Retirement Countdown Take Action Now to Get the Life You Want

by Shapiro, David

• ISBN13: 9780131096714
• ISBN10: 0131096710
• Edition: 1st
• Format: Paperback
• Copyright: 2004-06-09
• Publisher: Ft Pr

Summary

The practical, goal-oriented, action guide to retirement planning: a comprehensive roadmap to achieving and protecting your retirement! bull; bull; One of the world's leading retirement experts coaches readers to success, one step at a time. bull; Complete guidance on how to not outlive one's assets! Know what you'll need, how to get it, and how to protect it after retiring. bull; Website www.retirementcountdown.com will be available for additional access to the Retirement Countdown calculator.

Author Biography

David Shapiro, retired CFP, CLU, ChFC, has trained thousands of financial planning professionals during his 25-year career, helping their clients to better enjoy their retirement. Working with banks, insurance companies, and broker dealers, he has been a major influence in developing leading-edge retirement products. Shapiro is considered one of the top thought leaders on retirement planning and is a much sought-after speaker on the topic. As a highly successful entrepreneur, Shapiro knows about taking action and getting results. His two previous businesses were bought by Safeco Corporation and Wachovia Bank.

A featured columnist in the National Underwriter, he has coauthored two best-sellers, including Annuities (Dearborn Trade Publishing, 2001), which has sold more than 80,000 copies and was quoted in a Supreme Court decision. In 2002, Shapiro was the driving force behind the creation of National Retirement Planning Week and the National Retirement Planning Coalition (www.retireonyourterms.org). In addition to his writing and speaking, you may also see him quoted on retirement issues in business publications, from The Wall Street Journal to Money.

Table of Contents

Foreword	p. xvii
Introduction	p. xix
How to Use This Book	p. xxvii
Understanding the Problem and the Solution
Tick Tock Goes the Retirement Clock	p. 3
The Retirement Countdown Plan	p. 4
Facing the Facts	p. 7
Let's Physically Climb the Mountain	p. 7
A Lesson from a Great Corporate Leader	p. 9
Procrastination	p. 10
What If I Don't Reach My Goal? Facing Compromise	p. 16
Meet the Glovers	p. 17
You're Not Alone	p. 18
Summary	p. 18
Power Checklist	p. 19
Saving for Retirement	p. 21
The Current State of Retirement Savings--We're Just Not Saving Enough!	p. 25
Relative Versus Absolute Comparison	p. 26
Which Generation Group Do You Fall Into?	p. 27
Gap Analysis	p. 30
Don't Get Discouraged	p. 31
Summary	p. 35
Power Checklist	p. 35
Establishing an Income You Can't Outlive	p. 37
Setting Your Objectives	p. 38
Utilization of Assets	p. 40
Types of Income	p. 40
Creating Retirement Income	p. 52
Strategies for Managing Income	p. 52
Systematic Withdrawals	p. 53
Insured Income	p. 54
Minimum Distributions from Qualified Plans	p. 58
Common Mistakes Made	p. 61
Income Allocation	p. 62
Life Expectancy and Your Retirement	p. 62
Risks to Consider During Your Retirement	p. 63
Summary	p. 65
Power Checklist	p. 65
No Plan Is an Island	p. 67
Qualified Plans	p. 68
Defined Benefit Pension Plans	p. 70
Cash Balance Defined Benefit Plans	p. 74
Defined Contribution Plans	p. 76
Profit Sharing or Stock Bonus Plans	p. 82
Employee Stock Ownership Plans	p. 83
Simplified Employee Pension-IRAs	p. 83
Savings Incentive Match Plans for Employees	p. 84
Keogh Plans	p. 84
Individual Retirement Account Plans	p. 85
Traditional IRAs	p. 86
Roth IRAs	p. 87
Divorce and Plan Assets	p. 89
How Much Should You Put into Qualified Plans?	p. 89
How Should You Invest Your Qualified Plan Money?	p. 91
Summary	p. 92
Power Checklist	p. 92
Goal-Oriented Retirement Planning: Energy for Your Retirement	p. 95
Create a Culture for Success	p. 99
Know When to Give Yourself a Break: The Philosophy of Success	p. 100
Take a Current Snapshot	p. 100
Taking Small Steps Through GORP	p. 103
Establishing Your Goals	p. 103
529 Plans	p. 106
Next Steps	p. 107
Adding Goals and Prioritizing	p. 108
Matching Assets to Goals	p. 108
Managing the Shortfall	p. 111
Modifying and Achieving Your Goals	p. 115
Planning Your Retirement Goals	p. 115
Budgeting for Your Objectives	p. 115
Retirement as a Goal	p. 116
Life Expectancy and Your Retirement	p. 119
Do You Want to Have Leftovers?	p. 120
Creating Your Income Replacement Goal	p. 122
Summary	p. 123
Power Checklist	p. 124
Understanding Risk and Your Product Choices
Understanding and Managing Risk	p. 129
Many Ways to Manage Risk	p. 130
Types of Risk	p. 131
Systematic Investment Risk	p. 132
Understanding the Beta	p. 138
Managing Investment Risk	p. 138
The Third Dimension of Investing: Changing Lenses	p. 139
Monte Carlo Simulation	p. 141
Health/Mortality Risk	p. 142
The Role of Insurance	p. 143
Risk of Doing Nothing	p. 151
Summary	p. 152
Power Checklist	p. 153
Equity Investments: Taking Stock in Your Retirement	p. 155
The Securities and Exchange Commission	p. 161
Why Invest in the Stock Market?	p. 162
Ways to Invest in the Stock Market	p. 162
How to Choose Your Equity Investments	p. 163
Considerations for Buying Individual Stocks	p. 167
Buying on Margin	p. 170
Investing Abroad	p. 171
American Depository Receipt	p. 171
Utilities	p. 172
Risk Reward	p. 172
Individual Stocks and Goal-Oriented Financial Planning	p. 174
Summary	p. 175
Power Checklist	p. 175
Fixed Income Investments: Building a Bond	p. 177
Why People Buy Bonds	p. 179
Bonds, Bonds, My Kingdom for a Bond	p. 179
Corporate Bonds	p. 181
High Yield Bonds	p. 182
Government Bonds	p. 183
Municipal Bonds	p. 184
Zero Coupon Bonds	p. 186
Convertible Bonds	p. 187
Inflation Indexed Bonds	p. 188
Bond Funds	p. 189
How Bonds Are Rated	p. 189
Bonds and Loss of Principal	p. 190
Laddering Bonds	p. 191
Risk Reward	p. 191
Summary	p. 192
Power Checklist	p. 193
Insurance and Annuities	p. 195
Determining the Need for Insurance	p. 197
Risk Choices	p. 198
Insuring Preretirement Needs	p. 198
Annuities	p. 199
Insured Income	p. 211
Health and Insured Income	p. 213
1035 Tax-Free Exchanges	p. 214
The Press and Annuities	p. 215
Life Insurance	p. 216
Other Forms of Insurance	p. 219
The Safety of the Insurance Industry	p. 220
Summary	p. 221
Power Checklist	p. 221
Real Estate and Other Investments	p. 223
Real Estate and Related Investments	p. 224
Real Estate to Avoid	p. 226
Real Estate Investment Trusts	p. 227
Federal Agency Mortgage-Backed Securities	p. 228
Collaterized Mortgage Obligations	p. 232
Gold and Other Precious Resources	p. 232
Collectibles	p. 232
Lessons from eBay	p. 233
Liquidity and Market Value	p. 234
Summary	p. 235
Power Checklist	p. 236
Mutual Funds	p. 237
History of Mutual Funds	p. 238
Closed-Ended Funds	p. 238
Unit Investment Trusts	p. 239
Open-Ended Funds	p. 239
Equity Funds	p. 240
Hybrid Funds	p. 242
Taxable Bond Funds	p. 242
Tax-Free Bond Funds	p. 244
Money Market Funds	p. 245
Style Boxes	p. 246
Equity Indices	p. 248
Socially Responsible Investment Funds	p. 248
Turmoil in the Industry	p. 249
Mutual Fund Expenses	p. 250
Mutual Funds and Goal-Oriented Financial Planning	p. 254
Summary	p. 254
Power Checklist	p. 255
Managing Your Investments	p. 257
Chasing Returns	p. 258
Investing Is Not a Two-Dimensional Process	p. 258
Identifying the Right Mix of Securities in Your Portfolio	p. 260
Asset Allocation	p. 260
Dollar Cost Averaging	p. 262
Portfolio Rebalancing	p. 263
Standard Deviation	p. 265
Passive Management Versus Active Management	p. 267
Repositioning Assets	p. 268
Dogs of the Dow: Top 10 Dividend-Paying Stocks	p. 269
Efficient Frontier and Portfolio Diversification	p. 270
Lifestyle Investing	p. 272
Investing and Relationships	p. 273
Estate Planning and Retirement	p. 278
Summary	p. 279
Power Checklist	p. 279
Take Action Now to Get the Life You Want
Finding the Right Path for You	p. 283
Even the Best Athletes Have Coaches	p. 285
Paths to Choose	p. 286
The Distribution of Products Today and Tomorrow	p. 301
Summary	p. 302
Power Checklist	p. 303
Summiting the Mountain and Beating the Clock	p. 305
Where Do We Go from Here?	p. 306
Your Choices	p. 307
Spending Versus Investing	p. 308
Procrastination: Your Time Is Your Money	p. 309
The Importance of Communication and Trust	p. 310
Perseverance	p. 311
The Endurance	p. 312
It Ain't Over Until the Fat Lady Sings	p. 315
Retirement Countdown, the Web Site	p. 316
The Next Step Is Yours	p. 317
Power Checklist	p. 318
Developing an Action Plan	p. 321
Current Status for the Glovers	p. 322
Insurance Review	p. 327
Tax Documents	p. 327
Goal Setting and Costs	p. 328
Tough Decisions	p. 332
Retirement on Your Terms	p. 336
Appendices
The "Uniform Lifetime Table"	p. 339
Social Security Income	p. 347
Compound Interest Table	p. 349
Index	p. 355
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Congratulations on taking the first step toward reaching your retirement goals by making this timely purchase and finding your way to the starting line. My commitment to you is to "tell it like it is" without sugarcoating the message and yet deliver the message with a strong sense of encouragement and a touch of humor. Granted, your retirement is no laughing matter, but I've always found humor to be a great source of realism and perspective in life, so let's get to work. We can solve some problems and share a laugh or two. I promise that some will be at my expense. I think it's important for you understand why I'm writing this book and what you can expect from it. My primary reason for writingRetirement Countdownis a fairly simple one: I feel that with all my experience in the financial services investment industry, I have something to say that could help you achieve your retirement goals. That's why I hope that as you read this book, you feel the sincere spirit in which it is offered. I've seen a lot of good and bad over the past 25 years, and my fear is that 77 million Baby Boomers and a lot of others are heading into a harsh winter retirement storm. For me to be successful, I need to convince you that I have something of value to offer, and if you don't trust the advice I've provided, I will have failed in my goal. I need your trust to be able to help you. You need to know that I don't sell financial planning services, nor do I provide individual advice to anyone for a feethe occasional apple fritter or a new-release DVD, perhaps, but never a fee. Not that there is anything wrong with fees or commissions; I think that the role for professionals is a vital one in helping you meet your goals. However, I've always enjoyed leveraging my skills, and writing, speaking, and building businesses create the kind of leverage that I love and have excelled at over the years. You also need to know I haven't spent the majority of my years in a corporate ivory tower and that my experience is not purely from teaching others. The experiences I reflect on in this book are the result of thousands of meetings I have had with financial planners and their clients to discuss the benefits of retiring ontheirterms. I have worked with people of all ages, and I've conducted seminars in luxury hotels, trailer parks, schools, and conventions. One of the books I co-authored has been used in research for a Supreme Court decision and was quoted by Justice Ruth Ginsburg in her majority opinion. But what I've found is that people are simply peoplesome more informed, some less informed, some more trusting, and some less trusting. And the reason that Ihaveto tell it like it is in this book is that so many people lack the information necessary to develop a dialogue of substance with a professional who truly engenders trust in a relationship. And the result of that lack of trust is likely to be procrastination or a splintered approach to financial planning without balance, without vision, and without a plan. I can also say that financial planning in general and retirement planning specifically are difficult subjects to speak broadly to because we all have unique goals and obstacles to deal with. So, as you read this book, keep in mind that you'll have some work to do along the wayactually, a lot of work, because it'syourretirement and no one else's. I hope thatRetirement Countdownbecomes the most tattered book on your bookshelf, and I hope that my supporting Web site, www.retirementcountdown.com , is saved as one of your favorites. You'll need to be introspective and honest