UBCNews - Business - How To Maximize IRA Income Before & During Retirement: Finance Experts Discuss

Episode Date: January 7, 2026

Welcome back, everyone! Today we're tackling something that affects so many people nearing retirement or already living it - how to actually maximize your IRA income. And I have to say, this is one of those topics where a lot of folks think they've got it figured out, but there are some real surprises in store. Melia Advisory Group City: Tulsa Address: 5424 S Memorial Dr Website: https://www.meliagroup.com/

Welcome back, everyone. Today we're tackling something that affects so many people nearing retirement, or already living it, how to actually maximize your IRA income. And I have to say, this is one of those topics where a lot of folks think they've got it figured out. But there are some real surprises in store. Absolutely. You know, I've been working in retirement planning for years, and I still see the same mistakes over and over. people think they need this massive nest egg to retire comfortably or they're following outdated

withdrawal rules that could actually hurt them in the long run. Right. And that's what we want to unpack today. So let's start with the basics. What are some IRA management strategies that people preparing for retirement should actually be thinking about? Well, first off, maximizing contributions early on is huge. For 2025, if you're under 50, you can contribute up to $7,000 to a traditional or Roth IRA. If you're 50 or older, that jumps to $8,000. The power of compound interest means those early contributions can really snowball over time.

And I think that's where a lot of people miss out. They wait too long to start, right? Exactly. But here's something interesting. Even if you have a 401K at work, you can still contribute to an IRA. Now, with a Roth IRA, you'll need to meet income limits.

For single filers in 2025, your modified adjusted gross income needs to be at or below $150,000 to contribute the maximum, and it phases out completely at $165,000. For married couples filing jointly, it's $236,000 or below for the full amount, phasing out at $246,000. Okay, so income matters. What about the tax side of things? because I know there's a big difference between traditional and Roth IRAs. Huge difference. With a traditional IRA, your contributions might be tax deductible now, but you'll pay income tax on withdrawals later. Roth IRA contributions aren't deductible,

but you can always withdraw your contributions tax-free and penalty-free anytime. Once you hit 59 and a half and have had the account for at least five years, the earnings portion also comes out completely tax-free. So if you expect to be in a higher tax bracket when you retire, the Roth could save you a lot down the road. Definitely. And here's another advantage. Roth IRAs aren't subject to required minimum distributions.

Traditional IRAs require you to start taking RMDs at age 73. Whether you need the money or not, that can push you into a higher tax bracket and reduce what you leave to your errors. I actually had a client once who joked that RMDs were like the IRS forcing you to take your medicine, even when you feel perfectly healthy. Huh, that's a good way to put it. Now what about people who are already in retirement? How can they boost their income from existing IRAs?

Great question. One strategy is to think about tax-conscious withdrawals. You want to manage your tax brackets carefully? Maybe you spread distributions over several years, or you coordinate IRAs. withdrawals with Social Security and pension income to stay in a lower bracket. The goal is basically income optimization, making sure every dollar works as efficiently as possible for you. Mm-hmm.

I see. That point about income optimization sets up our next piece, specific withdrawal techniques. But first, a quick word from our sponsor. If you're in or near retirement and want to examine IRA management strategies built for your situation, Malia Advisory Group and Tulsa specializes in helping clients preserve savings and an increased retirement income. They offer guidance on contribution limits, withdrawal rules, and investment options with a focus on generating reliable income streams without eroding your principle.

They provide free consultations via Zoom, phone, or in-person. Learn more at meliagroup.com. Picking up on income optimization, what are some of those specific techniques people should know about? Well, there's the old 4% rule withdrawing 4% of your balance annually. But honestly, that's pretty rigid. Some people opt for fixed amount withdrawals. Others focus on withdrawing earnings rather than principal.

The key is adopting a total return strategy that considers your entire portfolio and income needs. It's about being flexible rather than following one-size-fits-all advice. Right, makes sense. What are the biggest mistakes you see people making with their eye? IRAs. Oh, where do I start? One common mistake is taking early withdrawals. If you pull money out before 59 and a half, you're generally looking at a 10% penalty on top of income tax. There are exceptions, first-time home purchases, educational expenses, unreimbursed medical costs, disability and birth or adoption expenses up to $5,000. But people often don't know about those.

So they end up paying penalties they could have avoided. Right. Another mistake is not understanding Roth conversions. You can convert money from a traditional IRA to a Roth, pay the taxes now instead of later, and then any future income is tax free. If you do this in a lower income year, the tax hit is smaller. I remember one couple I worked with years ago. They were both between jobs for a few months, and we use that window to convert a portion of their traditional IRA, save them thousands down the last. line. That's smart planning. Um, what about people who have multiple IRAs? Does that complicate things? It can. Here's the thing. Even if you have a Roth and a traditional IRA, your total contributions across all accounts can't exceed that seven or $8,000 limit. A lot of people think each account gets its own limit, but that's not how it works. Your contributions also

can't exceed your earned income for the year. Right. Absolutely. So to everyone listening, have you thought about how your withdrawal strategy will affect your tax situation in retirement? Because it sounds like timing is everything. Timing tax brackets coordination with other income sources. It all matters. And one more thing people often overlook. You can leave an IRA to your heirs. With a traditional IRA, they'll owe income tax on withdrawals, but with a Roth, they get that money tax free.

It's a powerful estate planning tool. That's something I hadn't really considered before. The legacy aspect of it. Yeah, and it ties into the whole approach of putting income first. When you focus on generating renewable income streams, rather than just preserving a lump sum, retirement looks very different. You're not constantly worried about market swings or running out of money.

Income comes first. That's the principle that changes everything. I mean, that's really the goal, isn't it? Having more income than you need without constantly, stressing about the balance. Exactly. And getting professional guidance can make a huge difference. People spend decades saving, but they don't always have a clear plan for turning those savings into reliable income. That's where specialized advice comes in, someone who can look at your whole picture and help you make informed decisions. Well, this has been incredibly helpful.

I think the big takeaway here is that IRA management isn't just about contributing money and letting it sit. There are real strategies, both before and during retirement, that can significantly impact your income and your tax situation. Absolutely, whether it's maximizing contributions early, choosing between traditional and Roth based on your tax situation, planning smart withdrawals, or understanding RMD rules, every decision matters. The good news is, with the right approach, you can make your retirement savings work much harder for you. Thanks so much for breaking all this down. For everyone listening, I hope this gives you some concrete ideas to think about as you plan your retirement strategy. Until next time.