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From calculating net worth to dealing with incompetent financial advisers, here are expert tips for navigating the often unpredictableworld of personal finances. Written in a question-and-answer format, the book makes sense of investments, mortgages, insurance policies, retirement plans, credit reports, and other terms and procedures that can easily overwhelm you. Step-by-step instructions give you the confidence to make key financial decisions as if a trusted adviser were by your side.
HOW SHOULD I ORGANIZE MY
Organizing your personal finances is just like cleaning out that dreaded family closet. You have to clear out all of the stuff you don't need, can't use, and won't want in the future. Then you have to create some sort of childproof/dogproof/neighborproof space in which you can store what you will need. Believe me, the paperwork--and the space you'll need for it--is a lot less than you think. A shoebox isn't the perfect size, but you can manage your personal finances with (1) a plastic storage facility with hanging files and (2) a bound ledger. Total cost? Less than $20.
Tracking Your Personal Finances
Keeping track of your personal finances is the only way you'll become intimately familiar with them. To create the financial future you want, you have to get a handle on where you are today. Here are several ways you can keep track of your personal finances.
Option 1: Paper and Pencil
How well does this option work? Tracking your expenses on paper is fine, especially if you've got the time. But it has its limitations.
In 1984, I went to study in Europe for a year. In addition to the cash I'd saved from working during summer vacation and my first two years of school, my mother and grandfather gave me a small stipend to help pay the cost of the year abroad. In exchange, my mother requested that I keep track of every "pence" I spent. My grandfather bought me a bound cash journal, something he used every week of his adult life to keep track of his financial portfolio.
Years later, my mother told me she didn't think I'd really do it. But I did. I wrote down every pound I spent during my year in Wales, down to the last pence. Every time I bought a London Times, the cost went into the journal. When I bought an old overcoat at an Oxfam store (the equivalent of our vintage clothing shops), I wrote it down. If I took a trip, bought a pack of gum, or picked up a round at the local pub, I put down how much I spent. Looking back, I am amazed that I was able to buy that old brown wool Oxfam coat for only £8 , or about $10. (At the time, the English pound was worth about $1.25. During the year I was there, it fell to $1.05.) I have a strong recollection of the details of that year abroad, precisely because I wrote down every amount I spent and what the exchange rate was at a given time. By the end of the year, I had spent £4,374.35 , which, at an average exchange rate for the year of about $1.20, came to $5,249.22. That princely sum (I was completely broke when I returned) included all trips, meals, lodging, clothes, haircuts, books, film, and film processing for the year, plus gifts for my family. The only thing it didn't include was school tuition and the cost of the dorm.
However, writing down every expense took a lot of time. I took my little red-and-black book everywhere with me, and wrote down expenses immediately so I wouldn't forget them. I saved receipts and entered those later if it wasn't possible to take the book with me. By the end of the year, the spine had collapsed, and my little book was being held together with rubber bands.
Here's what I learned from my year-long experiment of writing down everything I spent: It works. It also takes time, and I didn't have a lot of cash or expenses back then. Today, with a husband and two children, I live in a two-income household with many more expenses and a lot less time. Our monthly expenses look pretty typical for an average family of four (no dog!), and include things like a mortgage, doctor bills, insurance, and childcare. On the personal side, I'm having a good day if I can remember to pick up the kids at school on time, throw a load of laundry in the dryer on the way out, and take an umbrella in a downpour. Writing down every expense by hand wouldn't work that easily now. However, it can be done. As I said earlier, it will cost you less than $20 to set up your whole system. If you can't afford a computer or software, it's better to write down your income expenses and investments than not keep excellent track of them at all. After all, for thousands of years, people kept excellent track of these items on paper.
The method has some limitations. If you want to find a specific expense, you have to trust your memory and perhaps go back through years of pages to find it. If you want to compare how much you've spent, year to year, you'll need some additional time with a calculator. If you want to find a way to cut down your budget, you'll have to study what you spent week by week.
So there's your first option. A plastic storage box with hanging files from the hardware store, and a cash journal.
Option 2: A Computer
Your second option is to try electronic financial management software like Intuit's Quicken® or Microsoft Money®.
Computers are changing the face of everything we do. We can do two to three times the former amount of work with half the help simply because of the power of computer chips. For managing your money, a computer and software give you the tools of a professional. Not only will they help you track your daily expenses, but you can then look at those expenses on a daily, weekly, monthly, or year-to-date basis. The software can compare year-to-year totals with a keystroke. You can pull out a certain category of expenses--say, food--and see how much you spent on grocery bills each week, month, or year. You can pull out a certain department store, or restaurant, and see how much you've spent there in the past year. Or on travel. Or insurance premiums. You can balance your checkbook, keep track of cash received, run an amortization table for your mortgage, manage your stock portfolio, and keep track of how many miles you drive your car (useful if you can deduct them on your taxes). With Quicken®, you can even download your expenses directly into the companion tax preparation software, TurboTax®.
Basically, you can do everything you'd want to do when you analyze and track your personal finances. The cost? You can spend as little as $500 on a used computer or, for around $750, you can get a discontinued model at a computer superstore. You don't need all the newest bells and whistles to run personal financial software. They're typically designed for computers with a minimum of a 486 processor, or about what was considered top of the line in the mid-1990s. If you can afford one, you'll earn back your expense by being able to keep a much closer watch on your finances, and by finding ways to save its purchase price through eliminating some of the waste in your budget. (For tips on budgeting, check out Question 6.) In addition, if you purchase a scanner, you can scan in documents you need or want to save. A modem (which may come with your computer) will allow you to connect to the Internet and tap into virtually limitless amounts of free information.
Although you'll have to spend $500 to $1,000, you'll soon find that a computer is indispensable. As of 1998, nearly 50 percent of all households had personal computers, and more than 5 million households purchase them each year. More than 70 percent of the population had access to computers either at home or at work. This is the way of the future, and I'll go out on a limb here and suggest that if you don't decide to track your finances by computer today, you will do so within five years.
What are the limitations of personal finance software? If there's a blackout and you haven't saved everything, you could lose it. If you have saved everything, but your computer dies and you don't have your information backed up on a disk, you could lose it. If you don't have your software protected by a password, your two-year-old child could do some real damage. But that's about it. A small price to pay for the pleasure of using software to track expenses.
Option 3: An Accountant or a Money Manager
If you can afford the hourly fee, you could hire an accountant to track your expenses, write your checks, and manage your personal finances. Many famous actors and wealthy business executives do this. Some of the actors do it because they're financially irresponsible and would blow through $1 million faster than you can blink. The executives do it because they're so busy managing multibillion-dollar corporations they don't have the time to write personal checks (and their spouses don't want the job).
Hiring someone else to manage your cash sounds easy, but it's expensive. And, if you don't choose wisely, you could wind up with an accountant or money manager who blows through it, loses it, or steals it. Then you'd have to spend more money and time suing the money manager you chose, which would defeat the purpose of hiring someone in the first place.
Without a doubt, the best record-keeping device will be the one you actually use day in, day out. Choose a system that's easy to use--one that can expand to meet your needs as your financial life grows and changes shape. If you decide to go with Computer software, think about all of the other things you can do with it--like electronic banking, and management of your stock and mutual fund portfolios--before you commit. You may not own stocks today, but you probably will someday. Software that can automatically track your stock portfolio might prove useful down the line. And once you've started using one brand of software, you're less likely to switch, even if someone else's software develops a cool feature you'd like to have.
Many couples divvy up their household responsibilities. Too often, however, only one spouse or partner handles the management of the family's cash. That may seem to work in the short run, but each spouse (or partner) should have a hand in how and where records are kept. While you hope and pray you'll grow old together, you should run your finances as if preparing for the worst. If your spouse or partner dropped dead tomorrow, would you know what to do? Would you know where everything is? If the situation was reversed, would your spouse or partner know? Dealing with an emotional tragedy is scary enough without adding on a financial disaster. When you set up your finances and start keeping records, make sure all of the adults in the relationship know how to do it, how to access the accounts, and where the important papers are kept.
WHAT KINDS OF FILES DO I NEED
Human beings are born collectors. We collect everything from art, coins, crystal, and silver to faded Levis, beanie babies, baseball cards, and original Michael Jordan Nike basketball shoes. We also save memorabilia that have no intrinsic value whatsoever, like ticket stubs from a first date. Often, we save these things because of a misguided notion that they will be "worth something" someday, or that we'll need them in some desperate moment in the future.
Paper seems to accumulate faster than other things, and we hang onto it longer. We save letters and cards, our children's artwork and homework. We save our tax returns, old W-2s, and bank statements. Who doesn't have a stack of 20-year-old canceled checks sitting in the attic or basement? (Fortunately, most banks no longer send back canceled checks.)
When it comes to paperwork, there are some originals or copies that you need to keep around and others that you don't. The less clutter you have in your financial life, the more room you'll have to collect the things you really love. (You're not married to your old credit card statements!)
Here's a list of the important papers you should keep, why you need them, and when you can throw them away:
1. Federal and state income tax returns. Under current tax law, the Internal Revenue Service (IRS) may audit you for three to six years after you've filed your federal income tax return. Because you file annually for the preceding year, here's how the time frame works. You file in 1999 for 1998. The IRS may audit that return for up to three years after filing, or until the year 2002. If the IRS believes you've understated your income by more than 25 percent, your return could be audited until 2005. That's why most tax professionals recommend keeping a copy of your return for six years after you've filed it. However, if you intentionally fail to report income, or if you file a fraudulent tax return, there is no statute of limitations. The IRS could come after you ten, twenty, or even thirty years later.
Bottom line: Keep a copy of your final tax return in a file for at least six years, along with the attached W2s. If there are years for which you don't file a return, keep records showing that you didn't earn the minimum amount required to file in those years. If you use tax software to complete your returns, keep a copy of the file in your computer as long as you keep the supporting documentation. (Hint: Don't forget to print it out or save it on a disk when you sell or junk your old hardware.) Personally, I think your tax returns are important enough to keep every year, forever. In that way, you'll have a solid year-to-year record of your financial life, in case you ever need it. (If for no other reason, keep your tax records so you can impress your grandkids with how little you lived on when you were their age.)
2. Investments information. You need to know three things about your investments: (1) How much you paid for them, (2) how much you sold them for, and (3) what kind of annual returns you earned while you held them. When you buy an investment, you typically receive a written confirmation. If you trade through the Internet, your account statement will reflect the trade the next month.
Bottom line: Experts say you should hang onto your brokerage statements and other records pertaining to your investments until you sell them and report the capital gain or loss to the IRS. If there are annual capital gains or losses--for example, with some mutual funds or limited partnerships--you'll need the annual statements to file your returns. You may want to hold onto the purchase and sale documents until the six-year audit period expires.
3. Nondeductible IRAs, paycheck stubs. If you've been making periodic contributions to a regular IRA, or if you've started a Roth IRA or an Education IRA, there are certain tax records you should keep until you've withdrawn all funds from these accounts, to prove the amount of the nontaxable portion. (For more information on IRAs and their tax deductibility, see Chapter 13, Question 83: "What Are the Different Types of Retirement Accounts?") Paycheck stubs list important information, including your Social Security contributions.
Bottom line: Current tax law requires you to keep Forms 1040, 8606, 1099R, and 5498 for each year in which you made a contribution to your IRA accounts. Keep your paycheck stubs for the calendar year until you've received your W2 form (usually, in January) and checked it for errors.
4. Insurance policies. You'll buy many different types of insurance in your life, including homeowner's, life, medical, auto, disability, and liability. You may even purchase various insurance policies for estate tax purposes.
Bottom line: Keep the original insurance policy and signed contract for as long as you hold the policy. Once you cancel the insurance, you can throw out the documents about one year later.
5. Trusts and other estate-planning devices. Many individuals use trusts and other types of estate-planning tools to save on estate taxes.
Bottom line: You'll want to keep trust documents for as long as they're active.
6. Medical records. Current tax law permits you to deduct medical expenses in excess of 7.5 percent of your gross adjusted income. For example, if your gross adjusted income is $50,000, you may decuct the amount of medical expenses you paid that year in excess of $3,750. Unfortunately, this doesn't include medical insurance payments, which would easily put you over the top, but it does include dental and orthodontia costs as medical expenses.
Bottom line: After they've been settled by your insurance company, you should keep all your medical bills until the end of the year. If a claim isn't settled, or if you have a serious ongoing medical situation, you may want to keep the forms indefinitely, or until you've settled the claim. If you don't have enough medical bills to deduct any amount from your tax return, toss them after you file--and be glad you're in relatively good health.
7. Credit card receipts and statements. Once you receive your monthly statement listing your most recent payment and any items purchased (or returned) since the previous statement, you can toss out the credit card receipts for that month's activity. (If you have your own business, different rules apply.) Your credit card statement should also list any interest you have paid over the course of a year.
Bottom line: If you're fighting with a store about an erroneous charge, or waiting for a store credit, you should keep your statements until that situation is resolved. After you've closed out your year (for most people, that's December 31), you can toss all of your credit card receipts and statements. If you're using financial software, you can throw out your receipts after you've entered them. (If you ever need another copy of a credit card statement, most companies will provide it either free or for a small charge.)
8. Household bills and receipts. It would be nice if you could deduct the cost of food, heat, electricity, and diapers. Unfortunately, you can't. On the other hand, you may be able to deduct part or all of the cost of child care or school tuition.
Bottom line: After you've entered general household bills and receipts into your financial software or your expense book, you can pitch 'em. Keep child care receipts and tuition bills until you do your taxes. If you qualify for a tax deduction, make those receipts part of your permanent tax records.
9. Canceled checks, ATM receipts, bank statements. Few banks today still send account holders their canceled checks. Why? Because it's easier and cheaper for the bank to put copies of the checks on microfiche and send out a statement with miniature photos of the canceled checks. Initially, there was a huge uproar from account holders who were used to receiving their canceled checks. Now, most people agree that keeping the statements is easier.
Bottom line: Keep copies of your account statements, for IRS purposes, at least three to six years, or forever (your choice). If you apply for a mortgage, the lender will often ask you to produce the last two to three years' account statements. Automatic teller machine (ATM) receipts should be kept until the transactions they document show up on your bank statement. (Be sure you rip up the receipts before you toss them, so no one can steal your numbers.) If you still get canceled checks, you can toss them after a year, except those that back up tax deductions or capital improvements. The bank keeps copies of the back and front of each check and can provide a print of a check for a small fee if the need arises.
10. Mortgage, home equity loan, second mortgage, and property taxes. Current tax law allows you to deduct interest paid on a first mortgage, a home equity loan, or a second mortgage up to $1 million spread over two homes. You may also deduct your property taxes.
Bottom line: Mortgage servicing companies will usually send you a year-end statement listing the amount of interest you've paid over the year. You'll need this statement and your property tax bills when preparing your income tax return. After you file your return, it should become part of your permanent tax records for that year.
11. Home purchase/sale and capital improvements records. When you sell your home, current tax law permits you to take the first $250,000 (up to $500,000 if you're married and both spouses meet the minimum requirements) in capital gains tax-free. The way you calculate capital gains is to add up the cost of purchase, the cost of sale, and the cost of any capital improvements (structural items like replacing the roof count; repainting doesn't). Then, subtract that number from the sales price. The answer is your profit (or loss).
Bottom line: Keep your purchase documents until you sell your home, and report the gain to the IRS. In addition, it's important to keep excellent records (including canceled checks if you have them) of the cost of any improvements you've made to the home over the years. You'll want to keep these documents as part of your permanent tax records for the year in which you sell your home.
Four of the most useful pieces of paper you can keep are: (1) an updated copy of your accounts and assets, (2) a living will, (3) a durable power of attorney for health care, and (4) a durable power of attorney for financial matters. Even if you keep extremely careful records, it's difficult to put your hands on everything at a moment's notice. Your "List of Accounts" should include the name, account number, contact person (if available), and phone number of every bank, mutual fund, stock, trust, and credit card account you own. List individual stocks, and note where the certificates can be found. List safe deposit accounts. You should also list insurance policies, policy amounts, where the policy and supporting documentation (if any) can be found, and phone numbers. Finally, list the professionals (including brokers, attorneys, or accountants) who have helped you with your financial life, and how to contact them. Put a copy of your updated list of accounts (you should update it at least once a year) with your important papers (including your will and trust agreements), and tell your closest relative or friend where it can be found in case of an emergency.
A living will is a document that expresses what kind of medical treatment you want in case of a life-threatening illness or emergency. You can purchase a living will at a stationery store, buy a book on writing one, use legal software to create one, or have an attorney write one up for you (see a copy of one used in the state of Illinois on page 438). Make sure you and your spouse each sign living wills, and then tell your closest relatives or friends what your living wills say and where they can be found in case of an emergency. Most importantly, make sure you give a signed and/or notarized copy of your living will to your doctor, so he or she is aware of your wishes in case of a medical emergency. Another alternative is to give a durable power of attorney for health care to a trusted friend or family member. You'll probably want to make your doctor aware of this assignment and possibly even give him or her a copy of the paperwork. If you are an organ donor, or would like to be one, make sure you fill out the appropriate paperwork. A durable power of attorney for financial matters will allow your agent to make investment decisions on your behalf should you become incapacitated.
12. Airline ticket stubs, boarding passes, and frequent flier statements. The only reason to save airline ticket stubs and boarding passes is to make sure you've been given the appropriate credit on your frequent flier account.
Bottom line: If you've been credited with the appropriate miles on your statement, you can toss out your ticket stubs and boarding passes (the only way you can prove you were actually on a particular flight). When you receive your new statement each month, you can toss out your previous statement. (If you prefer, save them for the entire year and toss them out at the same time.) If you belong to a gold, platinum, or other premium award level for an airline, you'll want to save the letters, upgrade stickers, and other information sent to you while your membership remains active. You never know when you'll need to prove that something was promised to you earlier.
13. Warranties and receipts for big-ticket items. You may get a ten-year warranty for your newly built home, a six-year warranty for your new car, a three-year warranty for your new laptop computer, and a one-year warranty on a new dishwasher. A home seller might provide you with a one-year home warranty on the old house you buy.
Bottom line: A warranty is only as good as the company providing it. However, you should save the warranty paperwork at least until the warranty expires or until you sell the item. If it gets damaged or stolen, the original receipt and warranty documentation might help you prove the value of the item, or its age, for insurance purposes.
DO I NEED A SAFE DEPOSIT BOX?
A safe deposit box is literally a fireproof box located in a vault at a bank. It is supposed to be a safe place to put important, irreplaceable documents (like a will, stock certificates, and insurance policies), valuables (like gold and silver coins or jewelry), and memorabilia (your grandparents' birth certificates, a videotape of your children when they were young).
Can safe deposit boxes be broken into? Sure. How often does it happen? Almost never. Is it a good idea to get a safe deposit box? Yes. Some people substitute fireproof boxes that they can take with them as they move from house to house, around the country. A fireproof box is good, but it can be broken into or stolen. And in a really bad physical catastrophe, like a flood, earthquake, tornado, or horrible fire, the box might be damaged or destroyed.
There are two negatives to a safe deposit box: cost and keys. You can get almost any size you want, but a safe deposit box can be costly. Charges run from around $30 per year to upward of $1,000 per year for the largest safe deposit boxes. (On the other hand, if you've got a small Renoir worth several million dollars, that might seem like an inexpensive way to protect your painting.) The other problem is that you need a key to get into a safe deposit box. Typically, you receive two keys. If you lose one of your keys, you'll have to pay the bank a fee when you stop leasing the box. If you lose both keys and need to get into the box, you'll have to pay the bank the cost of breaking into the box and putting in a new lock.
Check out the prices of safe deposit boxes before you head to the biggest bank in town to lease one. You might find a new bank offering free safe deposit boxes for life if you keep a minimum of $1,000 in an interest-bearing savings account. You could undoubtedly get higher interest on that money by throwing it into a money market account, but the difference in interest might be far less than you'd pay for the box itself. And, if a neighborhood bank makes the offer, the convenience might be worth it.
Safe deposit keys typically contain your box number, but not the name of the institution. That's to prevent someone from stealing the key and gaining access to your box. Don't label the key with where the box is located. (You'd be surprised at how many people write the name of the institution on the envelope that the key comes in.)
|CHAPTER 1: Organization||6|
|1. How should I organize my personal finances?||6|
|2. What kinds of files do I need to keep?||10|
|3. Do I need a safe deposit box?||16|
|CHAPTER 2: Budgets, Accounts, and Savings||18|
|4. How do I calculate my net worth?||18|
|5. What are my financial goals?||26|
|6. How do I create a budget that works for me?||27|
|7. How much should I save each month?||42|
|8. What kinds of accounts should I have?||46|
|9. What is electronic banking?||49|
|10. How can I make the best use of an ATM?||51|
|CHAPTER 3: Credit and Credit Reports||53|
|11. How do I check my credit history?||53|
|12. What shows up on a typical credit report?||55|
|13. Howdo I fix my credit report?||61|
|14. What is my credit score?||64|
|15. How do I get the best deal on a credit card?||66|
|16. What is the difference between a credit card and a|
|cash debit card?||70|
|17. Which debt should I pay off first?||72|
|18. How do I consolidate my debt?||72|
|CHAPTER 4: Cars and Trucks||77|
|19. Should I buy or lease my next car?||78|
|20. Should I buy or lease a preowned vehicle?||94|
|21. How do I negotiate the best deal?||97|
|22. What leasing scams should I look out for?||106|
|CHAPTER 5: Insurance||110|
|23. What basic insurance coverage should I have?||111|
|24. How much life insurance do I need, and what kind of|
|coverage should I buy?||118|
|25. What type of medical insurance should I have?||129|
|26. How much homeowner's insurance or renter's insurance|
|should I have?||136|
|27. Should I have disability insurance?||145|
|28. What kind of auto insurance do I need and how can I|
|buy it for less money?||150|
|29. What other kinds of insurance do I need?||153|
|30. How do I choose a good insurance company?||160|
|CHAPTER 6: Real Estate||161|
|31. Should I buy a home or should I rent?||161|
|32. How much can I spend on a home?||165|
|33. What kinds of tax breaks exist for homeowners?||171|
|34. What are the benefits and the dangers of cosigning|
|35. Which type of mortgage should I choose?||175|
|36. When should I refinance my loan?||184|
|37. Should I take out a home equity loan?||186|
|38. What do I need to know if I'm going to own a second|
|39. What is a reverse mortgage?||195|
|40. How should I hold title to my home?||200|
|CHAPTER 7: Taxing Taxes||203|
|41. What are the tax basics I absolutely have to know?||203|
|42. What are some ways I can reduce my taxes?||214|
|43. When do I have to pay my taxes?||219|
|44. What are my chances of getting audited?||222|
|45. What happens if I don't pay my taxes?||226|
|46. How do I file electronically, and how do I contact|
|CHAPTER 8: Marriage, Partnership, and Children||233|
|47. Who should handle the finances in our family?||233|
|48. How do we determine whether it makes financial sense|
|for one of us to stay home with the children?||238|
|49. How do I teach my children about money? What gifts|
|should I give them?||241|
|50. How does divorce affect my personal finances?||248|
|CHAPTER 9: Investments: In the Beginning||251|
|51. What steps should I take to get started in investing?||251|
|52. How do time and timing affect my investment strategy?||256|
|53. How much risk should I take?||260|
|54. How do I develop a diversified portfolio that|
|reflects the risk I want to take?||265|
|55. How do I figure out how much money I'll need to pay|
|for my children's college education?||272|
|56. Should I prepay my mortgage?||283|
|57. Should I buy or sell investments based on a tip?||288|
|CHAPTER 10: Investments: Stocks and Mutual Funds||291|
|58. What do I need to know about stocks and the stock|
|market to start investing?||291|
|59. How should I decide which stocks to invest in?||300|
|60. What is a stock split?||305|
|61. Should I buy preferred stock or common stock?||307|
|62. What is a dividend reinvestment plan?||307|
|63. What is a mutual fund?||310|
|64. How do I analyze how expensive a mutual fund is?||321|
|65. What is a Real Estate Investment Trust (REIT)?||323|
|66. What are the biggest mistakes investors make?||327|
|CHAPTER 11: Investments: Annuities, Bonds, and Certificates|
|of Deposit (CDs)||332|
|67. What is an annuity?||332|
|68. What is a bond and what kinds of bonds can I buy?||336|
|69. How can I purchase a bond?||346|
|70. What does the bond market tell me?||351|
|71. What are certificates of deposit (CDs)?||351|
|CHAPTER 12: Investments: Taking a Walk on the Wild Side||353|
|72. What are options?||353|
|73. What are futures?||355|
|74. What is buying on margin, and what is selling short?||357|
|75. What is a limited partnership?||359|
|76. What are hedge funds?||360|
|77. Should I buy gold, silver, or other minerals?||361|
|78. Should I invest in underwater treasure hunts, lottery|
|tickets, or trips to Las Vegas?||362|
|CHAPTER 13: Planning for Your Retirement||364|
|79. What steps do I need to take to retire comfortably?||364|
|80. What are my retirement account options?||373|
|81. Should I borrow against my retirement accounts?||383|
|82. What will my expenses be when I retire?||385|
|83. How much money will I have when I retire?||392|
|84. How does Social Security work?||398|
|85. What do I need to know about withdrawing my|
|86. How can I retire as a millionaire (or at least retire|
|CHAPTER 14: Planning for the Next Generation||411|
|87. How do I get my estate in order?||411|
|88. How should I hold title to my investments?||417|
|89. What is probate?||419|
|90. When should I draw up a will?||421|
|91. What is the unified tax credit, how much inheritance|
|tax will I pay, and how much is the gift tax?||424|
|92. What is a living trust, and what is an irrevocable|
|93. What is a bypass trust?||430|
|94. What other kinds of trusts exist?||430|
|95. How should I give a gift to a nonprofit organization?||434|
|96. What is a living will, and what is a durable power of|
|CHAPTER 15: Knowing When You Need Help||443|
|97. How do I find the right kind of help?||443|
|98. How will I know if I need help?||450|
|99. What should I do if my financial advisers haven't|
|treated me well?||452|
|100. Now what?||454|
|APPENDIX I: Top 10 Mistakes We Make with Our Personal Finances||457|
|APPENDIX II: 5 Simple Things You Can Do to Improve Your|
|APPENDIX III: A Few Useful Charts||462|