| Most individuals in or near retirement have three | | | | money last in retirement. This timing can give you |
| financial legs to support them in retirement: Social | | | | more after-tax income in retirement and a better |
| Security benefits; qualified retirement savings [401(k), | | | | lifestyle. |
| IRA, 403(b), etc.] on which taxes have not yet been | | | | Unless you have substantially more money than |
| paid; non-qualified savings and investments on which | | | | needed for retirement, it is foolish to pay taxes you |
| taxes have been paid on the principal and possibly | | | | can avoid by simply changing the timing of how your |
| some or all of the earnings. By carefully coordinating | | | | three categories of money are used in retirement. |
| the use of these three sources of money, the typical | | | | The typical retiree's greatest fear, and also the |
| retirement-minded couple can add up to 20% to their | | | | greatest challenge, is to not run out of money |
| after-tax income and afford a better retirement | | | | before they run out of breath. Many are in danger of |
| lifestyle. Unfortunately, most couples in or near | | | | losing this battle because the Center for Retirement |
| retirement overlook the importance of coordinating | | | | Research is now reporting that 43% of U.S. |
| the uses of their available money. The results are | | | | households headed by workers ages 34-60 are in |
| higher tax bills and lower lifestyles in retirement. Both | | | | danger of having 90% or less of the money they'll |
| can be avoided. | | | | need to maintain their lifestyle in retirement. |
| In what follows, you will be shown how the typical | | | | According to one recent study reported in |
| retired couple can add as much as 20% to their | | | | Retirement Weekly:"The average American family is |
| after-tax retirement income just by coordinating | | | | on track to replace 57% of its annual pre-retirement |
| when to use the different categories of their money. | | | | income, some 28 percentage points less than the |
| There is nothing to buy, no risky investments to | | | | minimum 85% figure experts typically say retirees will |
| make or additional money needed: you just use what | | | | need to live on in their golden years". |
| you have smarter. This is very important for a | | | | You can stretch your retirement money by up to |
| married couple because one spouse could spend as | | | | 20%. Before we can discuss when and how to use |
| much as one-third of their lifetime in retirement. | | | | the three categories, each needs to be identified and |
| Conventional wisdom says to delay the use of your | | | | defined. You may receive other categories of |
| qualified money as long as possible in retirement | | | | money, e.g., inheritance, life insurance benefits, loans, |
| because it grows faster due to the tax deferral. | | | | reverse mortgage proceeds, trust income, lottery |
| Generally, the conventional wisdom is wrong. The | | | | (dream on) and support from family members, but |
| millions who have heeded this inappropriate advice will | | | | these will not be discussed in this Guide. Also, in the |
| have less after-tax money to support them in | | | | following discussion we've assumed the "average" |
| retirement. This Guide will show you that qualified | | | | retirement-minded couple; however, there are many |
| money should be used first so you can delay taking | | | | exceptions, and we recommend you seek |
| Social Security benefits as long as possible. There are | | | | professional advice before taking action. |
| also tax advantages to using your non-qualified | | | | |