Rights Contact Login For More Details
- Wiley
More About This Title The Value of Debt in Retirement: Why Everything You Have Been Told Is Wrong
English
Conventional wisdom is wrong – being debt free in retirement may actually increase your risk. The Value of Debt in Retirement teaches you how incorporating debt into your retirement strategy may increase your return, lower your taxes and actually lower your risk. You read that right. If handled correctly, debt—that thing we've all been taught to avoid—can play an integral role in your life, especially in retirement. New York Times Best Selling Author and nationally acclaimed financial expert Tom Anderson shows you how to use the time tested strategies of the best companies and the ultra rich to retire comfortably, minimize taxes, buy the things you have always wanted to have and do the things you have always wanted to do.
Thought provoking and against the grain, Anderson explains why your risk tolerance doesn't matter, why being debt free may actually increase your risk and why rushing to pay off your mortgage may be a financial disaster. Full of shocking revelations and tricks high- net-worth individuals have used for years, The Value of Debt in Retirement opens the world to a new approach to wealth management in retirement, one that factors in both sides of the balance sheet as an integrated ecosystem.
Real-world case studies illustrate how informed debt strategies can lead to a happier, healthier retirement. See how an individual with a net worth of more than $5 million can spend $20,000 per month - after taxes - and pay less than $5,000 per year in taxes, how it is possible to increase your rate of return by 50%, and how a lower risk portfolio with debt could increase the chances you do not run out of money.
Specifically written to Baby Boomers, practical guides and checklists show how to use debt strategies to fund primary and secondary properties, refinance credit card debt, and finance hobbies, such as cars and boats and recreational vehicles. Additional guides show how you can help your children, help your parents and leave a bigger legacy for your heirs and favorite charities. Regardless of your net worth, The Value of Debt in Retirement provides tools to use to apply these concepts to your personal situation.
There is no free lunch: the book delivers a balanced perspective focusing on the potential risks and benefits of the strategies discussed. A discussion on economic history highlights some of the shocks the economy may face and provides important warnings that you should factor into your retirement plan. Anderson not only shows that your life expectancy may be longer than you think, but also illustrates that many investors may be on track to average returns well under 4% for the next ten years – a potentially devastating combination. Irrespective of your beliefs about debt, The Value of Debt in Retirement proves risk is more important than return for retirees and provides suggestions on ways to minimize that risk.
Not all debt is good and high levels of debt are bad. The Value of Debt in Retirement is about choosing the right debt, in the right amounts, at the right time. Perhaps most importantly, this book isn't for everybody. This book requires responsible actions. If you can't handle the responsibility associated with the ideas then this book then it isn't for you. If you need a rate of return under 3% from your investments then you may not need this book. But if you can handle the responsibility and if you need a return above 3%, this book may offer insights into the best (and potentially only) way to achieve your goals.
English
THOMAS J. ANDERSON worked in investment banking in New York before moving into private wealth management. He has his MBA from the University of Chicago and a B.S.B.A. from Washington University in St. Louis. His extensive academic studies at some of the top schools in finance and economics, international experiences, and institutional background deliver a unique perspective on global markets.
He has been recognized as one of the top 40 advisors under 40 by On Wall Street magazine and four times by Barron's magazine as one of America's Top 1,000 Advisors: State by State. Tom lives in Chicago with his wife and three children.
English
Foreword xv
Acknowledgments xvii
Introduction xxi
Part I: Basic Ideas and Core Concepts
Chapter 1: A Better Path 3
A Successful but Controversial Debut 4
The Fifth Indebted Strength 7
Who Can Benefit from This Book? Not Only Millionaires! (But They Can, Too) 9
Everyday Example #1: Immediately Better Credit Card Debt 11
Getting beyond the ABLF and Focusing on Retirement 12
Notes 14
Chapter 2: Debt in Retirement: Conventional Wisdom, Right and Wrong 17
What Some Popular Retirement Books Get Right—and Wrong—about Debt 18
The “Good versus Bad” Debt Camp 19
Bach Where We Started: The Irresolutely “Against Debt” Camp 20
The (Very Small) “Sometimes It’s Okay to Have Debt” Camp 21
Everyday Example #2: A Bridge Loan over Troubled Quarters 22
Notes 24
Chapter 3: Why and Whether to Adopt a Holistic Debt?]Inclusive Approach in Retirement 27
A First Look at the Three Main Types of Debt: Oppressive, Working, and Enriching 28
Seven Rules for Being a Better Debtor 30
In the Company of Longer Life Spans 31
Winging Your Way to a Successful Retirement: The “Whole Chicken” Approach 33
Everyday Example #3: A Holistic Business Recipe for Success 35
Notes 37
Part II: The Power of Debt in Reducing Taxes, Increasing Return, and Reducing Risk
Chapter 4: Returning to the Return You Need 43
Cash Flow and Incoming Money: The Ultimate Key to Resource Management 45
You Have to Get Your Numbers Right! 46
Regardless of Your Net Worth, Distributions Are Rarely Constant over Time in Retirement 49
How Much Can You Safely Take Out? 52
How You May Be Able to Increase Your Rate of Return 54
How Is This Possible? A Big?]Picture Overview 56
Risks and Problems 57
Everyday Example #4: Retiring the “Loan” Survivor 58
Notes 60
Chapter 5: The Power of Debt Meets Our Ridiculous Tax Code: $5.5 Million Net Worth, $240,000
Income, and $4,000 in Taxes! 61
Some Brief Preliminaries: Income versus Incoming Money 63
The Websters: A Tale That Taxes the Imagination 64
Your De Facto Tax Advisor 76
An Inconvenient Truth 77
How to Pay Almost No Taxes in Retirement: A Few More Examples 78
Everyday Example #5: “Auto” You Not Be Sure You Are Getting the Best Loan? 81
Notes 84
Chapter 6: Risk Matters More Than Return 87
Why Your Personal Risk Tolerance May Not Matter 88
A Simple Understanding of Risk 91
An Overview: “What Time Is It?” 95
A Detailed Understanding: “How the Watch Works” 97
Proof That Debt Can Reduce Your Risk in Retirement 105
Everyday Example #6: A Lot to Think About? Not Really 107
Notes 109
Part III: How to Get There: A Glide Path
Chapter 7: The World Is Full of Risk—Especially Now 113
Not Your Usual Serious Caution 114
Learning from What Companies Do—Value Liquidity! 114
What about Interest Rate Risk? Fixed versus Floating Rate Debt 117
Investment Risks: It Isn’t the Debt That Matters, It Is the Quality of Your Investment Decisions! 119
Asset Allocation and Investment Considerations 119
A Six?]Step Approach to Diversified Investing in Retirement 120
Lessons from Math and History Suggest Caution 121
Be Careful What You Watch! 124
My Opinions on Asset Allocation 126
Notes 130
Chapter 8: The Sooner the Better: Moving from Oppressive to Working to Enriching Debt 133
Understanding the Implications of These Ideas for Your Life Plans 138
Getting a Handle on Whether You Should Adopt a Strategic Debt Approach 138
The Need?]Want?]Have Matrix 139
Watch Those Ratios! A First Glide Path into Retirement 144
What If You Are Not Optimal Today? 147
Dying with Debt? 147
Final Mortgage Considerations 148
Notes 150
Chapter 9: Conclusion: Lots of Tricks and Tools 151
A Checklist Review 153
Bringing It All Together: A Strategic Debt Strategy in Action 156
A Last Word: The Value of Debt in Retirement 159
Notes 160
Part IV: Guides
Guide 1: Leaving a Legacy 163
General Giving Philosophy 164
The Benefi ts of Giving While You’re Working 167
Giving to Create Income 168
Notes 172
Guide 2: Managing the ROI of Retirement 175
Retirement “ROI”: Resources, Outer Pragmatics, and Inner Dynamics 176
Retirement Is Coming: A Holistic Roadmap of the Territory before You Retire 176
Meta?]Management against a Background of Accelerating Change 177
Staying Eff ective and Informed over Time 180
Resource Management for the Long Haul 181
Partial Retirement/Partial Income 182
You Can Test?]Run Retirement 183
Real Estate, Small Business Ventures, and Personal Guarantees 184
Medicare 185
Long?]Term Care Insurance 185
Thoughts on Life Insurance 187
Reverse Mortgages 187
How You Should (or Should Not) Factor in Inheritance 188
Outer Pragmatics: Real World Concerns, Issues, and Details 189
Legal Planning 191
Medical Planning 192
Residency Planning 192
Life Planning 193
Inner Dynamics: Meaning, Purpose, and Pleasure in Retirement 194
Sharpening the Saw 196
Particular Considerations on Retirement and ROI for the LGBT Community 197
Notes 201
Guide 3: How to Help Your Family and Buy the Stuff You Want and Need: A Reference Guide 203
Act Like a Company/Think Like a CFO 203
Principles When Financing the Purchase of a Desired Item 204
Managing Credit Card Debt 208
Helping Your Kids with Their Credit Card Debt 208
Helping Your Parents 208
Buying a Luxury Car 209
Buying a Boat/Airplane/Art/Antiques/Jewelry, Paying for a Dream Vacation, Financing a Hobby (Horseback Riding, Car Racing) 210
Paying for Fractional Ownership (Home/Plane/Boat) 211
Helping Out Our Kids and Student Loans 212
Homes: Downsizing/Moving/Building 212
Purchasing a Second Home: Pluses and Minuses 213
Rent versus Buy a Second Home 217
One Hundred Percent Financing: The No?]Down?]Payment Real Estate Purchase Option 219
Notes 221
Part V: Appendices
Appendix A: About the Companion Website 225
Appendix B: Details for Chapter 4 227
Understanding the Ideas of Chapter 4, with Charts and Tables 227
Notes 234
Appendix C: Chapter 5 Detail 235
Understanding RMDs 235
The Liger at Work Again 237
Understanding Cost Basis and a Step?]Up in Basis 244
Notes 246
Appendix D: Details for Chapter 6—A Study of Withdrawal Rates in Retirement 249
Background: How the 4 Percent Rule Came to Life 250
Trinity Study Results 251
Trinity Study: Unfortunate Timing 258
Notes 260
Appendix E: A More Detailed Discussion on Risk, Return, and Correlation 263
Notes 266
Appendix F: More Detail on ABLF, Risk Details, and Official Statement of Disclosure and Understanding 267
More Detail on ABLF 267
Statement of Disclosure and Understanding 268
With Respect to ABLFs 270
Additional Important Notes 272
Notes 275
Glossary 277
Bibliography 283
About the Author 287
Index 289
