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The Complete Retirement Handbook

The Complete Retirement Handbook: The Most Authoritative Guide Available

Forest J. Bowman
Copyright Date: 1989
Pages: 248
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  • Book Info
    The Complete Retirement Handbook
    Book Description:

    If you are 20 or 30 years of age and just starting out in a career, this book can serve you as an excellent road map for your future retirement. If you are 40 to 50 years of age, this book can become the life-saver that can make your shortly-to-come retirement more full. If you are over 50 years of age, you need to rush out and get this book to keep from suffocating during your impending retirement. In other words, this book is an excellent volume for anyone who is in the American work force.

    The author begins the book with the basic premise that everyone who works for a living will one day retire, if that individual lives long enough. As a result, each person has a right to have a say in his or her retirement. Accepting that premise, the writer discusses the reason for a healthy attitude of looking forward to retirement. He points out that simply looking forward is not enough. One must consider whether to remain in one's locale or to move to a more favorable climate; Bowman discusses the pros and cons of the issue.

    eISBN: 978-0-8131-6220-1
    Subjects: Finance

Table of Contents

  1. Front Matter
    (pp. 1-6)
  2. Table of Contents
    (pp. 7-8)
  3. Acknowledgments
    (pp. 9-10)
  4. Preface
    (pp. 11-14)
  5. 1 It’s Your Life—You Call the Shots
    (pp. 15-25)

    The term “retirement planning” has no precise definition. It is, rather, a very broad description applied to a great many activities which help us make the adjustment from involvement in the workaday world to a life of leisure and ease—“the last of life, for which the first was made,” as Robert Browning put it.

    Obviously a life of leisure and ease will require adequate income, so financial planning is a large part of retirement planning. Too much leisure and ease, on the other hand, could become unbearably boring, so part-time work, hobbies, volunteer work with a school or charity,...

  6. 2 Life Begins at Retirement
    (pp. 26-38)

    Around the age of thirty, all of us begin to go through the process known as aging as we start to lose some of the natural resiliency of youth. The process is a perfectly natural one, although the pace at which it occurs varies from person to person.

    Many signs of aging are quite obvious. Near age thirty-five on the average, hair begins to go gray as some hairs lose their natural pigmentation. The process is gradual until finally there are more white hairs than hairs of the original color and we are no longer said to be gray but...

  7. 3 Sun Belt, Here I Come! Moving After Retirement
    (pp. 39-45)

    Next to when to retire, where to live during retirement is perhaps the most important question facing a prospective retiree. In order to make a wise decision, a careful evaluation of all the possibilities is necessary.

    If you are thinking about moving to a new area, be sure to base your selection on your own knowledge of the locality and its advantages for you and not on what someone else has tried to sell you.

    You might begin your investigation by looking atPlaces Rated Almanac, by Richard Boyer and David Savageau (Rand McNally, 1981). This book rates 277 metropolitan...

  8. 4 Your Retirement System—The Cornerstone of Your Planning
    (pp. 46-58)

    One of the key factors for a happy retirement is having sufficient funds to live on. This may seem pretty self-evident, but it is something to think about. One recent study suggests that right now it takes a net worth of $300,000 to retire comfortably but not lavishly. And five years from now, assuming an inflation rate of 8 percent, you’ll need assets of about $440,000 to retire comfortably. These figures assume that you will not spend any of the principal of your assets and will be able to live on a 10-percent return on these assets.

    These figures may...

  9. 5 Social Security—It’s “Social,” but How Much “Security”?
    (pp. 59-81)

    Social Security covers a wide range of programs, including survivor’s insurance, disability insurance, hospital and medical insurance for the aged and disabled, supplemental security income, and retirement (old-age) insurance. Other federal programs providing social security include unemployment insurance, black lung benefits, and a variety of public assistance and welfare services. When most people talk about Social Security, they mean what we will be referring to in this chapter—old-age or retirement insurance and some related disability and health-care benefits.

    Social Security is the basic method of providing a continuing income when ordinary family earnings are reduced or discontinued because of...

  10. 6 Where There’s a Will (or a Reasonable Substitute), There’s a Way
    (pp. 82-103)

    The term “estate planning” is not easily defined, for it includes a wide variety of activities. But, essentially, what we are talking about when we use the term is the planning for the transfer of our property, both during our lifetime and at death, with a minimum of tax cost and in such a way that it will not result in controversy.

    Traditionally the cornerstone of an estate plan has been the will, by which the owner disposed of his property on death. However, as the nature of property has changed and as the tax laws have evolved to keep...

  11. 7 Probate (and How to Avoid It)
    (pp. 104-110)

    When a person dies, his or her assets must be inventoried, all debts paid (including taxes), all debts due the decedent collected, and a final accounting made. (Think of it as the earthly version of the balance sheet we are told St. Peter reviews with us after death.) After this final accounting has been approved by the proper authorities, the decedent’s property is passed on to those persons who are entitled to take it. As a result, the property passes to them with a “clear” title—that is, there are no tax liens or other obligations affecting the ownership of...

  12. 8 Living with a Revocable Living Trust
    (pp. 111-118)

    Let’s assume that you own a small portfolio of corporate stocks and a four-unit apartment building. You have enjoyed managing these assets over the years and would like to continue management as long as you are capable. On the other hand, you don’t want to risk losing or substantially reducing the value of either asset by poor management if you should become incapable. And you would like some “standby” management in case you simply tire of the chore.

    There are several means available to provide protection in either event. The first of these is thepower of attorney. This is...

  13. 9 Taxes—In General
    (pp. 119-127)

    Plato, writing inThe Republicover two thousand years ago, said of a tyrant: “Has he not also another object which is that they [the people] may be impoverished by payment of taxes, and thus compelled to devote themselves to their daily wants and therefore less likely to conspire against him?”

    Benjamin Franklin spoke in more familiar terms in 1789 when he said: “In this world nothing is certain but death and taxes.” (Even Franklin failed to notice the obvious: At least it can be said of death that, unlike taxes, it doesn’t get worse every time Congress convenes.)


  14. 10 The Federal Estate Tax
    (pp. 128-138)

    As explained in the preceding chapter, the federal estate tax is a tax on transfers at death. It is a progressive tax, which is to say that the larger the estate, the higher the percentage of tax that is assessed. The size of your estate is the single most important factor in determining what estate tax your estate will pay.

    To determine the size of your estate, we begin with the concept of the “gross” estate, which is a listing of all the assets a decedent owned at death. One of the first questions we must ask is: What makes...

  15. 11 The Federal Income Tax
    (pp. 139-156)

    To determine how much income tax you will owe, you begin with the concept of gross income. And just as “gross estate” is defined in all-inclusive terms in the estate-tax section of the Internal Revenue Code, so “gross income” is defined in one all-inclusive sentence: “Gross income means all income from whatever source derived, including (but not limited to) the following items:…” If this grandly broad definition were all that there was to the Internal Revenue Code, it would be simple enough. But the next six thousand pages of the code consist, in large part, of backing away from the...

  16. 12 The Federal Gift Tax
    (pp. 157-161)

    The federal gift tax was devised to plug a loophole in the federal estate tax. Shortly after the estate tax law was enacted—in time to help pay for World War I—it became apparent that persons who were wealthy enough to be subject to the estate tax could avoid the tax by giving away their estate during their lifetime. If they died after giving their estate away, they would have no estate and the estate tax would not apply. So Congress moved quickly to create the federal gift tax, which taxed lifetime gifts at roughly 75 percent of the...

  17. 13 Tax Shelters
    (pp. 162-169)

    In a sense, the term “tax shelter” defines itself. A tax shelter is any means of shielding (or sheltering) money or assets from taxation. (Although most books on tax shelters deal solely with income tax, it is also possible, as demonstrated earlier, to shelter estate assets from the estate tax and to shelter gifts from the gift tax.)

    If, for example, income that would normally be subject to taxation as ordinary income can somehow qualify for taxation as a capital gain, this income has been sheltered from some of the income tax, since capital gains are taxed at a lower...

  18. 14 The Corporation—A “Better Mousetrap”
    (pp. 170-177)

    Suppose you want to engage in a business venture which, although it offers great potential for profit, also carries with it substantial risk. You are willing to invest all your excess capital and give the venture all your time and effort. However, if the business should fail, you would rather not lose your home, the family car, and your personal savings account. Moreover, you’d like to invite others to invest in your venture and to afford your investors some reasonable return on their money.

    Your venture is ideally suited for the business organization known as a corporation. A corporation is...

  19. 15 Putting Your Money to Work
    (pp. 178-192)

    We repeated earlier the well-known truth that acquiring a retirement nest egg is a matter of saving small amounts of money over a long period of time. The shorter the time, the larger the amounts that must be saved. Table 15-1 shows how an investment of $100 per month will grow at different rates of interest over a number of years.

    To use this table, you determine, as we learned in Chapter 4, what your financial needs will be after retirement and what income you can expect at that time. The difference is the amount you need to fill in...

  20. 16 Life Insurance
    (pp. 193-202)

    Life insurance is a contract between you and a company under which you agree to pay a certain amount of money every year. In return, the insurance company promises to pay those dependent upon you a large amount of money upon your death.

    Life insurance companies do not like to admit it, but in a sense, a life insurance policy is a bet. You are betting (albeit nothoping) that you will die before you have paid very much money to the life insurance company in premiums. The life insurance company, on the other hand, is betting that you will...

  21. 17 Putting It All Together
    (pp. 203-206)

    We’ve covered the whole subject of retirement, from the aging process through the emotional trauma of taxes, investments, and life insurance. What can we make of all this? What guidelines emerge?

    1.Careful planning is absolutely essential. The sooner you start planning for retirement, the better. But it is never too late to organize your life and work toward established goals. Having a successful retirement without planning for it will simply be a matter of luck. Luck always helps, but planning can make luck come your way. If you’re already retired, planning for tomorrow can bring the same positive results that...

  22. Appendix A Checklist for Apartment or Condominium
    (pp. 207-211)
  23. Appendix B Special Housing Checklist for the Elderly
    (pp. 212-213)
  24. Appendix C The Gap Between Postretirement Income and Expenses
    (pp. 214-216)
  25. Appendix D Evaluating Your Pension Plan
    (pp. 217-218)
  26. Appendix E State Requirements for a Valid Will
    (pp. 219-221)
  27. Appendix F Devices for Avoiding Probate
    (pp. 222-222)
  28. Appendix G State Individual Income Tax Rates
    (pp. 223-224)
  29. Appendix H State Inheritance and Estate Taxes
    (pp. 225-227)
  30. Appendix I Federal Individual Income Tax Rates
    (pp. 228-231)
  31. Appendix J Federal Corporation Income Tax Rates
    (pp. 232-232)
  32. Appendix K Computing Life Insurance Needs
    (pp. 233-234)
  33. Appendix L Monthly Savings Needed to Reach Desired Amounts at Retirement
    (pp. 235-236)
  34. Glossary
    (pp. 237-244)
  35. Index
    (pp. 245-248)