EPISODE #072

HOW TO TAKE ADVANTAGE OF THE SURPRISING BENEFITS OF PRINCIPAL PAYDOWN

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5 WAYS YOUR WEALTH IS UNDER ATTACK

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The 19 Sources of Retirement Income: Principle Pay Downs

In this principal paydown episode, John continues his series on the 19 Sources of Retirement Income, explaining how to strategically use them to boost your retirement income.

John has lectured extensively on financial planning. He is also the author of 5 Ways Your Wealth is Under Attack and It’s Your Wealth – Keep It.”

Don’t miss John’s key points:

  • A principle pay down is a strategy that lets you increase your income for a certain period of your retirement:
    • If you have a lump sum of money earning interest in annuities, money market accounts, bonds, CDs—or any investment vehicle—you take distributions from it that are not only interest, but also include some of the principle.
    • You do this over a set period of time, such as 10 or 20 years.
    • The portion of the distribution that is interest is taxed, while the distributions of principle are not taxed.
  • Since you are spending down your asset to zero, at the end of that 10 or 20 years, you need to have a replacement asset that has been growing over that timeframe.

And more:

  • The benefits of a principle pay down strategy:
    • It helps increase your income in a low interest rate environment, such as our current environment.
    • Since the portion of your distributions from principle grows each time, this strategy becomes more tax efficient over time.
  • A principle pay down strategy is best used in the early stages of retirement, when you may have goals of travel and enjoying other leisure activities.

For more, listen here. Then download our 19 Sources of Retirement Income and find out more ways to increase your retirement income. You’ll also find other great resources on our website such as our my book, 5 Ways Your Wealth is Under Attack. You can also preorder my new book It’s Your Wealth, Keep It. If you are new to Smallwood Wealth, schedule a Wealth Curve Conversation by clicking this link.

You can also connect with us on social media, or call us at (800) 797-1000. Set up a free, no-obligation 30-minute phone call with an advisor to discuss how to increase your income in retirement.

Talk to a Smallwood Wealth Management Financial Advisor

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