"Successful Aging" Linked to Harmful Drinking Aming Over 50s

By Sondra Forsyth

Retirement should represent an opportunity to enjoy life after decades of hard work and saving.

But it doesn’t always turn out that way, even with people who saved wisely, says Gary Marriage Jr., CEO of Nature Coast Financial Advisors (www.naturecoastfinancial.com).

Maybe it’s because of worries that those savings won’t last. Or maybe it’s just an inability to adjust after years in the labor force.

“I see so many people on a daily basis who have built up this great retirement, but they’re not using it,” Marriage says. “They’re not having fun. And I’m telling them let’s take some of that money and let you guys enjoy it. Go see the grandkids. Go on those vacations. That’s what retirement is all about. It’s about having fun.”

But the first step is to get in a position to do that, Marriage says. One of the biggest challenges for people is to make sure their retirement plans aren’t subject to excessive taxes, he says.

“There’s no way to guarantee you will never pay taxes, and I wouldn’t say taxes are such a bad thing either,” Marriage says. “Taxes do help our country’s infrastructure and pay for our teachers, firefighters, law enforcement officers and military.”

That said, there’s no reason to pay more than necessary, and there are steps people can take that will help ease the tax burden on their retirement savings.

•  Indexed universal life insurance. People usually view a life insurance policy as something that just pays money to your survivors after you die. But an indexed life insurance plan is structured so that interest accumulates and, more importantly, you can borrow from it without paying a tax penalty. So after years of paying the premium, you can start to use the policy as a source of tax-free income. “This can be a tremendous asset for many pre-retirees and retirees to grow and protect their business, retirement and estates,” Marriage says. “Another great feature these plans offer is they don’t have all the restrictions that most IRAs and other qualified accounts have.”

•  Converting an IRA or 401k to a Roth IRA. Millions of Americans are saving for retirement through traditional IRAs or 401k plans, which allow you to defer taxes on the portion of your income invested in those plans. And that’s great, Marriage says. But those plans do have tax implications when it comes time to withdraw money and, when you reach age 701Ž2, the federal government will require that you start making withdrawals. Depending on how long you live, you could be paying taxes on annual withdrawals for 20 years or more. One solution, Marriage says, is to convert the money to a Roth IRA. That entails withdrawing the money several years early, even though you aren’t required to do so, paying the tax on that sum, and returning the balance to the Roth IRA. Once all the money is converted to the Roth IRA, any future withdrawals are tax free.

There are other strategies for retirement savings as well, Marriage says, which is why it’s important that people find an advisor they can trust to help them work out the best plan.

“It still all boils down to what kind of retirement you want and what you are going to do in those retirement years,” Marriage says. “You want to make sure you have a solid and safe financial future. And then don’t forget to enjoy that future.”