Understanding Your Income & Investment Options | Michael Makes Sense Ep. 06

Michael Makes Sense

Michael Widlake of Commonwealth Guardians hosts a Q&A episode addressing listener questions about retirement income and investment options. He explains that no single retirement product is

Key takeaways

• Michael Widlake, founder of Commonwealth Guardians, explains that there is no single "best" retirement product for everyone.
• TJ from Pennsylvania asks about choosing between pensions, annuities, 401(k)s, TSPs, and IRAs, prompting a discussion on personalized planning over cookie-cutter solutions.

Main topics

• Retirement income strategies
• Traditional vs. Roth IRAs and tax implications

Notable quotes

"The short answer, unfortunately, is that there isn't one best product."

Conclusion

Listeners gain a clearer understanding that retirement success depends on personalized

Transcript preview

Speaker 6 (0:00) In uncommon financial times, common sense matters. Welcome to Michael Makes Sense, where Michael Widlake answers your financial questions and welcomes special guests to share their insights, real questions, clear answers, conversations that make sense. Speaker 4 (0:15) Welcome to Michael Makes Sense. Today's questions are about the different tools people use to build and protect retirement income. Michael, are you ready for our first caller? Speaker 2 (0:26) Yes, I am. Hi, Michael. I'm TJ from Pennsylvania. I keep hearing about pensions, annuities, 401ks, TSPs, IRAs, and honestly, I don't know what I'm supposed to have. Is there one retirement product that's better than the others? Hey, TJ, this is an important Speaker 3 (0:45) question because a lot of people are confused about this, and thank you for asking it. The short answer, unfortunately, is that there isn't one best product. And more importantly than that, there's good use or bad use of almost any kind of product that's available today. There are products that I don't use very often in my planning because of costs or how the product specifically works. But even that is not a comprehensive list. And some things, even though not optimal, can provide you with some real benefit. The reason why that this is so confusing is because you might meet someone that tells you they got the best things in sliced bread. It's going to fix all your problems. And despite having some great features and benefits, still might not be the right product for you. This is primarily because although your question is a great one, and again, thank you for asking it, it's unfortunately the wrong question. You know, we've got several things that we talk about when meeting people in our financial telehealth checkups, that you really get one shot to get a lot of this retirement planning thing right. And that there are eight parts to a comprehensive holistic retirement plan, that there are five critical risk areas that we need to use to determine your preparedness for. whatever life throws you throughout your retirement. And once we collect all that information though, that's when the actual work starts. Which products and tactics and strategies will give us the best mix to achieve your goals? How do we position your retirement savings and other savings to do the job that it needs to do to provide for your retirement? Now, if you're still working, you're dependent upon your paycheck and that's how you pay your bills. Face whatever life brings your way as well as set some money aside for retirement. But once you're retired, then your money has to provide that same kind of stability. We always talk about that you shouldn't be touching principle to live on as this potentially leads to running out of money. But what is the best way to accomplish producing income in your savings without engendering a huge tax implication? What's the best strategy to make sure that You don't lose buying power over time due to inflation. How can we make sure you and your family are the ones that get to put good use to your money instead of the IRS? So this exact question came up recently in a meeting with a couple at their reallocation of their funds meeting. And the husband was fixated on the insurance guarantees, a guarantee of safety, a guarantee of potential for lifetime income. And the wife was more focused on flexibility of use of the money that they had worked hard to save over their working years. The thing that made them smile, though, was the fact that I got to tell them that they were both right. And when I showed them that the issues that they had and the potential for solutions, the proper use of