New Rules of Retirement

Transcription

1 New Rules of Retirement Robert C. Carlson

2 Chapter 1 The New Rules of Retirement... 1 Learning Objectives... 1 Introduction... 1 Six Threats to Lifetime Income Security... 2 Retirement Threat #1: The Foundations Are Crumbling... 2 Retirement Threat #2: You re on Your Own for Medical Care... 2 Retirement Threat #3: Avoid the #1 Retirement Planning Mistake... 3 Retirement Threat #4: Most Retirement Investment Advice Is Wrong and Dangerous... 4 Retirement Threat #5: Retirement Lasts Longer Than Most Think... 5 Retirement Threat #6: Your Taxes Won t Go Down in Retirement... 6 You Can Create Safe, Secure, Sustainable Lifetime Income... 6 Review Questions... 7 Review Answers... 8 Chapter 2 Start with Spending... 9 Learning Objectives... 9 Introduction... 9 The 80 Percent Rule The Double Trouble Method Your Starting Point How Much Will You Really Need? Better Planning with Technology Uncertainty and Monte Carlo A Successful Retirement How to Forecast Spending Successfully How Much Is Enough? Review Questions Review Answers Chapter 3 Securing and Maximizing Guaranteed Lifetime Income Learning Objectives Introduction Securing Basic Expenses with Guaranteed Income Secrets to Boosting Social Security Benefits When to Begin Benefits The Basic Choices Don t Leave Money on the Table Introducing Spousal Benefits More on Spouses and Benefits Summarizing Spousal Strategies Advanced Strategies for Spouses Curtailed by 2015 Law Final Words on Spousal Strategies Maximizing Benefits for the Divorced and Widowed Fixing Social Security Claiming Mistakes A Caution about Delaying Benefits Working Can Reduce Benefits A Note about Social Security Solvency Guaranteed Income from Annuities Immediate Annuity Basics Why People Don t Buy Annuities Finding Inflation Protection Increasing Annuity Income for Life The Advantages of Longevity Annuities Other Annuities You Might Hear About Annuity Safety... 47

3 Review Questions Review Answers Chapter 4 Tapping Your Nest Egg Learning Objectives Introduction How Long Should It Last? The 4 Percent Rule Shortcomings of the 4 Percent Rule Understanding Dynamic Spending The Endowment Formula A Summary of Other Strategies Summary Review Questions Review Answers Chapter 5 Managing Your Nest Egg Learning Objectives Introduction The Classic Advice Invest Like the Rest Two Portfolio Anchors The Safety Fund Having Guaranteed Lifetime Income Better Ways to Build Retirement Portfolios The High-Yield, Income-Growth Strategy True Diversification Dynamic Investing for Risk Management Your Retirement Investment Strategy Review Questions Review Answers Chapter 6 Handling the Medical Expense Wild Card Learning Objectives Introduction Some Medicare Basics Changes from the Affordable Care Act of The Limits of Medicare Enrolling in Medicare Part B Premiums Reducing the Premium Surtax When Your Life Changed Traditional Medicare versus Medicare Advantage Coordinated versus Traditional Care Factors in Choosing Between Part B and Part C A Little-Known Medicare Advantage Plan Shopping for Medicare Supplement Plans Examining Part D Prescription Drug Plans Factors to Consider Choosing a Policy The Premium Surtax The Retirement Advantages of HSAs Filling the Biggest Gap in Retirement Health Care Health Care Orphans: Covering the Bridge Years Planning and Estimating Retirement Medical Expenses Final Words on Retirement Medical Expenses Follow This Plan ii

4 Review the Options Don t Miss the Deadlines Consider Extending Your Career Remember Inflation Shop for Coverage Review Questions Review Answers Chapter 7 Dealing with the Crisis in Long-Term Care Learning Objectives Introduction Will You Need Long-Term Care? Relying on Family What Medicare Offers Medicaid and Medicaid Trust Strategies The Asset Shifting Strategies Evaluating Long-Term Care Insurance Buying and Designing a Policy Customizing a Policy Factors Outside the Policy The Importance of Shopping Around When Should You Buy LTCI? Compare Group and Individual Coverage Tax-Qualified or Nonqualified Policy? Will LTCI Pay Benefits? Enhancing LTCI Exploring the Hybrid or Combination Policies Using Permanent Life Insurance Forging Your LTC Plan Review Questions Review Answers Chapter 8 Managing IRAs to Last Learning Objectives Introduction Navigating the Required Minimum Distribution Minefield Strategies to Reduce RMDs Empty an IRA Early? Is It Right for You? Converting a Regular IRA to a Roth IRA How to Decide Tilting Your Finances to Favor a Conversion Changing Your Mind Tips for Maximizing IRA Conversion Benefits Roth Accounts Are Not Only for the Young Using RMDs to Buy Life Insurance Using the Family Bank Strategy Which Account to Spend First? Which Investments for Tax-Deferred Accounts? Owning Nontraditional IRA Investments Review Questions Review Answers Chapter 9 Beware the Retirement Tax Ambush Learning Objectives Introduction The Stealth Taxes iii

5 The Importance of Adjusted Gross Income Reducing AGI and MAGI Convert IRAs Managing for a Low Tax Bracket The Benefits of Tax Diversification Determining Your Tax Rate The Alternative Minimum Tax Taxes on Social Security Benefits Itemized Deduction Reduction Saving Personal Exemptions The 3.8 Percent Tax on Net Investment Income Retirees Special Tax Problem Review Questions Review Answers Chapter 10 Handling Employer Retirement Plans Learning Objectives Introduction Defined Benefit Plan: Take an Annuity or Lump Sum? Choosing Your Annuity Evaluating Pension Buyout Offers Other Benefits Determining the Value Taxes Evaluating the Risk Trade-offs (k) Issues and Strategies Exiting 401(k)s: Facts and Scandals A Traditional 401(k) or Roth 401(k)? The Advantages of After-Tax 401(k) Contributions Handling Employer Stock in 401(k)s Using a 401(k) s Brokerage Investment Window Review Questions Review Answers Chapter 11 The Grandkids Need Your Help More Than Ever Learning Objectives Introduction A Small Sum Builds a Large Legacy The Installment Plan to Building a Legacy Guide to Helping with a Grandchild s Education Direct Gifts The Classic UGMAs Creating a Trust Section 529 Savings Plans Prepaying College Coverdell Savings Accounts U.S. Savings Bonds Just-in-Time Gifts Bringing it All Together Helping Beyond College Best Way to Help a Grandchild No-Tax, Low-Cost Way to Help a Grandchild Simple, Low-Cost Ways to Help Teaching Grandkids Wealth Management Review Questions Review Answers iv

6 Chapter 12 Estate Planning Is More than Taxes Learning Objectives Introduction Estate Planning Essentials for Everyone Best Gift to Leave Your Heirs Ensuring Your Estate Plan Essentials Medical Care Avoiding Disputes Probate Beneficiary Forms Care of Others Asset Management Succession Writing a Better Will Estate Liquidity Specific Bequests Debts and Taxes Personal Property Changing Circumstances The Estate Tax Understanding the New Portability The 20-Minute Estate Plan Estate Planning Basics Cutting Off the IRS The Turnabout in Tax Planning Review Questions Review Answers Chapter 13 Avoiding Financial Scams and Abuse Learning Objectives Introduction Comparing Fraud and Abuse Protecting Yourself from Scams and Abuse Making Identity Theft Less Likely Check Credit Reports Destroy All Debit Cards Freeze Your Credit Identity Secure Your Information Consider Credit Monitoring Services Closing the Door to Your Greatest Fraud Risk Review Questions Review Answers Chapter 14 Choosing the Right Retirement Location Learning Objectives Introduction Start with You Survey the Country Refine Your Search Find Your Community Types of Retirement Housing Traditional Housing Planned Communities Independent Living Assisted Living Facilities Nursing Homes Continuing Care Retirement Communities v

7 Avoiding the Boomerang New World of Adult Living Choices Review Questions Review Answers Chapter 15 Keys to a Successful Retirement Learning Objectives Introduction The Vacation Retirement Two Important, Overlooked Issues Where Your Spouse Fits Caring for Your Mind and Spirit Key Retirement Mistakes to Avoid Debt Spending Too Rapidly Uncovered Major Medical Expenses Helping Others Flying Solo Failing to Adapt Keeping Up with Changes Things That Really Matter Review Questions Review Answers Glossary Index vi