The procrastinator's guide to financial security : how anyone over 40 can still build a strong portfolio - and retire comfortably

The Procrastinator's Guide to Financial Security 2 Contents 5 Acknowledgments 10 Chapter 1— The Baby Boomers' Retirement Conundrum 11 Chapter 2— Traditional Retirement Planning 22 Pensions 22 Social Security: Background 25 Saving Social Security: Traditional Solutions 28 Saving Social Security: Nontraditional Solutions 30 When to Receive Social Security Payments 34 Chapter 3— Current Retirement Planning 36 Traditional Individual Retirement Accounts 39 Roth IRAs 41 401(k) Plans 44 Annuities 46 Self-Employment Retirement Options 49 Investing Your Retirement Money 52 Comparing 401(k) with Roth IRA Contributions 55 Withdrawing Money from Your Retirement Plans 56 How Much Money Do You Need to Retire? 58 The Critical Role of Investments 60 Growing Your Money While in Retirement 62 Chapter 4— Reducing Debt 66 Paying off Credit Cards 68 Credit Card Company Come-Ons 71 Debt Consolidation Loans 73 Lesson from the Bible 74 Time Is Money 76 Save It, Don't Spend It 78 Establishing a Budget 80 Reining in Excessive Spending 82 Adjusting the Budget 84 Chapter 5— Buyer Beware 86 Cold Calls 86 Commodity and Natural Resource Promotions 89 Magazine Articles 91 Newsletters and Information Advertisements 92 Chapter 6— Home Buying 95 Mortgage Basics 95 Fixed-Rate vs. Variable-Rate Mortgages 98 Paying off Your Mortgage Early 99 Refinancing Your Mortgage 103 Home Equity Loans 106 Chapter 7— College Tuition 109 Recent Tax Legislation 112 Prepaid College Tuition 114 Part 529 Plans 116 Paying College Tuition: Costing the Alternatives 119 Chapter 8— Family 121 Life Insurance 121 Medicare and Medicaid 125 Long-Term Care 128 Paying for Long-Term Care 131 Basics of Wealth Transfer 135 Wealth Transfer Strategies 138 Additional Family Matters 141 Chapter 9— Beginning Investing 146 Invest in Yourself—Now 146 Common Investing Misconceptions 148 Declare Your Financial Independence 149 Risks of Not Investing 152 Chapter 10— Developing an Investment Philosophy 157 Know before You Buy 157 Asset Allocation 161 Beating the Pros? 163 Pulling the Trigger 164 Meaningless Facts Related to Market Performance 166 Meaningless Facts Related to Market Declines 169 Meaningless Facts Related to Taking Risks 172 Why You Should Ignore Hot Tips 174 Get Rich Slowly 176 Using Time Wisely 178 Chapter 11— Markets 181 What Drives the Market? 181 What Drives the Stock Market? 183 What Drives the Bond Market? 186 Stock Market Indexes 188 Time in the Market 192 Bull and Bear Markets 195 What's Different Now? 197 Chapter 12— Stocks 201 Stocks Aren't Lottery Tickets 201 Purchasing Stocks 203 Buying a Company 206 The Price-to-Earnings Multiple 208 Using P/E for Investing 211 Investing Styles 213 Discount and Online Brokers 215 Stock Investment Programs 218 Selling Stocks 220 Chapter 13— Bonds 224 Buying and Selling Bonds 227 Bond Ladders 229 Treasury Inflation Protected Securities 231 Convertible Bonds 232 Chapter 14— Mutual Funds 236 Mutual Fund Categories 240 Time Periods 243 Caution on Mutual Fund Information 245 Mutual Fund Information Sources 248 Mutual Fund Allocation 251 Mutual Fund Fees 253 Buying Mutual Funds at Banks 255 Mutual Fund Alphabet Soup 256 Mutual Fund Distributions 259 Index Funds 261 Problems with Index Funds 263 Chapter 15— International Investing 268 Investing in International Funds 272 Introduction to Foreign Exchange 274 How Changes in Foreign Exchange Affect Stock Investments 276 How Changes in Foreign Exchange Affect Bond Investments 278 Chapter 16— Investment Strategies 281 Don't Be a Market Timer or a Trader 283 Investing Defensively 287 Value Stocks 290 Closed-End Funds 292 Growing Dividends 296 Internet-Related Investing Trends 298 Baby Boomer-Related Investing Trends 301 Index 305 A 305 B 305 C 305 D 306 E 306 F 306 G 307 H 307 I 307 J 308 K 308 L 308 M 308 N 308 O 308 P 308 Q 309 R 309 S 309 T 310 U 310 V 310 W 310 Y 310 For the burgeoning number of baby boomers, retirement is barreling full-steam ahead. And for many of them, having spent their lives focused more on consumption than on saving and investing, the future is looking pretty meager.

According to a recent study by the AARP, the average boomerÕs net worth is less than $50,000—far less than a person needs to retire comfortably. The good news, though, is that itÕs not too late to rectify the situation.

THE PROCRASTINATORÕS GUIDE TO FINANCIAL SECURITY supplies a crash course in the fundamentals of money management. In a clear, straightforward way—but with a tone that stresses the urgency of the situation—the book helps readers develop the knowledge, skills, and discipline they need to secure a comfortable retirement. TheyÕll find sound advice and step-by-step strategies on how to:

* Curb their impulse spending and get out of debt

* Set up a financial plan and stick to their budget

* Estimate the annual income they need to retire and use IRAs and salary deferral programs to reach that goal

* Make savvy financial decisions concerning life insurance, refinancing a home, and saving for college tuition

* Develop a personal investment philosophy

* Practice smart investment strategies designed to increase wealth—plus much more.

Author Biography: David F. Teitelbaum (Washington, D.C.) is a financial planner and an economist with the federal government. He writes frequent articles on personal finance for various Washington-area publications and has appeared on local radio shows to discuss the topic.

The precarious state of company pension plans and social security has made individual investing and financial planning essential, this guide provides a crash course in the fundamentals of money management. It includes topics such as tips for paying off mortgages and where to buy mutual funds.