Taking Stock

Have clients nearing retirement who are avoiding t

After a year of sudden terror and dreary markets, people are thinking more and more of what they'll do at the end of their employment.

In some cases these plans will be pushed up despite any financial schedule, when people feel life is too short to postpone retirement. Others may put their plans on hold as they review their portfolios and reevaluate the full impact of market gyrations.

We have a stack of books this month on retirement planning. Most are meant for the layman, though one or two may shed some light on topics that you may have only a passing interest in, such as 403(b) plans. Some are particularly useful for clients who have resisted discussing estate planning, or who have presented you with unrealistic goals, have minimal assets, or have an "I can't ever retire" mentality.

The Nitty Gritty

When it comes to helping clients understand retirement issues, whether it's the difference between a 401(k) and a 403(b) or how to calculate distributions and what can happen tax-wise if you don't do it right, we have five books you may want to recommend: J.K. Lasser's Winning With Your 403(b), by Pam Horowitz (John Wiley & Sons, 2001), J.K. Lasser's New Rules for Estate and Tax Planning, by Harold Apolinsky and Stewart H. Welch III (Wiley, 2002), Smart Guide to Estate Planning, by Laura Spinale (Wiley, 1999), Ernst & Young's Retirement Planning Guide, Ernst & Young (Wiley, 2001), and The Complete Idiot's Guide to Retiring Early, by Dee Lee and Jim Flewelling (Alpha Books, 2001).

Each of these books has something to offer the reader: clear, simple explanations of tough concepts, an upbeat approach to less-than-eagerly anticipated events, reality checks for retirement planning and expectations, and some of the ins and outs of the new tax law. Idiot's Guide offers sound advice on what must be done to build one's portfolio in order to leave the working world behind as quickly as possible. It also addresses the hard questions, such as how to cope with the reality of retirement, how to invest to keep your retirement income safer, and how to decide when you have enough to take the big step.

Estate and Tax Planning looks at wills vs. trusts, probate, insurance, gifting, and other strategies for minimizing estate tax. It also takes a good look at the amazing range of tax bills possible on the same estate, depending on one's strategy. Whether your client's desire is to conserve assets for heirs, make sure there's enough to support a lavish lifestyle, or leave the biggest possible chunk to charity, it's an excellent eye-opener for those who may be resisting planning for when they're no longer around.

Clients with 403(b)s who don't really understand them will feel much better after reading Winning With Your 403(b). In addition to defining a 403(b) and comparing it to other retirement vehicles, Horowitz devotes a great deal of attention to the pitfalls of 403(b) investing (many of which arise out of ignorance), the benefits of that particular type of plan, and how to manage one's account. Investment options are examined in layman's terms, as are allocation strategies to maximize returns and ways to help meet other financial goals.

Touchy-Feely Stuff

Both the Smart Guide to Estate Planning and Ernst & Young's Retirement Planning Guide offer something you might not expect to find in such practical-sounding books: deeper meanings. The former has a section on ethical wills, a fascinating concept that some clients may be familiar with. Based on an ancient Hebrew practice, the ethical will is not a legal document, but it sums up the principles that were important to you in your lifetime and sets them forth for those who come after you.

The latter book has a section on "personal and transitional issues" that includes such retirement planning aids as questionnaires to help the reader determine her attitudes toward growing older, plan for volunteer work, or clarify her values. Both books also offer good information, clearly presented, for a thorough understanding of a wide range of estate and retirement issues.

If you're really into those deeper meanings, though, you'll want to present clients with (and perhaps read yourself) The New Retirementality, by Mitch Anthony (Dearborn Trade, 2001) and How Much Is Enough? by Pamela York Klainer (Basic Books, 2002). While each author has a different approach, each looks at the issues of work and life in an invigorating way.

Anthony spends the first third of Retirementality telling the reader that our notion of retirement is based on "retiremyths"--such notions as "65 is old"; "Social Security won't be there"; "Most retirement income will be spent on doctors and pills"; "Retirement is the end of working"; and so on. He argues that we approach the concept of age differently now because of our longer lifespans and advances in medicine. Social Security is safe, he says, because "baby boomers are not victims" and will find a way out of the problem. And most of us want to work, he asserts. Even if we have to work, we should want to. This part of the book is a bit tiresome--like a cross between a rather preachy sermon and a rah-rah "Gipper" speech--but then he gets into the real meat of the book, which is fascinating.

Why, Anthony asks, should we wait until retirement to do what we want to do? He rightly points out that many people are waiting for retirement to either start a new business or pursue a career that offers more satisfaction than financial enrichment, or to develop better relationships with their families. During their working years, they pursue the path of greatest profit. If people rethink their wants and needs, however, and pay attention to what their paycheck is costing them in terms of life opportunities, they might find that it would be more worthwhile to find a way to pursue their dreams before retirement, and indeed give up the idea of retiring completely. To that end, he offers some strategies. His approach isn't for everyone, but it offers options that someone burned out at work or eager for a new lease on life might want to consider.

How Much Is Enough? looks at the question of why people continue to work when they already have the resources they need to change life paths, whether that change is into retirement, child-rearing, a new career, or cultivating a marriage.

Klainer notes that both wealthy people and poor people may have the same feelings of insecurity about money. This insecurity can affect not only their work lives but their home lives. It will also affect when, or if, they will ever feel comfortable enough to retire and abandon a regular paycheck, or saving enough from what they make to help cushion their senior years. She looks at wealthy people who have enough assets to support a retirement that is more than comfortable but who cannot leave because it's "not enough," and at those not so well off who are willing to take risks with a financial cushion of only a few thousand dollars. Klainer offers strategies to first uncover your hidden, destructive attitudes about money and then change those attitudes.

Salvage Operations

What if you have clients who are on the low end of the income spectrum, or who have utterly failed to put money away for retirement? We have a pair of books for you to consider: The Retirement Catch-Up Guide (Newmarket Press, 2000) and Bankroll Your Future Retirement With Help From Uncle Sam (Newmarket, 2001), both by Ellen Hoffman.

Catch-Up cites real-life examples of people of varying resource levels who are trying to repair past errors in planning their retirement. Hoffman's style is comfortable, easy to read, and nonjudgmental.

Bankroll points out the myriad ways that government actions affect one's retirement, and offers helpful suggestions on how to take into account those actions when planning your retirement. Whether it's health care, income, disposition of assets, or how to stay in your home in retirement, she offers clear discussions of the pros and cons.

Planning a life change of the magnitude of retirement calls for mental preparation as well as financial. So does approaching estate planning with a clear head instead of a teary "I can't bear to think about it" attitude. These books can help your clients do both.

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