Julie Jason - The Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad

This book is about achieving retirement securityreaching a level of comfort in knowing that you will not outlive your money, whether economic times are good or bad. As an investment counsel (a type of money manager) to high net worth families, I make my living helping individuals of all ages do just that. I also interact with students and readers of my financial column, who pose questions about every aspect of retirement planning. Often they are seeking to untangle thorny financial predicamentsmany of which I explore in the pages that follow.

All of these individuals are just like you, with similar needs, goals, and concerns. Some are well versed in the financial markets; others have little interest in the subject. Some have been investing all their lives; others are novices.

What they all share is the desire for some certainty in a time of transitionas they turn from today to the many tomorrows of retirement. Retirees face numerous unknowns, not the least of which is whether they can afford to retire and maintain their independence for the rest of their lives. But they need not face their retirement-income challenges alone, particularly in times of financial turmoil.

Let me reassure you on a couple of points.

Though the task at hand may seem overwhelming, it does not need to be. Together, in this book, we will address how you can create retirement income safely and carefully, regardless of your age, your financial circumstances, the economic times in which you live, and whether or not you have a financial adviser.

I promise you this: if you have never invested, never read an investment book, or never worked with a financial adviser, you will not be left behind. No matter who you are or what steps you have or have not taken up to this point, there is always something you can do to improve your situation.

How to Use This Book

Ive organized the material we will review together into four parts. Some chapters you will want to study closely and others you will want to skim, as I explain shortly. Because of the tools Ive provided, such as self-assessments, tables, checklists, and questions to ask, I suggest keeping a pen and pad handy to note which sections of the book you want to revisit later. These tools will help you apply the concepts we discuss to your own personal affairs. You will also find sets of rules to follow in situations that people ordinarily face in their search for reliable lifelong income.

, Understanding the Basics, well review how to set up your own cash-management system so you can be secure in knowing your needs will be met.

, youll get a sense of how youre doing now, which will give you a chance to consider how to do even better. To help you, Ill share a way of managing spending that works well for people who dont like to budget. And, of course, well examine sources of income, including pensions and Social Security.

Then well talk about tools that help quantify some of the uncertainty every investor faces when trying to predict the future, such as Monte Carlo modeling programs that reflect some of the current professional thinking on how to solve the retirement-income puzzle. Well also look at examples and case studies that illustrate how an adviser might work with a client to create a realistic retirement-income plan. (The case studies throughout this book present real people, their names and circumstances changed to preserve anonymity.)

If you are approaching retirement or are already retired, you will almost undoubtedly hear from financial advisers who want your business. At this time of life, it is important to distinguish among advisers in order to find one who is best suited for creating retirement income. Whether you are an old pro at investing or a newcomer, , after you have a sense of the different services you will likely be offered.

, Security for Sale: Evaluating Retirement-Income Products, is all about these retirement-income solutions.

Because these products are quite attractive at first blush, you may be tempted to proceed with a purchase after a quick sales presentation. Its important that you resist that urge until you have had a chance to contrast and compare the alternatives, so that you can choose the best for your situation. Thats what Ive provided a five-point rating system to compare these financial products more easily, as well as questions to ask when you speak to a salesperson about them.

I suggest you read through quickly to get an idea of the types of concepts and products you can expect to come across in your search for retirement income. Later, if your adviser recommends one of these products, review the relevant chapter carefully before buying anything. Keep in mind that you may have to talk to more than one adviser before making a decision about which (if any) retirement-income products are right for you.

In , Investing in Your Future: Retirement-Income Planning and the Markets, well discuss stocks, bonds, and other investments and what you can expect from them in good markets and bad. Because defined-contribution retirement accounts such as 401(k)s are an increasingly meaningful part of many peoples assets, well talk about how to manage a 401(k), as well as Individual Retirement Accounts (IRAs) and other tax-deferred savings accounts, both before and after retirement. Well also look at how much risk you should take on at different points in your life, how to deal with changing market environments, and how your financial goals may evolve as you progress from pre-retirement to retirement.

, well discuss how taxes affect retirees and talk about ways to manage withdrawals from IRAs and 401(k)s.

you are married or have a partner who is not as interested as you are in making investment decisions, I recommend that the two of you read this chapter together.

By raising your awareness of persuasion techniques, you will be able to spot and avoid potential mistakes. This awareness will help you safeguard your assets. To make it easier to apply these principles to real life, Ive created a set of Dont-Be-Fooled Rules that you can use when making financial decisions.

Most people need to work with an adviser after they retire, and it should be pretty clear that having a good adviser can make all the difference in the worldif not to you personally, then to the spouse or partner you may leave behind. In ) to use when you interview candidates. Let me emphasize a key point here: Even if you decide you dont need an adviser, you should be aware that your spouse might outlive youand may have difficulty managing the family finances on his* or her own without you. (* By the way, I use the male pronoun as shorthand throughout the book to denote both genders.)