ROTH Example instead of a QLAC
Starting assumptions for future ROTH needs to pay for lifestyle exceeding social security income after tax
2024 Year ending Age: 66
2024 Married, Both Collecting Max Social Security: 94,000 per tables
starting 2025, Jan 1
2024 Lifestyle Cost: 85,000 per year
2024 Life Expectancy Male (lowest) : 83
IRS/Social Security Inflation: 3%
IRA/Roth Annual return: 5%
Actual TV cost of Living Inflation: 5%
2024 Ending IRA/401K : ZERO, 0
2024 Ending Taxable Investment Savings : ZERO, 0
2024 Ending ROTH IRA size needed to pay for lifestyle through 2041: 10,000
There are so many variations on this type of scenario. . married vs single
lifestyle cost, IRA/401K starting point. . etc
The biggest variable is the Lifestyle cost,
which equals
Home ownership cost : $30-$35K per year currently
Food, vehicles, entertainment, travel: $50K per year
Total Lifestyle Cost = $85K per year
Married with Zero IRA, Zero Savings Account
Max Social Security
..........................Life style Cost................ROTH Needed to Cover Cash flow deficit through 2041
2024 Annual.......85,000..............................5 ,000
..........................100,000................. .........210,000
..........................115,000................. ........420,000
Throw in some IRA/401K savings, and your Roth doesn't need to be so high.
Throw in some investment savings, and your Roth doesn't need to be so high.
So instead of getting an QLAC, put a bunch of money in a Roth and you get to keep the money, watch it compound, and use it if you need it. . from which you may not ever need to withdraw
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