Boomer or Bust

About the Author

Steve Weisman is a renowned expert in the fields of elder law and financial planning, with a particular focus on issues that affect the baby boomer generation. He is a member of the National Academy of Elder Law Attorneys and is well-known for hosting the nationally syndicated radio show "A Touch of Grey." Weisman also serves as a legal editor and columnist for Talkers Magazine. His extensive experience and dedication to providing practical advice for aging populations make him a trusted authority in the realm of retirement and elder care planning.

Main Idea

"Boomer or Bust: Your Financial Guide to Retirement, Health Care, Medicare, and Long-Term Care" is a comprehensive guide designed to equip baby boomers with the knowledge and tools necessary to navigate the complex landscape of retirement planning. The book addresses critical issues such as maximizing the benefits of 401(k)s and IRAs, understanding Social Security and Medicare, and planning for long-term care. Weisman emphasizes the importance of early and informed financial planning to ensure a comfortable and secure retirement.

Table of Contents

1. Introduction
2. IRAs and 401(k)s: Retirement 'Gifts' from Congress
3. Retirement Investing
4. Income Taxes for Seniors
5. Reverse Mortgages
6. Planning for Long-Term Care
7. Long-Term Care Insurance
8. Social Security
9. Medicare
10. Medicaid
11. Advance-Care Directives
12. Conclusion

IRAs and 401(k)s: Retirement 'Gifts' from Congress

IRAs and 401(k)s are essential tools for retirement investing, offering significant tax advantages. However, many people fail to take full advantage of these benefits. By understanding and utilizing these tools effectively, retirees can significantly enhance their financial security.

The 4-1-1 on IRAs

One crucial aspect of managing IRAs is naming beneficiaries. Failure to update beneficiary designations can lead to substantial tax implications. For example, if an IRA passes to an estate rather than a named beneficiary, the funds must be withdrawn within five years, leading to higher taxes. Naming a spouse or even grandchildren as beneficiaries can extend the tax-deferred growth period, resulting in considerable tax savings.

"If listed as your beneficiary, your spouse has the ability, upon your death, to roll over your IRA into his or her own IRA, then withdraw the IRA funds based upon his or her own IRS-determined life expectancy." - Steve Weisman

Doing the 401(k) Math

Contributions to traditional 401(k) accounts are tax-deferred, meaning they are not taxed when deposited. Roth 401(k)s, however, are taxed upfront but allow for tax-free withdrawals in retirement. This can be advantageous for younger workers expecting to be in a higher tax bracket upon retirement. Balancing contributions between traditional and Roth 401(k)s can provide flexibility and tax benefits.

"Employers can offer a Roth 401(k) that allows employees to put all or some of their 401(k) contributions into a Roth 401(k) account. The amount of the worker's salary that is contributed into the Roth 401(k) is considered as taxable wages in the year of contribution, but the money grows tax-free and can be withdrawn later without incurring further income tax." - Steve Weisman

Retirement Investing

The traditional rule of needing 70% of pre-retirement income is becoming outdated due to rising healthcare costs. Many financial advisors now recommend planning to generate as much income in retirement as during working years. One strategy, the 4 percent solution, suggests withdrawing 4% of your portfolio annually to ensure it lasts throughout retirement.