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Personal Finance in Your 50s All-in-One For Dummies



Personal Finance in Your 50s All-in-One For Dummies

Eric Tyson

ISBN: 978-1-119-47153-0 April 2018 552 Pages

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Manage your finances and enjoy your retirement

Retirement security is one of the most pressing social issues facing the world in the next 30 years—so if you’re approaching your golden years, it’s essential to have a secure financial future. Personal Finance in Your 50s All-in-One For Dummies provides targeted financial advice and assists soon-to-be or established boomers with making informed decisions about how best to spend, invest, and protect their wealth while planning for the future.

Retirement is an exciting time … but it can also be scary if you’re not sure that you have your ducks in a row. This hands-on resource arms you with an arsenal of beginner to intermediate personal finance and estate planning techniques for everything from spending, saving, navigating insurance, managing medical costs, household expenses, and even employment.

  • Build a diversified portfolio
  • Create emergency funds
  • Avoid scams and frauds
  • Improve your estate planning

With the help of this all-in-one resource, you’ll get a succinct framework and expert advice to help you make solid decisions and confidently plan for your future.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 3

Where to Go from Here 3

Book 1: Managing Your Career and Retirement 5

Chapter 1: Finding a New Job after 50 7

Recognizing the Need for and Value of Experienced Workers 7

Tallying the Benefits of Staying in the Workforce 11

Reorienting Yourself to Today’s Job-Search Realities 12

Deciding What (Else) You Want Out of Work 13

Pursuing Your Passion and Finding Purpose 15

Putting Proven Success Strategies into Practice 21

Dealing with Ageism 27

Chapter 2: Dealing with Changes in Employment 31

Filing for Unemployment Benefits 32

Getting Your Financial House in Order 32

Financing Any Additional Education and Training 36

Writing Off Your Job-Hunt Expenses 41

Accounting for Social Security Benefits Reductions When You Work 43

Taking Advantage of Additional Public Benefits 44

Providing Benefits for Yourself 45

Chapter 3: Joining the Ranks of the Self-Employed 49

Working on Contract 50

Launching Your Own Business 55

Becoming a Social Entrepreneur 65

Exploring Franchising Opportunities 69

Chapter 4: Tracking Small Business Revenues and Costs 75

Establishing an Accounting System for Your Business 76

Keeping Good Tax Records for Your Small Business 80

Chapter 5: Estimated Taxes and Self-Employment Taxes 85

Form 1040-ES: Estimated Tax for Individuals 86

Keeping Current on Your Employees’ (and Your Own) Tax Withholding 89

Schedule SE: Self-Employment Tax 90

Form 8889: Health Savings Accounts (HSAs) 93

Chapter 6: Developing a Retirement Plan 97

Deciding When to Retire 98

Knowing How Much You Really Need for Retirement 99

Eyeing the Components of Your Retirement Plan 101

When Setting Up Your Couples Plan 106

Crunching the Numbers 107

Making Plans for Nonfinancial Matters 110

Chapter 7: Grasping Retirement Accounts and Their Rules 113

Eyeing the Characteristics of Retirement Accounts 114

Identifying the Different Types of Retirement Accounts 117

Rolling Over Retirement Balances 120

Choosing Beneficiaries for Your Retirement Accounts 123

Taking Required Minimum Distributions, or RMDs 125

Book 2: Getting Your Affairs in Order 127

Chapter 1: Ensuring That Your Last Wishes Are Honored 129

What Can Happen When You Don’t Plan Your Estate 130

Reaping the Benefits of Planning Your Estate 131

Looking Out for Common Pitfalls 133

Realizing What Happens If You Don’t Have an Estate Plan 138

Creating Your Will or Trust 140

Chapter 2: Planning Your Bequests 145

Calculating Your Assets 145

Determining Your Intended Heirs and Beneficiaries 146

Thinking about Your Family Circumstances 149

Estate Planning for Second Families 149

Estate Planning for Your Business 152

Appointing the People Who Will Carry Out Your Estate Plans 156

Finding Professionals to Assist You 159

Chapter 3: Providing for Your Children and Dependents 163

Choosing a Guardian 163

Managing Your Child’s Assets 166

Providing for Your Child’s Needs 167

Chapter 4: Writing and Signing a Will 173

Deciding Whether a Will Serves Your Needs 174

Exploring the Types of Wills 177

Elements of a Will 181

Executing a Valid Will 187

Book 3: Dealing with Insurance 189

Chapter 1: Seven Guiding Principles of Insurance 191

Keep It Simple 191

Don’t Risk More than You Can Afford to Lose 193

Don’t Risk a Lot for a Little 193

Consider the Odds 194

Risk a Little for a Lot 195

Avoid Las Vegas Insurance 196

Buy Insurance Only as a Last Resort 196

Chapter 2: Buying Insurance 199

Understanding What Makes a Balanced Insurance Program 200

Customizing Each Policy to Meet Your Unique Needs 200

Choosing Your Professional Adviser 201

Choosing an Insurance Company 206

Chapter 3: Getting the Most Out of Medicare 207

Starting Medicare: A Broad Overview of Enrollment Deadlines 208

Understanding Part A 210

Exploring Parts B and C 214

Qualifying for Prescription Drug Coverage with Part D 223

Eyeing a Medicare Supplement 230

Resolving Some Sticky Issues 234

Chapter 4: Introducing the Personal Umbrella Policy 237

Discovering the Umbrella Policy’s Major Coverage Advantages 238

Coordinating an Umbrella with Your Other Insurance 240

Determining How Many Millions to Buy 242

Book 4: Handling Budgets and Investments 245

Chapter 1: Protecting Your Employment Income 247

Assessing Your Need for Life Insurance 248

Protecting Your Employment Income: Disability Insurance 254

Investing In and Protecting Your Health 258

Chapter 2: Managing Budgets and Expenses 263

Pointing Out Some Retirement Worries You May Have 264

Spending Your Nest Egg 267

How Spending Really Changes in Retirement 269

Managing Your Expenses 271

Chapter 3: Guiding Investments and Distributions in Retirement 281

Guiding Your Investments through Retirement 282

Looking Closer at Annuities 285

Choosing Your Pension Options 289

Eyeing Withdrawal Strategies for Your Investment Accounts 294

Chapter 4: Making Your Best Choices under Social Security 297

The Lowdown on Social Security 298

Determining When You’re Eligible for Benefits 300

Taking a Closer Look at Spouses’ and Survivor Benefits 304

Identifying When You May Need to Receive Benefits 310

Noting How Working Reduces Benefits 314

Preserving Your Benefits 316

Being Aware of Potential Income Taxes on Your Benefits 319

Changing Your Mind: A Do-Over 324

Looking at What the Future Holds for Social Security 325

Book 5: Planning Your Estate 329

Chapter 1: Yes, You Have an Estate 331

What Is an Estate? 332

Why You Need to Plan Your Estate 339

Why Your Estate-Planning Goals Are Different from Your Neighbors’ 342

The Critical Path Method to Planning Your Estate 344

Getting Help with Your Estate Planning 346

Chapter 2: Bean Counting: Figuring Out What You’re Worth 353

Calculating the Value of Your Real Property 354

Calculating the Value of Everything Else: Your Personal Property 356

Dead Reckoning: Subtracting Your Debts from Your Assets 359

Giving Gifts throughout Your Life to Reduce Your Estate’s Value 360

Calculating Adjustments in Your Estate’s Value Due to Life Changes 360

Chapter 3: Probate and How to Dodge It 363

Probing Probate: What You Should Know 364

Knowing the Good, the Bad, and the Ugly of Probate 369

Streamlining the Probate Process 372

Appointing Your Person in Charge 372

Thinking Things Through When Someone Asks You to Be a Personal Rep 379

Understanding Will Substitutes 380

Sorting through the List of Will Substitutes 382

Identifying Some Less Common but Worthy Will Substitutes 392

Chapter 4: Understanding Trusts 397

Defining Trusts, Avoiding Hype 397

Trust Power — Making Your Beneficiaries Smile 402

Sorting Out Trusts — from Here to Eternity 405

Chapter 5: Minimizing Estate-Related Taxes 411

Figuring Out Where You Are Today 412

Fortune-Telling: Picturing the Future as Best You Can 415

Hmmm . . . Deciding on Strategies and Trade-Offs 421

Putting Together a Comprehensive Estate-Related Tax Plan 425

Book 6: Tapping Into Your Home’s Value 429

Chapter 1: Making Important Housing Decisions 431

Analyzing Moving 431

Tapping Your Home’s Equity: Reverse Mortgages 436

Looking at Tax Issues Regarding Your Housing Decisions 439

Chapter 2: Reverse Mortgages for Retirement Income 441

Grasping the Reverse Mortgage Basics 441

Shopping for a Reverse Mortgage 451

Deciding Whether You Want a Reverse Mortgage 453

Chapter 3: Deciding to Sell 455

Figuring Out if You Really Need to Sell 457

Knowing the Health of Your Housing Market 464

Chapter 4: Exploring the Economics of Selling 469

Estimating Proceeds of Sale 469

Assessing the Financial Feasibility of a Move 475

Chapter 5: Determining Your House’s Value 481

Defining Cost, Price, and Value 482

Determining Fair Market Value (FMV) 484

Using a Comparable Market Analysis 486

Bidding Wars 493

Index 497