Introduction 1 About This Book 2 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Getting Started with Retirement Planning 5 Chapter 1: Retirement Planning Is Up to You 7 Blazing Your Own Retirement Plan 8 Measuring Your Lifespan 9 Social Security Administration''s Life Expectancy Calculator 10 Bankrate''s Life Expectancy Calculator 11 Living to 100 Life Expectancy Calculator 13 Retirement Planning Beginnings: The Pension 13 Changing Times: The 401(k) 14 Behold the power of the 401(k) 17 An opportunity to save 18 Social Security: The De Facto Safety Net 19 Chapter 2: Determining How Much You Spend 21 Finding Out Where Your Money Goes 22 Eyeing your expenses 22 Tracking your money''s every move 23 Spending guidelines 24 Measuring Your Spending 25 Using your credit card company or bank''s online resources 25 Diving into the world of third-party apps and online tools 27 Checking out other money-tracking options 30 Doing something with all this data 32 Putting Your Spending in Context 32 Using government statistics as a guide 32 Seeing how spending changes as you age 34 Improving Your Numbers 36 Figuring out if your latte is ruining your retirement 37 Finding easy ways to stop wasting money 38 Boosting your income with a side gig 39 Table of Contents iii Chapter 3: Calculating How Much You Need to Retire 43 Getting to Know the 4 Percent Rule 44 How the 4 percent rule works 45 The magical power of the 4 percent rule 47 Shortcomings of the 4 percent rule 47 Using Online Retirement Calculators 51 Getting started 51 Exploring retirement calculators from mutual fund companies 54 Drilling in with detailed retirement calculators 56 Avoid gambling with retirement: Monte Carlo analysis 58 Understanding Why Starting Early Is Important 59 Compounding: The most powerful force in the universe 59 Inspiration to start retirement planning now 60 The race to $1 million: Doable if you start soon 61 Chapter 4: Choosing the Right Account 63 Retirement Planning in a Nutshell 63 Getting started 64 What about pensions and Social Security? 65 Things Change with SECURE Act 67 A Great Place to Start: 401(k)s 67 Advantages of 401(k) plans 67 Drawbacks of 401(k) plans 69 The Roth: An interesting twist on retirement savings 70 IRAs: A Cornerstone of Retirement Planning 71 Advantages of IRA plans 71 Drawbacks of IRA plans 73 A few IRA odds and ends 75 Self-Employed Plans 75 The spectacular SEP-IRA 76 The 401(k) for one: A one-participant 401(k) 77 Keeping it SIMPLE 77 What''s the Catch? 78 Tax-deferred isn''t tax-free 78 Beware the 10 percent early withdrawal penalty 79 Don''t mortgage your future: Retirement plan loans 79 Chapter 5: Gauging Your Appetite for Risk 81 Getting a Handle on Your Risk Tolerance 82 Determining your investor type 82 Understanding risk tolerance 84 Looking at risk tolerance differently 85 Using risk-assessment tools 86 The ABCs of Asset Classes 88 Putting stocks in a box 89 Adding bonds 91 Including a few other asset classes 92 Seeing how risk tolerance and returns work together 93 Chapter 6: Opening Your Accounts 95 Getting Your 401(k) Up and Running 96 Understanding target-date funds 98 Knowing the people involved in your 401(k) 99 Getting familiar with your 401(k) plan 99 Plugging into Your IRA 100 Knowing what you''d like to own 100 Choosing someone to handle your IRA 101 Mutual fund companies 101 Traditional and discount online brokerages 104 Robo-advisors 107 Connecting with a Financial Planner 112 Finding a financial planner 113 Deciding what is right for you 115 Part 2: Using Online Resources 117 Chapter 7: Managing and Optimizing Your 401(k) 119 Getting Online 120 Registering for 401(k) access 120 Getting to know your 401(k) tools 124 Checking your performance 125 Checking Your Portfolio Allocation 127 Understanding the key asset classes 128 Looking at your current mix without using a calculator 130 Finding your optimal asset class mix 132 Changing your asset allocation 133 Powering Your 401(k) with Contributions 135 Inspecting your current contribution level 135 Deciding how much to contribute 136 Seeing the power of putting more away 137 Discovering Other Nifty Aspects of Your 401(k) Plan Site 138 Locating information on plan loans and withdrawals 138 Digging into the statements 139 Finding various plan documents 140 Chapter 8: Taking Your IRA to the Next Level 141 Getting Online with Your IRA Provider 142 Opening your IRA account 142 Logging in and looking around 143 Understanding your portfolio holdings 145 Checking Your Portfolio Asset Allocation 145 Understanding correlation 146 Viewing your asset allocation on your provider''s website 147 Enhancing your asset allocation 148 Understanding Your IRA Contributions 152 Setting up IRA deposits 152 Roll over Beethoven: IRA rollovers 154 Funding an IRA with a Roth conversion 154 Taking Money out of Your IRA 155 Getting money out early: 72(t) distributions 156 Taking your required minimum distribution 156 Setting up a beneficiary 157 A word about inherited IRAs 158 Chapter 9: Optimizing Your Retirement with Third-Party Offerings 159 Understanding Fees 160 Improving success with lower fees 160 Knowing the types of fees 160 Uncovering the shocking truth about fees 162 Examining Your Portfolio Using Morningstar 163 Pulling up individual funds that you own 163 Putting your entire portfolio to the test 170 Grading Your Retirement Plans in Other Ways 173 Getting up close and personal with Empower 174 Going mobile with Quicken Simplifi 176 Chapter 10: Digging into Social Security 177 Discovering All the Benefits of Social Security 178 Disability coverage (SSDI): The forgotten bonus of Social Security 178 Medicare for All 180 Survivors benefits 181 Retirement benefits 181 Managing Social Security Information Online 183 Examining what you''re paying into Social Security 183 Signing up for and accessing Social Security information online 185 Understanding your history of Social Security credits 188 Planning for Social Security in Retirement 190 Claiming your Social Security benefit 191 Applying for benefits 193 Part 3: Maximizing Your Retirement Knowledge 195 Chapter 11: Balancing Other Needs with Retirement Savings 197 Cleaning Up Your Personal Balance Sheet 198 Building an emergency fund 199 Cutting loose the debt anchor 206 Opening a taxable brokerage account 211 Saving for a Home 212 How your retirement plans can help you buy a house 213 Knowing how much home you can afford 214 Budgeting for homeownership 216 Saving For College -- If You Can 217 Why your college-savings help matters 218 Choosing a college-savings account 219 Choosing a 529 provider 220 Figuring out how much you should save 221 Chapter 12: Fine-Tuning Your Asset Allocation 223 Exploring Stock Strategies 224 Understanding small versus large companies 225 Knowing where your money is: international, global, and emerging markets 227 Trusting real estate investment trusts 229 Diving for Income 231 Getting to know bonds better 232 Going to town with municipal bonds 234 Using Morningstar to study bonds 235 It''s Easy Being Green: The Rise of ESG 237 Deciding whether to include ESG in your retirement plan 238 Understanding ESG investments 239 Buying into an ESG 240 Chapter 13: Keeping Your Retirement on Track 243 Tracking Your Portfolio''s Health 244 Measuring returns and asset allocation 245 Modifying your plan 251 Tracking and Updating Your Goals 253 Assessing your goals 253 Seeing if your goals change your plans 254 Tracking retirement progress and milestones 259 Chapter 14: Gearing Up for Retirement 261 Creating a Retirement Budget 262 Test-driving your budget 262 Keeping your stock exposure 264 Waiting until 70 to collect Social Security 264 Having a healthcare plan 265 Knowing the bucket strategy 266 Working longer 266 Thinking about Annuities 268 Understanding the types of annuities 269 Finding an immediate annuity 271 Running sample annuity numbers 273 Unlocking a Goldmine: Reverse Mortgage 276 Understanding reverse mortgages 276 Understanding the drawbacks of reverse mortgages 277 Using a reverse mortgage 278 Chapter 15: Understanding Pensions 281 Checking a Private Pension''s Funding 282 Understanding the Problems with Public Pensions 283 Understanding Pensions Inside-Out 286 Choosing a lump sum versus ongoing payments 286 Choosing single life ver.