Personal Finance After 50 For Dummies E-Book

Eric Tyson

• Herausgeber: John Wiley & Sons
• Kategorie: Ratgeber
• Sprache: Englisch

Seitenzahl: 648

Veröffentlichungsjahr: 2015

Beschreibung

Manage your finances in your golden years--enjoy your retirement! Numerous life changes come with the territory of getting older--as we're reminded every day by anti-aging campaigns--but one change the media doesn't often mention is the need for a shifting approach to personal financial management. Personal Finance For Seniors For Dummies, 2nd Edition offers the targeted information you need to make informed decisions regarding your investments, spending, and how to best protect your wealth. You've worked your whole life for your nest egg--why not manage it as effectively as possible? Enjoying your golden years hinges on your ability to live the life you've dreamed of, and that's not possible unless you manage your finances accordingly. The right financial decisions may mean the difference between a condo in a more tropical climate and five more years of shoveling snow, so why leave them to chance? * Explore financial advice that's targeted to the needs of your generation * Understand how changes in government programs can impact your retirement * Consider the implications of tax law updates, and how to best protect your assets when filling out tax forms each year * Navigate your saving and investment options, and pick the approaches that best fit the economic environment Whether you're heading into your senior years or your parents are getting older and you want to help them take care of their finances, Personal Finance For Seniors For Dummies, 2nd Edition offers the insight you need to keep financial matters on the right track!

Leseprobe

Praise for Eric Tyson

“Eric Tyson is doing something important — namely, helping people at all income levels to take control of their financial futures. This book is a natural outgrowth of Tyson’s vision that he has nurtured for years. Like Henry Ford, he wants to make something that was previously accessible only to the wealthy accessible to middle-income Americans.”

—James C. Collins, coauthor of the national bestseller Built to Last; former Lecturer in Business, Stanford Graduate School of Business

“Personal Finance For Dummies is the perfect book for people who feel guilty about inadequately managing their money but are intimidated by all of the publications out there. It’s a painless way to learn how to take control.”

—National Public Radio’s Sound Money

“Eric Tyson … seems the perfect writer for a For Dummies book. He doesn’t tell you what to do or consider doing without explaining the why’s and how’s — and the booby traps to avoid — in plain English… . It will lead you through the thickets of your own finances as painlessly as I can imagine.”

—Chicago Tribune

“This book provides easy-to-understand personal financial information and advice for those without great wealth or knowledge in this area. Practitioners like Eric Tyson, who care about the well-being of middle-income people, are rare in today’s society.”

—Joel Hyatt, founder of Hyatt Legal Services, one of the nation’s largest general-practice personal legal service firms

“Worth getting. Scores of all-purpose money-management books reach bookstores every year, but only once every couple of years does a standout personal finance primer come along. Personal Finance For Dummies, by financial counselor and columnist Eric Tyson, provides detailed, action-oriented advice on everyday financial questions… . Tyson’s style is readable and unintimidating.”

—Kristin Davis, Kiplinger’s Personal Finance magazine

“This is a great book. It’s understandable. Other financial books are too technical and this one really is different.”

—Business Radio Network

More Bestselling For Dummies Titles by Eric Tyson

Investing For Dummies®

A Wall Street Journal bestseller, this book walks you through how to build wealth in stocks, real estate, and small business as well as other investments.

Mutual Funds For Dummies®

This best-selling guide is now updated to include current fund and portfolio recommendations. Using the practical tips and techniques, you’ll design a mutual fund investment plan suited to your income, lifestyle, and risk preferences.

Taxes For Dummies®

The complete, best-selling reference for completing your tax return and making tax-wise financial decisions year-round. Tyson coauthors this book with tax experts David Silverman and Margaret Munro.

Home Buying For Dummies®

America’s #1 real estate book includes coverage of online resources in addition to sound financial advice from Eric Tyson and frontline real estate insights from industry veteran Ray Brown. Also available from America’s best-selling real estate team of Tyson and Brown — House Selling For Dummies and Mortgages For Dummies.

Real Estate Investing For Dummies®

Real estate is a proven wealth-building investment, but many people don’t know how to go about making and managing rental property investments. Real estate and property management expert Robert Griswold and Eric Tyson cover the gamut of property investment options, strategies, and techniques.

Small Business For Dummies®

Take control of your future and make the leap from employee to entrepreneur with this enterprising guide. From drafting a business plan to managing costs, you’ll profit from expert advice and real-world examples that cover every aspect of building your own business. Tyson coauthors this book with fellow entrepreneur Jim Schell.

Personal Finance After 50 For Dummies®

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright © 2016 by Eric Tyson and Bob Carlson

Published by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

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Library of Congress Control Number: 2015950214

ISBN 978-1-119-11877-0 (pbk); ISBN 978-1-119-11883-1 (ebk); ISBN 978-1-119-11881-7 (ebk)

Personal Finance After 50 For Dummies®

Visit www.dummies.com/cheatsheet/personalfinanceafter50 to view this book's cheat sheet.

Table of Contents

Cover

Introduction

About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part I: Working toward Retirement

Chapter 1: Looking Ahead to Your Future

Planning for the Longer Term

Eyeing Keys to Successful Retirement Planning

Chapter 2: Protecting Your Employment Income and Your Health

Assessing Your Need for Life Insurance

Protecting Your Employment Income: Disability Insurance

Investing In and Protecting Your Health

Chapter 3: Developing a Retirement Plan

Deciding When to Retire

Knowing How Much You Really Need for Retirement

Eyeing the Components of Your Retirement Plan

When Setting Up Your Couples Plan

Crunching the Numbers

Making Plans for Nonfinancial Matters

Chapter 4: Identifying Retirement Investments and Strategies

Defining Investments

What You Need to Do Before You Select and Change Investments

Surveying Different Investments

Managing Investment Portfolios

Chapter 5: Grasping Retirement Accounts and Their Rules

Eyeing the Characteristics of Retirement Accounts

Identifying the Different Types of Retirement Accounts

Rolling Over Retirement Balances

Choosing Beneficiaries for Your Retirement Accounts

Taking Required Minimum Distributions, or RMDs

Part II: Making Money Decisions in Retirement

Chapter 6: Managing Budgets and Expenses

Pointing Out Some Retirement Worries You May Have

Spending Your Nest Egg

How Spending Really Changes in Retirement

Managing Your Expenses

Chapter 7: Guiding Investments and Distributions in Retirement

Guiding Your Investments through Retirement

Looking Closer at Annuities

Choosing Your Pension Options

Eyeing Withdrawal Strategies for Your Investment Accounts

Chapter 8: Making Important Housing Decisions

Analyzing Moving

Tapping Your Home’s Equity: Reverse Mortgages

Looking at Tax Issues Regarding Your Housing Decisions

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

Understanding Long-Term Care

Planning to Pay for LTC

Considering LTC Insurance

Using Hybrid Insurance Products

Financing LTC Yourself

Evaluating Employer and Group Coverage

Combining LTCI and Self Insurance

Part III: Dealing with Government Programs

Chapter 10: Making Your Best Choices under Social Security

The Lowdown on Social Security

Determining When You’re Eligible for Benefits

Taking a Closer Look at Spouses’ and Survivor Benefits

Identifying When You May Need to Receive Benefits

Noting How Working Reduces Benefits

Preserving Your Benefits

Being Aware of Potential Income Taxes on Your Benefits

Changing Your Mind: A Do-Over

Looking at What the Future Holds for Social Security

Chapter 11: Getting the Most Out of Medicare

Starting Medicare: A Broad Overview of Enrollment Deadlines

Understanding Part A

Exploring Parts B and C

Qualifying for Prescription Drug Coverage with Part D

Eyeing a Medicare Supplement

Resolving Some Sticky Issues

Chapter 12: The State Health Care System Backup: Medicaid

Discovering What Medicaid Is

Considering Medicaid Eligibility

Establishing Functional Eligibility

Meeting Financial Requirements

Examining Planning Strategies

Using Both Medicare and Medicaid

Eyeing Reasons Not to Seek Medicaid

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

Chapter 13: The Basics on Estate Planning

Understanding Estate Planning

Studying Some Strategies Before Starting Your Estate Plan

Answering Key Questions to Gather Critical Information

Knowing How Estate Taxes Work

Finding Good, Affordable Advice

Chapter 14: Eyeing Wills and Other Legal Documents

Writing Your Will

Assigning a Financial Power of Attorney

Delegating Medical Decisions

Passing Other Assets

Looking Closer at Probate

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

Understanding the Estate Tax

Tallying Your Assets

Reducing Your Estate

Taking Deductions

Choosing Family Estate Strategies

Contemplating Life Insurance

Avoiding the Tax on Gifts to Grandkids: The GSTT

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

Identifying the Cast of Characters

Naming the Types of Trusts

Using Trusts in Estate Planning

Part V: The Part of Tens

Chapter 17: Ten Common Retirement and Estate Planning Mistakes

Not Having at Least a Basic Financial Plan

Procrastinating about Estate Planning

Underestimating Life Expectancy

Miscalculating Inflation

Believing You’ll Retire When You Expected To

Ignoring Nonfinancial Planning

Failing to Coordinate with Your Spouse

Expecting to Age in Place

Thinking Most Medical Expenses Will Be Covered

Missing the Initial Enrollment for Medicare Plans

Chapter 18: Ten Things to Know about Working in Retirement

Some Work Is Good for You

The Social Security (Tax) Impact Can Be Huge

Number Crunching Can Show You How Different Scenarios Work

Life Is Short and You Owe It to Yourself to Do What You Love

Investing in Education Can Boost Your Employment Value

Some Employers Are More User-Friendly for Older Workers

Taking Some Employment Risk Is Important

Starting/Buying a Small Business May Be a Rewarding Option

Your Spouse May Not Want What You Want

Volunteering Makes You Happy and Benefits Your Community

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

Leverage Off Others’ Experiences

Ask for Professional Help

Invest in Their Health

Get Your Parents’ Affairs in Order

Examine Housing and Medical Care Options

Use Caregiver Agreements

Separate Living Spaces if Parents Are Going to Move In

Take Care of Your Family

Take Care of Yourself

About the Authors

Cheat Sheet

Advertisement Page

Connect with Dummies

End User License Agreement

Guide

Cover

Table of Contents

Begin Reading

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Introduction

We’re all getting older, together. Aging presents opportunities for increased wisdom and broader perspective as well as some increased challenges. One of those challenges has to do with finances. The new, and sometimes more complex, financial decisions that confront folks in their later working years and then in retirement can be tough to work through.

For example, consider the types of questions we, your humble authors, have been asked from folks in our advisory businesses:

Can we afford to retire? How much can we comfortably spend per year given our assets?

My employer is offering me pension options. How do I choose among them?

I just left my employer (by choice or through layoff) and have some money in a retirement account. What should I do with it?

How should I manage my investments now and in the years ahead? When should I begin collecting Social Security benefits?

What’s the process for withdrawing money from my retirement accounts, and how can I minimize my tax hit from doing this?

Should I buy an annuity? If so, what type? Are reverse mortgages a good idea?

What types of additional medical insurance — long-term care insurance, Medicare supplement, and so on — do I need pre- and post-retirement?

An agent is telling me to buy more and different life insurance. How much do I need and what type of life insurance should I buy?

Do I need a will? Do I need an estate plan? What should I do to protect my spouse, children, or significant others?

We wrote this book to answer these questions and many more that face you as you age and grapple with your finances during your senior years. We hope to not only answer your questions but to also make you aware of important issues you may not be aware of so you have plenty of time to consider them and make decisions that enhance your financial independence.

About This Book

Everyone needs to make financial decisions. Whether you’re rich, middle class, or poor, 50 or 85 years old, retired, or still working two jobs, money passes through your hands every day. No matter your situation, we’re excellently positioned to give you sound financial advice on the range of issues presented in this book. We each have decades of professional experience in the financial services industry; we each have extensive training and background to provide expert personal financial and retirement advice; and we both communicate in plain English with our readers, operate free of conflicts of interest, and interact with people like you with real financial problems that need solutions.

Eric started as a management consultant in the financial services industry and then worked as a personal financial counselor. Now he’s an author and the proprietor of www.erictyson.com. Eric is a trained economist who graduated with honors in Economics from Yale University. Bob is Chairman of the Board of Trustees of the Fairfax County Employees’ Retirement System, which has more than $3 billion in assets. He has served on the board since 1992. He’s also the editor of the monthly newsletter, Retirement Watch. Bob received his JD and an MS in Accounting from the University of Virginia and received his BS in Financial Management from Clemson University and passed the CPA Exam.

We also have established a few conventions to help you navigate through this book: First, although we’d like to believe that you want to pore over every last word between the two yellow and black covers, we make it easy for you to identify “skippable” material—information that’s interesting but not essential: text in sidebars (the shaded boxes that appear here and there) and paragraphs marked with a Technical Stuff icon. Second, we put all web addresses in monofont for easy identification. If a web address breaks across two lines of text, just type it in exactly what you see it in this book, pretending as though the line break doesn’t exist. (If you’re reading this book online, simply click the link to go to the webpage.) Finally, we refer to the decade from 2000 to 2009 as the 2000s. We just wanted to avoid any confusion in case you were thinking of the year 2095.

Foolish Assumptions

When writing this book, we made some assumptions about you:

You’re age 50 or older (or rapidly approaching that age) and are approaching or are in retirement.

You’re still in the workforce and have no plans to retire, which is fine and compatible with our approach in this book too.

You want expert advice about important financial topics, and you want easy-to-understand answers.

You want a crash course in personal finance and are looking for a book you can read to help solidify major financial concepts and get you thinking about your finances in a more comprehensive way.

Throughout this book, we offer many resources, including websites and online tools to help you, as well as plenty of alternative off-line resources and assistance.

Icons Used in This Book

The icons in this book help you find particular kinds of information that may be of use to you. Here’s a rundown of what each icon means:

This target flags strategy recommendations for making the most of your money.

When you see this icon, you’ll know the text next to it points out information that you definitely want to remember.

This icon marks things to avoid and points out common mistakes people make when managing their finances.

This icon alerts you to scams and scoundrels who prey on the unsuspecting.

The investigate icon tells you when you should consider doing some additional research. Don’t worry — we explain what to consider and what to look out for.

This icon appears beside discussions you can safely ignore because they aren’t critical to your understanding of the topic at hand; however, reading them can help deepen your personal financial knowledge.

Beyond the Book

In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet at www.dummies.com/cheatsheet/personalfinanceafter50 for information about employer pensions and go to www.dummies.com/extras/personalfinanceafter50 for articles that explain the evolution of long-term care, offer advice on how to answer Medicare questions, and more.

Where to Go from Here

This book is organized so you can go wherever you want to find complete information. Want advice on managing and tracking your expenses in retirement? See Chapter 6. If you’re interested in investing strategies and developing a retirement plan, cruise on over to Part II. If you’re not sure where you want to go, you may want to start with Part I. It gives you all the basic info you need to assess your financial situation and points to places where you can find more detailed information for improving it. Check out the table of contents for a chapter-by-chapter rundown of what this book offers. You also can look up a specific topic in the index. Last but not least, you can turn to Chapter 1 and begin reading for a complete and thorough crash course in personal finance during your golden years.

Part I

Working toward Retirement

Visit www.dummies.com for great (and free!) Dummies content online.

In this part …

Get complete and easy-to-understand guidance on how to best plan for a secure financial future

Learn how to protect your employment income.

Develop a plan that will see you through your retirement years by discovering the best retirement investments and strategies, and understanding retirement account rules

Chapter 1

Looking Ahead to Your Future

In This Chapter

Taking charge of your long-term plans

Implementing retirement planning strategies

From a young age, various adults in our lives tell us to plan ahead. Although it may be sunny and clear outside this morning, they tell us to take rain gear for this afternoon’s possible heavy rain. When packing for a day at the beach, they suggest sunscreen and money for lunch. And do your best in high school, they say, because your transcript will in part determine which colleges accept you.

Although some parents provide guidance to their children on the topic of long-term financial planning, most don’t because they aren’t sufficiently knowledgeable or are reluctant to explain these things to their kids. And therein lays a pretty significant problem concerning finances for your adult and especially later adult years.