Preface | p. xxi |
Coordinated Financial Planning | p. 1 |
Personal Financial Planning--The Process | p. 3 |
What Is Personal Financial Planning? | p. 3 |
Focus on Objectives | p. 4 |
Need for Personal Financial Planning | p. 5 |
Steps in the Planning Process | p. 6 |
Use of Financial Planning Statements | p. 7 |
Setting Financial Planning Objectives | p. 12 |
Importance of Setting Objectives | p. 12 |
Organizing Objectives | p. 12 |
Adjusting Objectives for Inflation and Possible Deflation (Recession or Depression) | p. 23 |
Adjusting Objectives to Changing Tax Laws | p. 24 |
Using Insurance Effectively | p. 27 |
Personal Insurance Principles and Selecting Insurers | p. 29 |
Personal Risk Management | p. 29 |
The Insurance Principle | p. 30 |
Considerations in Choosing an Insurer | p. 30 |
Considerations in Choosing an Agent or Broker | p. 34 |
Life Insurance and Social Security | p. 36 |
Sources of Life Insurance Protection | p. 36 |
Social Security | p. 38 |
Types of Individual Life Insurance Contracts | p. 42 |
Definitions of Life Insurance for Income Tax Purposes | p. 55 |
The Life Insurance Contract | p. 57 |
Planning and Using Life Insurance | p. 62 |
Substandard Risks | p. 64 |
Nonmedical Life Insurance | p. 64 |
What Actions Can an Uninsurable Person Take? | p. 65 |
Group Life Insurance | p. 65 |
How Much Life Insurance Is Needed? | p. 67 |
Health Insurance | p. 70 |
Sources of Health Insurance Protection | p. 70 |
Disability Income (Loss-of-Time) Coverages | p. 71 |
Medical Expense Coverages | p. 79 |
Individual Health Insurance Policy Provisions | p. 90 |
Medical Savings Accounts | p. 92 |
Health Reimbursement Arrangements (HRAs) | p. 93 |
Long-Term Care Insurance and Medicaid Planning | p. 94 |
Nature of Exposure | p. 94 |
Basic Planning Approaches | p. 95 |
Long-Term Care Insurance and Other Arrangements | p. 95 |
Medicaid Planning for Long-Term (Custodial) Care | p. 101 |
Property and Liability Insurance | p. 109 |
Property Insurance | p. 109 |
Personal Liability | p. 110 |
Homeowners Insurance | p. 112 |
Automobile Insurance | p. 116 |
Other Property and Liability Policies to Consider | p. 120 |
Insurance Companies and Premiums | p. 122 |
Investments and Investment Planning | p. 125 |
Basic Investment Principles | p. 127 |
The Basic Investment Objective | p. 127 |
Investment Directly or Through Financial Intermediaries | p. 127 |
Investment and Speculation | p. 129 |
Factors in the Choice of Investments | p. 130 |
Security of Principal and Income | p. 130 |
Rates of Return | p. 137 |
Marketability and Liquidity | p. 146 |
Diversification | p. 146 |
Tax Status | p. 148 |
Size of Investment Units (or Denominations) | p. 148 |
Use of Collateral for Loans | p. 148 |
Callability | p. 148 |
Freedom from Care | p. 149 |
Common Stocks | p. 150 |
Characteristics of Common Stocks | p. 150 |
Some Measures of Value for Common Stocks | p. 150 |
Information About Common Stocks | p. 154 |
The Investment Process | p. 155 |
Diversifying a Common Stock Portfolio | p. 157 |
Periodic Review | p. 157 |
Decisions Concerning Selling Common Stocks | p. 157 |
Dollar-Cost Averaging | p. 158 |
The Mechanics of Buying and Selling Common Stocks | p. 158 |
Margin Accounts | p. 160 |
Selling Short | p. 160 |
Securities Investor Protection Corporation | p. 161 |
Investment Categories of Common Stocks | p. 161 |
Some Theories of Common Stock Investment | p. 164 |
Common Stocks and Market Cycles | p. 166 |
The Case for Long-Term Investments in Common Stocks | p. 166 |
Some Caveats | p. 170 |
Other Equity Investments | p. 174 |
Real Estate | p. 174 |
Oil and Gas (Natural Resource) Ventures | p. 182 |
Other Tax Shelters | p. 182 |
Impact of Passive Activity Loss Rules | p. 183 |
Put and Call Options | p. 184 |
New Issues or Initial Public Offerings (IPOs) | p. 186 |
Commodity Futures Trading | p. 186 |
Art, Antiques, Coins, Stamps, Gold, and Other Precious Metals | p. 188 |
Fixed-Income Investments | p. 189 |
Types of Fixed-Income Investments | p. 189 |
Ways of Taking Returns from Bonds | p. 189 |
Corporate Bonds | p. 191 |
Municipal Bonds (Munis) | p. 192 |
U.S. Government Obligations | p. 196 |
Market Discount Bonds | p. 199 |
Zero-Coupon Bonds (Zeros) | p. 200 |
Preferred Stocks | p. 201 |
Guaranteed Principal Fixed-Income Investments | p. 202 |
Liquid Assets | p. 204 |
Conversion Privileges in Fixed-Income Securities | p. 204 |
Bond Ratings and Investment Quality | p. 204 |
Strategies for Investing in Fixed-Income Securities | p. 207 |
Mutual Funds and Other Investment Companies | p. 209 |
Kinds of Investment Companies | p. 209 |
Why Invest in Mutual Funds? | p. 209 |
Disadvantages of Mutual Funds | p. 210 |
Types of Funds--Some Planning Considerations | p. 210 |
Regulation of Investment Companies | p. 213 |
How to Invest in Mutual Funds | p. 213 |
Distributions from and Exchanges of Mutual Funds | p. 214 |
Mutual Funds and Their Investment Objectives | p. 215 |
Getting Information About Mutual Funds | p. 222 |
Mutual Fund Performance | p. 222 |
Mutual Fund Expenses | p. 225 |
Factors Involved in Selecting Mutual Funds | p. 226 |
Planning Considerations for Mutual Funds | p. 227 |
Tax Aspects of Mutual Funds | p. 227 |
Exchange-Traded Funds | p. 230 |
Hedge Funds | p. 230 |
Asset Allocation Strategies and Models | p. 232 |
Fundamentals of Asset Allocation | p. 232 |
Steps in the Asset Allocation Process | p. 233 |
Personal Factors and Asset Allocation | p. 233 |
Investment Objectives | p. 235 |
Investment Policies | p. 236 |
Possible Asset Classes to Be Considered | p. 237 |
Investment Vehicles to Be Considered | p. 237 |
Return-Risk Considerations | p. 239 |
Allocations Within Asset Classes | p. 243 |
How Investments (Asset Classes) Should Be Held | p. 243 |
Illustrations of Asset Allocation Strategies | p. 245 |
Income Tax Planning | p. 255 |
Income Tax Fundamentals | p. 257 |
The Federal Income Tax on Individuals | p. 257 |
The Federal Income Tax on Corporations | p. 273 |
Pass-Through Business Entities | p. 277 |
Federal Income Taxation of Trusts and Estates | p. 278 |
State and Local Income Taxes | p. 280 |
Basic Income Tax Saving Techniques for Individuals | p. 281 |
Eliminating or Reducing Taxes | p. 281 |
Shifting the Tax Burden to Others | p. 287 |
Allowing Wealth to Accumulate Without Current Taxation and Postponing Taxation | p. 288 |
Taking Returns as Capital Gains | p. 290 |
Taxation and the Capital Gains Lock-in Problem | p. 290 |
Tax-Planning Caveats | p. 298 |
Charitable Giving | p. 300 |
Basic Tax Principles | p. 300 |
Planning Techniques | p. 302 |
Planning for Retirement and Capital Accumulation Plans | p. 317 |
Employer-Provided Qualified Retirement Plans and Social Security Benefits | p. 319 |
Economic Problems of Retirement Years | p. 319 |
Steps in Planning for Retirement Income | p. 319 |
Sources of Retirement Income | p. 320 |
Characteristics of Employer-Provided Retirement Plans | p. 322 |
Pension Plans | p. 333 |
Profit-Sharing Plans | p. 336 |
Savings (Thrift) Plans | p. 338 |
Stock Bonus Plans and Employee Stock Ownership Plans (ESOPs) | p. 344 |
Hybrid Qualified Retirement Plans | p. 345 |
Retirement Plans for the Self-Employed (HR-10 or Keogh Plans) | p. 346 |
Other Employer-Provided Retirement Plans and Other Employee Benefits | p. 351 |
Other Employer-Provided Retirement Plans | p. 351 |
Other Employee Benefits | p. 358 |
Individual Retirement Accounts and Annuities (IRAs) | p. 361 |
Basic Concepts | p. 361 |
Types of IRAs | p. 362 |
Other Aspects of IRAs | p. 371 |
Planning Issues for IRAs | p. 372 |
Planning for Taking Distributions from Qualified Retirement Plans and IRAs | p. 377 |
General Considerations | p. 377 |
Taxation of Benefits from Qualified Plans and IRAs | p. 379 |
Planning for Distributions from Qualified Retirement Plans and IRAs | p. 397 |
Individual Investment Annuity Contracts | p. 406 |
Fundamental Purposes of Annuities | p. 406 |
Types of Individual Annuities | p. 406 |
Parties to the Annuity Contract | p. 409 |
Phases of Annuities | p. 409 |
Investment Returns on Annuities | p. 410 |
Expense Charges on Annuities | p. 412 |
Withdrawals and Loans | p. 413 |
Exchanges of Annuities | p. 414 |
Annuity Distribution (Payout) Options | p. 414 |
Annuity Death Benefits | p. 414 |
Split-Funded Annuities | p. 415 |
Taxation of Nonqualified Annuities | p. 416 |
Other Individual Annuity Arrangements | p. 418 |
Using Life Insurance Values to Provide Retirement Income | p. 418 |
Employee Stock Compensation Plans | p. 420 |
General Considerations | p. 420 |
Types of Plans | p. 420 |
Statutory Plans | p. 421 |
Nonstatutory Plans | p. 424 |
Provisions of Stock Option Plans | p. 428 |
Valuation of Stock Options | p. 431 |
Some Caveats Concerning Stock Options and Other Plans | p. 434 |
Planning Issues Regarding Stock Options and Other Stock Plans | p. 434 |
Estate Planning | p. 437 |
Estate Planning Principles | p. 439 |
Objectives of Estate Planning | p. 439 |
Methods of Property Disposition | p. 440 |
Property and Property Interests | p. 441 |
What Is Meant by the "Estate"? | p. 448 |
Settling the Estate | p. 452 |
Trusts in Estate Planning | p. 454 |
The Transfer Tax System | p. 462 |
Impact of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) | p. 462 |
Applicable Credit Amount (Unified Credit) and Applicable Exclusion Amount | p. 463 |
Federal Gift Tax | p. 464 |
Federal Estate Tax | p. 472 |
Federal Generation-Skipping Transfer (GST) Tax | p. 480 |
Lifetime Giving and Sales Within the Family | p. 486 |
Making Lifetime (Inter Vivos) Gifts to Noncharitable Donees | p. 486 |
Sales Within the Family | p. 503 |
Loans to Family Members | p. 506 |
Marital Deduction Planning, Postmortem Planning, and Estate Liquidity | p. 507 |
Marital Deduction Planning | p. 507 |
Postmortem Estate Planning | p. 522 |
Estate Liquidity | p. 524 |
Life Insurance in Estate Planning | p. 526 |
Taxation of Life Insurance | p. 526 |
How to Arrange Life Insurance | p. 533 |
Gifts of Life Insurance | p. 540 |
Revocable Living Trusts, Other Will Substitutes, and Property Management Arrangements | p. 544 |
Revocable Living Trusts as a Will Substitute | p. 544 |
Joint Property with Right of Survivorship | p. 548 |
Property Management Arrangements to Deal with Physical or Mental Incapacity | p. 549 |
Financing Education Expenses | p. 552 |
Importance as a Financial Objective | p. 552 |
Nature and Growth of Education Costs | p. 552 |
Estimating Education Costs | p. 553 |
Financial Aid Considerations | p. 554 |
Tax "Breaks" for Education Costs | p. 555 |
Strategies in Planning for Education Costs | p. 557 |
Planning for Business Interests | p. 572 |
Potential Issues | p. 572 |
Characteristics of Closely Held Businesses | p. 573 |
Types of Business Entities | p. 573 |
Check-the-Box Regulations | p. 581 |
Income Tax Basis in Business Interests | p. 582 |
Factors in Choice of Entity | p. 583 |
Disposition of Business Interests | p. 588 |
Retention of Business Interests | p. 598 |
Index | p. 601 |
Table of Contents provided by Ingram. All Rights Reserved. |