Carrie Schwab-Pomerantz - The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions

The information in this book is general in nature and not intended as specific, individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, please consult with a qualified tax advisor, CPA, financial planner, or investment manager.

The discussions of various investment types throughout the book are in no way intended as a solicitation of any product or service offered through Charles Schwab & Co., Inc., its affiliates, or any other investment firm.

Investing involves risk, including possible loss of principal. Investment and insurance products are not deposits, are not FDIC insured, are not insured by any federal government agency, are not guaranteed by a bank or any affiliate of a bank, and may lose value.

Much of the information herein is based on tax year 2013. Please consider how potential changes to the tax code in future years may affect your planning.

The Schwab Center for Financial Research (SCFR) is a division of Charles Schwab & Co., Inc.

Carrie Schwab-Pomerantz is president of the Schwab Foundation, senior vice president of Charles Schwab & Co., Inc., and chairman of the Board of Schwab Charitable. Charles Schwab & Co., Inc. (Member SIPC), is a registered broker-dealer and wholly owned subsidiary of the Charles Schwab Corporation.

The Charles Schwab Foundation is a 501(c)(3) nonprofit, private foundation that is not part of Charles Schwab & Co., Inc., or its parent company, The Charles Schwab Corporation.

Schwab Charitable is the name used for the combined programs and services of Schwab Charitable Fund, an independent nonprofit organization. The Fund has entered into service agreements with certain affiliates of The Charles Schwab Corporation.

Copyright 2014 by The Charles Schwab Corporation

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ISBN 978-0-8041-3736-2
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v3.1

To Chuck,
who I am proud to call Dad.
Your passion and energy inspire me every day.

I founded Schwab when I was in my late thirties. At that point in my life I was ambitious, optimistic, and determined to make my mark on the business world. I wasnt thinking about leaving a legacy or even securing my future. But as a young entrepreneur I did recognize a bad situationand an opportunity to right a wrong.

That wrong was Wall Street. Before the Securities and Exchange Commission deregulated commissions in 1975, a stock trade could cost hundreds or even thousands of dollars. Brokers were simply salesmen; they could have been peddling vacuum cleaners or aluminum siding. They just wanted to make their hefty commissions. Individual investors didnt stand a chance against the sales pitches, fees, and conflicted advice.

Thankfully, the investing world has changed dramatically. A long series of reforms and technological advances has helped give individual investors more control. You can research investments from your home computer and buy and sell stocks, bonds, and funds with the click of a mouse, paying few or no fees. You can participate in the growth of the American economy along with the big guys.

But theres a hitch. Along with this power has come responsibilitylargely mandated by government policy that has incentivized employers to move away from fixed pensions and toward IRAs and 401(k)s. In addition, although I believe that Social Security will be around for a very long time, it isntand was never intended to bea ticket to a comfortable life. Plus, thanks to advances in medicine and more knowledge about healthy lifestyles, were living decades longer than previous generations. Taken together, this adds up to a sizable challenge for every adult. Put bluntly, it means you need more money. Were living in a world of taking care of yourself.

Forty-plus years after founding Schwab, with the perspective that can only come from decades of experience, I have a new wish: In the face of our new realities, I would like every American to feel confident and knowledgeable as they take control of their own financial future. I would like every adult to face this challenge head-on, knowing that they will succeed.

I feel privileged to work on behalf of millions of Americans who are doing just this. In our early years, Schwab clients were strictly independents, or do-it-yourselfers. Today, some like to be independent while others prefer working closely with an advisor. Regardless, we are gratified that the majority not only are involved with their financial lives, but also feel a sense of optimism as they look to the future.

As you look ahead, I hope you share this sense of optimism. Yes, the financial world is complicated. And yes, we face ongoing challenges as technology, government policy, and the regulatory environment continue to evolve. But I remain confident that you can succeed. You can read books like this one, ask tough questions, and demand straight answers. You can secure your financial future.

Charles R. Schwab
Founder and Chairman

W hen I first started to work on this book, I and everyone else at Schwab referred to it as the retirement book. That was our shorthand for talking about life in the later part of our lives. But the label never felt right. As I think about my colleagues, my friends, my family, and our clients, some retire in the traditional sense of the word. But the majority of us continue to work in some capacity, whether or not we get a paycheck. Were active, involved, and full of things we want to do for ourselves and for others.

I dont know about you, but when I turned 50 I had a bit of a heart-to-heart with myself. Okay, Carrie, youre 50, youre really an adult, and youve learned a lot. Now, with less than half of your life to go, what do you want to accomplish? What impact can you have?

Thats the real reason Im writing this book. I want everyone to be able to accomplish whatever it is that makes them feel whole, or complete. I want every person to be able to reach into their own bank of talents and use them to the best of their ability.