The Fruitcake of the Financial World

Ready for a slice of fruitcake this holiday season? How about some guaranteed income? Brian talks about the CARES Act, early withdrawals, and annuities in today’s show.

If you are feeling financially squeezed because of the pandemic, did you consider taking an early withdrawal on your retirement savings? The CARES act allowed this to happen penalty-free, but is that really a good idea?

Brian shares what happens when you take an early withdrawal. Doing this to pay off debt may not help you in the long run as much as you’d like. While there may not be a 10 percent penalty, you do still have to pay the tax. Consider whether you really need this money right now. If you’re in a desperate situation, then do what you have to do. But otherwise, you’ll want to keep that invested in order to reap the benefits of compound interest.

A lot of Brian’s clients are doing legacy planning now, both for their children and for charities they care about. A charitable gift allows you to leave behind money to something you care about while also giving tax benefits.

Finally, the fruitcake is infamous as a holiday dessert. What is the fruitcake of the financial world? Many don’t appreciate a fruitcake but also have never had one. Similarly, an annuity is often full of assumptions and people avoid them without ever really knowing what it is. An annuity has guaranteed money for the rest of your life. It’s just a matter of knowing what tools you need and how to use them.

Listen to the entire episode or skip ahead using the timestamps below.

Honest Takes:

[0:12] What happens when you make an early withdrawal?

[3:12] Are the people in their 30s and 40s investing enough?

[5:16] Brian shares a client story about someone sitting on lazy money.

[8:05] What’s the fruitcake of the financial world?

Today’s Truth:

“Let’s come up with a game plan: what are you trying to do?”

Brian Bowen

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