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The New Savage Number: How Much Money Do You Really Need to Retire?

Book Description

Nationally known personal finance expert Terry Savage helps you answer the most important retirement questions

During a time when looking to the future is more important than ever, author Terry Savage offers street smart advice for the many soon-to-be retirees wondering how much longer they will have to work to make up for the losses in their retirement accounts. The New Savage Number provides the strategic guidance and hands-on techniques necessary to plan a successful, satisfying retirement.

Throughout the book, Savage helps you figure out how much money you need to retire-your savage number-and how to invest to reach that goal. Then, as retirement looms, she guides you through the process of planning withdrawals so the money lasts your entire lifetime. In between, Savage offers practical advice on everything from getting personal finances organized to insuring retirement plans against the disastrous need for long-term care. An informative, engaging book that future retirees of every age can utilize, The New Savage Number

  • Contains updated chapters reflect the current economy including changes to the mortgage market and stock market performance

  • Takes issues such as social security, long term insurance, and new investment risks into consideration

  • Offers guidance on continuing to earn income in retirement

Written with every retirement bound individual in mind, The New Savage Number, Second Edition provides you with the tools needed to rescue your retirement.

Table of Contents

  1. Copyright
  2. Preface
  3. Introduction: Can You Retire?
  4. 1. RETRO-RETIREMENT
    1. 1. THE SAVAGE NUMBER
      1. 1.1. Shaping Retirement Reality
      2. 1.2. Avoiding Generation Warfare
      3. 1.3. Hoping For a Miracle?
      4. 1.4. You're Not Alone
      5. 1.5. The Likely Solution: Retro-Retirement
    2. 2. TIME IS MONEY
      1. 2.1. Consuming Time and Money
      2. 2.2. Running Out of Time
      3. 2.3. What's Your Time Worth?
      4. 2.4. The Time Value of Money
    3. 3. THE 10 KEY QUESTIONS
      1. 3.1. How Long Will I Live?
      2. 3.2. What Will Inflation Do to the Value of My Savings?
      3. 3.3. How Can I Save Enough?
      4. 3.4. How Should I Invest the Money I've Saved for Retirement?
      5. 3.5. How Much Will I Spend to Live in Retirement?
      6. 3.6. How Much Can I Withdraw Each Month without Running Out of Money?
      7. 3.7. What's the Biggest Danger to My Retirement Plans?
      8. 3.8. How Can I Earn Money during Retirement?
      9. 3.9. How Can I Retain Control of My Financial Life?
      10. 3.10. What If I Have Money Left Over When I Die?
      11. 3.11. Getting the Answers
  5. 2. MONTE CARLO YOUR MONEY
    1. 4. THE SAVAGE ANSWER: MONTE CARLO MODELING
      1. 4.1. Monte Carlo Modeling: How It Works
      2. 4.2. Beware of Averages
      3. 4.3. Monte Carlo Modeling and Retirement Planning
      4. 4.4. Monte Carlo and You
    2. 5. SAVING UP, DRAWING DOWN
      1. 5.1. Accumulation Phase
      2. 5.2. Withdrawal Phase
      3. 5.3. The Right Balance
    3. 6. GETTING IT ALL TOGETHER
      1. 6.1. Online, on Paper, on Your Computer
      2. 6.2. Free Online Money Management
      3. 6.3. The Basics: Paying Bills Online
      4. 6.4. Organizing Your Online Financial Life
      5. 6.5. A Credit Checkup
      6. 6.6. Portfolio Tracking
      7. 6.7. Quicken
      8. 6.8. Morningstar
      9. 6.9. Moving Beyond Tracking—to Advice
    4. 7. A ROAD MAP TO MONTE CARLO
      1. 7.1. The Best Routes
        1. 7.1.1. Financial Engines
        2. 7.1.2. Morningstar Asset Allocator
        3. 7.1.3. T. Rowe Price
        4. 7.1.4. Fidelity
        5. 7.1.5. Vanguard
        6. 7.1.6. Financial Planners
      2. 7.2. Arriving in Monte Carlo
  6. 3. INVESTING FOR RETIREMENT
    1. 8. STOCKS, BONDS, AND CHICKEN MONEY
      1. 8.1. Realistic Stock Market Expectations
        1. 8.1.1. Stock Market Returns—Then and Now
        2. 8.1.2. Historic Returns—The Big Picture
        3. 8.1.3. Long Term—Do You Have 20 Years?
        4. 8.1.4. Persuasive Perspective
        5. 8.1.5. Opportunity of a Lifetime?
        6. 8.1.6. What to Expect—The Next 20 Years
      2. 8.2. Understanding Bonds
        1. 8.2.1. How You Can Lose Money in Bonds
        2. 8.2.2. The Advantage of Bond Funds
        3. 8.2.3. Total Return, Total Risk
        4. 8.2.4. Stocks versus Bonds—An Alternative?
      3. 8.3. Keep Your Nest Eggs Safe With Chicken Money
        1. 8.3.1. Chicken Money Investments
        2. 8.3.2. Chicken Money and Risk
      4. 8.4. A Minute on Mutual Funds
    2. 9. BEYOND THE BASICS
      1. 9.1. Exchange-Traded Funds
      2. 9.2. Real Estate Investment Trusts
      3. 9.3. Gold and Natural Resources
      4. 9.4. The U.S. Dollar
      5. 9.5. Options
      6. 9.6. Futures
      7. 9.7. Hedge Funds
    3. 10. ONE-STEP RETIREMENT INVESTING
      1. 10.1. Buying the Whole Market
        1. 10.1.1. Index Mutual Funds
        2. 10.1.2. Exchange-Traded Funds: Spiders
        3. 10.1.3. Futures: E-mini S&P 500
      2. 10.2. Retirement Investing Made Easy: Targeted Retirement Funds
        1. 10.2.1. How Targeted Retirement Funds Work
        2. 10.2.2. Comparing the Companies
      3. 10.3. Starting Small—No Excuses!
        1. 10.3.1. U.S. Global Funds—ABC Plan
        2. 10.3.2. ShareBuilder
  7. 4. STREAMS OF RETIREMENT INCOME
    1. 11. WHERE WILL THE MONEY COME FROM?
      1. 11.1. The Balancing Act: Income Versus Principal
      2. 11.2. Gainful Employment in Retirement
      3. 11.3. Withdrawals from Retirement Accounts
        1. 11.3.1. Where and When to Withdraw
        2. 11.3.2. Required Minimum Distributions and Required Beginning Date
        3. 11.3.3. Getting It Right
      4. 11.4. Generating Income from Your Portfolio
        1. 11.4.1. Laddering: A Bond Strategy for Retirement
        2. 11.4.2. Covered Call Writing to Add Investment Income
    2. 12. ANNUITIES FOR INCOME AND TAX-DEFERRED GROWTH
      1. 12.1. Immediate Annuities
      2. 12.2. Tax-Deferred Annuities
        1. 12.2.1. Fixed-Rate Tax-Deferred Annuities
        2. 12.2.2. Variable Tax-Deferred Annuities
      3. 12.3. The Latest Annuity Products
        1. 12.3.1. Guaranteed Minimum Income Benefits
        2. 12.3.2. Equity-Indexed Annuities: A Warning
      4. 12.4. Tax-Deferred Annuity Withdrawals
      5. 12.5. Tax-Deferred Annuity Exchanges
      6. 12.6. Your IRA Inside an Annuity?
      7. 12.7. Annuities: The Real Risk Factor
    3. 13. SOCIAL SECURITY AND MEDICARE
      1. 13.1. Social In-Security
        1. 13.1.1. How Much Can You Expect?
        2. 13.1.2. How Much Can You Earn?
        3. 13.1.3. How to Apply for Benefits
      2. 13.2. Medicare
        1. 13.2.1. Medicare Enrollment
        2. 13.2.2. How Medicare Works
        3. 13.2.3. Medicare Supplement Policies
        4. 13.2.4. Medicare Prescription Coverage—Part D
      3. 13.3. A Final Thought About Social Security and Medicare
    4. 14. HOW TO TURN YOUR HOME INTO YOUR PENSION
      1. 14.1. Reverse Mortgages
        1. 14.1.1. Reverse Mortgage for Income
        2. 14.1.2. Reverse Mortgage for Purchase
      2. 14.2. More Income From Your House Using Trusts
        1. 14.2.1. Installment Sale
        2. 14.2.2. Private Annuity Trust
  8. 5. LONG-TERM CARE: THE GREATEST RISK OF ALL
    1. 15. LONG-TERM CARE INSURANCE: WHO NEEDS IT?
      1. 15.1. The Government's Role in Long-Term Care
      2. 15.2. Insurance for Your Retirement
      3. 15.3. Our Parents, Ourselves
      4. 15.4. Long-Term Care Insurance: A Woman's Issue
      5. 15.5. What If You Don't Use It?
      6. 15.6. Why You Shouldn't Procrastinate!
    2. 16. HOW TO UNDERSTAND LONG-TERM CARE COVERAGE
      1. 16.1. Rising Demand, Soaring Costs
      2. 16.2. When to Buy? While You Can!
      3. 16.3. How Do I Use My Policy?
      4. 16.4. What Should My Long-Term Care Policy Cover?
        1. 16.4.1. Elimination Period
        2. 16.4.2. Daily or Monthly Benefit
        3. 16.4.3. Length of Benefit
        4. 16.4.4. Inflation Protection
        5. 16.4.5. Reimbursement Policy
        6. 16.4.6. Guarantee Period
        7. 16.4.7. Spousal Discounts
        8. 16.4.8. Intergenerational Transfers
        9. 16.4.9. Care Coordinators
        10. 16.4.10. Optional Riders
        11. 16.4.11. Partnership Programs
        12. 16.4.12. International Coverage
    3. 17. BUYING YOUR LONG-TERM CARE POLICY
      1. 17.1. Which Insurance Company Should You Choose?
      2. 17.2. What Should it Cost?
      3. 17.3. 10-Pay: Controlling Price Risk
      4. 17.4. Long-Term Care Policies and Income Taxes
      5. 17.5. Paying for Long-Term Care with Life Insurance and Annuities
        1. 17.5.1. Acceleration Riders
        2. 17.5.2. Blended Life Insurance Policies
        3. 17.5.3. Blended Annuities
      6. 17.6. Employee Group Long-Term Care Policies
      7. 17.7. The Federal Long-Term Care Insurance Program
      8. 17.8. Long-Term Care Insurance from Affinity Programs
      9. 17.9. A Final Argument: The Cost of not Having Long-Term Care Insurance
  9. 6. ESTATE PLANNING: THE PRICE OF SUCCESS
    1. 18. WHAT'S LEFT?
      1. 18.1. What Could Happen?
      2. 18.2. What is Your Estate?
      3. 18.3. What are Estate Taxes?
      4. 18.4. What Is Probate?
      5. 18.5. What is a Revocable Living Trust?
      6. 18.6. Health-Care Power of Attorney
      7. 18.7. Living Will
      8. 18.8. Durable Power of Attorney
      9. 18.9. Naming Retirement Plan Beneficiaries
        1. 18.9.1. Your 401(k) Plan Beneficiary
        2. 18.9.2. Your IRA Beneficiary
      10. 18.10. What Else Should You Consider?
        1. 18.10.1. Guardianship of Children
        2. 18.10.2. Bequests to Minor Children
        3. 18.10.3. Trusts for Disabled Adult Children
        4. 18.10.4. Division of a Business
      11. 18.11. Moving Assets Out of Your Estate
        1. 18.11.1. 529 College Savings Plans to Avoid Estate Taxes
        2. 18.11.2. Reverse Mortgage to Fund Life Insurance Outside the Estate
      12. 18.12. Life Insurance and Your Estate
        1. 18.12.1. What Kind of Life Insurance Do You Need?
        2. 18.12.2. Keep Life Insurance Outside Your Estate
        3. 18.12.3. Changing Policies
      13. 18.13. Spouses and Estate Planning
      14. 18.14. Choosing an Estate Planner
  10. CONCLUSION
  11. ACKNOWLEDGMENTS