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From: Mike Hebel <Mike©sfpoa.org >To: Rosano, Salvatore' <[email protected] >Date: Monday, August 327, 26195603 11:05 AMSubject: Re: Picture and Blo for CPCA Conference
S enaratelv to sairosano@aoi COflI.
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lacticino actornev, since 1974 spi. CiOliZiOS; in e:oolmr..eslH.uries, workers
H S .1ec:or retirement law, administrative law, and labor law. His prinlasy 555
s I. C .. ansi. :ft-putv sheriffs emplo yed by the Cl:s and ,:tcuntv of 1/an Francisco. He has
: .:. 577 di sabilitv retirement and industrial death case as the ttSF Retirement• state bar certified specials'- in wor cr5 compensacion law.
isiod r i nan0 iai pme (CEP) bi s teisioua onHavo
.1 s.afe tv officers with 457 deferred compensation accumuawtiCn and distribution
..........obby Mike is a meser of 6 investment •olubs I of which he serves as president and
limited to active/retired police officers.
...isv-os serve as the welfare officer for the San Francisco Police Officers Asso. In
- YeaL :psehens e a a awent 1 s m awia o: m
shorter seminars for other OCSF public safesy memt.es
55.55.:. :50 on his own retirement goals. Four 7:ears Soc he ano his wife (77v opened a large
in n Fo i The oppig I the 1/non awis ls
- Ion n1 isiolizes i 1 siwn OH iii sn le and
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• S . o:T..:r..::s awry financial plan
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t 175.1 s/Mo HSlO5 for successful retirement
- SO 5:55 sour next IC) years?
so Ce ..•r financial preparedness and advanced planning in ret Crement sa.tiefaccion
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....anduoit materlal . Please let me knos.: _5.s aporoolo.sts- SOHi1.........:r at 1 coOing thIs
tafore I do it. Thanks Mike
:rs slaivatore.P.osano4nhtsa .cho
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Page 1 of 2
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an fetswar( Cc'-p ly o Ar'enca 20 Fary Aveni South New Yore NY 10003
I really think it's better to retire whenyou still have some snap in your garters.
—RUSSELL B. LONG
Company founders look upon retirementas something between euthanasia andcastration.
—LEON A. DANCO
TA/ho knows whether in retirement Ishall be tempted to the last infirmity of
mundane minds, which is to write a book.—GEOFFREY FISHER
THOUGHTSOn the Business of Life
O
rganized money-raising efforts are now under way to build a retirement home in
Florida for aged rockers. Is it that long ago it all began?As a NewYork Times editor-ial noted, "Rock-and-roll lyrics were always about endless summers, bitters weet young
love and rocking till a quarter to three. If anybody died, it was in a car crash and, as often as not, in a
lover's arms. Did anyone ever think then about things like retirement and dying in poverty?"
—MALCOLM S. FORBES (1988)
I prefer to leave standing up, like awell-mannered guest at a party.
—LEONTYNE PRICE
My voice had a long, nonstop career.It deserves to be put to bed with quietand dignity, not yanked out every oncein a while to see if it can still do what itused to do. It can't.
—BEVERLY SILLS
Lord Tyrawley and I have been deadthese two years, but we don't chooseto have it known.
Men and women approaching retirementage should be recycled for public servicework, and their companies should footthe bill. We can no longer afford toscrap-pile people.
—MAGGIE KUHN
As to that leisure evening of life, I mustsay that I do not want it. I can conceiveOf no contentment of which toil is notto be the immediate parent.
—ANTHONY TROLLOPE
Cessation of work is not accompaniedby cessation of expenses.
Walk sober off before the sprightlier ageComes titt'ring on, and shoves you from
the stage.—ALEXANDER POPE
Ifyou keep working you'll last longer.I'd hate to spend the rest of my life tryingto outwit an 18-inch fish.
—HAROLD GENEEN
It is very grand to "die in harness,"but it is very pleasant to have the tightstraps unbuckled and the heavy collarlifted from the neck and shoulders.
—OLIVER WENDELL HOLMES SR.
A Text..And whatsoever ye do, do it
heartily, as to the Lord, and not
unto men.—COLOSSIANS 3:23
Sent in by Nornsan Chapin, Newnan, Ga. What's
your favorite text? The Forbes Book of Quota-
tions: Thoughts on the Business of Life is given to
senders of Bible texts that are used.
More than 14,000 "Thoughts," arranged alphabetically bysubject, are available in a 955-page, one-volumedeluxe edition, Forbes Book of Quotations: noughts on theBusiness of Life. The price is $40, plus $3.50 shipping and$1 per item for handling (add applicable soles tax).To order, please call toll-free, 1-800-876-6556.—LORD CHESTERFIELD —CATO THE ELDER
February 3,2003 • Volame 171 *Number 3 FORBES (ISSN 0015 6914) is published biweekly, monthly in August, with an extra issue in September, by Forbes Inc.. 60 Fifth Ave., New York, N.Y. 10011.Periodicals postage paid at New York, N.Y. and at additional mailing offices. Canadian Agreement No. 40036469. GST # 12576 9513. RT. POSTMASTER: Forbes Subscriber Service is llavailable online. To subscribe, change your address, or for other assistance, please visit www.forbes.com/customerservice . Or write to Forbes Subscriber Service, P.O. Box 5471, Harlan, LA51593-0971. MAILING LIST: We make a portion of our mailing list available to reputable firms. If you prefer that we not include your name, please write us. Copyright © 2003 Forbes Inc.All rights reserved. Title is protected through a trademark registered with the U.S. Patent Office.
132 F 0 R B E S February 3; 2003
PAGE
A+Auto&Home Insurance (Cal Casualty) 7Antioch, City of 49BART 46Blackwater Target Systems 37Brentwood, City of 45CA Aviation Services 37CA Rural Crime Conference 28CAHP 2&32Cantrell, Green, Pekich, Cruz & McCort 14CenterPointe Lending 28Chandler, John P., Law Offices of 35Chenega Technical 49Children's Network 25Coploans.com 35COPSWEST 8Davidson's 56Dean Security 39Diablo Valley Express Lending 42ERS 34Financial Firm 34 & 45Foley's 10GentiayJewelry 43Gillette, Norman, Law Offices of 42Global Rings 15Hartford Financial Services Group 13JanCampbel! 11Jones, Rodney - Attorney 10Kelly, Timothy, Law Offices of 39Lackie & Dammeier 15Liberty California Mortgage 9Mastagni, Holstedt & Amick 22Myers-Stevens'10&39Napa, City of 49Nice Shot 41O'Donnell Chevy 33O'Mara, Scott, Law Offices of 6Ontario Dodge 33Parker-Robb 33Performance Group 35 1Police and Fire Home Loan Program 31PORAC's 51st Annual Conference 26 & 27PORAC Merchandise 29PORAC News 48PORACTraining Schedule 47PORAC Web Site 8 & 22Rains, Lucia & Wilkinson, LLP 12Rocklin, City of 45Simi Valley, City of 46So. Illinois University 45 -Stone, Michael P., Law Offices of 13Stone Ridge Recreational Living 23Taft University 45Ted Blocker Holsters 39UCBerkeley 44Union Institute 55Village RV 32West Coast Post Trauma Retreat 28
Are you part of the 3%@50 Club?If your agency has already obtained this benefit, but your name does not appearbelow, please let us know at PORAC and we will be happy to odd your association'sname to the list. Please contact Claude Alber, PORAC's labor consultant, at 1-800-937-6722, or e-mail him at [email protected]
These 242 agencies have verified that they have 3%@50:
Alameda El Monte Marysville San CarlosAlhambra El Segundo Menlo Park San DiegoAlpine County Escalon Merced San Diego Co.Amador County Escondido Milpitas San Diego HarborAnaheim Eureka Modesto San Diego SchoolsAntioch Fairfax Modoc Co. San FernandoArcadia Fairfield Mono Co. San GabrielArcata Folsom Monrovia San Joaquin Co.Atherton Fontana Montebello San LeandroAuburn Fontana Schools Monterey San Luis ObispoAzusa FortunaMonterey Co. San MarinoBakersfield Foster CityMonterey Co. Prob. San MateoBanning Fountain Valley Monterey Penn. Air. San Mateo Co.BART Fremont Morgan Hill Santa AnaBeaumont FullertonMorro Bay Santa Ana SchoolsBell Garden Grove Mountain View Santa BarbaraBelmont Gardena Murrieta Santa ClaraBenicia Gilroy Napa Santa Clara Co.
Santa CruzBerkeley Glendale Napa Co. Beverly Hills Glenn Co. National City Santa Cruz Co.
SantaSanta MariaBishop Grass Valley Nevada City Santa MonicaBlythe Gridley Nevada Co. Santa PaulaBrawley Half Moon Bay Newark Santa RosaBrea Hawthorne Newman Scotts ValleBrentwood Hayward Newport Beach Seal BeachBuena Park Healdsburg Oakland SeasideBurbank Hermosa Beach Oceanside SebastopolButte Co. Hillsborough Ontario Shasta Co.Calaveras Co. HollisterOrange Signal HillCalifornia City Humboldt Co. Orange Co. Siskiyou Co.Cal.State Univ. Police Huntington Beach Orange Co. Prob. SonomaCampbell Huntington Park Orland Sonoma Co.Capitola Imperial Co. Oxnard SonoraCarlsbad Indio Pacific Grove South GateCarmel Inglewood Palm Springs South Lake TahoeCeres lnyo Co. Palo Alto Stanislaus Co.Chico Irvine Palos Verdes Estates St. HelenaChino Irwindale Paradise Stockton(hula Vista JacksonPetaluma Suisun CityClearlake Kensington Pittsburg SunnyvaleCloverdale Kern County Placentia SusanvilleClovis LA City Schools Placer Co. Sutter CreekColton La Habra Placerville TorranceColusa Co. La Mesa Pleasant Hill TracyConcord La Verne Pleasanton TruckeeContra Costa Co. Lincoln Pomona Tuolumne Co.Corning Livermore Redding TurlockCorona LodiRedlands UkiahCosta Mesa Lompoc Redondo Beach Union CityCotati Long Beach Richmond UCalif: Police
VacavilleCovina Los Alamitos Riverside VallejoCulver City Los Altos Riverside Co. VenturaCypress Los Banos Rocklin VisaliaDavis Los Gatos Roseville Walnut CreekDos Palos Madera Sacramento West CovinaDowney Mammoth Lakes Sacramento Co. WestminsterEast Bay Rgn. Parks Manhattan Beach Salinas WhittierEl Cajon Manteca San Anselmo WilliamsEl Cerrito Mann Co. San Bernardino Co. WillowsEl Dorado Co. Mariposa Co. San Bruno Yuba City
54 PORAC Law Enforcement News • JULY 2003
U25...
I 14 I 0* 11*^ Medicaid budget diverted
from the long-term care n eeds
of the indigent population to
pay for nursing home care forBANK Jthe nonincligent
67.3.... ...Percentage of a home's 190,000... 5...purchase price being Forecasted average annual Percentage of total nursing
borrowed by the average cost, in dollars, of a nursing home care expenses paid for
home buyer in 2001,versus home stay in 30 years by long-term care insurance
41.3 percent 20 years ago )Department of Labor) T / (The Levy Economics Institute)
(AEW capital Management)
44 .4A 70009 ,
6 so Percentage of retirees who take Record number of mutual funds
Percentage of home values in Social Security before age 65 that ceased operation in 2002
2002 consumed by mortgage Wall Street Journal (Money)
debt,versus 30.1 percent 20 39years before(Federal Reserve)Percentage of total U.S. Percentage of retirees who left
nursing home patient days the workforce earlier than they
paid in at least part by planned, mostly due to health
Number of states where half the Medicaid problems and layoffs
baby boomer population live (The Levy Economics Institute) (Employee Benefit Research Institute)
(MetLife)
Financial Planninga Distant Third Place...
Financial planning as a vol-
untary employee benefit ranks
a distant third place among em-
ployees, according to a survey
by MetLife of the most popular
voluntary benefit programs.
An increasing number of
employers are offering volun-
tary benefits and nearly six in
ten workers are buying some of
the benefits. The most popular
benefits used by employees are:
Why Do People L----Retire?...
The National Council on
the Aging asked people over
age 65 who considered them-
selves "retired" what was themost important reason or rea-
sons they decided to retire.
The biggest reason was quali-
fying for Social Security, cited
by 72 percent. Other reasons:
• 71 %—Accumulated savings
• 50%—.Reached a specific
age
• 46%—Family reasons
• 400/o—Decline in health
• 20%--Pressure fromemployer
Among those over age 65,
58 percent considered them-
selves completely retired, 2
percent said they were retired
and working. and 19 percent
said they were not retired.
For a brochure on the report,
go to htriv//206.112.84.147/
content. cfm?sectionlD 93 &
detail = 96
life -
Long-term careinsurance :
Financial pIanning
Auto insuranc,
29 college savingplans
20% 30% 40%
tion.You have to own assets
rifortable with everything yot
ant and author, CBS Market Watch
Journal of Financial Planning /July 2003
Life Life LifeAge of expectancy Age of expectancy Age of expectancybeneficiary (in years) beneficiary (in years) beneficiary (in years)
0 82.4 36 456 76 12i
1 81.6 39 44.6 77 12.1
2 80.6 40 433 78 11.4
3 79.7 41 42.7 79 10.8
4 78.7 42 41.7 80 102
5 77.7 43 40.7 81
6 76.7 4.4- : 11- 39.8 82
7 75.8 45 38.8 83 13.6
8 748 46 379 64 8.1
9 73.8 47 37.0 85 7.6
10 72.8 48 36 0 86 7.1
11 71.8 49 35.1 87 6.7
12 70.6 50 . 341 58 6.3
13 69.9 51 33.3 89 5.9
15 67.9 53 31.4 91 5.2
16 86,9 84 305 92 4.9
17 66.0 55 29.6 93 4.6
85.0 66
19 64.0 57 27.9 95 4.1
20 27.0 98
21 62.1 59 26.1 97 3.6
22 61.1 80 2S 98 34
23 . 60.1 61 24.4 99 3.1
24 59.1 62 y, - 23.5 100 2.9
25 58.2 63 22.7 101 2.7
21.8 102 2.5
27 56.2 65 21.0 103 2.3
28 553 66 201 104 2.1
29 54.3 67 19.4 105 1.9
30 5 88 18.6 106 ) .131 52.4 69 17.8 107 1.5
51.4 70................17.0 108 1,4
33 50.4 71 16.3 109 1.2
34 - 494 72 153 110 . 1.1
35 48.5 73 14.8 111+ 1.0
473 4 . .. . 1.4 Source: Ed Sioft's IRA37 46.5 75 Advisor
M.
H_
BRADLEY J.WILLCOX, MD- BETH ISRAEL DEACONESS MEDICAL CENTER
From theWorld's
Longest-Lived±7People
New grads who can't find jobs
should try internships, we hearfrom career adviser Nella Barkley.Opportunities remain plentiful despite
the downturn. Find out about programs
from college placement offices. Evenbetter: Target an organization and
design a project with defined, measura-ble objectives. Examples: Marketing—compare a company's Web site with thecompetition's. Corporate communications—interview new hires for the employeenewsletter. Political science—monitor acandidate's volunteer network.
Nella Barkley is president of Crystal-BarkleyCorporation, career-management drm, New York cmand author of The Crystal-Barkley Guide to TakingCharge of Your Career (Workman).
Religion-based scams are on therise, says Marc Beauchamp, whose
organization represents state securities
regulators. In the past three years, more
than 90,000 investors have been swin-
dled out of almost $2 billion. A scammer
joins a church, rises to a position of in-fluence and convinces members his/
her investment strategies are divinelyinspired. Some convince churches to
unwittingly help them recruit investors,claiming a portion of profits
will go to a
worthy cause. Investments range fromprecious metals to promissory notes. Self-defense. As with any investment, makesure the seller and investment company
are licensed and registered in your state.Obtain a prospectus. Ask a trusted pro-
fessional to evaluate any investmentMarc Beauchamp is executive director of North
American Securities Administrators Association, Inc.(NASAA), Washington, DC. www.iuzsaa.org
Suspicious activity to watch out
for, from security consultant TanyaDeGenova. People you don't recognizesitting for long periods in a car in yourneighborhood.. .strangers loitering byyour office building taking notes, mak-ing sketches or asking questions. Some-one with a bulge under his/her coat—especially in large crowds, on subways,etc.—which could indicate weaponspossession. Important: Report suspi-cious activity to the police. Describe the
people—height, weight, age, hair and
clothing color and bags they carried. Ifpossible, take the car's license plate
number. And: Do not open, shake ormove packages or open large envelopes
if you're not familiar with the sender.Tanya DeGenova former FBI agent, is president of
TSD Security Consulting Group Inc.. Boston. www.tsdconsu2ting.cons
NOVEMBER 15, 2001
T
he residents of Okinawa, an is-
land chain of Japan, are amongthe healthiest and longest-lived
people in the world. Okinawa has more
100-year-olds than anywhere else-33.6
per 100,000 people, compared with about
10 per 100,000 in the US.
The 25-year Okinawa CentenarianStudy discovered that compared with
Americans. Okinawans have...
.80% lower risk of breast andprostate cancers.
'50% lower risk of colon and ovari-an cancers.
.40% fewer hip fractures.
• Minimal risk of heart disease.
What's the secret to the Ok.inawans'longevity—and what can we do to
achieve the same healthful vigor? Thesefactors are especially important...
ACCEPTING ATflTUI)E
While many Americans have Type A
personalities, Okinawans believe thatlife's travails will work themselves out
The average American might be said tosuffer from hurry sickness. Okinawansprefer to work at their own pace, re-
ferred to locally as Okinawa Time. Theydon't ignore stress.. .but they rarelyinternalize it.
Stress causes the body to secrete
large amounts of corrisol and other stress
hormones. That damages the heart andblood vessels and accelerates bone loss.
To reduce stress: Don't take onmore than you can handle.. take advan-tage of flextime at work.. .don't get workedup about things you can't change, such astraffic jams or rude behavior., practicedeep breathing and meditation.
LOW-CALORIE INTAKE
Okinawans consume an average of1,900 calories a day, compared with 2,500
Bottom LinePERSONAL
for Americans. Studies have shown that
animals given a diet with 40% fewercalories than the diets of free-feedinganimals live about 50% longer.
Reason. Harmful oxygen molecules(free radicals) are created every time thebody metabolizes food for energy. Becausethe Okinawans take in fewer calories, theirlifetime exposure to free radicals—whichdamage cells in the arteries, brain andother parts of the body—is reduced.
PLANT-BASED DIET
About 981/o of the traditional Okinawandiet consists of sweet potatoes, soy-basedfoods, grains, fruits and vegetables. This
is supplemented by a small amount of
fish (and lean pork on special occasions).These plant foods contain phytonutrients—chemical compounds that reduce free
radical damage. A plant-based diet is alsohigh in fiber, which lowers cholesterol
and reduces the risk of diabetes, breastcancer and heart disease. The currentOkinawan diet is about 80% plant food.
Wok advantage: The Okinawans'style of cooking is high-heat stir-frying in awok, which requires little oil. They typical-
ly stir-fry with canola oil, which is high inheart-healthy monounsaturated fat andomega-3 fatty acids. These fatty acids lowerlevels of LDL (bad) cholesterol while in-creasing levels of HDL (good) cholesterol.
SOY FOODS
Elderly Okinawans eat an average oftwo servings of soy foods daily—such
Bottom Line/Peraosuml interviewed Bradley J. Wilcox,MD, geriatrics fellow at Beth Israel Deaconess Med-ical Center and in the Division of Aging, HarvardMedical School, Boston. He is coauthor of The OkinawaProgram (Crown).
Dr. Wilcox collaborated with his twinbrother. D. Craig Willcox. PhD, a medicalanthropologist and assistant professor, Old-nawa Prefectural University, and Makoto.Suzuki, MD, principal investigator of theOld Centenarian
Sal and hood of geron-
tolo; Okinawa International University.
as tofu, miso soup and soybean
sprouts. Soy is rich in flavonoids,chemical compounds that reduce thetendency of LDL to stick to arteries,
thereby reducing the risk of heart
Andrew L. Rubman, NDUniversity of Bridgeport
Fortify YourImmune System
Astrong immune system can helpto fight off pathogens, including
bacteria and viruses, and may improveresistance—but not necessarily makeyou immune—to anthrax bacteria,smallpox viruses and other germs.
These supplements boost immunityand are generally safe for most every-one. Pregnant and breast-feedingwomen should consult their obste-tricians before taking any supplements.Dosages are based on a 150-pound20-year-old male adult.
•Bio-Vegetarian, a combina-tion of vitamins and minerals. One cap-sale twice daily. Priority One Health andNutrition, 800443-2039.. .www.priorityonevitamins.com . $17 for 60 tablets.
'Aqua Se4 which contains themineral selenium. Two drops on thetongue twice daily. TE. Neesby, 800-633-7294. $5 for a half-ounce bottle.
To protect and help detoxify theEver and digestive tract...
'Lipall-Plus, a vitamin andherb supplement One tablet twice daily.Anabolic Laboratories, 800-445-6849...www.anaboliclabs.com. $12 for 90tablets.
'Anabolic Milk Thistle. Onecapsule twice daily. Anabolic Laboratories,800-445-6849.. .www.anaboliclabs.corn. $10 for 50 capsules.
Children's dosages: Checkwith your pediatrician. Physicians ad-just dosages by age and body weight
Also important: Exercise reg-ularly.. minimize stress... eat plentyof fresh fruits and vegetables.. andreduce intake of wheat-based products.
Emergency food supply:Freeze servings of egg-drop soup madewith a chicken-stock base. This is a com-pact source of fresh water, protein, vitalfat, vitamins and minerals. Classic recipe:www.globalgourmet.com/food-special/2OO1/joy/eggdrop.htrn1.
Andrew U Rubman, ND, is associate professor ofclinical medicine, College of Naturopathic Medicine,University of Bridgeport, and director, SouthburyClinic for Traditional Medicines, both in Connecticut
disease or stroke. Soy foods may also
protect against cancer... menopausal
discomfort (such as hot flashes) . . . and
osteoporosis. You don't have to eat alot of soy foods to get similar benefits.One daily serving of tofu (about three
ounces) or soy milk (eight ounces)
may be protective.
FISH
Fish harvested from the waters stir-rounding Okinawa is an integral part of
the daily diet The omega-3 fatty acids in
fish "thin" the blood and reduce the riskof clots—the main cause of heart attack.
Omega-3s also inhibit the body's
production of inflammatory chemicals
called prostaglandins. That may lower
the risk of inflammatory conditions,such as arthritis and the bowel disorder
Crohn's disease.Americans can get similar benefits
by eating fish at least three times a week.
Cold-water fish—salmon, mackerel,
tuna—contain the largest amounts of
omega-3s. Fish oil supplements are aworthwhile alternative for those who
are "fish phobic."
HEALTHY WEIGHT
The traditional Okinawan diet is
low in fat and processed foods, as wellas calories—so obesity is rare in elder
Okinawans. This means their risk ofweight-related health problems, such
as diabetes, heart disease and cancer, is
much lower than that of Americans.
This is in stark contrast to younger
Okinawans, who eat a more Western-ized diet and have the highest obesity
levels in Japan.
Postmenopausal bonus: Aftermenopause, a woman's main source ofestrogen is no longer the ovaries, butextraglandular tissues, mainly body fatWomen who maintain a healthful weightproduce less estrogen, which reducesthe risk for breast cancer.
JASMINE TEA
Okinawans drink about three cups ofjasmine tea daily. It contains moreantioxidant flavonoids than black tea.
Those antioxidants may reduce risk forheart disease as well as some cancers.
NOT SMOKINGIn the US, hundreds of thousands of
people die from smoking-related dis-
eases annually. Few elderly Okinawans
ever smoked... although one man inter-viewed for the study took up smoking
when he was 100. He got bored with it
and quit the next year. About 60% of
younger Okinawan men now smoke.
EXERCISE
People are healthiest when they
combine aerobic, strengthening andflexibility exercises. Okinawans often
get all three by practicing martial arts
or a traditional style of dance that re-sembles tai chi. Smart regirn..
• Swimming, biking, jogging, etc. forat least 30 minutes three times weekly.
• Lifdng weights at least 20 minutestwice weekly.
'Flexibility exercises—yoga orstretching—whenever you can andcertainly after each aerobic or strength-training session.
SOCIAL LINKS
IVIoai is an Okinawan word that
means "meeting for a common pur-
pose." Groups of friends, colleagues orrelatives get together at least once amonth to talk... share gossip.. and
provide emotional or even financial
supportPeople who maintain active social
networks live longer and are less likelyto get sick. When they do get sick, theyrecover more quickly if they have the
support of friends.
SPIRITUALITY AND RELIGION
People who have spiritual or reli-gious beliefs live longer than those
who don't Spirituality and religion area part of daily life in Okinawa. Peoplepray daily for health and peace. Theylook out for one another in a "help thyneighbor" ethic called Yuimaru. Mod-
eration is a key cultural value.Women are the religious leaders in
Okinawa. They also tend to have veryhigh levels of life satisfaction and
respect as they age. U
Statement of Ownership Mana"ement and Circulation Pub-Shed annuall y as required by tIe US Postal Service.
Borrorr Linc/Perronof ISSN 802744805 USFS p: 538-150. Dote:Ociober I, 2001. Frequency : Semimonthly . No of Issues publishesannuaflv: 24. Annual subscription price: 559. Location. 55 Rail-road Ave., Greenwich, CT 56936. General business Offices. 55Railroad Ave., Greevvoich, CT 06836. Publisher: Slavic Edrisron.55 Railroad Ave.. Greenwich. CT 06836. Editor Sola,jorrAbnamo.55 Railroad Ave.. Greenwich. CT 06836. Macarms Editor: KelliMcGowan. 55 Railroad Ave - Greenwich, CT 06536 Driver:Boardroom Inc.. 55 Railroad Ave.. Greenwich, CT 06836 Stuck-holders. armin g ICr or more of total amount of stock: Xlaniv Earl.stats. 53 Railroad Ave.. Greenwich, CT 06836. Them are no bond-holders. wort ga gees. or other socodrv noldeen owning or holding% or wore of total amount of bonds. wnrt000es. or other stows.
des. Latent and Natutn of Circaiaoon' At crane each issue precrd-ins 12 months. Total no. copies posted 971.213. Pair cmv mail5565cc alice 957.987. Total paid circulation 957.907 F-distribution 10,085. Total dtsnmbbatvot 968.072. Office use. Irbourt.spoiled 5.141. Total 971,273. Actual sioolr insat nearest flUngdote: Total no. of cop ies printed 861.697 Paid Circ. mailsubscriptions 551,373. Total paid circulation 051.573. Freedistribution 7,074 Total distr y bstioc 858,647 Office use, lefi-anna. spoiled 3.050. Total 861,697I certify that the statements wade by we above are correct andcom plete. Martin Edniston. Faniisoee.
'Ith' Bottom LineFor fastest service on your change
of address, visit our Web site at NOVEMBER 15, 2001rumuc ttnl iut rs.s,mhevwinn
Worksheet }cIPLINGERS RETIREMENT PLANNING
STEP How much income will you need in retirement?
A. Current annual income$ _____________
xB. Growth factor from Table I
x____________
C. Projected annual income at retirement $_ ±$ =$x
D. Percentage of income you want to replace (suggestion: 80%)
E.Target annual retirement income, in future dollars=$
STEP 2 1, How much will you get from social security and pensions?
F. Projected annual social security benefit, in today's dollars $ $
G. Projected annual defined-benefit pension, in today's dollars $ $
H. Total (add lines F and G)$ $ __________
I. Growth factor from Table I (assume 3%) x
J.Adjusted benefits=$_ +$
STEP 3 How big a nest egg do you need?
K. Target annual retirement income, in future dollars (line E)$
L. Combined social security and pension benefits, in future dollars (line
M. Annual income needed from nest egg, in future dollars = $
divided by 12
N. Monthly income needed from nest egg, in future dollars$divided by I ,000
X
0. Amount needed to generate $1,000 a month (from Table 2)
P. Preliminary nest-egg goal
STEP 4 Protect against inflation
Q. Inflation-protection factor (1.3 or 1.6)
R. Inflation-adjusted nest-egg goal
STEP s How much have you already accumulated?
S.Current value of 401(K)s, IRAs, Keoghs and other retirement savings
T. Growth factor from Table I
U. Projected future value of current savings= $
STEP 61 How much will you draw from home equity?
V.Current home value x
$W. Growth factor from Table I
X. Estimated home value at retirement=
$
Y. Mortgage remaining at retirement + down payment on new home-
Z. Home's contribution to nest egg=$
STEP i How much more do you need to save?
. flationadjusted nest-egg goal (line R) $
ome's contribution to nest egg (Z) + any other assets - $
BB. Future value of current savings (line U) + h
CC. Nest-egg shortfallDD. Savings target factor from Table 3
you nPr month -$
EE. How much you e='-
RETIREMENT FOR ToDA y ' s RETIREE
1. Physical Health
2. Mental Health
3. Diet
4. Exercise
5. Social relations
6. Personal relations
7. Intellectual stimulation
8. Spiritual balance
,.c3U S RE1-t
THE RETIREMENT WHEEL
\0
The Retirement Letter.HELPING YOU BUILD AND ENJOY A RICHER RETIREMENT
My Most Astonishing Retirement Discovery—Ever!
Dear Friend,
When I started writing THE RETIREMENT LETTER (over 23 years ago!), I was in the same boat asa lot of you are now—I was working and investing full-time to build up my nest egg so that I could enjoythe retirement of my dreams, but I was apprehensive about whether those dreams could come true. WasI making the right moves with my nest egg? My pension? Medicare? Social Security? Or was there atrg42 waiting to be sprung on me?
Luckily, I've learned a lot in the past 23 years as I've helped thousands of people (and myself!)through the retirement process. And I'm happy to say that my retirement dreams are coming true.
The dreams are coming true for me because I made an astonishing discovery about retirement...
I learned that there are just 15 key decisions you've got to make—and make right—in order to guar-antee yourself a successful retirement. And I learned that half of those key decisions come after you've"officially" retired!
Do You Know For Sure What These 15 Key Decisions Are?
The difference between making these decisions right and making them wrong can be very dramatic.It could mean the difference between taking an annual vacation in Paris instead of in Peoria, or cruisingaround the Mediterranean rather than just driving through Montana. Instead of fishing in the local pond,you'll be able to afford that custom houseboat on the shores of beautiful Lake Powell—but only if youmake these 15 decisions right!
I want you to enjoy the same kind of fulfilling retirement I will be. And I don't want you to make acritical mistake that jeopardizes all you've worked so hard to achieve. That's why I've written a reportcalled "15 Keys to a Successful Retirement." In it, I share with you the lessons I've learned that will guar-antee you'll do retirement the right way
In "15 Keys to a Successful Retirement," I'll take you step-by-step through each of these "howto's"—how to avoid "evaporating" your nest egg and find healthy income streams, how to minimizetaxes, how to set up your estate so you can enjoy your retirement and leave some of your assets for yourchildren and how to make your retirement as full, enriching and enjoyable as you deserve.
RETIREMENT LETTER co-editor Phil Springer and I worked very closely together to develop thispowerful report. We drew on my experience and his expertise to hammer out every detail, every fact,every form you need to make your best retirement decisions. The result is a painstakingly researchedreport that outlines for you—in an easy-to-understand, step-by-step manner—each of the key decisionsyou need to make before and during retirement.
Here are the 15 decisions to successful retirement that I've discovered:
1. Selecting an overall investment strategy—high risk, low risk, growth vs. income.
2. Deciding where to live.
3. Choosing when to officially retire from full-time employment.
(Over, please...)
-
Journal of Financial Planning/ May 2002 :'I
Retirement Vision Finan
Name:Date:
1. How I plan to change my lifestyle (if at all) when I retire:
2.
3. -.-
4.
2. What I will miss most about the job I currently have:
3
4
3. My biggest fears about retirement:
1.
2.
3.
4.
4. What I most look forward to about retirement: .
3
4
J. What the idea! week in my retirement life will look like (how I will invest my time):
1.
2.
3. .
4.
6. The top four things •! would like to accomplish / experience in my lifetime:
1.
2.
3.
4.
Page 1
Idea! Week in Retirement
Financ
Name:Date:
'PSPage
H Tdx Day., 1913
TO BE FILED BY COLLECTOR FORM 1040 TO BE FILLED IN BY MUNICIPAL COUNTY CLERK
List No --------------------- •-• INCOME TAX•______ File No--------------------------------------------------
- THE PENALTY- --- District of. ..... . ........ . ...... - .............R FAILURE TO HAVE THIS RETURN Assessment L ist.....
THE HANDS Of THE COLLECTOR OFDate received ----------------------------------------------------- INIERKAL REVENUE ON OR BORE Page- ------------------- Line -------------------------
MARCH I IS $20 TO $1,000(5(1 INSTRUCTIONS ON PAGE 1.)
UNITED STATES INTERNAL REVENUE.
RETURN OF ANNUAL NET INCOME OF INDIVIDUALS.(As provided by Act of Congress, approved October 3, 1913.)
RETURN OF NET INCOME RECEIVED OR ACCRUED DURING THE YEAR ENDED DECEMBER 31 191__(FOR THE YEAR 1913, FROM MARCH 1. TO DECEMBER 31.)
Filed hy(orfor) of(Foil some of individual) (Siren: and No.)
in the Town, orPostOfflcesf_.. - State of(Fill in page 2 and 3 before making entries below.)
1 GROSS INCOME (see page 2 line 12) - -- 5-
2 GENERAL DEDUCTIONS (see page 3 line 7)
3. NET INCOME _____ -------- ----- 5---- ----- ------ -
Deductions and exemptions allowed In computing Income subject to the normal tax all percent.
4. Dividends and net etirnings received or accrued, of corpora-tions, etc. subject to like tax. (See page 2, line 11) - -
5. Amount of income on which the normal tax has been deducted - -and withheld at the source. (See page 2, line 9, column A)
6. Specific exemptions of $3,000 or $4,000, as the case may be.(See Instructions 3 and 19)
Total deductions and exemptions. (Items 4,5 and 6)....._. _.__
7 TAXABLE INCOME on which the normal .n of iper cent ktobecalculated (See Instruction 3). $L
8. When the net income shown above on line 3 exceeds $20,000, the additional tax thereon must be calculated as per schedule below,
INCOME TAX
I per cent on amount over $20,000 and not exceeding S50,000— $—.---
2 $50,000
3 U $75000 $100000_
4 $100000 $250000....
5 " U $250000 $500,000
6 U U 5500000 - - - - - -
Total additional or super tax__________________
Total normal tax (1 per, cent of amount entered on line 7)— ..i.—._... -
Total tax liability
Or
• Do airport or hotel shuttles have wheelchair lifts?
• How are city buses and cabs equipped? Los Angeles
offers accessible taxi service for wheelchair users, but
New York City doesn't. Buses may have wheelchair
lifts, but relying on them makes you hostage to the
bus schedule. If you use a power wheelchair, another
option is to try to arrange for door-to-door paratransit
service. (Because of demand, you will need a letter
from your doctor to use the service.)
Get the details on your hotel room Book a hotel located
close to the attractions you want to see so you won't
spend too much time going to and from sites. Use the
hotel's toll-free number for general information, but
call the direct number of the hotel where you intend to
stay for up-to-date details about your room accessibility
and other matters, and ask such questions as:
• Can I fit a wheelchair under the sink?
• Is there a roll-in shower?
• Is the bed on a platform? A platform is essential for
people who use a Hoyer Lift to transfer from the
wheelchair to the bed because the lift must fit under
the bed.
Go With a Compatible Group
Traveling with a group is one way to test the waters
if you haven't traveled a lot on your own. It's also
the safest way to reach remote or unusual areas.
Take a package tour. More companies are offering roar or
travel packages for people with disabilities. Wilderness
Inquiry (800-728-0719; www.wildernessinquiry.org ) inMinneapolis offers 100 to 150 trips a year in North
America, Costa Rica and Australia, with activities
including canoeing, dog sledding and skiing. Other
experienced tour operators are Accessible Journeys
(800-846-4537; www.disabiIitytravel.org), Flying Wheels
(507-451-5005; www.fIyingwheelstravel.com ) and Medical
Travel (800-778-7953; www.medicaltraveI.org), which
handles travelers with special needs, such as those with
oxygen tanks.
Consider a cruise. Cruise ships are popular with people
with disabilities because you unpack only once. As a
rule, newer ships are better because they are usually
more accessible. While life on board may be comfortable,
your real challenge may come when the ship pulls into
port: "Sometimes you're stuck at the dock," says Gimp
on the Go's Lloyd. Among the countries with relatively
good ground transport from major ports are Australia,
Canada, Germany and the U.K. Ask lots of questions
before you book, including whether the ship will anchor
at sea rather than dock at port, forcing passengers to
climb into a small, tender boat to get ashore.
RETIREMENT LIVING
Update on the Costof Nursing-Home Care
T
HE AVERAGE COST of a private room in
• nursing home is $168 a day, or $61,320
• year, according to a new survey by the
MetLife Mature Market Institute in West-
port, Conn. Assuming an average stay of two and a half
years, the total cost is $153,300. Additional services
will increase the tab. Nursing-home costs in Stamford,
Conn., are the most expensive in the nation, $347 per
day; Shreveport, La., the least, at $88 per day.
The daily rate for nursing-home care varies greatly
across metropolitan areas. To find the cost of long-term
care in a city not included in the table below, go to
www.ltcfeds.com and click on "Cost of Care." We'll pub-
lish the costs of assisted living and the average hourly
pay for home-health aides in upcoming issues of the
Retirement Report.
Daily Cost of Nursing-HomeCare in Selected Cities
E1Birmingham, Ala. $121 Kansas City, Mo. $147
Tucson, Ariz. 166 Billings, Mont. 135San DieSo, Cal. 188 Omaha, Neb. 207Denver, Cob. 141 Las Vegas, Nev
199 HHartford, Conn. 233 Manchester N.H.
188
Wilmington, Del. 161 Cherry Hill N J 206Washington, D.C. 203 Albuquerque N M 154
Orlando, Fla, 134 New York, N.Y.274
- Atlanta, Ga. 130 Charlotte N C 148
Boise, Idaho
147 Fargo N D 155
Elgin, Ill. 177 Akron Ohio 185Indianapolis, Ind. 163 Oklahoma City, Okla. 125Des Moines, Iowa 116 Eugene, Ore. 143
Wichita, Kan. 119 Philadelphia, Pa. 189
Lexington, Ky. 142 Providence, R.I. 181
New Orleans, La. 95 Columbia, S.C. 136
Brunswick, Maine 183 Memphis, Tenn. 133
Silver Spring, Md. 177 Fort Worth, Texas 143
Boston, Mass. 243 Salt Lake City, Utah 149
Grand Rapids, Mich. 154 Rutland, Vt. 201St. Paul, Minn. 198 Arlington, Va. 205
Jackson, Miss. 126 Seattle, Wash. 204
July 2002 KIPLINGER'S RETIREMENT REPORT I 15
\1
2003
$87,000No Limit
1.4%
$32,921.92(for 2001)
$606$3,653
$1,741/month
$11,520/year*
$87,900No Limit
2.1%
$33,252.09(for 2002)
$612$3,689---
$1,825/month
$11 ,64OIyear**
October 2003
New Numbers for 2004:Social Security Factors,IRS Dollar Limits, PBGCGuarantee Limit andMedicare Rates
This Bulletin reports new numbers for 2004 that are
of interest to sponsors of benefit plans. These new
limits and rates, determined using the consumer
price index (CPI) and other data, were released on
October 16, 2003.
SOCIAL SECURITY TESTS AND LIMITS
The table below notes the inflation-adjusted dollar
tests and limits for Social Security benefits for 2004,
alongside the equivalent figures for 2003 for
comparative purposes. (This information is also
available on the following page of the Social
Security Administration's Web site:
http://www.ssa.gov/pressoffice/factsheets/colafacts2
004-alt.htm)
IRS RETIREMENT PLAN LIMITS
The Economic Growth and Tax Relief Reconcilia-
tion Act of 2001 (EGTRRA) introduced many new
retirement plan limits that plan sponsors could adopt
starting in 2002. The 2004 amounts for plans that
adopted the EGTRRA limits are shown in bold type
in the table at the top of page 2.
SOCIAL SECURITY BENEFIT TESTS AND LIMITS
Wage Base:a) for Social Security Taxb) for Medicare
Cost-of-Living Adjustment (COLA) Increase
Average Annual Wage
PIA Formula:a) First Bend Pointb) Second Bend Point
Maximum Social Security BenefitFor a Worker Retiring at Age 65 and 2 Months in 2003 andfor a Worker Retiring at Age 65 and 4 months in 2004 (SocialSecurity Normal Retirement Age - SSNRA)
Earnings Test - Early Retirement (Age 62)(Amount that Can Be Earned before Benefits Are Cut)*
* Under the Senior citizens' Freedom to Work Act of 2000, people who are covered by Social Security can receive their fullbenefits once they reach SSNR.A (age 65 and 2 mos. in 2003 and age 65 and 4 mos. in 2004) regardless of how much theywork and earn.** The early retirement earnings test is higher in the year of an individual's SSNRA. In 2003, it is $30,720/yr ($2,570/mo) until2 mos. after 2 person's 65th birthday. In 2004, it is $31,080/yr ($2,590/mo) until 4 mos. after 2 person's 65m birthday.
NdflCy BrideBorn October 26, 1941.
since 1991.Oh baby, the beflefitS are inuedible!Why are people like Nancy - and over 35 million others -
joining AARP when they turn 50? Because of the remarkable
benefits AARP makes available to members. From discounts
to important services that can make members' lives easier
and more productive.
As a member, age 50 or older, you'll also enjoy:
/ Savings on hotels, resorts and car rentals worldwide
/ Workshops and volunteer opportunities in your community
/ Your subscription to AARP: The Magazine and the
AARP Bulletin
/ FREE tax preparation assistance and up to 20% savings
on legal services
/ Discounts on prescription drugs and healthcare products
/ Member savings with AOL and EarthLink services
/ Lobbying efforts in Washington, D.C., and your state for
important issues (Medicare, Social Securit y, etc.)
/ And much more!
-----------
JOIN AARP TODAY!Coil 1-800-424-3410 • Go to www.uarp.org
Or, mail this form to AARP, ?.G. Box 199, Long Beach, U 90801U 1 Year/$ 12.50 D.2 Years/$2 1.00 U 3 Years/$29.50
Name
Address
City_____ State Zip Code
Date of Birth H3 PAAMONTH DAY YEAR
U I work full time. U I work part time. U 1 am retired.
Spouse's/Partner's Name
Date of Birth / ________ /MONTH DAY YEAR
U Check or money order enclosed, payable to AARP. (Send no cash.)
U Please bill me later.U If you're an active or retired educator, check here to loin the
National Retired Teachers Association Division of AARP.H3PNF
A4" domestic
are nor deductible for income tax purposes. Annual dues include $3.30 for asubscriphon to AARF: The Mogozme, $2.09 for the Bulletin. Dues outside the U.S.domesnc mail limits: 517/ year for Canada and Mexico, $28/I year for all
Aossill other countries. One membership also includes spouse/pormer. Please allow sixweeks for delivery of your membershic kit.
Getting Going /By Jonathan Clements will all be reversed Within the
ready on track for a laternext decade. Second, Congress ready because theystill hasn't sorted out the mess Boom and Bust simply aren't savingBoomer Bummer: It's Going to Get Ugly Tht:ke:babybPomerfarnilies
enough.boomers—thosethere is the looming problem of their wealth. Figures shown reflect horn between 1946 andFor the Generation Nearing etirement how to pay for retirees' Social median net worth, or assets minus deb 1955—have a median netSecurity and Medicare benefits,
worth of just $146,000, in-Curiently, the two Social Se Richest 20/ l' cludmg home equity, acHE BOOMERS' RL1REMENT dreams as falling bond yields have encouraged investors curity trust funds—one for dis-
cording to an analysis ofare about to go bust, to take their chances in the stock market, ability, the other for retirement Above average $245,100I don't have much tolerance for doom-and- But at this point, interest rates don't have benefits a surplus, Federal Reserve data bygloom pundits. S
Middle 20? $107 150 AARP, the WashingtonStill, as I think about the rap- much more room to drop That meanss we won't partially offsetting the regular e
, group foi' seniors. To beidly approaching retirement of the baby see additional big gains in bond prices and we government budget deficit. By Below overage $34,230 sure, many of these folksboomers, those born between 1946 and 19M, one are unlikely to see a further big climb in the 2018, however, the trust funds '5
will receive company pen-thought comes to mind: It's going to get ugly, stock market's price-earnings multiple. will be paying out more than Poorest 209/. $1,550Don't worry, I am not about to bore you The real-estate market is also likely to strug- they collect through payroll and sinus, so they are in better
shape , for retirement thanwith some wild-eyed financial forecast, gle. In recent years, property prices have other taxes. The Medicare hos- Sources: Federal Reserve, AARP
their net worth suggests,Rather, my pessimism is rooted in three en- climbed smartly, as falling mortgage rates have pital-insurance trust fund will
Still, the typicaltirely predictable developments, allowed homebuyers to pay more. But with inter- be in a similar bind, starting in 2013,
boomer's retirement nest egg looks awfullyest rates nearing the 'ound floor, mortgage It's anybody's guess how the politicians will skimpy, esU Losing Steam: Balls and bears argue rates can't decline much further, pecially when you consider thatfix this fiscal mess, Maybe Congress will boost today's retirees not only will live longer, butfiercely over whether stocks, bonds and real Result? Going forward, investors are almost the eligibility age for Social Security retirement also they face rising medical costs and possi-estate are over or undervalued. But whichever certain to garner far more modest gains from benefits. Maybe income-tax rates will rise. bly devastating nursing-home expenses,Side you favor, it is pretty clear returns in the their three biggest assets, stocks, bonds and Maybe there will be a tax surcharge slapped on For many baby boomers, the solution willdecade ahead won't match the heady gains of real estate. My advice: Don't bank on earning retirement-account withdrawals,
be to delay retirement. That will give themthe 1980s and 1990s. That means boomers will double-digit gains. Instead, to make your wealth What to do? If you want to retire at age 65, more time to save and to earn investmentfind it tougher to retire in comfort, grow, hold down investment costs, avoid foolish you will likely need a bigger nest egg. I would returns. It will also shorten their time in re-
This forecast isn't based on any fancy investment mistakes and save like a demon, assume tax rates are headed higher, which tirement. That means they can delay claim-economic analysis. Rather, it comes down to
means the post-tax value of your retirement say- ing Social Security, resulting in a largerone simple fact: The fuel of falling interest 0 Feeling the Squeeze For the moment, Uncle ings will be less than you imagine. I would also monthly benefit, and they can be more ag-rates is almost spent.
Sam seems wonderfully generous. But this lar- assume that the Social Security retirement age gressive in spending down their portfolio
Since 1981, the yield on the benchmark gess won't last, and my hunch is retirees will will rise, with younger boomers having to wait once they do quit the work force.10-year Treasui'y note has declined from al- bear the brunt of future government cutbacks, until age 70 to get full benefits, 'most 16% to under 4%. That has not only Why this gloom? There are three reasons, "I think there s been a change in
psyche," says John Gist, associate director of
pushed up bond prices, which move in the First, many of the tax cuts introduced in the U Coming Up Short: If all the boomers quit the RP's public policy institute. "The collapse
opposite direction from yields, but also it past few years are already scheduled to disap- work force at 65, it would create major economic in the stock market has opened people's
has driven investors into stocks. Over the pear, thanks to the sunset provisions included in problems, because there would be too many retir- eyes. They're saying, '1 don't have a lot ofpast 22 years, the stock market's share- recent tax laws. Unless Congress acts, the dlvi- ees and too few workers. But this is one problem options and maybe I'll have to work
price-to-earnings multiple has quadrupled, dend, capital gains, income and estate-tax cuts that's likely to solve itself. Many boomers are al- longer.'
Aa
..............
D2TUESDY APRIL 30, 2002 THE WALL STREET JOURNAL
PERSONAL FINANCE
What Does Retirement Bold?Study Shows Fulfilled, FrLLst rated aud How They Got There
D - JEFF _ ._. -uf
W
ILIT WILL YOUR retirementlook like?
Will you be secure and satis-fied? Or financiall y unstable and fear-ful? And if you knew what was in store.would you change your course of action?A new study to be released this morningcould provide a road map to the life youwant—or don't want—when your currentworking days end.
The study, conducted by market-re-search finn Harris Interactive and geron-tologst Ken P chttvaid. segments currentretirees based on their experiences in re-tirement, and shows how each segment ar-rived at their current point in life. For to-day's workers, the knowledge can serve asa guide as they move toward retirement.
The study was sponsored bn financial-services firm AIG SunAmerica Inc.,which says it will use the results to edu-cate its agents about the various finan-cial paths to retirement.
The Pght Routs to RetremeitAre you doing the right things now -- D eon:e';e :ne retirement you want? Here are thef:nanc:al choices that help ed lead .'arious -e:-ees no their current situation in life.
Percentage of retirees who
fell into one of four broad 27% 19% 22% 32%categories
Ageless Comfortably Live for Sick &Explorers Contents Todays Tireds
ConLrloutc to iR.t MME 4O%
Invested in mutual WflO - ; 39% 2O% -
Contributed to ad(k) or wriia clan77
Invested in real estate
Invested :n stocks
Investec in icons
Purchased an annuity . 29% 15%
Bought long-term care insurance ' 29%
A Chance to Change
For those still in the work force, Mr.Dvchtwald says, the broad message ofthe research is that 'everyone is on acourse. -..When you realize what trackyou're on, you have a chance to makesome changes.'
So. what track are you on?Well, the research revealed that there
are essentially four broad categories ofretirees, which the stud y labels: AgelessExplorers, who are in control of theirlives and eager to attack new ventures:Comfortably Contents, financially fit andperfectl y happy to live the Golden Yearslifestyle; Lose for Todays, who see retire-ment as a whole new life. but are anxiousabout their financial Preparedness: andthe Sick L Treds, who failed to plan ade-uuatelo and feel unfulfilled in retirement.
By examining the choices those retir-ees made leading up to retirement, theresearchers sa y, it is possible to essen-tially reverse-engineer the investmenttraits that produced the han p ies: retirees.
The biggest ke y to satisfaction, thestudy found, was financial preparedness.While the most satisfied retirees do tend
None or the acove
to have higher net worths, happiness wasmore a function of advance planningthan pure wealth, says Humphre y Tay
-lor. chairman of the Harris Poll. a ser-vice of Harris Interactive.
People really don't know the size ofthe financial base they need to live the life-style they want in retirement," says Mr.Taylor, "but the longer you save, the hap-pier you are because you feel prepared."
Two factors in preparedness, re-searchers note, were length of tirre spentplanning and diversification of assets.The most satisfied retirees. regardless ofthe size of the i r nest egg, saved for about24 years. according to the stud y. Theleast satisfied: 11 years And retireeswho say they're most satisfied a b out re-tirement tend to have put mone.' into avariety of investments.
In particular, retirees lean heavil y to-ward individual retirement accounts, orIRAs, and comp an y-s ponsored retirement-savings plans such as a 401(k) or 4031b,i.Thou gh that doesn't necessaril y mean
sources: SIC SunAmehca; Cams Fnterscvve
they maxed out their contributions to thesenlans; those numbers aren't available.
The happy retirees also were buyersof mutual funds and individual stocksand, to a lesser degree, bonds and realestate. A smaller percentage purchasedannuities and long-term-care insurance.
Investing in Nothing
Conversely, those who are most fearful0 retirement today did little to help theircorn cause when the y were younger. Theyrarely contributed to tax -advantaged say-ngs plan such as 401(ks and tPkns,
toou gh, such p ians don't reoutre espec:alivYrge investments, And the y weren't bigbuyers of stocks, bonds, mutual funds orreal estate. In fact, 267c of the most mAui-filled group of retirees. the so-called sickand thesis, basically invested in nothing.
"You can see exactly how people windthe circumstando the y 're in." says
Mr. Dvchtwald. "and it shows you havecontrol over what your retirement is go-ri g do be."
This might involve redecorating your
home, taking that trip around the
world, living in another location for a
few months and spending more time
with your children and grandchil-
dren. Everyone has a different wish
list, but we often find you spend
more money this first year of retire-
ment because of pent-up demand.
You didn't have time to spend this
money previously because you were
too busy working. To be on the safe
side, we estimate that during your
initial years of retirement you'll
spend at least the same amount of
money as you did when you were
still working, just on different things.
In the second stage of retirement,
we find most people spend less
money than they did when they
first retired. In this stage you settle
down and your expenses are more
predictable. In the third stage, you'll
be spending more money on health
care, which will increase your
expenses again.
We find that initially most people
have sufficient income on which to
retire. But it's important not to lose
sight of your secondary goal: to have
your money last as long as you do.
To be conservative, we assume that
you'll live to at least 100 in our long-
term retirement projections and
that your expenses will increase by
at least the rate of inflation.
Retirement Income Sources: A Sample WorksheetFixed Income Sources Estimated Annual Income
Taxable Nontaxable
Pension *
$ SSocial Security**
$ $
Other
$ $
Total
$ $
* Initially, part of your pension income may be tax-tree.** According to the level of your total taxable income, these benefits can be 85-percent taxable.
Variable Income Sources Estimated Annual Income
Personal Investments Value Taxable Nontaxable
Bonds/Bond Funds $ $ $
Stocks/Stock Funds $ $ $Annuities* $ $ $
Cash Value Life Insurance** $ $ $
Other $ $ $
Total $ $ $* A portion of the annuity income is treated as tax-free return of capital.
** If you borrow against the cash value of your Cite insurance, the income is not taxable.
Retirement PlansTraditional IRAs $ $ $
Roth IRAs* $ $
SEP-IRAs $ $
401 (k) Plans $ $
Keogh Plans $ $
Other $
Total $ $ $* If you hold the Roth account for at least five years and meet other requirements, any withdrawals
from this account will be tax-free.
Total Projected Retirement Income $ $
A word of caution: Since this first
year will be one of adjustment, both
financially and psychologically, we
recommend you stay in your cur-
rent home the first year you re
retired before making an irrevoca-
ble move to another location.
Predictable Sourcesof Retirement IncomeSources of retirement income when
you first retire fall into two cate-
gories: predictable income (pen-
sion, annuities and Social Security)
and variable income (personal and
retirement investments and work).
Ask your pension plan administra-
tor for a written estimate of your
monthly pension income based on
your expected retirement date.
Also ask how much more monthly
income you would receive if you
deferred payments until later.
Pension and annuity income is cal-
culated based on your life ex-
pectancy so the earlier you receive
it, the lower your payments will be.
In the January 2004 issue we dis-
cussed your options with Social
Security income.
Although the value of your home
could be a future source of income,
we rarely count it as an initial
source. For many, the home is their
largest asset. Although it doesn't
produce income and in fact is an
expense to maintain, you can tap
into the equity in your home in the
future either by selling it and buying
a less expensive home or by taking
out a mortgage or reverse mortgage.
To be conservative, we also don't
consider possible future inheri-
tances as part of your retirement
planning. If you inherit, your retire-
ment income will be higher, but we
don't want you to count on an inher-
itance in case it doesn't materialize.
Variable Sources of Retirement IncomeTo predict your income from other
sources, make a list of all your per-
sonal accounts and retirement
accounts. Next to each investment,
indicate its current total value and
the current annual income it gener-
March 2004 • Better Investing 19
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CONFERENCE
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Hosted by theSanta Barbara Police Department
27TH ANNUAL CPCA CONFERENCEFEBRUARY 9-12, 2004
FESS PARKER'S DOLJBLETREE RESORT
NEXTEL1:05am 9/15
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ACTIONACCESSORY.
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All other product or service names are the property of their respective owners, All rights reserved-
WORKSHOPS
The Law Enforcement Response to Weapons of Mass Destruction.
3:00pm - 5:00pm, Santa Cruz, Tuesday
Joseph Heck addresses the realistic potential of local Law Enforcement being the first responders to an act ofterrorism. He will discuss the importance of local law enforcement's need for preparedness for a medicalresponse to such an attack that has the potential of depleting their immediate resources.
Risk Management - 2004 Update
3:00pm - 5:00pm, San Miguel, Tuesday8:30am - 10:30am, San Miguel, Wednesday
Gordon Graham instructs law enforcement on why things generally go wrong, and how to prevent these incidentsfrom happening. He follows up his prevention efforts with a dynamic presentation on how to recognize futureincidents and concludes his program with a detailed examination on how to prove proper conduct.
Leadership in a High Stress Environment--- or Management Theory Doesn't Cut It!
8:30am - 10:30am, San Miguel, Wednesday
Rear Admiral Ray Smith reflects on his four years in command of the Navy Seals and how his experience relates
to leadership in law enforcement.
Legal Update - 2004
10:45am - 12:00pm, San Miguel, Wednesday
Martin J. Mayer will address the legal issues involving civil liability and law enforcement.
14
Schedule of Events
7:00am - 5:00pm7:30am - 8:30am8:30am - 2:30pm8:30am - 10:30am
8:30am - 10:30am
10:45am - 12:00pm
10:45am - 12:00pm
12:00pm - 2:00pm12:00pm - 4:30pm
2:15pm - 3:30pm
2:15pm - 3:30pm
Wednesday, February 11, 2004
Registration & InformationContinental BreakfastTrade Show Open"Risk Management — 2
("Leadership in High StrsEironment...oì)Management Theory
Legal Update 2004
Surviving Hell: Leadership LessonFor Tough Times"Thomas Esensten
ade Show LuncheonSpouse
"Managing Public Controversy in OneHour and Fifteen Minutes"Aisha Marlin-Walton
RorI3Td K. WakabayashiDoctor v. Lawyer - Fitness
For Duty Evaluations
13Doubletree FoyerDoubletree FoyerGrand BallroomSanta Cruz
San Miguel
San Miguel
Santa Cruz
Grand Ballroom
San Miguel
Santa Cruz
(::S:a,:ta 7Crz)
San Miguel
Martin J. Mayer J.D.3:45pm - 5:00pm Retirement Planning for Police Executives"
Captain Michael Hebel (Retired)3:45pm - 5:00pm NYPD Disaster Response
LL John -Moran NYPDDinner on your
7:00am - 5:00pm7:30am - 8:30am
8:30am - 10:15am
10:00am - 4:00pm
10:30am - 12:00pm10:30am - 12:00pm
10:30am - 12:00pm
12:00pm - 2:00pm
2:15pm - 4:15pm
6:00pm - 7:00 pm
7:00pm - 12:00pm
Thursday, February 12, 2004
Registration & InformationInspirational BreakfastGreg Bell Former Oakland RaiderRadical Islam and It's Impact on Law
Enforcement Including Community Policing"George Akklequist Special Federal OfficerSpouse/Guest TourOjai Valley Inn and SpaBoard of Director's MeetingMaking the Accountability Connection:
The Chief's Role in Achieving AccountabilityDave Hudson"Post Event Public Relations"John DaviesHost Chief's LuncheonGuest Speaker: LAPD Chief Wm. BrattonSponsored by Northrup Gruman ITUnited Parcel Service"The Sniper Investigation: A Local PerspectiveWilliam C. O'TooleAssistant Chief of PoliceMontgomery County Department of PoliceMontgomery, MarylandInstallation ReceptionSponsored by LOJACKIntergraph Public SafetyInstallation BanquetEntertainment: Skip BanksSponsored by Motorola
Doubletree FoyerSierra Madre North
Santa Barbara Ballroom
Sierra Madre NorthSanta Cruz
San Miguel
Grand Ballroom
Santa Barbara Ballroom
Reagan Room
Grand Ballroom
