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Seven Steps to Financial Freedom in Retirement



Seven Steps to Financial Freedom in Retirement

Hank Parrot

ISBN: 978-1-118-11188-8 June 2011 224 Pages

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An interactive guide to mapping your retirement plans

In Seven Steps to Financial Freedom in Retirement, financial advising and estate planning expert Harold Parrott guides the reader through the sometimes murky waters of retirement planning. Using a simple "Lifestyle Expense" planning approach customized to see how much money each person needs to live on in retirement, Parrott explains what investments can help readers reach their desired goals with minimum risk. Using detailed questionnaires, the book provides an informative guide for anyone concerned about having enough money to live comfortably in their retirement years.

An educational book employing an easy-to-understand format, Seven Steps explains the basics of IRAs and 401(k)s, before launching into a more in-depth discussion of the strategies and tax implications thereof, looking at:

  • Annuities, bonds, and CDs
  • The perils of "stock picking"
  • The basics of estate planning

A unique and indispensible resource for assessing finances to determine the full scope of the reader's assets, the book helps to determine projected lifestyle expenses post-retirement and crafts a road map showing what types of products and accounts are likely to be of most value.

Introduction xiii

Chapter 1: Getting the Nest Egg Ready to Hatch 1

A New Approach 2

What You’ve Got 5

Where Are Your Retirement Resources? 11

Looking Forward 15

Chapter 2: Putting Your Assets to Work for You 17

The Old Way: Maximizing Returns Based on Risk Tolerance 17

The Hank Parrott Way: The Smart Money Approach 19

Looking Forward 29

Chapter 3: IRA Mastery 31

Planning for Taxes 32

What Makes Up a Traditional IRA? 35

Traditional and Roth IRAs: Learn the Difference! 39

Tax Considerations When Investing IRA Assets 43

Taking Distributions from Traditional IRAs 45

Estates and IRAs 48

Passing It Along 49

Looking Ahead 51

Chapter 4: Enhancing Your Retirement with Built-In Guarantees: Annuities, Bonds, and CDs 53

Bonds: What Is Guaranteed and What Is Not 53

Annuities: Separating Myths from Truth 58

CDs: A Key Element in an Income-Generating Retirement Portfolio 73

Putting It All Together: Investing for the Long Term 82

Chapter 5: How the Smart Money Invests 83

Learning through Trial and Error 84

The Real Story 85

Starting Off: The Retirement Investor Quiz 89

Busting the Investment Myths 90

Active Management 94

Tune out the Media’s Advice 96

Investing versus Speculating: Know the Difference! 96

A Real Story about Speculative Investing 97

The Smart Money Investment Strategy 98

All about Asset Allocation 100

How Do You Measure Diversification? 102

The Importance of Staying Disciplined 103

Tax Planning and Investments 104

My Best Advice 107

Looking Forward 107

Chapter 6: Paying for Helping Hands: The Ins and Outs of Long-Term Care 109

What Are Your Options? 110

Planning Ahead 111

Common Myths about Long-Term Care 112

How you’ll Pay 115

Examining Which LTC Payment Option Works for You 116

Understanding Long-Term Care Insurance 119

Frequently Asked Questions 125

Last But Not Least 127

Chapter 7: The Basics of Estate Planning 129

Why Estate Planning? 130

Problematic Probate 131

All about Trusts 136

The Five Essential Documents 137

Lightning Round: Other Types of Trusts 141

Whom Should I Name as Trustee? 144

The Value of Real Professionals: Finding the Right Certified Expert 145

Frequently Asked Questions 147

Estate Planning Checklist 149

Where to Go from Here 150

Appendix A: Confidential Lifestyle Questionnaire 151

Appendix B: Lifestyle Expense Worksheet 161

Appendix C: Financial Lifestyle Fact Finder 165

Acknowledgments 177

About the Author 181

Index 183