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9781119724186

Personal Finance After 50 For Dummies

by ;
  • ISBN13:

    9781119724186

  • ISBN10:

    111972418X

  • Edition: 3rd
  • Format: Paperback
  • Copyright: 2021-04-27
  • Publisher: For Dummies
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Supplemental Materials

What is included with this book?

Summary

The best way to take control of your post-career financial future 

Retirement is lasting longer for all of us. That’s why—and however long you decide to keep working—it’s essential to plan ahead so you can live your post-career life as you wish. The latest edition of Personal Finance After 50 For Dummies details what you need to know—making it the perfect book to shelve next to your diet and fitness library, so you can keep your finances, as well as your health, in peak condition. Whether you’re new to financial planning or are pretty savvy but want to cut through the noise with targeted information and advice, you’ll find everything you need to know about how best to spend, invest, and protect your wealth so you can make your senior years worry-free, healthy, and fun.  

In plain English, retirement and financial experts Eric Tyson and Bob Carlson cover all the issues from investing, Social Security, and the long-term insurance marketplace to taxes and estate planning—including state-by-state differences. They demystify the muddy world of financial planning and provide strategies that make the course ahead crystal clear. They also dive into less obvious territory, showing how it’s possible to strategize financially to avoid the worst impact of unexpected events—such as the COVID-19 crisis—as well as exploring what investment approaches you can take to protect the most important possession of all: your own and your family’s health.  

  • Minimize your taxes and make wise investing decisions 
  • Find out how the SECURE Act affects retirement accounts and savings 
  • Navigate the latest Medicare, Social Security, and property tax rules 
  • Dig into what’s new in estate planning and reverse mortgages 
  • Get what you want from your career as you approach retirement 

Whether doing it for yourself or for parents, it’s never too late to begin retirement planning—and this highly praised, straightforward book is the best way to take control, so you can be confident your senior years are exactly what you want them to be: golden.  

Author Biography

Eric Tyson is a recognized personal finance counselor, writer, and lecturer. Tyson has been featured on and quoted in hundreds of publications and media outlets.

Bob Carlson is Chairman of the Board of Trustees of the Fairfax Country Employees’ Retirement System.

Table of Contents

Introduction 1

About This Book 2

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Part 1: Understanding Personal Finance After 50 5

Chapter 1: Looking Ahead to Your Future 7

Planning for the Longer Term 8

Identifying long-term planning issues 9

Taking personal responsibility for your financial future 12

Saving and planning sooner and smarter pays off 12

Eyeing Keys to Successful Retirement Planning 14

Saving drives wealth 15

Keeping your balance 15

Understanding that planning is a process 16

Chapter 2: Protecting Your Employment Income and Your Health 17

Assessing Your Need for Life Insurance 18

Understanding the purpose of life insurance 18

Determining your life insurance need 19

Assessing your current life coverage 20

Figuring out what type to buy 22

Choosing where to buy life insurance 23

Protecting Your Employment Income: Disability Insurance 24

Why most people lack disability insurance and why you need it 24

Identifying needed disability coverage 26

Shopping for disability coverage 27

Investing In and Protecting Your Health 28

Take care of your ticker 29

Exercise (and sweat)! 30

Hydrate with good-quality H2O 31

Include fiber in your diet 31

Manage your stress 32

Get your calcium and vitamin D 33

Chapter 3: Developing a Retirement Plan 35

Deciding When to Retire 36

Knowing How Much You Really Need for Retirement 37

Figuring out what portion of income you need 38

Grasping what the numbers mean 39

Eyeing the Components of Your Retirement Plan 39

Social Security retirement benefits 39

Pensions 42

Investments 43

Your home’s equity 43

Setting Up a Couples Plan 44

Crunching the Numbers 45

Understanding assumptions and how they work 46

Making the numbers work 48

Dealing with excess money 48

Making Plans for Nonfinancial Matters 49

Personal connections 50

Personal health 50

Activities, hobbies, interests 50

Chapter 4: Identifying Retirement Investments and Strategies 53

Defining Investments 54

Understanding risk 54

Eyeing your returns 55

Considering how investments are susceptible to inflation 57

Being aware of tax consequences 57

Monitoring sensitivity to currency and economic issues 58

What You Need to Do Before You Select and Change Investments 59

Knowing your time horizon 59

Factoring some risk into your investment plan 59

Keeping the bigger picture in mind 60

Allocating your assets 61

Surveying Different Investments 61

Comparing lending investments to ownership investments 62

Looking into stocks 63

Investing in mutual funds and ETFs 64

Comparing investments and risks 66

Managing Investment Portfolios 68

Funds of funds and target-date funds 69

Index and exchange-traded funds 70

Assessing and changing your portfolio 72

Chapter 5: Grasping Retirement Accounts and Their Rules 75

Eyeing the Characteristics of Retirement Accounts 76

Focusing on the tax benefits 76

Being aware of restrictions and penalties 78

Identifying the Different Types of Retirement Accounts 79

Employer-sponsored retirement accounts 79

Self-employed retirement savings plans 80

Individual Retirement Arrangements (IRAs) 81

Rolling Over Retirement Balances 82

Deciding what road to take 82

Choosing a custodian and rolling over your balance to an IRA 83

Choosing Beneficiaries for Your Retirement Accounts 85

Taking Required Minimum Distributions 87

Calculating your RMD for an IRA 88

Computing the RMD for other retirement plans 89

Part 2: Making Money Decisions in Retirement 91

Chapter 6: Managing Budgets and Expenses 93

Discussing Some Retirement Worries You May Have 94

Running out of money 94

Supporting others 95

Addressing your worries 96

Spending Your Nest Egg 97

Considering the 4 percent rule 97

Naming the factors affecting your use of retirement assets 98

How Spending Really Changes in Retirement 99

Managing Your Expenses 102

Bigger-picture issues 102

Taxes 103

Housing 104

Utilities and communication 105

Food 106

Transportation 107

Personal care and fashion 107

Travel and fun 108

Healthcare 108

Insurance 109

Children and grandchildren 109

Chapter 7: Guiding Investments and Distributions in Retirement 111

Guiding Your Investments through Retirement 112

Estimating your investment income 112

Rebalancing your investments 113

Looking Closer at Annuities 115

Annuities: A retirement account and insurance combination 116

Contributing in your working years 116

Annuitizing in your retirement years 118

Examining the newest annuity 120

Choosing Your Pension Options 121

Selecting between a lump sum or monthly payments 121

Deciding among monthly payment options 125

Eyeing Withdrawal Strategies for Your Investment Accounts 126

Chapter 8: Making Important Housing Decisions 129

Analyzing Moving 129

Considering the pros and cons of moving 130

Eyeing the options for where you can move 132

Tapping Your Home’s Equity: Reverse Mortgages 135

Defining terms and costs 135

Determining whether a reverse mortgage is right for you 137

Searching for more information on reverse mortgages 137

Looking at Tax Issues Regarding Your Housing Decisions 138

Being aware of capital gains exclusion rules 138

Converting your home to a rental: Yes or no? 138

Chapter 9: Considering Your Long-Term Care Insurance Needs and Options 141

Understanding Long-Term Care 142

Naming the types of long-term care 142

Predicting who will need long-term care 144

Estimating how much long-term care will cost 145

Planning to Pay for LTC 148

Considering Traditional LTC Insurance 149

Knowing the basic features of LTCI 149

Checking out two more important LTCI factors 155

Using Hybrid Insurance Products 157

Exploring annuities to finance LTC 158

Financing LTC with life insurance 159

Assessing the LTC hybrids 159

Reimbursement versus Indemnity Coverage 160

Financing LTC Yourself 161

Figuring out whether you can finance your own LTC 161

Deciding when to buy LTCI 163

Comparing tax-qualified and nonqualified policies 164

Opting for life insurance instead of LTCI 166

Taking advantage of the reverse mortgage 166

Evaluating Employer and Group Coverage 167

Combining LTCI and Self-Insurance 169

Part 3: Dealing with Government Programs 171

Chapter 10: Making Your Best Choices under Social Security 173

The Lowdown on Social Security 174

Determining When You’re Eligible for Benefits 176

Reviewing your earnings history 177

Defining when you can retire 177

Taking a Closer Look at Spouses’ and Survivor Benefits 180

Understanding the choices for spousal benefits 181

Ensuring spouses are taken care of: Survivor’s benefits 184

Identifying When You May Need to Receive Benefits 186

What are your cash flow needs? 186

Will waiting pay off? 186

What other income do you have? 187

Do you want to continue to work? 188

What are the potential income taxes on benefits? 188

What’s your life expectancy? 188

Noting How Working Reduces Benefits 189

Taking the penalty for exceeding the annual income limit 190

Determining the penalty on a monthly basis 190

The penalty isn’t always bad 191

Preserving Your Benefits 191

Deferring income 192

Using your corporation 193

Considering exempt income 193

Relying on special income 194

Being Aware of Potential Income Taxes on Your Benefits 195

Understanding how modified adjusted gross income works 195

Reducing taxes on benefits 197

Changing Your Mind: A Do-Over 199

Deciding whether you should take a do-over 200

Doing the do-over 200

Looking at What the Future Holds for Social Security 200

Chapter 11: Getting the Most Out of Medicare 203

Starting Medicare: A Broad Overview of Enrollment Deadlines 204

Understanding Part A 206

Seeing who’s eligible and signing up for Part A 206

Defining Part A coverage 208

Exploring Parts B and C 210

Scoping out Part B 211

Probing Part C: Medicare Advantage 215

Qualifying for Prescription Drug Coverage with Part D 219

Examining Part D plans 220

Enrolling in a Part D plan 224

Eyeing a Medicare Supplement 226

Understanding Medigap policies 226

Standardizing Medigap policies 227

Choosing a Medigap policy 228

Obtaining quotes for Medigap insurance 230

Resolving Some Sticky Issues 230

Changing plans 231

Monitoring changes at work 231

Making a foreign move 232

Chapter 12: The State Healthcare System Backup: Medicaid 233

Discovering What Medicaid is 234

Considering Medicaid Eligibility 234

Establishing Functional Eligibility 235

Meeting Financial Requirements 236

Understanding income limits 236

Understanding asset limits 238

Examining Planning Strategies 246

Spending down 247

Creating a life estate 247

Setting up trusts 248

Buying an immediate annuity 250

Going the spousal refusal route 251

Recognizing the downsides of Medicaid eligibility strategies 252

Using Both Medicare and Medicaid 253

Eyeing Reasons Not to Seek Medicaid 254

Part 4: Estate Planning: It’s More than Just Dead People and Lawyers 257

Chapter 13: The Basics on Estate Planning 259

Understanding Estate Planning 260

Studying Some Strategies Before Starting Your Estate Plan 263

Finish your plan no matter what 263

Keep track of your estate 264

Estimate cash flow 265

Don’t wait for the perfect plan 265

Carefully choose executors and trustees 266

Anticipate conflicts 266

Answering Key Questions to Gather Critical Information 267

Who’s in charge? 268

How much should I give now? 268

Should I apply controls and incentives? 268

Should heirs get equal shares? 269

Should I exclude someone? 270

How should my blended family be handled? 271

Should I leave only money? 271

Should my wealth stay in the family? 272

Knowing How Estate Taxes Work 272

Reviewing the estate tax 273

Considering state taxes 274

Finding Good, Affordable Advice 275

Doing it yourself 275

Using an expert: Yes or no? 276

Chapter 14: Eyeing Wills and Other Legal Documents 279

Creating Your Will 279

Pointing out some important details 280

Facing the limits of wills 284

Excluding family members 284

Avoiding things you can’t do with your will 285

Assigning a Financial Power of Attorney 285

Recognizing the importance of a POA 286

Choosing the right POA 287

Delegating Medical Decisions 288

Understanding living wills 288

Signing DNRs 289

Assigning a healthcare proxy or POA 290

Authorizing HIPAA 290

Combining documents 291

Passing Other Assets 291

Naming beneficiaries for your assets 292

Examining the special case of IRAs 292

Looking Closer at Probate 294

Avoiding probate: Yay or nay? 295

Considering joint tenancy 295

Making use of living trusts 296

Chapter 15: Tackling the Federal Estate Tax When You Have Too Much Money 299

Understanding the Estate Tax 300

Examining how your estate tax is calculated 300

Decreasing your estate taxes 302

Tallying Your Assets 303

Making sure you don’t overlook certain factors 304

Assessing included assets 304

Reducing Your Estate 306

Considering strategies to lower your estate’s value 306

Maximizing tax-free gifts 309

Taking Deductions 312

Looking at the marital deduction 312

Understanding portability of the lifetime exemption 313

Giving charitable gifts 314

Choosing Family Estate Strategies 315

Equalizing estates 316

Using the bypass trust 316

Taking advantage of marital deduction trusts 317

Putting the strategies together 318

Contemplating Life Insurance 319

Paying obligations with life insurance 320

Purchasing life insurance to enhance inheritances 320

Avoiding the Tax on Gifts to Grandkids: The GSTT 321

Chapter 16: Focusing on Estate Taxes and the Many Types of Trusts 323

Identifying the Cast of Characters 324

Naming the Types of Trusts 325

Looking at when trusts take effect 325

Revoking or retaining rights 326

Determining how income is distributed 327

Addressing the trustee’s powers 328

Using Trusts in Estate Planning 328

Donating to charity with charitable trusts 329

Opting for retained income trusts 330

Taking care of special needs with SNTs 332

Spreading the wealth through dynasty trusts 333

Creating life insurance trusts 334

Part 5: The Part of Tens 335

Chapter 17: Ten Common Retirement and Estate Planning Mistakes 337

Not Having at Least a Basic Financial Plan 338

Procrastinating about Estate Planning 338

Underestimating Life Expectancy 339

Miscalculating Inflation 340

Believing You’ll Retire When You Expected To 341

Ignoring Nonfinancial Planning 341

Failing to Coordinate with Your Spouse 342

Expecting to Age in Place 343

Thinking Most Medical Expenses Will Be Covered 344

Missing the Initial Enrollment for Medicare Plans 345

Chapter 18: Ten Things to Know about Working in Retirement 347

Some Work is Good for You 348

The Social Security (Tax) Impact Can Be Huge 348

Number Crunching Can Show You How Different Scenarios Work 349

Life is Short and You Owe It to Yourself to Do What You Love 350

Investing in Education Can Boost Your Employment Value 350

Some Employers Are More User-Friendly for Older Workers 350

Taking Some Employment Risk is Important 351

Starting/Buying a Small Business May Be a Rewarding Option 351

Your Spouse May Not Want What You Want 352

Volunteering Makes You Happy and Benefits Your Community 352

Chapter 19: Ten (or So) Tips to Know about Caring for Your Aging Parents 353

Leverage Off Others’ Experiences 354

Ask for Professional Help 354

Invest in Their Health 355

Get Your Parents’ Affairs in Order 355

Examine Housing and Medical Care Options 355

Use Caregiver Agreements 356

Separate Living Spaces if Parents Are Going to Move In 357

Take Care of Your Family 357

Take Care of Yourself 358

Index 359

Supplemental Materials

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

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