Tax Strategies, Annuities Paired to Generate Retirement Income

Stock market volatility combined with record-low interest rates makes the retiree’s search for secure income challenging, according to Jerry Golden, president of Golden Retirement. The Savings2Income method was designed for Baby Boomers who are saving for or just entering retirement, Golden said. “S2I focuses on the underserved middle market and mass affluent, whose retirement savings have been hit hardest in the current economy,” he said.

The planning method uses proprietary software to calculate how best to accumulate guaranteed retirement income over time. The goal is to create dependable income to meet or exceed an investor’s essential expenses without incurring additional risk.

The firm launched a website to explain the S2I planning method that includes case studies with examples of the impact on an investor’s full retirement savings and income situation. The site has a simple retirement calculator that takes into account an investor’s age, assets and risk tolerance to illustrate the advantages of the S2I planning method when applied to nonqualified savings, or what S2I terms personal retirement savings.

The plan offers five steps to:

• Lower fees on all retirement savings;
• Defer taxes on retirement savings for as long as possible;
• Maximize Social Security benefits;
• Build up guaranteed income over time; and
• Convert savings to a steady stream of lifetime income.

During the accumulation phase of an S2I plan, retirement savings grow tax-deferred and benefit from low fees. As the retiree transitions from the saving-to-spending phase, the method converts savings into dependable, spendable after-tax income.

Golden explained that the initial amount of retirement income is set and then adjusted periodically, typically every five years, to meet any expected expenses. Budgets may have to be adjusted to reflect changing situations, but the S2I planning method is flexible and can address different scenarios.

The method frees retirement income from the constraints of market returns or interest rates during each payout period, because income is taxed when received and the balance of retirement savings continues to grow tax-deferred, according to Golden. “Retirement income is deposited directly into the individual’s checking account each month,” he said. After a “no worry age” (typically life expectancy) is reached, active investment management is no longer required and guaranteed income is paid to the investor for the rest of his or her life. 

The S2I planning method is available through Golden Retirement Advisors.