Personal Finance in Your 50s All-in-One For Dummies® Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com Copyright © 2018 by John Wiley & Sons, Inc., Hoboken, New Jersey Certain materials excerpted from: Getting the Job You Want After 50 For Dummies, Copyright © 2015 by AARP Personal Finance After 50 For Dummies, 2nd Edition, Copyright © 2015 by Eric Tyson and Bob Carlson Selling Your House For Dummies, Copyright © 2018 by Eric Tyson, Ray Brown, and John Wiley & Sons, Inc Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, 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978-1-119-47146-2 (ebk) Personal Finance in Your 50s All-in-One For Dummies® To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Personal Finance in Your 50s All-in-One For Dummies Cheat Sheet” in the Search box Table of Contents Cover Introduction About This Book Foolish Assumptions Icons Used in This Book Beyond the Book Where to Go from Here Book 1: Managing Your Career and Retirement Chapter 1: Finding a New Job after 50 Recognizing the Need for and Value of Experienced Workers Tallying the Benefits of Staying in the Workforce Reorienting Yourself to Today’s Job-Search Realities Deciding What (Else) You Want Out of Work Pursuing Your Passion and Finding Purpose Putting Proven Success Strategies into Practice Dealing with Ageism Chapter 2: Dealing with Changes in Employment Filing for Unemployment Benefits Getting Your Financial House in Order Financing Any Additional Education and Training Writing Off Your Job-Hunt Expenses Accounting for Social Security Benefits Reductions When You Work Taking Advantage of Additional Public Benefits Providing Benefits for Yourself Chapter 3: Joining the Ranks of the Self-Employed Working on Contract Launching Your Own Business Becoming a Social Entrepreneur Exploring Franchising Opportunities Chapter 4: Tracking Small Business Revenues and Costs Establishing an Accounting System for Your Business Keeping Good Tax Records for Your Small Business Chapter 5: Estimated Taxes and Self-Employment Taxes Form 1040-ES: Estimated Tax for Individuals Keeping Current on Your Employees’ (and Your Own) Tax Withholding Schedule SE: Self-Employment Tax Form 8889: Health Savings Accounts (HSAs) Chapter 6: Developing a Retirement Plan Deciding When to Retire Knowing How Much You Really Need for Retirement Eyeing the Components of Your Retirement Plan When Setting Up Your Couples Plan Crunching the Numbers Making Plans for Nonfinancial Matters Chapter 7: Grasping Retirement Accounts and Their Rules Eyeing the Characteristics of Retirement Accounts Identifying the Different Types of Retirement Accounts Rolling Over Retirement Balances Choosing Beneficiaries for Your Retirement Accounts Taking Required Minimum Distributions, or RMDs Book 2: Getting Your Affairs in Order Chapter 1: Ensuring That Your Last Wishes Are Honored What Can Happen When You Don’t Plan Your Estate Reaping the Benefits of Planning Your Estate Looking Out for Common Pitfalls Realizing What Happens If You Don’t Have an Estate Plan Creating Your Will or Trust Chapter 2: Planning Your Bequests Calculating Your Assets Determining Your Intended Heirs and Beneficiaries Thinking about Your Family Circumstances Estate Planning for Second Families Estate Planning for Your Business Appointing the People Who Will Carry Out Your Estate Plans Finding Professionals to Assist You Chapter 3: Providing for Your Children and Dependents Choosing a Guardian Managing Your Child’s Assets Providing for Your Child’s Needs Chapter 4: Writing and Signing a Will Deciding Whether a Will Serves Your Needs Exploring the Types of Wills Elements of a Will Executing a Valid Will Book 3: Dealing with Insurance Chapter 1: Seven Guiding Principles of Insurance Keep It Simple Don’t Risk More than You Can Afford to Lose Don’t Risk a Lot for a Little Consider the Odds Risk a Little for a Lot Avoid Las Vegas Insurance Buy Insurance Only as a Last Resort Chapter 2: Buying Insurance Understanding What Makes a Balanced Insurance Program Customizing Each Policy to Meet Your Unique Needs Choosing Your Professional Adviser Choosing an Insurance Company Chapter 3: Getting the Most Out of Medicare Starting Medicare: A Broad Overview of Enrollment Deadlines Understanding Part A Exploring Parts B and C Qualifying for Prescription Drug Coverage with Part D Eyeing a Medicare Supplement Resolving Some Sticky Issues Chapter 4: Introducing the Personal Umbrella Policy Discovering the Umbrella Policy’s Major Coverage Advantages Coordinating an Umbrella with Your Other Insurance Determining How Many Millions to Buy Book 4: Handling Budgets and Investments Chapter 1: Protecting Your Employment Income Assessing Your Need for Life Insurance Protecting Your Employment Income: Disability Insurance Investing In and Protecting Your Health Chapter 2: Managing Budgets and Expenses Pointing Out Some Retirement Worries You May Have Spending Your Nest Egg How Spending Really Changes in Retirement Managing Your Expenses Chapter 3: Guiding Investments and Distributions in Retirement Guiding Your Investments through Retirement Looking Closer at Annuities Choosing Your Pension Options Eyeing Withdrawal Strategies for Your Investment Accounts Chapter 4: Making Your Best Choices under Social Security The Lowdown on Social Security Determining When You’re Eligible for Benefits Taking a Closer Look at Spouses’ and Survivor Benefits Identifying When You May Need to Receive Benefits Noting How Working Reduces Benefits Preserving Your Benefits Being Aware of Potential Income Taxes on Your Benefits Changing Your Mind: A Do-Over Looking at What the Future Holds for Social Security Book 5: Planning Your Estate Chapter 1: Yes, You Have an Estate What Is an Estate? Why You Need to Plan Your Estate Why Your Estate-Planning Goals Are Different from Your Neighbors’ The Critical Path Method to Planning Your Estate Getting Help with Your Estate Planning Chapter 2: Bean Counting: Figuring Out What You’re Worth Calculating the Value of Your Real Property Calculating the Value of Everything Else: Your Personal Property Dead Reckoning: Subtracting Your Debts from Your Assets Giving Gifts throughout Your Life to Reduce Your Estate’s Value Calculating Adjustments in Your Estate’s Value Due to Life Changes Chapter 3: Probate and How to Dodge It Probing Probate: What You Should Know Knowing the Good, the Bad, and the Ugly of Probate Streamlining the Probate Process Appointing Your Person in Charge Thinking Things Through When Someone Asks You to Be a Personal Rep Understanding Will Substitutes Sorting through the List of Will Substitutes Identifying Some Less Common but Worthy Will Substitutes Chapter 4: Understanding Trusts Defining Trusts, Avoiding Hype Trust Power — Making Your Beneficiaries Smile Sorting Out Trusts — from Here to Eternity Chapter 5: Minimizing Estate-Related Taxes Figuring Out Where You Are Today Fortune-Telling: Picturing the Future as Best You Can Hmmm … Deciding on Strategies and Trade-Offs Putting Together a Comprehensive Estate-Related Tax Plan Book 6: Tapping Into Your Home’s Value Chapter 1: Making Important Housing Decisions Analyzing Moving Tapping Your Home’s Equity: Reverse Mortgages Looking at Tax Issues Regarding Your Housing Decisions Chapter 2: Reverse Mortgages for Retirement Income Grasping the Reverse Mortgage Basics Shopping for a Reverse Mortgage Deciding Whether You Want a Reverse Mortgage Chapter 3: Deciding to Sell Figuring Out if You Really Need to Sell Knowing the Health of Your Housing Market Chapter 4: Exploring the Economics of Selling Estimating Proceeds of Sale Assessing the Financial Feasibility of a Move Chapter 5: Determining Your House’s Value Defining Cost, Price, and Value Determining Fair Market Value (FMV) Using a Comparable Market Analysis Bidding Wars About the Authors Connect with Dummies Index End User License Agreement witnesses to will, 188 SelectQuote (website), 253 self-employed retirement savings plans, 117–118 self-employment about, 49–50 contract work, 50–54 franchising, 69–74 launching your business, 55–65 social entrepreneurs, 65–69 taxes See estimated taxes; taxes self-insured retention (SIR), 240–241 self-proving will, 179, 180 selling assets, 36 capital assets, 323 housing, 455–468 Selling Your House For Dummies (Tyson), 454 Senior Entrepreneurship Works, 60 senior fitness trainer, as a business idea, 59 SEP-IRA (Simplified Employee Pension Plan, Individual Retirement Account), 45, 118 Serve America Act, 40 settlor, 388, 399 setup record-keeping system, 81–82 trusts, 426 shared housing, 274 side fund, 312 signing wills, 187, 188 Silver Scholarship Grant Program, 40 Simple IRA, 45 Simplified Employee Pension Plan, Individual Retirement Account (SEP-IRA), 45, 118 single-life option, for pensions, 294 SIR (self-insured retention), 240–241 Skees, Bill (business owner), 16 skill building, writing off, 43 skilled labor jobs, 19 skilled nursing facilities, under Medicare Part A coverage, 213 Skillshare, 52 Small Business Administration (SBA), 53, 60, 72, 74 Small Business Investment Company program, 63 small estate affidavit, 372 Smart Money (magazine), 348 SNPs (special needs plans), 221 social entrepreneurs about, 65–66 help for, 69 nonprofit start-up to-do list, 66–68 Social Security about, 297–299 benefits of, 43–44, 101–103, 108, 272–273, 299 do-overs, 324–325 eligibility for, 300–304 future of, 325–327 income taxes on benefits, 319–324 preserving benefits, 316–319 receiving benefits, 310–314 reducing benefits, 314–316 spouses' and survivor benefits, 304–310 survivor's benefits, 251 website, 300, 301 Social Security Administration (SSA), 101–103, 251, 314, 318 Social Security benefits about, 43–44 in retirement assumptions, 108 as a retirement plan component, 101–103 taxes on, 272–273 software development jobs, 18 sole proprietorships defined, 80 inheritance of, 154–155 Solo 401(k), 45 special income, 319 special needs plans (SNPs), 221 special needs trust, 147, 170 speed, as an advantage of joint tenancy, 385 spending after retirement, 269–271 nest eggs, 267–268 spendthrift trust, 147 spouses benefits to, 304–310 leaving estates to, 424 SSA (Social Security Administration), 101–103, 251, 314, 318 SSI (Supplemental Security Income), 451 Stafford loan, 37 Standby HECM, 437 standing exercises, 260 Starting a Business All-In-One For Dummies, 55, 257 starting Medicare, 208–209 Startup Nation, 60 state economic development agencies, financing with, 64 state income tax, 82–83 statutory will, 177 step therapy, 227 step-type moves, 260 stock certificate, 337 stock options, 359 strategies for estate planning, 421–425 for success, 21–27 stress management, 261 subscriptions expenses for, 279 writing off, 42 subtracting debts from assets, 359–360 success stories/strategies, 16, 21–27 succession plan, 153, 154 successor trustee, 388, 401 successors, choosing, 158–159 summary probate, 372 Supplemental Security Income (SSI), 451 supporting others, 264–266 surtax, 217 survivor benefits, 304–310 T T Rowe Price Web-based Retirement Income Calculator, 107–108 tailor, as a business idea, 59 tangible personal property, 356–358 tangible personal property memorandum, 185, 336 tax basis, 423 Tax Benefits for Education Information Center (website), 37 tax breaks, leveraging, 41 tax credits, 275 tax tables, checking, 413–414 taxable bonds, 323 taxes benefits of retirement accounts, 114–115 deductions for moving costs, 475 as a disadvantage of joint tenancy, 385–386 estate, 144, 153, 417–418 estate plans and, 138 estate-related, 411–427 estimated quarterly income taxes See estimated taxes Form 8889: Health savings Accounts (HSAs), 93–95 housing and, 439–440 income, 78–79 keeping records, 80–83 managing, 272–273 paying, 375–376 payroll, 78–79, 326 probate and, 370 property, 273, 471–472 rebalancing investments, 283–284 reducing, 79–80 Schedule SE: Self-Employment Tax, 90–93 Social Security benefits, 313, 319–324 state, 82–83 traps for, 414–415 trusts and, 403 withholding, 89–90 tax-exempt bonds, 323 tax-exempt interest income, 320 Technical Stuff icon, telephone costs, 276 television, bundling with Internet, 276 tenancy by the entirety, 393 tenants in common, 384 term life insurance, 252 Term4Sale (website), 253 terms, of reverse mortgages, 437–438 testamentary trust, 387, 405–408 testamentary will, 178, 179 TheLadders (website), 12 third-party closing costs, for reverse mortgages, 449 Thrift Savings Plan, 117 time commitment with self-employment, 67 tracking for contract work, 54 will substitutes and, 381 timeshare, 355 Tip icon, title transfer, as an advantage of joint tenancy, 384 total annual rate, 450 tracking time for contract work, 54 trade-offs, 24, 421–425 Trading Options For Dummies, 3rd Edition (Duarte), 359 training financing, 36–41 getting, 26–27 transaction costs, rebalancing investments, 284 transfer tax, in closing costs, 471 transfer-on-death provision, 177 transferring retirement accounts, 119 translator jobs, 19 transportation, expenses for, 277 travel, expenses for, 278 travel accident insurance, 196 Trawinski, Lori (author) “The Long Road Back: Struggling to Find Work after Unemployment,” 21, 22, 24 trust, living about, 143, 387, 403 advantages of, 389–391 costs of, 392 disadvantages of, 391–392 paperwork for, 388–389 roles in, 387–388 trust agreement, 400 trust principal, 387, 390 trust property, 399 trustee, 156–158, 388, 400 trustor, 399 trusts about, 397–398 beneficiaries of, 402–405 categorizing, 405–500 checklist for, 400–402 components of, 398–399 creating, 140–144 defined, 124 holding assets in, 152 setting up, 426 terminology, 399–400 turnover, 9–10 two-thirds joint and survivor option, for pensions, 294 Tyson, Eric (author) Investing For Dummies, 119 Personal Finance After 50 For Dummies, 35 Personal Finance For Dummies, 348 Selling Your House For Dummies, 454 website, 260 U Uber (website), 36 unemployment benefits, filing for, 32 Unhappy Franchisee, 74 Uniform Probate Codes (UPC), 368 Uniform Transfers to Minors Act (UTMA) trust, 169 unmarried couples, 387 UPC (Uniform Probate Codes), 368 upside down, as a homeowner, 464 U.S Department of Education (website), 38 U.S Department of Labor, 78, 477 utilities, as an expense, 275–276 UTMA (Uniform Transfers to Minors Act) trust, 169 V value calculating for personal property, 356–359 calculating for real property, 354–356 of estate, 412 of housing, 482–483 Van Slyke, David M (professor), 56 variable annuity, 286 variable life insurance, 252–253 vegetables, heart health and, 259 venture capitalists, 63 vested interest, 339 video, for insurance inventory, 192 voice-over actor/artist, 58 volunteering, 23, 112 VolunteerMatch (website), 112 W waiting period, in LTD, 256 Warning icon, water bill, reducing, 276 websites AARP Foundation, 26 AARP's LifeReimagined, 58, 59 Accion, 63 AccuQuote, 253 American Association of Franchisees & Dealers (AAFD), 73 American Chamber of Commerce Research Association (ACCRA), 477 American College of Trust and Estate Counsel (ACTEC), 160 American Franchisee Association (AFA), 73 American Institute of Certified Public Accountants (AICPA), 160 Association of Small Business Development Centers, 60 Bankrate, 34 Bizstarters, 52 Blue MauMau, 74 The Bridgespan Group, 69 Bureau of Labor Statistics, 27–28 BusinessUSA, 62, 64 Certified Financial Planner Board of Standards, 35 Certified Public Accountant/Personal Financial Specialist (CPA/PFS), 350 Cheat Sheet, The Chronicle of Philanthropy, 69 College Savings Plans Network, 38 CommonGood Careers, 69 Consumer Financial Protection Bureau, 38–39 coverage gap, 226 Edvisors, 38 eHealth, 47 Elance, 52, 58 Encore.org, 69 Fastweb, 40 Federal Trade Commission (FTC), 74 FinAid, 38, 40 Financial Planning Association, 35, 348 Fiverr, 52 flood insurance, 195 Franchise Registry, 73 FRANdata.com, 73 Freelancer, 52 Fundingcircle.com, 63 Garrett Planning Network, 35 Gofundme, 63 GoHealth, 47 Grants.gov, 64 Guides.co, 52 GuideStar, 69 Guru, 52 Healthcare.gov, 46 HourlyNerd, 52 “How Work Affects Your Benefits,” 44 HUD-approved counselor, 453 Idealist, 69 Independent Sector, 69 Indiegogo, 63 insurance company grades, 206 Insure.com, 47 International Franchise Association (IFA), 74 IRS, 37, 78, 86, 89, 126, 169, 413, 440 IRS Publication 521, “Moving Expenses,” 42 IRS Publication 587, “Business Use of Your Home,” 43 IRS Publication 915, “Social Security and Equivalent Railroad Retirement Benefits,” 321 IRS Publication 970, “Tax Benefits for Education,” 41, 43 job, 17 job search tips, 23 Kauffman Foundation's FastTrac Boomer Entrepreneur program, 60 Kickstarter, 63 Kiva Zip, 63 Lawrence N Field Center for Entrepreneurship, 60 life insurance, 253 LifeReimagined, 58, 59 Lyft, 36 Medicare, 207, 215, 228 Medicare & You, 215 Mint, 34 National Association of Health Underwriters, 47 National Association of Personal Financial Advisors, 35 The National Council of Nonprofits, 69 NetQuote, 47 Onevest, 63 PayScale, 477 The Pink Fund, 68 public benefits, 44 Public Service Loan Forgiveness Program, 39 ReliaQuote, 253 retirement account retrictions, 116 Rockport Institute, 58 SCORE, 60 Securities and Exchange Commission (SEC), 349 SelectQuote, 253 Senior Entrepreneurship Works, 60 Skillshare, 52 Small Business Administration (SBA), 53, 60, 72, 74 Small Business Investment Company program, 63 Social Security, 300, 301 Social Security Administration (SSA), 101, 103, 251, 314, 318 Startup Nation, 60 T Rowe Price Web-based Retirement Income Calculator, 107 Tax Benefits for Education Information Center, 37 Term4Sale, 253 TheLadders, 12 Tyson, Eric (author), 260 Uber, 36 Unhappy Franchisee, 74 U.S Department of Education, 38 U.S Department of Labor, 78, 477 VolunteerMatch, 112 WorkCoachCafe, 12 You Need a Budget, 34 weight lifting, for health, 260 What Americans Really Want…Really (Luntz), 266 What Color Is Your Parachute? A Practical Manual for Job-Hunters and Career-Changers (Bolles), 257 whole life insurance, 252–253 will substitutes about, 380–381 defined, 368 types of, 382–395 Williams, Jeff (CEO), 52 wills about, 173 benefits of, 174–177 creating, 140–144 elements of, 181–187 executing, 187–188 types of, 177–180 withdrawals, from investment accounts, 294–295 withholding about, 89 defined, 86 filing for employees, 89–90 Form W-4, 89 witnesses, choosing for will, 188 word of mouth, for finding insurance agents, 203 work deciding what you want out of, 13–14 meaningful, 14 WorkCoachCafe (website), 12 workforce benefits of staying in the, 11–12 current, work-life balance, 14 worth about, 353 calculating adjustments due to life changes, 360–361 calculating value of personal property, 356–359 calculating value of real property, 354–356 giving gifts, 360 housing, 470 knowing your, 54 reducing value with gifts, 360 subtracting debts from assets, 359–360 writing business plans, 61–62 writing off job-hunt expenses, 41–43 Y You Need a Budget (website), 34 WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA ... 978-1-119-47146-2 (ebk) Personal Finance in Your 50s All -in- One For Dummies To view this book's Cheat Sheet, simply go to www .dummies. com and search for Personal Finance in Your 50s All -in- One For Dummies. .. Agreement Introduction Welcome to Personal Finance in Your 50s All -in- One For Dummies! So, you’ve hit your 50s, your job is fulfilling and lucrative, your kids got full-ride scholarships to college, your. .. Creating Your Will or Trust Chapter 2: Planning Your Bequests Calculating Your Assets Determining Your Intended Heirs and Beneficiaries Thinking about Your Family Circumstances Estate Planning for