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It’s complicated.
Get answers.

Written in a simple question-and-answer style, The Charles Schwab Guide to Finances After Fifty puts the information you need at your fingertips. Every answer is based on Carrie’s real-world experience as a financial leader and incorporates the most current guidance from the Schwab Center for Financial Research. The answers and insights that fill this book’s pages can help you take control of your finances in today’s complicated times.

Table of Contents

Q: I just retired. What’s the smartest way to draw income from my portfolio?

A: You have a half dozen or so accounts ranging from your 401(k) to your IRA, to your Roth IRA, to your brokerage accounts, each with different rules and regulations. Each also holds a variety of investments, from individual stocks and bonds to mutual funds and ETFs. So, yes, it can be very confusing to know what to take from where.

Thankfully, my colleagues at the Schwab Center for Financial Research have created a priority system. Their goal is to help you make decisions that minimize your taxes while also protecting your portfolio for the future.

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Part III: Life in Retirement, Question 23

Q: Does it make sense to borrow from my 401(k) if I need cash?

A: When cash is tight, your 401(k) can seem like a perfectly reasonable way to make life a little easier. The money is there and it’s yours—so why not tap it to pay off debt or get out of some other financial jam? Or you might be tempted to use it to pay for that dream vacation you deserve to take.

Stop right there. The cash in your 401(k) may be calling you—but so is your financial future. The real question here: Will taking the money today jeopardize your financial security tomorrow?

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Part I: When Retirement Is at Least Ten Years Out, Question 8

Q: Should I be debt-free before I retire?

A: In an ideal world, none of us would have any debt—ever. And we’d certainly pay off our mortgages, credit cards, and car loans before we retire. But that’s not always possible. And sometimes, it’s not even the best thing to do. As I discussed a bit in my Top Ten Recommendations, debt isn’t necessarily negative. In fact, in the financial world there’s a common distinction made between “good debt” and “bad debt.” But you have to know the difference. And to keep debt from ruining your plans, you also have to figure out how much debt you can comfortably handle on your retirement income. Here are some ways to go about it…

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Part II: Getting Closer: Transitioning into Retirement, Question 13

Q: I’m confused about how to divide my estate between my children, who have different needs and financial resources. Is it best to divide it into equal parts?

A: This question raises some significant issues about fairness and about how to handle estate planning— particularly the importance of communicating with your heirs about your wishes and intentions. When it comes to family and money, even the most generous of impulses can be misinterpreted. For instance…

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Part V: Estate Planning, Question 40

Q: How can I save for my kids’ college without derailing my retirement?

A: While I know it goes against the grain of being a parent, when it comes to retirement, you have to put yourself first. It’s kind of like the airline emergency instructions to position your own oxygen mask before you help your child. In other words, you won’t be of much use to your child or anyone else if you don’t take care of yourself. Now this doesn’t mean you have to completely sacrifice one savings goal for the other. It just means that you have to stay true to your retirement savings plan while looking realistically at all the choices you have for handling college costs…

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Part I: When Retirement Is at Least Ten Years Out, Question 3

Q: When should I file for Social Security benefits?

A: Most people are eligible to start collecting Social Security benefits at age 62. But if you wait until what the Social Security Administration calls your full retirement age (FRA), which is 66 for those born between 1943 and 1954, you’ll get a larger monthly benefit…

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Part IV: Maximizing Social Security and Medicare, Question 30

Q: My husband has no interest in our finances. How can I get him involved?

A: Every couple figures a way to divvy up responsibilities according to their skills and preferences. But when it comes to money, it’s essential that both partners participate in some capacity—and that both are completely aware of what’s going on. In my family I’m more of the day-to-day person, but my husband is involved in every decision and knows whom to call if something comes up.

To me, that’s a crucial distinction—and one that you’re wise to address now. That’s not to say it will be easy to get your husband’s attention. It may be especially difficult because it’s harder to change behaviors once they’ve been in place for a long time. But it’s something that’s best to tackle sooner rather than later…

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Part VI: The People in My Life, Question 46

Q: My 20-something child has decided she wants to move back home. I like my new empty-nest lifestyle, but I want to help her out. How can I balance these?

A: This is becoming a common quandary as more and more parents find that their fledgling adult children aren’t quite ready to fly. According to the Pew Research Center, roughly 29 percent of young adults ages 25–34 are now living with their parents. And it’s not because the kids are necessarily looking for an easy ride. The economy and job market are just making it a lot harder for kids to take off on their own as early as we (or they) might wish.

Interestingly, the same study found that kids and parents both generally say that living together at this stage of life isn’t necessarily a bad thing…

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Part VI: The People in My Life, Question 44

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