Smartest Retirement Book You'll Ever Read

The book is by Daniel Solin which I reviewed in the fall of 2014. The notes are based on the paperback version from August 2010, printed in the United States.

I missed summarizing chapters 6 - 22, 32 - 38 and 40 but if I ever review them, I'll update the notes.

Preface

Investing before is as critical as during retirement.
Simply saving money does not mean you will automatically be able to support yourself during retirement.
You are on your own when investing the money before and during retirement.

Deflating Inflation

People should be as concerned about withdrawing from retirement accounts as much as investing in them.
Supposedly there are some smart investing rules that apply before and after retirement, for any age and any stage of investing life.
Inflation at 3%:

Value of $100 will go down to $76 in 10 years.
Value of $100 will go down to $56 in 20 years.

Person's retirement can be 30 years or longer. So investing during retirement is also critical.
Use this retirement calculator to find out how much money you will need to save before retirement:

http://www.bls.gov/data/inflation_calculator.htm

If I want to retire on $1 million 20 years from now then I have to save $1,607,624.83 (160% of $1 million).
Medical costs are rising faster than inflation.
Social Security is the only guaranteed inflation indexed money retirees can depend on for increased cost of living through the retirement years.
Withdrawing 6% annually from an all-bond portfolio there is 27% chance of having anything left after 30 years. (The goal should be to have the portfolio grow instead.)
Basically, the retirement book is asking you to put money into the stock market - the point is pure and simple.
It is trying to convince you that bonds or social security will not be enough to last you the retirement years.
Also the book is trying to convince you that you need to continue to invest during your retirement years by selling and buying stocks in your portfolio by using index funds.

When Conservative is Risky

Income-only portfolio (where you don't take money out of principal) does not work with certificates of deposits, savings accounts or collection bonds. This type of portfolio does not keep up with inflation.

Retirees are worried that if they have stocks they won't live long enough to get through a down market, where initial deposits into investments recover their value, so they avoid stocks. But only stocks offer returns over the inflation rate.

What's more is that a retirement portfolio needs a globally diversified selection of stocks, not only domestic.

Stocks for the Timid

A summary of the opening quote for this chapter:

If you set aside money for two years worth of groceries and bills then you have the staying power to stick with an investment portfolio in a very tough market.

Two years worth of bills and groceries can add up to:

Groceries: $1500 a month = $18,000.
Bills: $2000 a month = $48,000.

While down markets do turn around you should have part of your portfolio perform well in a down market.

One simple idea for this portfolio theory is to make a yearly withdrawal from all your investments equally across the proportions of your investment types. If you have 40% in stocks and 60% in bonds, the withdrawal of an example sum of $30,000 would be $12,000 from stocks and $18,000 from bonds.

And the reason for this is that your portfolio theory should drive your investment's growth and not the principal. You would not withdraw only the dividends of stocks and bonds or % from interest, but an amount that you need to cover your expenses during retirement.

The plan is to:

1. Reinvest dividends from stocks, treasuries or bonds.

The portfolio theory continues that you may additionally have to sell more stocks to remain balanced in your portfolio. This is captured in one sentence and does not explicitly state that you should buy anything for the proceeds, even though that was the intent of the message.

Stock-Picking Perils

The quote for this chapter simply can't be summarized, it just has to be remembered as it is:

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."

-Warren Buffett

Your investments should be divided between stocks and bonds. There are misconceptions about bonds and stocks cause most anxiety.

There are basic principles about buying stocks and how they should make up your portfolio.

Blue chip stocks used to be the most dependable, many retirees gravitated to these kinds of stocks, as they were the most safe.

Shareholders of individual stocks have been hit the hardest after 2008's market crash, especially the financial and car industry stocks.

The book is trying to make the argument that it was never a good strategy to buy and hold those stocks anyway. Actually there is a long history of disappointment for investors by stocks that have been perceived as dependable.

This sentence captures the clutch of the issue with individual stocks: "The potential gains for any individual stock can't make up for the tremendous risk of holding it."

The book obviously is going to recommend buying index funds and this is the book's goal but the sentence above is very justifiable in any scenario. Investing in any individual stock is going to be one of the riskiest move you can make with your money.

The worst performance for a 4 year annualized all-stock portfolio was less than 2 percent (positive). Any 10-year period from the last five decades through December 2008, all-stock portfolios had profits 99.1 percent of the time.

The above two facts are pointed out in the book, but obviously you have to invest and withdraw at the right time for this to be a very relevant guide.

Squeezing Your Nest Egg Hard

Issue of withdrawal rates is a critical one that's still evolving
Withdrawal strategy for retirees with portfolio 50-75% in stocks:
Don't withdraw more than 4.15% of net worth the first year
This is a 30 year retirement rate
For subsequent years add the inflation percentage to the withdrawal
For example, if you took 10,000 the first year then you'll take out 10,300 the second year
Not a big increase but it's intended to provide a retiree near certainty that portfolio will last at least 30 years
The 4.15% rate is based on market's performance since mid-1920s

Squeezing Your Nest Egg Harder

Determining the maximum initial withdrawal rate is the holy grail in retirement planning
The retirement portfolio balance in first year of retirement dictates withdrawal amount (using 4.15%)
If that year stock market standing is up then your amount is up, even if the following year the stock market is down
Many experts say it's not necessary to take out a smaller amount due to down market, the following year in this example
Retirement advisers choose to use P/E (price to earnings) ratio as guideline to get the withdrawal rate
5% withdrawal rate is OK if the stock market wasn't overvalued during first 15 years of person's retirement (Michael Kitces)

10-Year P/E Ratio	Safe Withdrawal Rate
P/E > 20	4.5%
P/E 12-20	5.0%
P/E < 12	5.5%

P/E > 20 = market overvalued
After 2008 market crash the P/E became < 20, so withdrawal rate went up for retiree investors
P/E < 12 last occurred from 1974 until 1986
To find P/E ratios go to Robert J. Shiller's site

http://www.econ.yale.edu/~shiller/data.htm
http://som.yale.edu/faculty-research/our-centers-initiatives/international-center-finance/data/stock-market-confidence

So the end argument on this chapter is:

You may take out the same withdrawal rate when stock market is down (versus when market was up) by knowing the P/E ratio is lower as a result of the down market
When market is down so is the average P/E ratio (allowing retiree investors to take higher withdrawal rate their first retirement year)
"Great consolation to those who retire when the markets are ailing"

Squeezing Your Nest Egg Hardest

Try to answer at what income you want to retire, not at what age
William Bengen - an icon of withdrawal research

"floor-to-ceiling" strategy
5% withdrawal is fine if

Bull market: 25% more when withdrawing than the initial withdrawal (ceiling)
Bear market or rough market: 10% less than the initial withdrawal (floor)

Withdraw at the beginning of each year (not sure why)
Bengen: 91% chance portfolios to last 30 years

Overall summary: you can increase your withdrawal by taking into account market conditions on the date of your yearly withdrawals

Basic Withdrawal Strategies

Ultimately withdrawal is about smart tax management
There is an order of asset types that should be withdrawn during retirement that is tax efficient
Order in which to draw down assets

Post-tax accounts
Deferred retirement accounts

IRAs
SEP-IRAs
401(k)s
403(b)s
Roth IRAs

Post-tax accounts are taxed at 15% max so they should be used first during retirement (lowest-cost income)
The tax-deferred amount can stay invested and continue compounding untaxed
Untaxed compounding investments increase faster in value
If the tax-deferred money is untouched it can be moved to Roth IRA where no minimal withdrawals are needed (conversion to Roth 401k requires paying wage income)
If Roth IRA is untouched by a retiree the estate can side-step capital gains taxes due to "step-up in basis", when the taxable portfolio is reset at zero
The above strategy is a tax-efficiency (post-tax first) and making the the most out of time with tax-deferred investments while using the post-tax as income
Also, withdrawing post tax investment is less expensive to the retiree because tax is lower and you don't have to withdraw additional amount to cover IRS portion

	Person 1	Person 2
Retirement age	65	65
Nest egg	$1.4 million	$1.4 million
Amount tax deferred	$1.1 million	$1.1 million
Withdrawal strategy	Tax deferred first Post tax last	Post-tax first Tax deferred last
Yearly withdrawal rate	4.15%	4.15%
Balance at age 100	$0	$1.2 million

Post-tax withdrawal maximum tax rate is 15% on capital gains on any long-term profits realized
Retirees in the 10 - 15% tax bracket owe no taxes on profits (through 2010 - check now)
The longer cash stays in a tax-protected account the more the account value will increase in this status
The reasoning for taking out post-tax portion of the retirement balance out first is that you are paying low taxes on this. It is maximum of 15%. The longer deferred taxes are on the other balance type the better as that amount grows by reinvesting itself tax-free. So you get a good deal by having the most money left being invested for you still, instead of having it run out by having it taken out (and paid tax on it).
If you have short life expectancy and enough in post-tax retirement funds that you are using for income during retirement then designate the pre-tax (tax-deferred) portion to my children (they will take it out tax-free; no capital gains taxes)
At age 70 1/2 federal government will require you to take withdrawals from pre-tax balances
The withdrawal rate will be computed by a federal formula
Strategically pull money out during years when taxable income is lower
Pulling money from tax-deferred account lowers the required minimum distribution
Another strategy is to make withdrawal without pushing yourself into a higher tax bracket

Moving Your Retirement Accounts

What's the benefit of a rollover IRA?
To get better investment options than what employer offers (even though post tax)
Benefit is central account from all jobs w/ 401k from the past
You can find sample portfolios in appendix B of the Smartest Retirement book
Always rollover from trustee to trustee
Withdrawal strategies

Keep 401k with old employer
You can take out at 55 years old from 401k?
"No case will insulate you from paying taxes", but if in smaller tax bracket you pay less taxes
The only money that makes sense to cash-in from retirement is "appreciated company stock" because it's going to be 15% (not 35% when it's rolled into IRA) even with 10% penalty
The 10% penalty is applied from cost basis and not the withdrawal amount
If there is appreciated company stock then cashing-in is better than moving to IRA
Does this strategy make sense whenever you can take out the stock? Even if you don't have to wait till age 55?

Roth Redux

Roth IRA conversion
If you don't want to withdraw anything
Roth investment appreciation is tax-free (no capital gains taxes)
Keep minimum 5 years after conversion
Also good for high income earners and leaving tax-free income for heirs

The Reverse Holdup

You must start taking distributions no later than April 1 of the year following the year in which you turn seventy and a half
Don't double up on withdrawals, as there are tax consequences, making sure you take your first withdrawal prior to December 31 (don't wait until spring)
To figure out the yearly withdrawal rate divide the balance by 27.4 years if you are 70 years old
You must take out from each retirement account separately as required by IRS
Very little reprieve from IRS if mistakes happen, but possible

Winning the Social Security Lottery

If you expect an average life span then it doesn't matter when you start taking out Social Security
If you live longer than usual then it's best to wait until age 70 before taking out Social Security
If you take out Social Security then make sure you aren't working anymore (otherwise your payments will be reduced)
When to start taking out Social Security payments

Leaving Your Spouse a Legacy of Poverty

Men (not women) make decisions on these two issues that dictate how surviving spouses live:
When to take out their Social Security benefits
How to structure pension payments
Men take out early Social Security and later when they die, women may choose husbands' benefit, which is lower because it was started in early retirement (as men are usually older than wives)
Unless hers is bigger but apparently it's rarely the case
When taking earliest payments, they reduce their checks 20 - 30%
Also, working income reduces the size of the Social Security checks received before full retirement age
Working until age 70 (delaying Social Security benefits) tremendously helps increase later Social Security benefits, and additionally the nest egg funds are not being used

Leaning on a Thin (Pension) Reed

Corporations convert traditional pensions into cash-balance pensions to save a lot of money

Even if you're lucky enough to have a pension, you may not be able to rely on it (traditional pension)

Reverse Mortgages

Stay away from reverse mortgages
This financial "product" is a last resort to finance something in a critical and final situation if there is no money around whatsoever
Reverse mortgages have the same cost as buying a home
Credit report fee
Flood certification fee
Escrow, settlement, closing fees
Document prep fees, recording fees, courier fees, pest inspection, property survey, etc
Do not ever take out a reverse mortgage

Low Cost Lifelines

See "How to Fight Property Taxes"

http://www.ntu.org

Elder Care Locator

800-677-1116

Should You Sell Your Life?

Never sell your life insurance policy
If you sell it, you will end up selling it at a deep discount

Broker's fee is a commission you pay

So if you sell your policy for $500K and broker's fee is 8%, you get $452K

You pay taxes on what you get for the policy (the $452 minus all full income taxes)
There is also provider fee at 1 - 3%, which could be another $10K off the $452K

Recommendations

If you can't afford your insurance policy, reduce the death benefit
Keep the policy for your heirs
If you have sufficient cash value in policy it can be used to cover premiums
Terminally ill people can claim percentage of death benefit or reduce or stop premium payments altogether without jeopardizing the death benefit
If policy issues are unclear consult a fee-only insurance advisor

Hope When It Seems Hopeless

AARP Foundation Benefits QuickLink

http://www.aarp.org/quicklink

The National Council on Aging - BenefitsCheckUp

http://www.benefitscheckup.org

Helping raise grandchildren

http://www.aarp.org/quicklink
State Children's Health Insurance Program (SCHIP)
Medicaid (can it be used for grandchildren?)
Supplemental Security Income

Lower utility bills

Low Income Home Energy Assistance Program (LIHEAP)

http://www.acf.hhs.gov/programs/ocs/liheap
http://www.acf.hhs.gov

Lower phone bill

The nationwide Lifeline program

http://lifeline.gov
You have to apply through your local phone company

Care Before Medicare

You qualify for Social Security benefits at 62 years old
Medicare starts at 65
Using spouse's coverage is best
COBRA requires almost (if not) full payment of insurance premium

Allows you to continue employer insurance benefits for up to 18 months

Spouse of a retiree who has Medicare can take COBRA for up to 3 years
Widows are eligible for 36 months of COBRA
COBRA is geographically assigned, you may lose coverage somewhere else
HIPAA is another option if COBRA runs out
Group coverage can be cheaper than an individual policy
It's tough to find individual policy for older Americans who aren't eligible through HIPAA

The Short Skinny on Long Term Care

70% of Americans over age 65 will require long-term care
10% of people 55 years old or older own a policy
Long term care offers daily assistance to help stay otherwise independent
Be sure your policy covers home care and not just nursing home care
Uncle Sam does not pay for nursing home (HMOs, Medicare or private insurers don't pay for it)
Medicare only pays for "medically necessary" care in certain conditions
Long-term care policies are complicated, and critical questions to be answered are

Do I need it?
What's exactly the cost?
How much coverage I must have?
Should I get inflation protection?
How long should my policy cover me?
What should be the deductible?
Do I need non-forfeiture benefits?

You need to determine if long-term care insurance should be part of your financial planning

Who Needs Long-Term Care Insurance?

Long-term insurance is never one-size-fits-all type of recommendation
Medicaid pays for nursing home for people without assets
Assets below $200K

Can exempt some assets while taking Medicaid for nursing home
May still need a policy for better facilities
Medicaid people may not even get a spot at nursing facilities

Assets between $200K and $750K

Will incur biggest loss due to institutional care
Can't qualify for Medicaid (until most assets are gone)
Can benefit from state long-term care partnership programs
Must seriously consider "short-fat policy"

Policy that runs for short period of time with better daily benefits

Assets between $750K - $2 million

Probably won't deplete your nest egg (probably)
Paying for years will affect surviving spouse
May benefit from "short-fat policy"

Assets between $2 million and $4 million

Can pay for nursing facility or at-home care themselves
For coverage you can choose

Policy with an extremely long elimination period with lifetime benefit coverage
Policy with lifetime benefit with rich daily benefit with higher level of care

When Fat Beats Skinny

Short-fat policy might pay $200 everyday for 3 years
Long-thin policy might pay up to $100 a day for 6 years
Most people will need short-fat policy, they'll only live 2-3 years in nursing home (average)
Policy with greater benefits offers more nursing home or assisted living options
Treat a shorter policy like a longer one - slow down claims
If 3 year policy covers $200 a day, and policy holder claimed $150 a day, policy will extend beyond 3 years
The opposite cannot be done, i.e. a 6 year policy providing $125 a day and you claiming $200 a day over a shorter period
Make a special consideration on daily benefit amount
Differences between cities and states are large
Check federal National Clearinghouse for Long-Term Care Information at:
http://www.longtermcare.gov
Consider inflation-protected long-term care (compound coverage)
Provides better coverage as benefits increase by 5% annually
$200 a day policy for 3 years is $219K, but 10 years later the benefit cash pool becomes $339,550 (or $339,741 with 5% inflation rider)
No inflation protection keeps the $219,000 policy at the old $219,000
Watch out for "elimination period" on policy, which is actually when the policy benefits begin
They can be 30, 60, 90 or 180 days or a year, sometimes they begin right away
Look for this first before deciding which provides the best fit
Consider a state partnership policy, where private long-term insurers are making policies more attractive
Easier with these to get Medicaid (nursing home)
http://www.longtermcare.gov
Make sure long-term care is "federally qualified", so any benefits are tax-free

Keeping Your Long-Term Care Policy in Force

65 year old couple will ultimately spend $85,000 paying yearly premiums for joint long-term care by the end of their life

Where's the Check?

Insurance companies make money when they don't pay claims
Policyholders always confront unnecessary delays and overwhelming bureaucracies
Improper paperwork by insurer (not policyholder) can result in denied coverage
Some policyholders are denied coverage until after a long time after purchasing insurance
National Association of Insurance Commissioners keeps some information on complaints nationwide
http://www.naic.org
There are and were many investigations into long-term care practices launched by the government and congressional committees
State insurance regulators know track records of premium increases for individual insurers
Stick with insurers with an A-rating or better from big rating services
A.M. Best
Standard & Poor's

Find the Will to Leave a Will

Dying without a will justifies worst fears
Probate court will consume a lot of money
The state will decide who gets your house and the portfolio of mutual funds (and savings)
A will is essential to establish an estate plan where you want your things to go after your death
House
Furniture
Jewelry
Vehicles
Savings accounts
Taxable investment accounts
Who to raise your kids if they're less than 18
A will tells who is the executor (spouse, friend, attorney) that will
Distribute property
Pay outstanding bills
Complete final tax returns
Handle funeral costs
Transfer what's left to heirs
A will won't direct who inherits
IRAs, workplace retirement accounts
Pensions or annuities
These accounts have beneficiaries, so they must be kept current

Avoiding Probate Purgatory

In probate court the estate lawyers are the winners
Very arduous, expensive process if probate court process happens
How to avoid probate court

Create a Living Trust

Your description how you want your assets distributed

Establish a trustee that will carry out the distribution
The trust is revocable by you, or can be updated
You can add assets or take them out of the trust
The trust owns the assets, not you

How to Create a Living Trust

All property and accounts must be re-titled, reflecting the trust owns them
Married couples create joint living trust
Married couples trust can avoid or reduce estate taxes when attorney includes language for an "exemption equivalent" or "bypass trust"
Exemption equivalent provision ensures each spouse claims their estate tax credit
2009 limit on estate tax exemption was $3.5 million
If a couple is worth $7 million then each can claim the $3.5 through the use of an exemption equivalent trust, so no estate taxes are owed

Name a Beneficiary for Retirement Accounts

Include the names of people who will inherit the retirement accounts
You can even name your living trust as your beneficiary

Establish Payable-on-Death Accounts in all accounts in banks (savings, checking, etc)

Add a payable-on-death designation to your current accounts
They won't be able to claim your money while you're alive

Create a Transfer-on-Death Registration (individual stocks or bonds)

Contact brokerage firm, mutual fund company or financial adviser to register the taxable accounts in what's called "beneficiary form"
You will get new certificates that show the securities in beneficiary form
Beneficiary has no right to the securities until the owner's death
The registration can be updated anytime
Different than "rights of survivorship" where both owners must cash-out and re-register the account, whereas "transfer-on-death" the beneficiary has no rights to the account and owner has complete control over it

Transferring Ownership of a Vehicle

In some states it's possible to name a beneficiary for your vehicle (check with NY State DMV)
The eventual owner has no right to the vehicle as long as you're alive

The Magic Power of an Inherited IRA

Even a modest inherited IRA can grow into a windfall
Inheritance example 1

45 year old inherits $50,000 IRA from parents
He doesn't withdraw over the next 38.8 years
At 8% it would grow to $303,113

Inheritance example 2

45 year old inherits $500,000 IRA
After same number of years it would be $3,031,136
A grandchild who would inherit that IRA (and took withdrawals over her life) would make that $3 million look like small change

Longest period of time IRA can be stretched is 82.4 years (child or grandchild will get this long to empty it)
IRAs compound for years
Name the correct beneficiary on the IRA (failing to do so can be disastrous, and a Will won't help)
Original owner's name must stay on the IRA. If that changes the inheritor will have to pay taxes as IRS will consider it cashed out and taxable
Beneficiaries have to be careful when moving IRA; any potential move can be taxed by IRS
When leaving a job roll 401k into an IRA

Children or grandchildren can withdraw over their lifetimes (they can't do it with your 401k)

Convert to Roth IRA (see chapters 25, 26, 27)

Inheritors of a Roth will have to make yearly withdrawals but won't pay any taxes

Irrevocable Trusts Require Trust

Once assets in irrevocable trust you lose all rights of ownership and control
Do it for estate tax reasons, assets and income not taxable in trust (as long as person who transferred the asset doesn't get benefits)
Estate income can be taken by a window, but will end up with the deceased's children
These trusts are used for asset protection

Cannot be claimed by creditors if trust is properly drafted as irrevocable
You may have to part with all ownership of the assets (including right to income) in order for the assets to be protected

Must consult attorney before setting up any irrevocable trust
Somebody will have to administer the trust for many years
Trust needs trustees - family members, corporate trustees, banks, brokerage firms, or trust company, or a combination of an individual and a corporate trustee
Trustees oversee how money inside trust is managed and how it's dispersed from the trust
Trustee must know Prudent Investor Rule

Diversify between stocks, bonds and cash; trust must be invested in different asset classes as it's a prudent approach to reduce risk (small-cap, large-cap, foreign stocks, and government bonds)

Invest for Total Return

Again - diversify (invest for total return), which means that in addition to income the investment principle grows

Use index funds to avoid large fees and avoid corporate trustees, learn more at:

http://www.fiduciary360.com - training for trustees

Put as much effort into ensuring the future health of a trust as you do in thinking through whether you need one in the first place

I Love You, but Let's Sign on the Dotted Line

Prenuptial agreement can serve to resolve financial conflicts when older couples marry
Prenuptial agreements make couples more comfortable commingling their assets
These agreements protect one spouse when the other is strapped with financial obligations
Without a prenup, spouse takes most of assets no matter what the will or trust says or beneficiary designations
Older people find easier to do prenups as it has to do with their estate planning for their children
When setting up prenuptial agreement

Be honest about all assets and income, hidden assets or income may later invalidate an agreement, and exchange a few year's of tax returns
Write a draft agreement, then have one spouse's attorney will adjust it, and the other spouse's attorney will make possible changes
Don't sign a bad document, a judge won't likely sign one that is bad
Never forget what's in the document

Don't do 'right of survivorship', as your spouse will inherit your assets instead of your children

Keep a signed copy together with estate documents

Mail Order Experts

Con artists are out to get you to capitalize on the retirement boom
They have no devotion to becoming true professionals
Retirees have more than $8.5 trillion in assets; big pot of gold to aim at
Regulators

North American Securities Administrators Association (represents investment regulators in all 50 states)
Issues alerts to check credentials of anyone claiming to be a senior specialist

They sell high-commission insurance products seniors don't need

Equity-indexed annuities
Deferred variable annuities
Example: one commission agent pocketed $720,000 worth of commissions from insurance companies throughs ales to retirees
Avoid these people

Expensive Free Meals

If a financial professional is offering you a free meal, run
Goal of any seminars for seniors is to sell them products
They are at some TV stations, radio programs, and at financial seminars
All airwaves are for sale
Radio air time is up for bid for these people to sell most products, which are mostly or entirely bad products (brokered shows)
Don't hand over or buy products from anyone who buys airtime (radio or TV), it's not worth the risk

These products are expensive and of dubious value

Financial seminars are a breeding ground for dangerous investment advice
These people also make their way to workplaces; HR perks up when they get offered 'free' advice to employees

Employees mistakenly think seminars are endorsed by their employer

Seminar hosts sometimes get people to roll their retirement eggs into their plans!
A lot of these shows promise great returns on investments
Investigations proved 10% of all presentations are actually fraudulent

Whom Can You Trust?

If you need financial advice stick to a fiduciary who makes no effort to beat markets and who uses well-known independent custodian (Charles Schwab, Fidelity, Vanguard, etc)
Daunting decisions to make when you retire

Social security withdrawal age
Pension payouts
Nest egg withdrawal strategy

If you hire anybody for advice only search fiduciaries
Do not hire brokers or insurance agents

They will ask to withdraw lump sum and move into their brokerage business, where they invest
Retirees should take monthly checks

Best way to check is to ask them to sign a document they will always act as a fiduciary on my behalf (brokers or insurance agents won't sign)
Registered investment advisor who is required to act as a fiduciary is the best option
If not fiduciaries then look for someone that charges a fee, not a commission
Anyone that charges a fee must show that in his or her agreement first

They charge by yearly retainer, flat fee, or by the hour

For fee-only fiduciaries check out

National Association of Personal Financial Advisors

http://www.napfa.org

To qualify for NAPFA a professional has to give commission-free advice for the last 3 years

Take any offer to meet registered fiduciaries as a complimentary meet to get to know session

Have questions ready

http://www.napfa.org/tips_tools/index.asp or Financial Advisor Checklist on their site

At the get-acquainted session ask what's the investment strategy

Is it asset allocation?
Globally diversified portfolio of low-cost index or passively managed funds?
Ask if he can beat the markets by picking actively managed mutual funds
He should find right asset allocation for you and your tolerance for risk
No actively managed funds, or individual stocks or bonds
They should only recommend low-cost index funds from major fund families, or
Passively managed funds from DFA (Dimensional Fund Advisors)

The advisor should consider annuities (Vanguard or TIAA-CREF)
Advisor should not be the custodian of your assets
Checks should be made out to independent well-known custodians like Charles Schwab, Fidelity or TD Ameritrade
You should be able to check all aspects of your account 24/7 on the website of the custodian
Never make check payable to advisor or advisory firm
Check advisors ADV form; you'll find education, professional background, any problems, lawsuits, or arbitration proceedings, conflicts of interest, investment philosophy, and method of payment
You can find ADV on advisors on the SEC site

http://www.adviserinfo.sec.gov/iapd/content/iapd_orgsearch.aspx
http://www.adviserinfo.sec.gov
Or start from http://www.sec.gov by search that site

Ten Golden Rules

Close your brokerage account. No good reason to have one. Brokers can't outperform stocks or mutual funds, can't time the market, and are not fiduciaries
Never buy individual stock or bond, except Treasury bills. Risk is vastly increased with individual investments
Use fee-only investment planner, or a certified public accountant, who limits time to preparing a plan and answering your questions
Use registered investment advisor who recommends only globally diversified portfolio of low-cost index funds or passively managed funds (check cost ratios), and confirm in writing that she will act as a fiduciary in all her dealings with you
Keep assets at independent, well-known custodian; make any checks payable only to the custodian, never to the advisor or her firm, and get checks only from the custodian
If investing on my own only use funds from well-known fund families - Fidelity, Vanguard, T. Rowe Price, Charles Schwab
Avoid all alternative investments like hedge funds, limited partnerships, and private equity deals
Add up all monthly expenses

Deduct amount of Social Security and other income you can count on
Think about purchasing immediate annuity directly from low-cost provider such as Vanguard or TIAA-CREF for the difference
Sleep well knowing you have enough money to meet your monthly expenses

Keep enough cash to meet 2 years of living expenses in an FDIC-insured savings account, or CD, Treasury bills, or money market fund from a major fund family
Prepare a will, it's the first important step in estate planning

The Proof is in the Pudding!

National health expenses to rise 6.9% in 2008 - two twice the rate of inflation

http://www.nchc.org/facts/cost.shtml
http://www.inflationdata.com

"Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable"

http://bobsfiles.home.att.net/trinity.htm

Chapter 2: When Conservative is Risky

Retirement income from stocks
"Retirement Income Redesigned: Master Plans for Distribution, an Adviser's Guide for Funding Boomer's Best Year", edited by Harold Evensky and Deena B. Katz (Bloomberg Press, 2006)

"Spending from a Portfolio: Implications of a Total-Return Approach Versus an Income Approach for Taxable Investors"

https://institutional.vanguard.com/iip/pdf/wp_totalret.pdf

Chapter 3: Stocks for the Timid

"Bonds for Wealth" by Gene Fama Jr.
"Think Total Return" by Bryan Olson (available at Charles Schwab website)

Chapter 4: Stock Picking Perils

Check out marketwatch.com and search for "widows and stocks"

http://www.ifa.com/resilienceofcapitalism.asp

Companies that went bankrupt

http://www.ifa.com/12steps/step3/step3page2.asp

Chapter 5: Balancing Risk and Returns

On Dec 9 2008 interest rates on 4-week Treasury bills went to 0% (USA Today has article on that)
Ibbotson Associates have historical figures (found on morningstar.com, not available to general public)

Chapter 6: High Fund Expenses Are Your Mortal Enemy

Article showing negative effects of high costs

https://personal.vanguard.com/jumppage/simplestrategies

Damning indictment of active investing - May 2008 interview with Kenneth R. French, a professor of finance at Dartmouth College (consultant to DFA)

http://www.advisorperspectives.com/pdfs/our_interview_with_ken_french.pdf

Also check "The Cost of Active Investing" by Ken French (average investor lost 0.67%? by foregoing indexing?)

Chapter 7: The Investing Secret Your Broker Won't Tell You

Supported data for index investing
The Smartest Investment Book You'll Ever Read (also by Solin)
Tax efficiency & Bogle study

http://www.ifa.com/12steps/step7/step7page2.asp

6-part series on index investing by W. Scott Simon

http://www.advisor.morningstar.com/articles/articlelist.asp?colId=536

Index Fund Advisors

http://www.ifa.com

Chapter 8: Make a Date with Target-Date Funds

Exhaustive overview from Vanguard

https://institutional.vanguard.com/iip/pdf/ICR4KC.pdf

WSJ's look at some of the problems with target-date funds

http://www.filife.com/stories/targetdate-funds-shake-up-the-mix

Search for "Target-Date Funds Hit Their Stride" on businessweek.com

Chapter 9: Resist the Allure of ETFs

Comparison of index funds and ETFs

http://www.altruistfa.com/etfs.htm
http://www.efficientfrontier.com/ef/901/shootout.htm

Depository of ETF stats, info and trends

http://www.morningstar.com/Cover/ETF.html
http://www.indexuniverse.com

Washington Post article quoting Morningstar analyst expressing concerns in ETFs

http://www.washingtonpost.com/wp-dyn/articles/A20447-2005Apr2.html

"Buy and hold is boring, but it's effective in the long run."

Chapter 10: Bonds in a Nutshell

Good place to research bonds is morningstar.com
Good tutorial on bonds:

http://www.investopedia.com/university/bonds

Book dedicated to bond investing
The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today, by Larry Swedroe and Joseph H. Hempen

Chapter 11: Blindsided by Bonds

Short term bond fiasco

http://news.morningstar.com/articlenet/article.asp?id=251658&_QSBPA=Y

Schwab bond fund is an "unmitigated disaster", as described by morningstar analyst

http://biz.yahoo.com/pz/081006/151651.html

Chapter 12: Avoid Treasury Inflation-Protected Securities

Treasury curve rates (whatever that means!)

http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml
http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml

TIPS yield rates available on

http://www.morningstar.com
http://www.bloomberg.com

Helpful articles on TIPS

http://news.morningstar.com/articlenet/article.aspx?id=82054&_QSBPA=Y

"TIPS Prove Poor Tip for Traders Betting on Inflation"
http://bloomberg.com/apps/news?pid=20601009&sid=agxFn.wFZrlc&refer=bond

Chapter 13: You Need Cash Insurance

FDIC info on coverage of bank deposits

http://www.fdic.gov/quicklinks/consumers.html

Check your FDIC coverage for all bank accounts using EDIE the Estimator

http://www2.fdic.gov/edie/index.html

List of failed and closed banks

http://www.fdic.gov/bank/individual/failed/banklist.html

Associated Press story of failed banks

http://www.usatoday.com/money/industries/banking/2008-11-25-fdic-problem-banks_n.htm

Chapter 14: The Holy Grail: More Reward, Same Risk

Banks being stingy with their customers
"The Fine Print: 10 Secrets Your Bank Keeps", by Jim Rendon, Smart Money Magazine, July 20, 2008
Smaller banks on paying higher interest rates

http://www.helium.com/items/82583-which-banks-pays-the-highest-interest-rate-on-savings

Helpful Wikipedia article on Certificates of Deposit (CD)

http://en.wikipedia.org/wiki/Certificate_of_deposit

Chapter 15: Money Market Funds Make Money

Reserve Fund's problems

http://www.usatoday.com/money/perfi/funds/2008-11-10-reserve-primary-money-market-fund_N.htm

Check out the story of the breaking of the buck by Community Bankers U.S. Government Money Fund 1994 (too long URL to copy from book)
U.S. Department of the Treasury money market insurance coverage

http://www.treasury.gov/press/releases/hp1147.htm

Money Market funds overview

http://banking.about.com/od/investments/a/moneymarketfund.htm

Chapter 16: Immediately Consider Immediate Annuities

Landmark TIAA-CREF study claiming that immediate annuities can decrease the changes that a retiree will die impoverished, titled "Making Retirement Income Last a Lifetime"

http://www.ibmemployee.com/pdfs/makingretirementlast.pdf

Another article dealing with concerns about immediate annuities

http://www.insurancenewsnet.com/article.asp?a=top_lh&id=87015

In Vanguard Plain Talk Library series check out "Should You Consider an Income Annuity?"

http://www.vanguard.com/pdf/ptia.pdf

Another study by Milliman Inc. titled "Immediate Annuities and Retirement Income Portfolios"

http://www.milliman.com/expertise/life-financial/publications/rr/pdfs/immediate-annuities-retirement-income-rr05-19-08.pdf

Case against immediate annuities

http://www.insurancenewsnet.com/article.asp?a=sa&neID=20060703376.1_2af50038a33797ac

Chapter 17: The Annuity That Keeps on Giving

American Council on Gift Annuities

http://www.acga-web.org

NY State Insurance Department has helpful list of top then questions about charitable gift annuities

http://www.ins.state.ny.us/que_top10/que_life_cha.htm

Fidelity Investments report on the benefit of giving appreciated stocks and mutual funds through charitable donation

http://personal.fidelity.com/myfidelity/insidefidelity/newscenter/mediadocs/smart_giving_report.pdf

Chapter 18: Just Say No to Variable Annuities

Why many people are wary of variable annuities, read "Variable Annuities: What You Should Know"

http://www.sec.gov/investor/pubs/varannty.htm

Another report damning variable annuities

http://slcg.com/pdf/workingpapers/annuities.pdf

Chapter 19: The Inequitable Annuity

Compelling indictment of the equity-indexed annuity industry
"An Economic Analysis of Equity-Indexed Annuities", by Craig J. McCann

http://slcg.com/pdf/workingpapers/eia%20white%20paper.pdf

Unsophisticated investors will continue to be victimized until absense of sales pratice abuses is assured (and truthful disclosures occurs)
SEC got involved on this, and approved a new rule to help protect seniors and investors from fraudulent and abusive practices

http://sec.gov/news/press/2008/2008-298.htm

Chapter 20: Undermining Your Money

For information on Peter Lynch's flawed withdrawal advice of 8-9% from your retirement nest egg, see

http://www.retirement-financial-advisor.com/run_out.htm

T. Rowe Price study about outliving your nest egg, "Will You Outlive Your Nest Egg", March 9, 2003

http://medicaleconomics.modernmedicine.com/medical-economics/news/clinical/personal-finance/will-you-outlive-your-nest-egg

Chapter 21: The 4 Percent Rule

"Retirement Calculator from Hell", William Bernstein

http://www.efficientfrontier.com/ef/998/hell.htm

William P. Bengen (CFP) determined 4% withdrawal rate would have survived the Depression, WW2, 1070's and the dot-com bust of early 2000's
Of the 4 major bear markets, the one that hurt retirees the most was in 1970's due to the big inflation
"Determining Withdrawal Rates Using Historical Data", January 1994

http://www.bobneiman.com/NWM_Pages/Determining%20Withdrawal%20Rates%20-%20/William%20Bengen.pdf

"Conserving Client Retirement, Part III", Journal of Financial Planning, December 1997, pp. 84-97
More studies on withdrawal rates by T. Guyton, in Journal of Financial Planning
"Decision Rules and Maximum Initial Withdrawal Rates", March 2006

http://www.bobneiman.com/NWM_Pages/Decison%20Rules%20&%20Maximum%20Initial%20Withdrawal%20Rates%20-%20Guyton%202006.pdf

"Decision Rules and Portfolio Management for Retirees: Is the 'Safe' Initial Withdrawal Rate Too Safe?", October 2004

http://www.bobneiman.com/NWM_Pages/Decision%20Rules%20&%20Portfolio%20Management%20for%20Retirees%20Safe%20Withdrawal%20Rate%20-%20John%20Guyton.pdf

Chapter 22: Squeezing Your Nest Egg Hard

Peak withdrawals for time horizon of 10 years is 8.9%, whereas for time horizon of 40 years it should be 4.2% (if you've 10 years left in your retirement versus 40 years). There's a table of peak withdrawals by William P. Bengen
Excellent article on the 4 percent rule by Walter Updegrave

http://money.cnn.com/2007/08/13pf/expert/expert.moneymag/index?postversion=2007081410

Chapter 23: Squeezing Your Nest Egg Harder

Michael Kitces, director of financial planning at Pinnacle Advisory Group, released a long article in May 2008 "Resolving the Paradox - Is the Safe Withdrawal Rate Sometimes Too Safe?"

http://www.kitces.com/assets/pdfs/Kitces_Report_May_2008.pdf

Article discussing Kitce's work

http://www.onwallstreet.com/asset/article/613331/market-based-withdrawals-html?pg=

Chapter 24: Squeezing Your Nest Egg Hardest

William P. Bengin reviewed his past research and discussed his views on safe nest egg withdrawal rates in his book Conserving Client Portfolios During Retirement (Financial Planning Association, 2006)
Another discussion of Bengen's floor-to-ceiling approach and other withdrawal strategies, see

http://bobsfiles.home.att.net/VariableWithdrawals.htm#bengen

Another useful article, "Conserving Client Portfolios During Regirement, Part IV"

http://bobsfiles.home.att.net/pdfs/Conserving_Client_Portfolios_During_Retirement_Part_IV.pdf

Chapter 25: Basic Withdrawal Strategies

James Lange, CPA, author of "Retire Secure! Pay Taxes Later: The Key to Making Your Money Last As Long As You Do", 2nd edition
More on tax withdrawal strategies, see report from TIAA-CREF Institute by William Reichenstein, see "Tax Efficient Sequencing of Accounts to Tap in Retirement"

http://www.tiaa-crefinstitute.org/articles/tr100106.html

Tax rules for inherited Roth IRAs, see

http://www.fairmark.com/rothira/inherit.htm

Chapter 26: Moving Your Retirement Accounts

Rollover options

http://www.bankrate.com/brm/news/financial_literacy/retirement_investing/IRA_rollover_a1.asp

Chapter 27: Roth Redux

James Lange has written many articles on Roth IRA and their advantages, and Tax Increase Prevention and Reconciliation Act at

http://www.rothira-advisor.com/roth_ira_conversion_and_new_tax_cut.htm

CCH issued report on this act and a helpful section on the new rules about conversions
http://tax.cchgroup.com/Legislatioin/TIPRA.pdf (not valid)
To avoid IRA tax disaster you may need expert advice - certified public accountant, estate attorney, investment advisor (true expert on IRA rules)
Check professional's abilities by resources materials he uses
Ed Slott's IRA Advisor
Leimberg Information Services Inc.
"Life and Death Planning for Retirement Benefits", by Natalie Choate
Brentmark Software's Retirement Analyzer
TO learn about care and handling IRAs
Slott's "Your Complete Retirement Planning Road Map: A Comprehensive Action Plan for Securing IRAs, 401ks, and Other Retirement Plans for Yourself and Your Family", Ballantine Books, 2007. It has checklists to keep IRA owners from making bad mistakes

Chapter 28: The Reverse Holdup: Required Distribution Rules

Excellent resource for mandatory retirement withdrawal information is "Life and Death Planning for Retirement Benefits: The Essential Handbook for Estate Planners", 6th edition (Ataxplan Publications, 2006) by Natalie Choate
Congress eliminating minimum distributions (2009)

http://webcpa.com/article.cfm?articleid=30199&pg=ros

Chapter 29: Winning the Social Security Lottery

Birthdate dictates when you will retire. In 2015 at 37 years of age you'll retire at age 67 (or later?)
Glen S. Daily's "Delaying Social Security Benefits: A Real Options Perspective" provides good information on the timing of Social Security payments

http://glenndaily.com/socialsecurity.htm

Social Security Administration has a wealth of data about the benefits

http://www.ssa.gov

Chapter 30: Leaving Your Spouse a Legacy of Poverty

Social Security and Women

http://www.socialsecurity.gov/women

There's a study called "Why Do Women Claim Social Security Benefits So Early?" by Alicia Munnel and Mauricio Soto, from the Center of Retirement Research at Boston College
Same center produced another research in October 2007
"Why Do Married Men Claim Social Security Benefits So Early? Ignorance or Caddishness?"
Both of the above studies are at CRR at Boston College

http://crr.bc.edu

Another study by Munnel, with Nadia Karamcheva, is in the article "Why Are Widows So Poor?"

http://crr.bc.edu/briefs/why_are_widows_so_poor.html

Chapter 31: Learning on a Thin (Pension) Reed

How "pension giants covet the management of pension assets"

http://www.businessweek.com/magazine/content/08_33/b4096000769608.htm

How cash benefit plans penalize older workers with more seniority see "Cash Balance Plans" by Graham R. Mitenko, Michael J. O'Hara, and Gerald V. Boyles

http://cba.unomaha.edu/faculty/mohara/web/CBPP-INET.html

Sobering look at present and future problems with nation's pension plans
"While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis", by Roger Lowenstein, (Penguin Press, 2008)
What employers are doing to change their pension plans (Vanguard, October 2007)
"Recent Changes to Defined Benefit Plan Design: 2000 - 2006"

http://institutional.vanguard.com/VGApp/iip/site/institutional/researchcommentary/article?File=ChsToDBPlan2000_2006

Chapter 32: Pension Distribution Elections are Critical

"Effects of the Pension Protection Act of 2006 on Lump Sum 401k Distributions"

http://research401k.com/pension-payout.html

AARP detailed study "Pension Lump-Sum Distributions: Do Boomers Take Them or Save Them?"

http://assets.aarp.org/rgcenter/econ/dd144_pension.pdf

Chapter 34: Retirement Delayed is Retirement Enhanced

Congressional Budget Office reviewed the past decade's research on the retirement prospects of aging Americans
"Retirement Age and the Need for Saving"
Conclusion: substantial number of baby boomers wouldn't be able to maintain their current consumption levels if they didn't push back their retirement date

http://cbo.gov/doc.cfm?index=5419&type=0

Excellent article, "Optimizing Your Retirement Income: What Works Best and Why", by Christine Fahlund

http://investor.financialcounsel.com/Articles/RetirementPlanning/ARTRET0000050-OptimizingYourRetirementIncome.pdf

Concludes "Generally, no single decision will improve pre-retirees' potential retirement security as much as continuing to work even a few more years beyond the anticipated retirement date."

Chapter 36: Don't Count on Age Discrimination Laws to Protect Your Job

See "Trends in Labor Force Participation in the United States"
U.S. Bureau of Labor Statistics Monthly Labor Review, October 2006
U.S. Equal Employment Opportunity Commission's copy of the landmark Age Discrimination in Employment Act of 1967 (ADEA)

http://eeoc.gov/policy/adea.html

How ADEA affects people today, see "How Do Age Discrimination Laws Affect Older Workers?", by Joanna N. Lahey

http://crr.bc.edu/index.php?option=com_content&task=emailform&id=98

AARP helpful study for employers on age discrimination "Age Discrimination: What Employers Need to Know"

http://assets.aarp.org/www.aarp.org_/articles/money/employers/age_discrimination.pdf

Chapter 37: Part-Time Work Can Be Full-Time Trouble

Merrill Lynch published "The 2006 Merrill Lynch New Retirement Study"

http://www.ml.com/media/66482.pdf

Chapter 38: The Reverse Mortgage Wheel of Fortune

Stats on reverse mortgages go to National Reverse Mortgage Lenders Association

http://nrmlaonline.org/rms/statistics/default.aspx?article_id=601

Chapter 39: Reverse Mortgages: Too Good to Be True?

Discussion and summary of new federal housing law raising ceiling on the amount seniors can borrow
http://www.bankrate.com/bos/news/retirementguide2008/20081103-reverse-mortgages-a1.asp?caret=3c

Chapter 40: Making Usury Look Good: The Real Costs of Reverse Mortgages

How reverse mortgage can turn into a financial disaster

http://aging.senate.gov/minority/index.cfm?Fuseaction=Hearings.Detail&HearingID=9a59e516-2933-4c2e-b91d-bb01336bd016

Lenders can charge up to 2% of the first 200K on the loan amount, and 1% on the balance, overall cap of $6,000
Article discussing new rules for reverse mortgages

http://www.affil.org/media2/lending-in-the-news/lending-in-the-news/reverse-mortgages-retoole

Bankrate.com published articles on the new rules

http://www.bankrate.com

AARP article on the pluses and minuses of reverse mortages

http://assets.aarp.org/rgcenter/consume/2007_22_revmortgage.pdf

Chapter 41: Low-Cost Lifelines

Article listing many sources of financial help for seniors

http://www.suntimes.com/business/currency/1319447,senior-help-programs-120808.article

Chapter 42: Should You Sell Your Life?

FINRA Investor Alert "Seniors Beware: What You Should Know About Life Settlements"

http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/AnnuitiesAndInsurance/P018469

Chapter 43: Help When It Seems Hopeless

Stats on number of seniors who don't apply for food stamps

http://www.usatoday.com/money/prefi/retirement/2008-07-01-retiree-fixed-income_N.htm

Chapter 44: Care Before Medicare

Stats on employers offering retiree healthcare were gathered for the Henry Jr. Kaiser Family Foundation's Employer Health Benefits 2008 Annual Survey

http://ehbs.kff.org

National Health Law Program

http://www.healthcarecoach.com

On HIPAA go to U.S. Department of Labor's Employee Benefits Security Administration

http://www.dol.gov/ebsa/faqs/faq_consumer_hipaa.html

COBRA FAQ:

http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html

Chapter 45: The Short Skinny on Long-Term Care

Provided by U.S. Department of Health and Human Services' National Clearninghouse for Long-Term Care Information

http://www.longtermcare.gov/LTC/Main_Site/Paying_LTC/Costs_Of_Care/Costs_Of_Care.aspx

Chapter 46: Who Needs Long-Term Care Insurance?

Elder Law Answers has an article on long-term care insurance, i.e. how much coverage is needed and what features are important

http://elderlawanswers.com/elder_info/elder_article.asp?id=2595

Website of U.S. Department of Health and Human Services, and discussion on long-term care policies

http://www.medicare.gov/longtermcare/static/home.asp

If you're considering purchase of long-term care

http://www.bankrate.com/brm/news/retirementguide2008/20081103-health-insurance-costs-a3.asp?caret=1b

Consumer Reports has an article on long-term care coverage

http://www.consumerreports.org/cro/money/insurance/longterm-care-insurance-1103/overview/

Chapter 47: When Fat Beats Skinny: Choosing the Right Long-Term Care Insurance

"Developing Financial Planner Recommendations for Long-Term Care Insurance Policies", June 2008

http://www.kitces.com (requires subscription)

Perspective of the health insurance industry on this issue, see "Shelton Surveys the Changing LTC Insurance Scene"

http://www.nahu.org/meetings/annual/2006/ShowDailyMonday.pdf

Chapter 48: Keeping Your Long-Term Care Policy in Force

Premium costs for long-term care coverage
http://www.longtermcare.gov/LTC/Main_Site/Paying_LTC/Private_Programs/LTC_Insurance/index.aspx
Fidelity survey how much seniors will pay for long-term care over their live see if you can find it on Reuters
And for discussion of the Fidelity survey concerning yearly premiums seniors will pay for joint long-term care over their lifetimes
http://www.insurancenewsnet.com
AARP's views on long-term care and various policy options available
http://www.aarp.org/money/financial_planning/sessionfive/longterm_care_insurance.html

Chapter 49: Where's the Check? Making Claims and Getting Paid

Search for "long term care insurance and lawsuits on NY Times website
There are follow-up stories on nytimes.com about the long-term care congressional investigations - at least 2 stories
Search for this on nytimes.com: "congress putting long-term care under scrutiny"

Chapter 50: Find the Will to Leave a Will

For estate planning go to Nolo Publishing that publishes many books toward consumers on issues with estate planning
http://www.nolo.com
Why you need to keep beneficiary forms up to date, see "Beneficiary Documentat Case Goes to High Court"

http://www.investmentnews.com

Chapter 51: Avoiding Probate Purgatory

Read an excellent series of articles on living trusts

http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2212

Info about payable-on-death joint accounts

http://wills.about.com/od/howtoavoidprobate/a/jointpod.htm

Info about Uniform Transfer-on-Death Security Registration Act

http://www.mccusl.org/nccusl/uniformact_summaries/uniformacts-s-tutsra.asp

Chapter 52: The Magic Power of an Inherited IRA

Check out any articles written by nation's leading expert on IRAs, Ed Slott, CPA
Overview of options when you are inheriting an IRA

http://personal.fidelity.com/products/retirement/inheritedira/parentorother.shtml

Chapter 53: Irrevocable Trusts Require Trust

Differences between revocable and irrevocable trusts

http://www.taxprophet.com/pubs/trust_nl.html

See "Prudent Investor Act", which is based on Prodent Investor Rule, from The National Conference of Commissioners on Uniform State Laws

http://www.nccusl.org

Chapter 54: I Love You, but Let's Sign on the Dotted Line: Prenups for Seniors

Check out the book "Prenuptial Agreements: How to Write a Fair and Lasting Contract" by Katherine E. Stoner (Nolo, October 2008)
Ohio Department of Aging article on the need for prenuptial agreements, "the second time around"

http://ohioline.osu.edu/ss-fact/pdf/0184.pdf.old

Chapter 55: Mail-Order Experts

Alerts on "senior specialists" (i.e. fraudsters) can be found at the North American Securities Administrators Association's investor alerts

http://nasaa.org/Investor_Education/Investor_Alerts___Tips/7181.cfm

SEC weighs in on "senior specialists"

http://sec.gov/investor/pubs/senior-profdes.htm

Check out article on nytimes.com called "For Elderly Investors, Instant Experts Abound"

Chapter 56: Expensive Free Meals

Yearlong examination conducted by state and federal regulators determined that 100% of investment seminars were sales presentations
50% of seminars sponsored by securities firms had exaggerated or misleading advertising claims
Report is called "Protecting Senior Investors: Report of Examinations of Securities Firms Providing 'Free Lunch' Sales Seminars"
Regulators: SEC, North American Securities Administrators Association, and FINRA
This report is located at

http://sec.gov/spotlight/seniors/freelunchreport.pdf

FINRA article describing how unethical pitchmen convince soon-to-be retirees to cash in their retirement savings

http://finra.org/Investors/ProtectYourself/InvestorAlerts/RetirementAccounts/p017365

Chapter 57: Whom Can You Trust?

Morningstar Advisor's Fiduciary Focus columns by W. Scott Simon

http://www.advisor.morningstar.com/articles/articlelist.asp?colId=536

Learn about importance of fiduciary investment advisor at National Association of Personal Financial Advisors

http://www.napfa.org

Thoughtful article about Bernard Madoff Ponzi scheme, see the article of John C. Coffee Jr., a professor at Columbia University Law School

http://www.cnn.com/2008/POLITICS/12/16/coffee.madoff/index.html

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