Retire Secure! Third Edition: The Rate of Return You Earn Makes a Big Difference

Retire Secure A Guide to Getting the Most Out of What You've Got, James Lange 2015

I love it when clients give me feedback, good or otherwise. When I wrote the second edition of Retire Secure!, I got a lot of complaints about the fact that our calculations assumed an investment rate of return of 8%. Our more conservative clients told me that 8% was just not realistic for them, and that our numbers must therefore be inaccurate.

Chapter 1 compares the difference between saving in pre-tax and after-tax accounts, but in order to keep those conservative clients happy, the assumed rate of return has been lowered to 6%. As expected, the difference in the two accounts was not quite as dramatic as when we used an 8% rate of return, but the results showed that it is still better to save using a pre-tax account. Then we looked at the significant reduction in the wealth accumulated by both savers and, being the number crunchers that we are, we said, “What do they have to do in order to get that wealth back?” The answer was to increase the amount contributed to the account each year and the rate of return you earn makes a big difference over the long term.

Do you want to teach your children and grandchildren the benefits of starting to save early in their lives? We introduce two new types of retirement savings plans that make it possible for low-income taxpayers such as students to contribute to a retirement account that has no fees and very low minimum contributions. There is also a new section devoted to a discussion on the growing trend of using loans against retirement plans to pay for expenses such as college education. It must be okay because it’s your own money, right? Read Chapter 1 to learn the pros and cons of this strategy.

Have you been seeing the term “underfunded pension plan” a lot lately? If you haven’t, you might want to Google that term and look at what comes up. The number of underfunded pension plans in this country has reached an alarming level, and, even if you are eligible for benefits under such a plan, you might want to consider establishing a back-up plan. Chapter 1 addresses this problem.

Check back soon, and I’ll give you can idea of what you can expect in Chapter 2!



Jim Lange A nationally recognized IRA, Roth IRA conversion, and 401(k) expert, he is a regular speaker to both consumers and professional organizations. Jim is the creator of the Lange Cascading Beneficiary Plan™, a benchmark in retirement planning with the flexibility and control it offers the surviving spouse, and the founder of The Roth IRA Institute, created to train and educate financial advisors.

Jim’s strategies have been endorsed by The Wall Street Journal (33 times), Newsweek, Money Magazine, Smart Money, Reader’s Digest, Bottom Line, and Kiplinger’s. His articles have appeared in Bottom Line, Trusts and Estates Magazine, Financial Planning, The Tax Adviser, Journal of Retirement Planning, and The Pennsylvania Lawyer magazine.

Jim is the best-selling author of Retire Secure! (Wiley, 2006 and 2009), endorsed by Charles Schwab, Larry King, Ed Slott, Jane Bryant Quinn, Roger Ibbotson and The Roth Revolution, Pay Taxes Once and Never Again endorsed by Ed Slott, Natalie Choate and Bob Keebler.

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