9780132361323

#x1C;Imagine that you board an airliner and are told that you will be piloting the plane. Such is the plight of tens of millions of Americans, on whom have been foisted a jumble of 401(k), 403(b), and 457 defined contribution plans, and are as well qualified to manage their retirement portfolios as they are to pilot a jet from Los Angeles to Boston. Since things aren#x19;t changing any time soon, you may very well need flying lessons, and pronto. Frank Armstrong#x19;s The Retirement Challenge: Will You Sink or Swim?is just the ground school you need.#x1D; #x13;William Bernstein, author of A Splendid Exchange: How Trade Shaped the Worldand The Four Pillars of Investing: Lessons for Building a Winning Portfolio #xA0; #x1C;Armstrong and Doss have written a simple and understandable guide through the maze that is our financial world. If your goal is to outperform the vast majority of investors on the road to retirement, The Retirement Challenge: Will You Sink or Swim?paves the way.#x1D; #x13;TAYLOR LARIMORE, coauthor of The Bogleheads#x19; Guide to Investing #xA0; #x1C;This is a great handbook for those planning for retirement. Armstrong and Doss not only tell you the right way to build a plan, they also show you how to avoid purchasing products from the wolves of Wall Street that lead investors to be sheared like sheep.#x1D; #x13;LARRY SWEDROE, author of The Only Guide to Alternative Investments You#x19;ll Ever Needand Wise Investing Made Simple #x1C;In today#x19;s investment markets, this is an invaluable book. If you care about the quality of the rest of your life, you owe it to yourself and your family to read The Retirement Challenge: Will You Sink or Swim?#x1D; #x13;HAROLD EVENSKY, CFP#xAE;, AIF#xAE;, President, Evensky & Katz #xA0; In 48 quick, practical lessons, Armstrong shows how to assess what you have and what you#x19;ll need to build a simple, reliable retirement plan. Better yet, the book#x19;s easy online calculators do all the math for you. Investing for retirement has never been so sensible and simple!#xA0;Includes free access to comprehensive Web-based tools and resources atwww.Sink-Swim.com: More than 75 easy-to-use online calculators and budget spreadsheets to help you get on track and stay on track Sample asset allocation plans you can adjust for any stage of your career and any portfolio Up-to-the-minute updates on pension law, regulation, enforcement, and estate planning Free Sink or Swim Newsletter, and much more

Frank Armstrong, III, CLU, CFP^™, AIF, is the founder and principal of Investor Solutions, Inc., a fee-only registered investment advisor. He has more than 30 years’ experience in the securities and financial services industry. His bestselling book The Informed Investor was cited by BusinessWeek as one of the best investment books of the year. Frank has twice been named by Barron’s as one of the top 100 independent financial advisors. He was a featured columnist on Morningstar.com for a number of years and is a frequent contributor to AccountsWorld.com and FundsInteractive.com. He has appeared on “CNN Headline News,” “Your Money with Stewart Varney,” “PBS Morning Business Report,” CNBC, “Money Life with Chuck Jaffee,” and public radio stations around the country. Frank is widely quoted in the media, his articles appear in major financial magazines and Web sites, and he lectures nationwide on principles of investment management.

Jason R. Doss is an attorney with the Atlanta-based law firm, The Doss Firm, LLC. He represents consumers against the financial services industry in securities arbitrations and consumer class action litigation. Jason has a proven track record of fighting for consumers’ rights and for taking major corporations to task. Over the last few years, he has initiated some of the largest consumer class action cases in the country. Since 2001, Jason has been an active member of the Public Investors Arbitration Bar Association (PIABA), a national organization devoted to representing investors in securities arbitration.

Acknowledgements	p. xiv
About the Authors	p. xv
Introduction	p. 1
Overview of the Retirement Problem	p. 7
You Are On Your Own	p. 8
Surviving in an Era of Cradle-to-Grave Insecurity!	p. 8
The Changing Face of Retirement	p. 15
Work Optional	p. 19
The Retirement Problem	p. 20
Meet Your Retirement Plans	p. 23
Defined Benefit Plans	p. 24
Pension Plans	p. 24
Defined Benefit Plans	p. 25
Defined Contribution Plans-An Overview	p. 30
For Plan Sponsors	p. 30
For Participants	p. 31
The Basic Defined Contribution Plan	p. 32
Investment Control and Safe Harbor Provisions	p. 35
Funding Options	p. 35
Portability	p. 36
Profit-Sharing Plans	p. 37
Employee-Funded Plans	p. 38
Generic Problems with Pension Plans	p. 39
What Is Wrong with Self-Funded, Self-Directed Plans?	p. 39
Investor Behavior	p. 43
The 401(k) Plan	p. 47
The 403(b) Plan-Not-For-Profit Enterprises	p. 50
Is Your 403(b) Plan Broken?	p. 52
The Roth 401(k), 403(b) Option	p. 55
Section 457 Plans for Municipal and State Employees	p. 56
Making the Most of Your 401(k), 403(b), or 457 Plan	p. 58
Choosing the Right Plan Options	p. 58
Integrating Your Retirement Plan Assets into Your Total Financial Plan	p. 59
IRAs	p. 60
Learning to Love IRAs	p. 60
Setting Up Your IRA	p. 62
Types of IRAs	p. 62
Regular	p. 63
Roth IRAs	p. 65
Non-Tax-Deductible IRAs	p. 66
Rollover IRA	p. 68
Keep Up to Date	p. 71
Summary	p. 71
Retirement Planning for the Self-Employed	p. 72
How Does Your Plan Stack Up?	p. 75
Total Expenses	p. 76
Quality Fund Choices	p. 77
Adequate Funds Choices to Diversify the Portfolio Properly	p. 77
Suggested Asset Allocations	p. 77
Company Stock: Just Say "No"	p. 78
Bells and Whistles	p. 79
Individual Advice	p. 79
Company Match	p. 79
What Can Go Wrong	p. 80
DB Plan Termination	p. 80
Voluntary Freezes or Terminations	p. 80
Distress or Involuntary Terminations	p. 81
Conclusions	p. 84
Defined Contribution: Plan Sponsor Failure	p. 84
Should You Contribute to It?	p. 87
Alternatives to Qualified Plans	p. 89
The Good	p. 89
The Bad	p. 90
The Ugly	p. 90
Alternatives	p. 90
A Game Plan if Your Employee-Funded Plan Falls Short	p. 91
Summary	p. 92
Help from the Courts	p. 93
Where Are You in Your Career?	p. 95
Early and Mid-Career	p. 97
Changing Jobs: Smart Moves for Your Pension Plan	p. 99
Take the Money and Run!	p. 100
Systematically Looting Your Retirement Funds	p. 101
Age 55 Separation from Service	p. 102
Company Stock	p. 102
Reinvesting the Net Proceeds	p. 103
Creditor Proofing	p. 103
Conclusion	p. 103
Leaving the Money in Your Old Plan	p. 104
Reasons to Remain in the Old Plan	p. 104
Reasons to Look Elsewhere	p. 105
One Final Consideration: Loans	p. 106
Rolling Your Plan into Your New Employer's Plan	p. 107
Costs and Features	p. 107
Creditor Proofing	p. 107
Loans	p. 107
Retirement Between 55 and 591/2	p. 108
The Conduit IRA	p. 108
The IRA Rollover	p. 108
At Age 50, the Catch-Up Provisions	p. 111
Approaching Retirement Transition Planning	p. 112
Early Retirement Tactics: How to Avoid the Tax Traps	p. 114
How to Retire Early and Not Pay the Taxman a Penalty	p. 114
Exceptions to the Early Distribution Tax Penalties	p. 114
Conclusion	p. 119
70 is the New 65: Delayed Retirement Advantages	p. 120
Summary	p. 123
At Retirement	p. 125
Critical Choice: Lump Sum Versus Annuity for Distributions	p. 125
Annuity Options for DB Plans-How to Decide	p. 125
Lump Sum or Annuity	p. 126
Which Assets to Spend First During Retirement?	p. 129
Early Retirees	p. 130
Normal Retirees	p. 130
Required Minimum Distributions (RMD) at Age 701/2	p. 131
Summary	p. 131
Paying Off the House at Retirement	p. 132
Additional Considerations	p. 134
Estate Planning	p. 134
Three Common Claims Brought by Investors	p. 137
Unsuitability	p. 137
Churning	p. 138
Unauthorized Trading	p. 138
What Do You Do When You Suspect That You Have Been Victimized?	p. 139
The Arbitration	p. 140
How Much Will You Need?	p. 143
Too Much Is Never a Problem	p. 144
Beware Simplistic Software	p. 145
Keep It Real	p. 146
Forecasting Your Retirement Needs	p. 147
Sustainable Withdrawal Rates	p. 148
Old Assumptions Are Hazardous to Your Wealth	p. 148
A Pioneering Study	p. 149
Summary	p. 150
Forecasting Your Needs	p. 152
Early in Your Career	p. 152
Later in Your Career	p. 154
The Three-Phase Model of Retirement: Is It Valid for You?	p. 155
Gap Analysis	p. 156
Accounting for Outside Incomes in Asset Allocation	p. 157
How Are You Doing?	p. 159
Investing to Meet Your Goals	p. 161
The Anti-Cramer Guide to Investment Success	p. 162
Start Early	p. 163
What Wants to Be a Millionaire?	p. 164
Get Market Rates of Return	p. 166
What Are Reasonable Expectations for Market Returns?	p. 167
Manage Risk, Don't Avoid It	p. 168
Cleaning Up Credit Card Debt	p. 169
Costs Matter	p. 173
Taxes Matter	p. 176
Control Risk	p. 178
Risk and Reward Are Related	p. 178
Controlling Risk	p. 179
An Accumulation Example	p. 180
Risk Is Amplified with Systematic Withdrawals	p. 181
Summary	p. 182
Determine Your Risk Tolerance and Time Horizon	p. 183
Concentrated Stock	p. 185
The Perils of Company Stock	p. 187
Recognizing the Effect of Volatility	p. 190
Totally Skewed	p. 191
Taking the Right Amount of Risk	p. 193
It's the Portfolio, Stupid!	p. 197
Traditional Active Managers Are a Waste of Money	p. 198
Market Efficiency	p. 198
Randomness	p. 199
Manager Effectiveness	p. 199
Build a Global Portfolio of Asset Classes	p. 200
Asset-Class Investing	p. 200
Investment Vehicles	p. 201
Individual Stocks and Bonds	p. 201
Mutual Funds	p. 201
Separate Accounts	p. 202
Index Funds	p. 202
Exchange Traded Funds	p. 202
Annuities: Just Say No!	p. 203
A Truly Toxic Product	p. 206
Building Your Buckets	p. 208
The Risky Bucket	p. 208
The Low-Risk Bucket	p. 212
Periodic Maintenance	p. 214
Investing During Retirement	p. 216
Bucket One-Adequate Liquid Reserves	p. 220
Bucket Two-World Equity Market Basket	p. 221
Withdrawal Strategy-Preserve Volatile Assets in Down Markets	p. 222
Selecting an Advisor	p. 224
Avoiding Advisor Risk	p. 224
Getting Objective Advice	p. 227
Reaching Your Goals	p. 233
Personal Savings and Liabilities	p. 233
You Must Save Early, Lavishly, and with Discipline	p. 236
Keep Time on Your Side	p. 237
Public Policy Issues	p. 240
Social Security	p. 240
Medicare	p. 241
Sinking Is Not an Option	p. 242
Glossary	p. 243
Index	p. 251
Table of Contents provided by Ingram. All Rights Reserved.

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Introduction IntroductionBill Gates and Warren Buffett are probably not stressing about their retirement incomebut many Americans are. Study after study shows that they are not on track to support themselves in retirement and are behind their parents at the same age. Yet, most Americans spend more time researching which flat screen TV to buy than planning for retirement. Like Scarlett O'Hara in Gone with the Wind , they choose to "worry about that tomorrow."I can guess some reasons why you might put off dealing with your retirement: it's not fun, it takes a long time, it's complicated, it's difficult, it's confusingit's all the above! I sympathize. Really I do. But I don't believe it's any of those things. Well, OK, perhaps your version of fun is a little different from mine. But planning your retirement isn't an ordeal. It can be done quickly, elegantly, simply, and economically. Hang in there with me. I'm going to prove it to you.My first book, The Informed Investor , delivered the Cliff Notes of an MBA investment class. I reviewed investment theory and practice as it developed over the last 50 years. I'm not going to do that again in this book, but if you feel the need for more background, I recommend The Informed Investor .This time, I'm going to stick to practical, actionable information and strategies for retirement planning. If The Informed Investor was 90% theory and 10% action items, Sink or Swim is 90% specific information and action items. It gives you the tools to take control of your financial success without drowning in trivia or being overwhelmed by boring repetitive chores.First, you meet your pension plan. You learn what it is, how to calculate benefits, how it works, what can go wrong, what to do if something goes wrong, and whether it's even attractive enough for you to participate. If it's not, you have viable alternatives and, under a 2008 U.S. Supreme Court Ruling, some recourse.Next, wherever you are in your career, there are smart moves you want to pursue to maximize your retirement benefits. Whether you are right out of school, or already in retirement, you have lots of options to control your benefits.How much will you need for retirement? Early in your career, it might be hard to estimate, but as you get closer, you can refine your guesstimate. You will learn how.Finally, you learn how to invest your retirement assets economically and effectively while controlling risk to give yourself the highest probability of success in meeting your goals. Best of all, the system is easy to monitor and set up, and it works with all your investment accounts, whether inside a pension plan or your taxable accounts.Do-It-Yourself -A companion Web site, http://www.Sink-Swim.com, provides you with a wealth of additional information and updates. Visit this Web site for the following: Hundreds of articles on investment theory, products, and best practices. Updates to pension law, regulation, and enforcement. Over 75 calculators that let you see how much you need to contribute for a prosperous retirement and whether you are on track to meet your goals. Sample asset allocation plans that can be adjusted for any stage of your career and por

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The Retirement Challenge Will You Sink or Swim?: A Complete, Do-It-Yourself Toolkit to Navigate Your Financial Future

The Retirement Challenge Will You Sink or Swim?: A Complete, Do-It-Yourself Toolkit to Navigate Your Financial Future

0132361329

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