How This Ties Back to Retirement Accounts
With 401(k)/IRA Rollover: Use a qualified annuity to defer taxes while securing guaranteed income.
Example: Roll over $200K 401(k) → annuity for $1,200/month lifetime income at 65.
Without Retirement Accounts: Ideal for conservative investors who want growth without stock market risk.
4. How Someone with $100K Can Use It
📊 Projected Growth vs. Safety
Strategy → Potential Growth (5 Years) → Downside Protection
FIA (5% cap) → $128,000 → 100% principal safety
S&P 500 → $150,000 (avg) → -30% in crashes
CDs (3%) → $116,000 → 100% safe but low growth
5. Real-Life Scenario
Linda (58, teacher with $250K savings) transfers $150K from IRA into a fixed indexed annuity. Earns 4% annual average (capped) for 7 years → grows to $197K. Starts $1,100/month lifetime payments at 65.
6. Myth-Busting
❌ "Annuities are scams with high fees."
✅ Truth: FIAs have no fees (only surrender periods). High fees apply to variable annuities.
❌ "You lose all your money if you die early."
✅ Truth: Most include death benefits (heirs get remaining account value).
7. Pros & Cons
✅ Advantages
• Zero market risk to principal
• Tax-deferred growth
❌ Drawbacks
• Growth capped (misses bull markets)
• Surrender charges (5–10 years)
8. Risk Management Tips
• Ladder annuities (buy multiple over time to avoid locking in low rates).
• Add a rider for inflation protection (costs extra but valuable long-term).
9. Tax Implications
• Qualified (IRA/401(k) rollover): Taxed as income during withdrawals.
• Non-qualified (after-tax money): Only earnings taxed (LIFO accounting).
10. FIA vs. Bonds/CDs
11. Next Steps
1. Request illustrations from 3+ insurers (Allianz, Nationwide, Brighthouse).
2. Choose a strategy:
• Growth: 100% S&P 500-linked index.
• Balanced: 50% index / 50% fixed interest.
12. Best For
• Retirees needing predictable income.
• Pre-retirees (55+) who want growth without risk.
13. FAQs
Q: Are FIAs a good choice for conservative investors?
A: Yes—if you prioritize principal protection with some upside potential.
Q: What if I die early?
A: Death benefits return remaining account value to heirs.
14. Key Concepts
• Participation Rate: % of index gain credited.
• Surrender Period: Charges if withdrawn early.
15. Biblical Insight
"The prudent see danger and take refuge." — Proverbs 22:3.
Action Step: "Ladder multiple FIAs over time to build a firm refuge of guaranteed income."
A hybrid insurance/investment product that guarantees principal protection while offering market-linked growth (based on an index like the S&P 500).
2. How It Works
Premium: Lump sum or installments paid to insurer.
Growth: Earns interest based on index performance (e.g., 3–6% cap rate).
Income Phase: Can convert to lifetime payments (like a pension).
3. How This Ties Back to Retirement Accounts
With 401(k)/IRA Rollover: Use a qualified annuity to defer taxes while securing guaranteed income.
Example: Roll over $200K 401(k) → annuity for $1,200/month lifetime income at 65.
Without Retirement Accounts: Ideal for conservative investors who want growth without stock market risk.
4. How Someone with $100K Can Use It
📊 Projected Growth vs. Safety
Strategy → Potential Growth (5 Years) → Downside Protection
FIA (5% cap) → $128,000 → 100% principal safety
S&P 500 → $150,000 (avg) → -30% in crashes
CDs (3%) → $116,000 → 100% safe but low growth
5. Real-Life Scenario
Linda (58, teacher with $250K savings) transfers $150K from IRA into a fixed indexed annuity. Earns 4% annual average (capped) for 7 years → grows to $197K. Starts $1,100/month lifetime payments at 65.
6. Myth-Busting
❌ "Annuities are scams with high fees."
✅ Truth: FIAs have no fees (only surrender periods). High fees apply to variable annuities.
❌ "You lose all your money if you die early."
✅ Truth: Most include death benefits (heirs get remaining account value).
7. Pros & Cons
✅ Advantages
• Zero market risk to principal
• Tax-deferred growth
❌ Drawbacks
• Growth capped (misses bull markets)
• Surrender charges (5–10 years)
8. Risk Management Tips
• Ladder annuities (buy multiple over time to avoid locking in low rates).
• Add a rider for inflation protection (costs extra but valuable long-term).
9. Tax Implications
• Qualified (IRA/401(k) rollover): Taxed as income during withdrawals.
• Non-qualified (after-tax money): Only earnings taxed (LIFO accounting).
10. FIA vs. Bonds/CDs
| Fixed Indexed Annuity | 10-Year Treasury Bond |
|---|---|
| 3–6% (capped) | 4.3% (fixed) |
| No principal risk | No principal risk |
11. Next Steps
1. Request illustrations from 3+ insurers (Allianz, Nationwide, Brighthouse).
2. Choose a strategy:
• Growth: 100% S&P 500-linked index.
• Balanced: 50% index / 50% fixed interest.
12. Best For
• Retirees needing predictable income.
• Pre-retirees (55+) who want growth without risk.
13. FAQs
Q: Are FIAs a good choice for conservative investors?
A: Yes—if you prioritize principal protection with some upside potential.
Q: What if I die early?
A: Death benefits return remaining account value to heirs.
14. Key Concepts
• Participation Rate: % of index gain credited.
• Surrender Period: Charges if withdrawn early.
15. Biblical Insight
"The prudent see danger and take refuge." — Proverbs 22:3.
Action Step: "Ladder multiple FIAs over time to build a firm refuge of guaranteed income."
1. What It Is
An insurance contract with investment subaccounts (like mutual funds) that allows market-linked growth with death benefits and optional income guarantees.
2. How It Works
Premium: Lump sum or installments.
Invest: Choose subaccounts (stocks, bonds, balanced portfolios).
Income Phase: Add a rider for guaranteed lifetime income (fees apply).
3. How This Ties Back to Life Insurance
• Use IUL to supplement income if market underperforms your annuity.
• Optional death benefit protects heirs if markets drop before payout begins.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Invest: 60% equity subaccounts + 40% fixed options.
Add income rider if you need predictable payments.
5. Real-Life Scenario
Karen (55, $65K salary) invests $100K in a variable annuity with a 5% guaranteed income rider; receives $5K/year for life starting at 65, plus market upside.
6. Myth-Busting
❌ "Variable annuities have hidden fees."
✅ Truth: Fees are disclosed in the prospectus; shop for low-fee riders (<1%).
❌ "You can’t access your money."
✅ Truth: Withdrawals allowed (surrender charges may apply early).
7. Pros & Cons
✅ Advantages
• Market upside potential
• Optional income guarantees
❌ Drawbacks
• Higher fees (subaccounts + riders)
• Surrender charges
8. Risk Management Tips
• Choose low-cost subaccounts.
• Limit rider fees to <1% for best value.
9. Tax Implications
• Earnings tax-deferred until withdrawal.
• Withdrawals taxed as ordinary income.
10. Variable Annuity vs. Mutual Funds
11. Next Steps
1. Request fee schedules and rider quotes from insurers.
2. Compare subaccount performance vs. index benchmarks.
12. Best For
• Those needing both upside and income certainty.
• Investors wanting built-in death benefits.
13. FAQs
Q: Can I switch subaccounts without taxes?
A: Yes—inside the annuity.
Q: What if markets crash?
A: Income guarantees still pay, but account value drops.
14. Key Concepts
• Subaccount Selection: Choose funds like a portfolio.
• Rider Fees: Understand income-guarantee costs.
15. Biblical Insight
"The wise store up choice food and oil…" — Proverbs 21:20.
Action Step: "Use riders to ‘store’ guaranteed income for lean years, but keep a conservative core."
An insurance contract with investment subaccounts (like mutual funds) that allows market-linked growth with death benefits and optional income guarantees.
2. How It Works
Premium: Lump sum or installments.
Invest: Choose subaccounts (stocks, bonds, balanced portfolios).
Income Phase: Add a rider for guaranteed lifetime income (fees apply).
3. How This Ties Back to Life Insurance
• Use IUL to supplement income if market underperforms your annuity.
• Optional death benefit protects heirs if markets drop before payout begins.
4. How Someone Making <$70K Can Use It
📊 Contribution Strategy
Invest: 60% equity subaccounts + 40% fixed options.
Add income rider if you need predictable payments.
5. Real-Life Scenario
Karen (55, $65K salary) invests $100K in a variable annuity with a 5% guaranteed income rider; receives $5K/year for life starting at 65, plus market upside.
6. Myth-Busting
❌ "Variable annuities have hidden fees."
✅ Truth: Fees are disclosed in the prospectus; shop for low-fee riders (<1%).
❌ "You can’t access your money."
✅ Truth: Withdrawals allowed (surrender charges may apply early).
7. Pros & Cons
✅ Advantages
• Market upside potential
• Optional income guarantees
❌ Drawbacks
• Higher fees (subaccounts + riders)
• Surrender charges
8. Risk Management Tips
• Choose low-cost subaccounts.
• Limit rider fees to <1% for best value.
9. Tax Implications
• Earnings tax-deferred until withdrawal.
• Withdrawals taxed as ordinary income.
10. Variable Annuity vs. Mutual Funds
| Variable Annuity | Direct Mutual Funds |
|---|---|
| Tax-deferred growth + riders | Taxable dividends/capital gains |
| Death benefit | No death benefit |
11. Next Steps
1. Request fee schedules and rider quotes from insurers.
2. Compare subaccount performance vs. index benchmarks.
12. Best For
• Those needing both upside and income certainty.
• Investors wanting built-in death benefits.
13. FAQs
Q: Can I switch subaccounts without taxes?
A: Yes—inside the annuity.
Q: What if markets crash?
A: Income guarantees still pay, but account value drops.
14. Key Concepts
• Subaccount Selection: Choose funds like a portfolio.
• Rider Fees: Understand income-guarantee costs.
15. Biblical Insight
"The wise store up choice food and oil…" — Proverbs 21:20.
Action Step: "Use riders to ‘store’ guaranteed income for lean years, but keep a conservative core."
1. What It Is
A contract that converts a lump-sum premium into an immediate stream of payments (monthly, quarterly, etc.) for life or a set period.
2. How It Works
Premium: Lump sum to insurer.
Payment Options: Life-only, joint-life, period certain.
Receipts: Begin within 12 months of purchase.
3. How This Ties Back to Life Insurance
• Use alongside term life: immediate annuity covers expenses if life cover lapses.
• Or combine with whole life dividends to fund premium.
4. How Someone with $100K Can Use It
📊 Income Examples
• Life-only: $100K → $600/month for life.
• Period-certain (10 years): $100K → $850/month guaranteed.
5. Real-Life Scenario
Susan (65) buys $200K immediate annuity; receives $1,200/month for life, covering her living expenses and freeing up other assets.
6. Myth-Busting
❌ "Immediate annuities are illiquid."
✅ Truth: Some allow 10% free withdrawal per year.
❌ "You lose everything if you die early."
✅ Truth: Period-certain or refund options preserve value for heirs.
7. Pros & Cons
✅ Pros
• Guaranteed income
• Simple structure
❌ Cons
• Limited liquidity
• Inflation risk if no rider
8. Risk Management Tips
• Add cost-of-living rider if inflation is a concern.
• Choose joint-life option if spouse needs protection.
9. Tax Implications
• Part of each payment is return of principal (tax-free).
• Remainder taxed as ordinary income.
10. Immediate Annuity vs. Deferred Annuity
11. Next Steps
1. Request payout illustrations and rider quotes.
2. Compare life-only vs. period-certain vs. joint-life.
12. Best For
• Those needing an instant, predictable pension.
• Individuals wary of market volatility.
13. FAQs
Q: Can I cancel an immediate annuity?
A: Some allow a free-look period (30 days).
Q: What if I die soon after purchase?
A: Refund or period-certain options protect heirs.
14. Key Concepts
• Life-Only vs. Joint-Life: Choose based on spouse protection.
• Period-Certain: Guarantees payments for a minimum term.
15. Biblical Insight
“Teach us to number our days…” — Psalm 90:12.
Action Step: “Secure today’s income to steward your days wisely.”
A contract that converts a lump-sum premium into an immediate stream of payments (monthly, quarterly, etc.) for life or a set period.
2. How It Works
Premium: Lump sum to insurer.
Payment Options: Life-only, joint-life, period certain.
Receipts: Begin within 12 months of purchase.
3. How This Ties Back to Life Insurance
• Use alongside term life: immediate annuity covers expenses if life cover lapses.
• Or combine with whole life dividends to fund premium.
4. How Someone with $100K Can Use It
📊 Income Examples
• Life-only: $100K → $600/month for life.
• Period-certain (10 years): $100K → $850/month guaranteed.
5. Real-Life Scenario
Susan (65) buys $200K immediate annuity; receives $1,200/month for life, covering her living expenses and freeing up other assets.
6. Myth-Busting
❌ "Immediate annuities are illiquid."
✅ Truth: Some allow 10% free withdrawal per year.
❌ "You lose everything if you die early."
✅ Truth: Period-certain or refund options preserve value for heirs.
7. Pros & Cons
✅ Pros
• Guaranteed income
• Simple structure
❌ Cons
• Limited liquidity
• Inflation risk if no rider
8. Risk Management Tips
• Add cost-of-living rider if inflation is a concern.
• Choose joint-life option if spouse needs protection.
9. Tax Implications
• Part of each payment is return of principal (tax-free).
• Remainder taxed as ordinary income.
10. Immediate Annuity vs. Deferred Annuity
| Immediate | Deferred |
|---|---|
| Payments start ≤12 months | Payments start ≥1 year |
| Locks in current rates | Allows more growth pre-payout |
11. Next Steps
1. Request payout illustrations and rider quotes.
2. Compare life-only vs. period-certain vs. joint-life.
12. Best For
• Those needing an instant, predictable pension.
• Individuals wary of market volatility.
13. FAQs
Q: Can I cancel an immediate annuity?
A: Some allow a free-look period (30 days).
Q: What if I die soon after purchase?
A: Refund or period-certain options protect heirs.
14. Key Concepts
• Life-Only vs. Joint-Life: Choose based on spouse protection.
• Period-Certain: Guarantees payments for a minimum term.
15. Biblical Insight
“Teach us to number our days…” — Psalm 90:12.
Action Step: “Secure today’s income to steward your days wisely.”
1. What It Is
An insurance contract where you pay premiums now and defer income payments to a future date (e.g., age 65), allowing tax-deferred growth.
2. How It Works
Premium: Single or flexible payments.
Accumulation: Grows tax-deferred at a fixed or indexed rate.
Distribution: Begin lifetime or period payments at your chosen date.
3. How This Ties Back to Retirement Accounts
• Use QLAC rules to defer up to $200K of RMDs past 72.
• Roll over IRA funds to a deferred annuity to smooth income spikes.
4. How Someone with $100K Can Use It
📊 Deferral Examples
• Defer $100K at 3% fixed → $150K in 15 years.
• Indexed option: 80% cap with 0% floor for market upside.
5. Real-Life Scenario
Bill (55) funds a deferred annuity with $150K; at 65, it converts to $1,200/month for life, supplementing his 401(k) distributions.
6. Myth-Busting
❌ "Deferred annuities lock up your money forever."
✅ Truth: Some allow partial surrenders or free withdrawals up to 10%.
❌ "They’re only for the wealthy."
✅ Truth: QLACs allow lower minimums ($25K+) and protect RMDs.
7. Pros & Cons
✅ Pros
• Tax-deferred growth
• Income longevity protection
❌ Cons
• Surrender charges if withdrawn early
• Fees vary by product
8. Risk Management Tips
• Ladder deferral periods for flexibility.
• Combine fixed and indexed options to balance growth.
9. Tax Implications
• Earnings taxed as ordinary income upon distribution.
• QLAC distributions excluded from RMD calculations up to $200K.
10. Deferred Annuity vs. IRA
11. Next Steps
1. Compare fixed vs. indexed deferred annuities.
2. Evaluate QLAC options for RMD relief.
12. Best For
• Those seeking to smooth retirement income.
• Individuals concerned about longevity risk.
13. FAQs
Q: Can I withdraw funds before distribution date?
A: Only via surrender (charges apply) or riders.
Q: What if I don’t need the income?
A: Many annuities offer death benefits to heirs.
14. Key Concepts
• QLAC Rules: Up to $200K deferred from RMDs.
• Deferral Period: Choose start age for optimal payouts.
15. Biblical Insight
"Teach us to number our days…" — Psalm 90:12.
Action Step: "Secure guaranteed income for your final seasons—defer wisely, live abundantly."
16. 📌 Deferred Annuity Cheat Sheet
Details
2024 Rates: $12–$31 annual income per $1K (based on deferral)
Retirement Hack: Use QLAC rules to shelter IRA funds from RMDs until 85
First Step: Request illustrations showing 10/20/30-year deferrals
Critical Rule: Irrevocable – only commit “endgame” money
An insurance contract where you pay premiums now and defer income payments to a future date (e.g., age 65), allowing tax-deferred growth.
2. How It Works
Premium: Single or flexible payments.
Accumulation: Grows tax-deferred at a fixed or indexed rate.
Distribution: Begin lifetime or period payments at your chosen date.
3. How This Ties Back to Retirement Accounts
• Use QLAC rules to defer up to $200K of RMDs past 72.
• Roll over IRA funds to a deferred annuity to smooth income spikes.
4. How Someone with $100K Can Use It
📊 Deferral Examples
• Defer $100K at 3% fixed → $150K in 15 years.
• Indexed option: 80% cap with 0% floor for market upside.
5. Real-Life Scenario
Bill (55) funds a deferred annuity with $150K; at 65, it converts to $1,200/month for life, supplementing his 401(k) distributions.
6. Myth-Busting
❌ "Deferred annuities lock up your money forever."
✅ Truth: Some allow partial surrenders or free withdrawals up to 10%.
❌ "They’re only for the wealthy."
✅ Truth: QLACs allow lower minimums ($25K+) and protect RMDs.
7. Pros & Cons
✅ Pros
• Tax-deferred growth
• Income longevity protection
❌ Cons
• Surrender charges if withdrawn early
• Fees vary by product
8. Risk Management Tips
• Ladder deferral periods for flexibility.
• Combine fixed and indexed options to balance growth.
9. Tax Implications
• Earnings taxed as ordinary income upon distribution.
• QLAC distributions excluded from RMD calculations up to $200K.
10. Deferred Annuity vs. IRA
| Deferred Annuity | IRA |
|---|---|
| Tax-deferred growth + riders | Tax-deferred or tax-free growth |
| QLAC exclusion from RMDs | Fully subject to RMDs at 73 |
11. Next Steps
1. Compare fixed vs. indexed deferred annuities.
2. Evaluate QLAC options for RMD relief.
12. Best For
• Those seeking to smooth retirement income.
• Individuals concerned about longevity risk.
13. FAQs
Q: Can I withdraw funds before distribution date?
A: Only via surrender (charges apply) or riders.
Q: What if I don’t need the income?
A: Many annuities offer death benefits to heirs.
14. Key Concepts
• QLAC Rules: Up to $200K deferred from RMDs.
• Deferral Period: Choose start age for optimal payouts.
15. Biblical Insight
"Teach us to number our days…" — Psalm 90:12.
Action Step: "Secure guaranteed income for your final seasons—defer wisely, live abundantly."
16. 📌 Deferred Annuity Cheat Sheet
Details
2024 Rates: $12–$31 annual income per $1K (based on deferral)
Retirement Hack: Use QLAC rules to shelter IRA funds from RMDs until 85
First Step: Request illustrations showing 10/20/30-year deferrals
Critical Rule: Irrevocable – only commit “endgame” money
Retirement planning isn't about picking the "perfect" account, it's about building a fortress with multiple layers of protection. Your 401(k) is the foundation, IRAs are the reinforced walls, annuities act as the moat against longevity risk, and life insurance serves as the drawbridge to pass wealth tax-efficiently. No single strategy can weather every storm, but together, they create an unshakable structure that allows your money to outlive you—not the other way around. Start where you are, use what you have, and remember: The best retirement plan is the one you actually stick with.