Ric Edelman - The Truth About Retirement Plans and IRAs

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Also by Ric Edelman

The Truth About Money

Rescue Your Money

The Lies About Money

Ordinary People, Extraordinary Wealth

Discover the Wealth Within You

The New Rules of Money

What You Need to Do Now

Ric Edelman, the Nations #1 Independent Advisor, Ranked Three Times by Barrons : According to Barrons , The formula [used] to rank advisors has three major components: assets managed, revenue produced and quality of the advisors practice. Investment returns are not a component of the rankings because an advisors returns are dictated largely by each clients risk tolerance. The quality-of-practice component includes an evaluation of each advisors regulatory record. The rankings are based on the universe of applications submitted to Barrons . The selection process begins with a nomination and application provided to Barrons. Principals of Edelman Financial Services LLC self-nominated the firm and submitted quantitative and qualitative information to Barrons as requested. Barrons reviewed and considered this information, which resulted in the rankings. The Top 100 Independent Financial Advisors was published Aug. 27, 2012; Aug. 28, 2010; and Aug. 31, 2009. The Top 1,000 Advisors Ranked by State was published Feb. 18, 2013; Feb. 20, 2012; Feb. 21, 2011; and Feb. 22, 2010.

This book contains performance data. Past performance does not guarantee future results. The data is provided solely for illustrative and discussion purposes. The data used reflects a variety of time periods; rather than focusing on a specific period mentioned or the results derived, you should focus instead on the underlying principles.

None of the material presented here is intended to serve as the basis for any financial decision, nor does any of the information contained within constitute an offer to buy or sell any security. Such an offer is made only by prospectus, which you should read carefully before investing or sending money.

The material presented in this book is accurate to the best of my knowledge. However, performance data changes over time, as do laws and regulations. Consequently, my advice could change as well. Therefore, you are encouraged to verify the status of the information contained in this book before acting.

While all the stories and anecdotes recited in this book are true, all the names have been changed to protect each individuals privacy. It is impossible to ascertain the identity of any person based solely on the information in this book, so if youre a client, friend or relative of the author, you can relax!

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Copyright 2014 by Ric Edelman

All rights reserved, including the right to reproduce this book or portions thereof in any form whatsoever. For information address Simon & Schuster Paperbacks Subsidiary Rights Department, 1230 Avenue of the Americas, New York, NY 10020.

First Simon & Schuster trade paperback edition April 2014

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Designed by Ric Edelman, Suzi Fenton, and Christine Janaske

Library of Congress Cataloging-in-Publication Data has been applied for.

ISBN 978-1-4767-3985-4

ISBN 978-1-4767-3986-1 (ebook)

To Brad and Larry

Writing a book is supposed to be a solitary act, but at Edelman Financial Services, everything is a communal effort. Thus, this books production reflects the work of an astonishingly large group of people.

Much credit goes to Mike Lewis, editor of our monthly newsletter, Inside Personal Finance. Mikes contribution cant be overstated, and his fingerprints can be found throughout the book. Where Mike left off, Mitch York, my firms portfolio manager, and Andrew Cohen, a member of my Education and Communication staff, picked up. They gathered all the raw data and statistics and fact-checked the entire manuscript.

Im well-known for creating books that are as much fun to look at as to read, and this one is no different. With my trademark charts, graphs, footnotes, sidebars and cartoons, the book is easy on the eyes and comfortably moves the reader from page to page. Unlike other authors who merely send Word files to their publishers, we actually deliver camera-ready art to ours maintaining full control over the layout along the way. Credit for the books visualization goes to Suzi Fenton, my firms manager of creative services, and her able associate, Christine Janaske. This book might be mine, but they treat the book as though its theirs. They actually might be right.

Whenever I write a book from my first 17 years ago ( The Truth About Money ) to this one, and all those in between my greatest fear is not that Ill get a bad review (I cant control that), but that the book will contain an error of some sort (which I can control). Omissions and commissions are equally frightful. Might I leave out a fact? Is there an important point unstated? Or have I written a nonsensical sentence or been particularly (as demonstrated by that adverb and highlighted in this parenthetical phrase) verbose?

To guard against the risk of flaw, all of the financial planners of Edelman Financial Services read the manuscript. I also invite other members of the staff to volunteer as a reviewer, to give me a consumers viewpoint. That approach was fine 17 years ago when our firm was small and a handful of folks helped me out, but this time I found myself with 142 reviewers! Because pretty much everyone made comments on pretty much every page, I had to sift through more than ten thousand pages (electronically, thankfully) of comments! This task was made manageable by my traffic control team Ashley Duran, Sarah Kenney, Rosa Wray and Andrew Cohen. Without their logistic assistance, I never could have mastered the task and it was essential that I did, for the comments were awesome and helped me convert a decent manuscript into one really worth reading.

Particular thanks for their reviewing prowess goes to my colleagues Alan Facey, Alan Wheedleton, Anderson Wozny, Betty OLear, Brandon Corso, Brian Rafferty, Charlie Nardiello, Christine Cataldo, Darrell Reynard, David Lubitz, David Sheehan, Denise Zuchelli, Doug Keegan, Doug Rabil, Ed Hungler, Ed Moore, Ed Schweitzer, Ed Swikart, Fahima Shaw, Frances Falanga, Isabel Cooper, Jackie Oates, Jean Edelman, Jeff White, Jeremiah Burke, Jessica Cline, Jim Marx, Jo-Anna Wilson, Karen Morse, Lisa Eitzel, Lisa Lausten, Mary Davis, Mike Lewis, Patrick Day, Rick Mueller, Ryan Bergmann, Sarah Kenney, Scott Butera, and Theresa Coughlin. (As you noticed, in keeping with our firms standards, everyone is listed alphabetically by first name.)

I also want to thank Adam Jefferis, Adam Karron, Andrew Cohen, Andrew Massaro, Ann Crehan, Anthony Brewer, Aric Jacobson, Aura Carmi, Beth London, Bobbie Starr, Brad Hartzel, Caitlin Chen, Carl Sanger, Catherine Caceres, Christine Wessinger, Clarence Haynes, Connie Green, David Heinemann, Dean Tsantes, Debbie Dull, Diane Jensen, Ed Lynch, Erich Hoffman, Felix Kwan, George Ball, George Dougherty, Isabel Barrow, Jack London, Jan Kowal, Jason Cowans, Jeffrey Lewis, Jenny Greene, Jigisha Dahagam, Joanna L. Cecilia-Fleming, Jonathan Saxon, Josh Andreasen, Keith Spengel, Ken Murray, Kevin Maguire, Kristine Chaze, Lesley Roberts, Linda Campbell, Marcelle Belisle, Maribeth Bluyus, Mary Ellen Nicola, Michael Krowe, Pam Becker, Philip Carroll, R. J. Reibel, Rey Roy, Rick Ehlinger, Robert Schneider, Ron Sisk, Ronald Bolte, Ryan Poirier, Ryan Singer, Sean Wintz, Surendra Dave, Tom Begley, Tom Wood, Tracey Martin, Val Taddei, Vicki Wilson and Wilson Mitchell.