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 How much income do you need?
 Usually 60 to 80 percent of pre-retirement
          Keep the House?
 Equity is the property’s market value
  minus the amount of the mortgage not yet
 Reverse mortgage is a loan against the
  equity in the borrower’s home in which
  the lender makes tax-free monthly
  payments to the borrower. The loan must
  be repaid when you sell home.
   Are people who receive property from
    someone who has died.
What type of investment strategy?
   Usually low risk
       How much insurance?
 Need medical insurance and other types.
 Medicare does pay health insurance over
  65, may be 67 for you.
 Medicare is government run health
               Beat inflation
   Is the goal of retirement investing.
           Estate Planning
 Estate- is all that a person owns, less
  debts owed, at the time of the person’s
 When people die, their possessions pass
  to other people, either as directed by the
  person who died (called the decedent), or
  by the laws of the state in which the
  person died.
              Estate Planning
   Is preparing a plan for transferring
    property during one’s lifetime and at one’s
   Is a legal document that tells how you
    want your estate to be distributed after
    your death.
   A person to carry out the transfer of your
    estate when you die.
 The person who makes the will.
 Any person who is 18 or older and of
  sound mind can make a legally valid will.
        5 requirement of a will
1)   Sound Mind
2)   Must be written
3)   Testator must sign
4)   Must have a witness
5)   Must be notarized
             Types of Wills
 Simple Will
 Holographic Will – Valid in 19 States
               Will Terms
 Intestate – people who die without a will.
 Codicil – lists the modifications and then
  reaffirms a previous will.
 Beneficiary – Receives property.
           Power of Attorney
   Is a legal document authorizing someone
    to act on your behalf.
 Is a legal document in which an individual (the
  trustor) gives someone else (the trustee) control
  of property, for ultimate distribution to another
  person (the beneficiary).
 Living Trust – inter vivos
 Testamentary Trust – takes effect upon the
  death of a trustor. Valuable for minor children or
  if you wish to avoid high taxes on your estate.
    When should a child receive an
   What age?
 Is a court supervised process of paying
  your debts and distributing your property
  to your heirs upon your death.
 An attorney is required.
 Property held in trust is not subject to
    Ownership? who gets what at
 Joint Ownership
 Right of Survivorship – Living Spouse
  automatically becomes sole owner.
 Ownership Singly – Asset becomes part of
              Estate Tax
 The Federal Government Tax estates.
 Tennessee has inheritance tax estates
  after 1 million.
                 Gift Tax
 Is a tax on a gift of money or property, to
  be paid by the giver, not the receiver, of
  the gift.
 You can give up to 11,000 without paying
  gift tax.
          Retirement Accounts
   Individual Retirement Account (IRA) –
    savings plan for retirement that has a
    fixed amount per year, and can’t be
    withdrawn until age 59.5 or later.
            Types of IRA’s
 Traditional IRA – Delay paying taxes on
  contributions, withdrawals will be taxed.
 Roth IRA – Contributions are taxed now,
  but withdrawals will not be taxed.
 Education IRA – IRA for qualified school
             Keough Plan
 Is a tax-deferred retirement savings plan
  available to self-employed individuals and
  their employees.
 Is restricted to $30,000 or 25 percent of
  earned income in any one year, whichever
  is less.
 Contributions fully tax deductible and
  earnings are tax-deferred.
 Simplified Employee Pension – Authorized by
  Congress to encourage smaller employers to
  establish employee pension plans with IRAs as a
  funding method.
 The employer makes an annual tax deductible
  contribution of up to 25 percent of the
  employee’s salary or $40,000, whichever is less.
 Employee contributions to these plans are tax
   Is an insurance company investment that
    provides a series of regular payments,
    usually after retirement.
    Employer Sponsored Retirement
 Defined-benefit plan
 Defined-contribution plan
 401(k) Plans – (Profit Companies Plan)
  employees choose a percentage of salary
  they want to contribute to account. It is
  not taxable until withdrawn.
 403(b) Plans – Government or not for
  profit business. Much like 401(k)
     Government Retirement
 Social Security Benefits – Is safety net,
  not meant to be one’s only retirement.
 Maximum benefits start at 65, possibly 67
  for you.
 Can receive reduced benefits at 62.
           Military Benefits
 Retired Military receive benefits after 20
 Receives pension without regard to other
   Entitled to the full amount of the plan.

   This is a word to know, very important.