4 types of income not taxed in retirement. | FinTips

[Music] hey Dustin tivity a financial adviser with jazz wealth managers how you doing today hope you're having a great day here look a lot of times when we talk about retirement investments we're also talking about the strategy behind them right so a lot of people look at their Roth IRA 401k whatever and they focus on the investments inside of them that's great you should definitely do that make sure they're tightened up and ready right for your goals we help you with that here at Jazz well I hope you'll keep us in mind jazz wealth calm thank you by the way to all of you who have decided to use us and give us a shot I know we're a small fish in a big pond but I'm here trying to help and I'm thankful that you guys check us out anyways the investments are just half the battle see the strategy about how you're gonna save on taxes also becomes part of the battle as well you want to make sure that your dollars are going into the right places so when you get to retirement you're not taxed to death right because the IRS is looking they want the money but they're giving you advantages along the way and so today what we're going to talk about is four types of retirement income the income that you may use for retirement that's not taxable in retirement so let's make this a short one because this is our thin tip series where we just try to teach you something real quick get out of the way let you get back to life so the first thing we're going to talk about is HSA contributions HSA is are becoming more and more popular as you as we go here just because now you can have any investment you like inside of them they're becoming really really popular and one of the reasons is because the money that you put in is tax-deductible the money gets to grow tax-free and if you take it out for qualified medical reasons or expenses that money is tax-free as well so you get this triple tax benefit of being able to save for what may be medical expenses but could also be used for retirement see if you get to retirement let's say you're 65 and you go I never used my HSA or I still have a balance there you actually get to treat it as if it's a traditional IRA that's pretty awesome now the other catch - the HSA is that let's say you're putting money in year after year after year after year you paid some medical expenses along the wait but you didn't use the HSA to reimburse yourself right so for example that thousand dollars you spend in a year on medical expenses the next year you spend a thousand dollars but you didn't touch the HSA and that just kept growing you know you can actually go back in time retroactively Lee and reimburse yourself for expenses that you had in a previous year so what a lot of people do is sort of trick the system here and this is totally legal you can do this you can fill up an HSA let it grow continue to let it grow pay your medical expenses along the way and when you find that some point in your life you need an extra thousand dollars or something you can say hey three years ago I had a medical expense for a thousand dollars I'd like to pluck a thousand dollars out now and pretend that I'm paying that off right but you don't actually have to you can use the thousand dollars tax-free for anything you like and that's not just me giving you some loophole in the system you're actually allowed to do that so for that reason HSA is very very popular and of course if you need them for medical expenses and you need to take the money out to pay for a hospital bill or whatever it is well that's what it's there for you get to take it out and use it for that tax-free so don't go racking up your credit cards and things trying to pay off those medical bills you can take control yourself and save in an HSA so that's number one number two which is becoming more popular as well is reverse mortgages I'll just put reverse mortgage there right now when these first came out a lot of people were like ATS a scam come on it was that guy on TV the I forget the celebrity that's always on there with the mustache a lot of people were like you joshing me man come on this can't be real the way it works well they're not scams they're actually a viable solution for a lot of people it didn't really save enough for retirement here's the bottom line reverse mortgage payments are considered loan proceeds and are not considered actual payments according to the IRS what that means is if you have a line of credit reverse mortgage if you got a lump sum payment in a reverse mortgage in a given year or let's say you do monthly payments and so you're getting this monthly income that that doesn't count towards the federal tax there so you actually get to use that money without paying federal tax on that and so that could be one type of retirement income that's not really taxed in retirement so something you might look tor there as well number three and this one's an easy one we focus on these a lot qualified Roth distributions right so I'll put Roth distributions here qualified Roth distributions is just a fancy way of saying that you followed the rules and you took the money out when you were supposed to for most of you it's going to be age 59 and a half you happen to be disabled buying a first time home have high medical expenses those are other qualified reasons that you may be able to take money out of a Roth but in general what we're talking about is when you become 59 and a half let's say you retire a year later so you're going on 61 62 years 61 years old you can actually take money out of the Roth IRA tax-free now that's in contrast to the traditional IRA where you contribute money you get a tax credit when you contribute but then when you get to retirement then you pay taxes a Roth IRA is good for people that are maybe in a lower tax bracket right now or expect to be in a higher tax bracket when they get to retirement it may make sense to not use an IRA for that and instead use a Roth IRA so that you can have some more post tax income in retirement by now you're already starting to see okay I can't just use my 401 K I need to consider the Roth 401 K the Roth IRA maybe an HSA fits you're gonna end up with a few different buckets here to put your money into overall alright number four we're on number four right now are you downsizing do you envision yourself downsizing in retirement and you're gonna sell off your home maybe you're gonna get a smaller home okay no problem the capital gains that you have on the sale of your home can be forgiven right or non-text so if you are a single person you sell your home and you make a profit of up to $250,000 you don't pay tax on that if you're married filing jointly and you sell your property as a couple then you can go up to 500,000 in that case where if you have a profit of $500,000 you don't pay tax on them here's the key to that though a lot of people try to you know kind of get one over on the system here so I tell you you have to have used that home as your primary residence in two of the last five years so if you had it for two years rented it out for three years and then sold it you can still sell it and not have to pay the capital gains on it but the key is it can't be like a rental property that you've had for a while right it has to be that it was a primary residence within the last five years there so that is tip number four I'll give you a bonus one if you like one just says I'm thinking about it here life insurance proceeds so if you are the beneficiary of a life insurance payout due to the death of the policyholder whoever it may be generally that's not considered taxable either so might be something that you want to consider as well I'm not saying you make that part of your retirement plan it's just something that comes up a lot people ask that question in short here is the lesson of the day a strategy around the investing accounts that you use is just as important as the investments you put in the account now when it comes to the investments or the strategy if you need any help you know where to find us jazz wealth managers says so on the shirt always says so on the shirt there I appreciate you guys keeping us in mind we also do a class every day it's called the closing beat it is live on our youtube channel at five o'clock Eastern Time we go over the stock market what happened the good the bad and the ugly for the day there so you can bring your questions I'm happy to help if you have investments that you're just not sure what to do with I could try to help you there as well live on our YouTube channel jazz wealth managers in the meantime I will thank you for paying attention during this video and giving us a shot to teach you something here we're very focused on education at jazz wealth enjoy the rest of your day and maybe we'll see you later at the closing beat why should you choose jazz wealth as your retirement or long term investing service our portfolios are managed by us not some faceless mutual fund manager our private classes will teach you everything about investing and getting your dough straight best of all our fiduciary standard means your best interests comes before ours [Music]

Channel: Jazz Wealth Managers

Views: 1,034,705

Keywords: retirement, retirement planning, taxes in retirement, taxes in retirement planning, retirement strategies, retirement investing, retirement investment strategies, retirement investing for beginners, how to save for retirement, how to save for retirement at 50, how to save for retirement at 40

Id: B05OtAHXuJI

Length: 8min 35sec (515 seconds)

Published: Wed Nov 06 2019