Contents
FOREWORD BY CHARLES R. SCHWAB xiii
INTRODUCTION xv
My Top Ten Recommendations for Every Age 1
PART I: When Retirement Is at Least Ten Years Out 9
| Q1. | I’m saving for retirement—but how much is enough? | 11 |
| Q2. | I’m 50 and haven’t started to save for retirement. What can I do? | 17 |
| Q3. | How can I save for my kids’ college without derailing my retirement? | 24 |
| Q4. | There are so many different types of retirement accounts. What do I really need? | 32 |
| Q5. | The stock market has me spooked. How should I invest as I get closer to retirement? | 45 |
| Q6. | I’m too busy to manage my money carefully. Are there any simple strategies for someone like me? | 73 |
| Q7. | Is long-term care insurance worth the cost? | 83 |
| Q8. | Does it make sense to borrow from my 401(k) if I need cash? | 88 |
| Q9. | My partner and I aren’t married. What do we need to know about managing our finances as a team, especially when it comes to retirement planning? | 95 |
| Q10. | I want to contribute to a few charities. How can I make the most of what I have to give? | 104 |
| Q11. | I’m drowning in financial paperwork. How can I get organized? | 114 |
PART II: Getting Closer: Transitioning into Retirement 121
| Q12. | Can I keep contributing to my retirement accounts indefinitely? | 123 |
| Q13. | Should I be debt-free before I retire? | 127 |
| Q14. | What should I do with my 401(k) when I leave my job? | 133 |
| Q15. | I’m thinking of leaving my nine-to-five job to become a consultant, working from home. What’s the cost of being my own boss? | 141 |
| Q16. | My kids are grown. Do I still need life insurance? | 148 |
| Q17. | I’m fit as a fiddle. Do I really need disability insurance? | 154 |
| Q18. | I’m thinking of downsizing once I retire. Will I get hit with a tax bill when I sell my house? | 160 |
| Q19. | Should I take my pension as a lump sum or monthly payments? | 167 |
| Q20. | Should I buy an annuity? | 175 |
| Q21. | I’m 60 and way behind in my savings. Will I ever be able to retire? | 183 |
PART III: Life in Retirement 189
| Q22. | Now that I’m retired, how should I manage my money to make it last? | 191 |
| Q23. | I just retired. What’s the smartest way to draw income from my portfolio? | 198 |
| Q24. | I was forced to retire early for health reasons. How can I make up for the unexpected shortfall in savings? | 208 |
| Q25. | Can I lower my income tax bill now that I’m retired? | 215 |
| Q26. | Does a reverse mortgage make sense? | 223 |
| Q27. | What insurance do I need at this point in my life? | 228 |
| Q28. | If I go back to work (even part-time), what do I need to know? Can I still collect Social Security? Contribute to my 401(k)? | 236 |
| Q29. | I handle all of the family finances. How can I create a turnkey system for my spouse in case something happens to me? | 242 |
PART IV: Maximizing Social Security and Medicare 247
| Q30. | When should I file for Social Security benefits? | 249 |
| Q31. | How much will I collect from Social Security? | 258 |
| Q32. | I’m divorced. Am I entitled to a Social Security benefit from my ex? | 265 |
| Q33. | What Social Security benefit can I expect if I become disabled? | 269 |
| Q34. | How much will my spouse receive from Social Security if I die? | 274 |
| Q35. | When and how do I apply for Medicare? | 279 |
| Q36. | I’ve heard about insurance to supplement Medicare. What will I need, and how much will it cost? | 285 |
| Q37. | Once I’m on Medicare, will I have other out-of-pocket health care costs? What can I do now to lower my health care expenses later? | 291 |
PART V: Estate Planning 297
| Q38. | I want to create an estate plan. What do I need? | 299 |
| Q39. | When I take into account the value of my home and all my investments, my estate is sizable. What do I need to know about estate taxes? | 305 |
| Q40. | 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? | 315 |
| Q41. | I’m thinking about giving my kids part of their inheritance now, as opposed to holding on to everything until I die. What does this mean for estate and gift taxes? | 320 |
| Q42. | My spouse and I have three children together, and I also have two children from a previous marriage. How can we make sure that our estate plans treat everyone fairly? | 326 |
| Q43. | I want to leave the bulk of my estate to my children, but also want to make meaningful contributions to a few charities. How can I incorporate this into my estate plan? | 332 |
PART VI: The People in My Life 337
| Q44. | My 20-something child has decided that 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? | 339 |
| Q45. | As a retiree, I don’t have a lot of extra money. I’ve always helped my children and other extended family members—but now it’s tough. How do I sort this out? | 344 |
| Q46. | My husband has no interest in our finances. How can I get him involved? | 349 |
| Q47. | My husband of 50 years has just died. He always handled our finances, and I’m feeling at sea. How can I manage? | 354 |
| Q48. | I’m 50 and contemplating a divorce after 25 years of marriage. My husband has always been the chief breadwinner and has been in control of our money. How can I cope? | 363 |
| Q49. | I’m a widow and about to remarry. What should I be thinking about from a financial perspective? | 369 |
| Q50. | I have a child with special needs. What can I do to make sure that she will always be taken care of? | 374 |
GLOSSARY OF FINANCIAL TERMS 379
SOURCE NOTES 397
ACKNOWLEDGMENTS 403
INDEX 405