Investors, shell-shocked by the "Great Recession" of 2008-2009, are looking for answers, for something fresher than the old 'buy-and-hold' mantra. They hunger for stability, yet yearn for growth to rejuvenate their battered portfolios. Ray Lucia's The Buckets of Money Retirement Solution: The Ultimate Guide to Income for Life provides just that—a reassuring and scientifically proven strategy that gives investors both growth and income.
Lucia, a Certified Financial Planner who's helped thousands of people invest more than $2 billion, explains how to spend down 'safe' buckets (containing, for example, Treasuries, CDs, bonds), while leaving a riskier bucket (real estate, stocks and alternative investments) to grow long-term. This strategy shields investors from the short-term ups and downs of the market. And it gives them the courage and discipline to stay invested no matter what the future holds.
Written in a breezy, accessible style and loaded with tons of examples and clear, specific calculations, the book explains how to set your financial goals, divvy up your money accordingly, and then invest intelligently. With this book as your guide, readers will learn how to achieve both income and growth while at the same time reducing risk. "All in all," Lucia writes, "this plan is akin to a sports car that seats six, approximating the best of both worlds. In this case by being a conservative strategy that’s also growth-oriented."
Almost every kind of investment—stocks, bonds, commodities, real estate—plunged in the past year or two, turning off millions of investors who'd been planning for and counting on a reasonably comfortable retirement. These retirees or near-retirees need solutions ... something fresher than the old 'buy-and-hold' mantra. Yet here's what they hear from the financial-services industry: Set up an asset-allocation model, then take a systematic withdrawal to support your retirement ... remembering, of course, to rebalance the accounts to remain in sync with the model. Wrong! That maximizes the advisors' fees but doesn't protect the investors' assets during the tough times.
Table of Contents:
Foreword by Ben Stein xi
Acknowledgments xv
Introduction xvii
Part I Regain Your Balance
Chapter 1 Adapt to the Changing Landscape 3
The End of Easy 3
The Lessons 9
A Final Word 10
Chapter 2 Prepare for Whatever the Future Holds 11
Rebuild Your Savings 12
Rethink Your Retirement Years 17
Retool Your Retirement Savings Plans 23
Reinvent Your Strategy 26
A Final Word 28
Part II Forge a New Plan
Chapter 3 Grasp the Buckets of Money Concept 33
Put Time on Your Side 34
Other Risks 35
Wall Street’s Answer 38
Flawed Analyses 40
Main Street’s Myopia 41
“Reverse Dollar-Cost Averaging” 42
Proper Allocation 44
Proper Location 45
A Final Word 47
Chapter 4 Choose the Proper Investments 49
Bucket 1: The Income Bucket 49
Bucket 2: The Relative Safety Bucket, Mid-term Investments 58
Bucket 3: The Growth Bucket, Long-Term Investments 68
A Final Word 76
Chapter 5 Execute the Buckets of Money Strategy 77
First, Check Goals 77
Art and Science 78
Filling the Buckets 79
Bucket 1 80
Bucket 3A 81
Planning for Inflation 82
Bucket 3B 83
The Bottom Line 85
The Fate of the Heirs 85
Another Scenario 86
How Much Risk? 87
How to Allocate 88
The Importance of Bucketizing Now 89
A Final Word 90
Part III Refine the Plan
Chapter 6 Take Another Look at Annuities 93
What’s an Annuity? 93
Predicting the Future 102
Good Evidence 102
What Academia Says 103
Recovery Strategy 104
Risks and Opportunities 105
A Final Word 106
Chapter 7 See What REITs Can Do for You 109
What Exactly Is a REIT? 110
Combining the Best Features 110
Public versus Nontraded REITs 113
Another Advantage 114
The Lowdown on Loads 116
Are All REITs Low-Leveraged? 118
What Kinds of Properties Are Best? 120
Differs from Homes 124
The Role of REITs in a Portfolio 124
What Should You Look For? 125
Getting Help 128
My Personal Bias 129
A Final Word 131
Chapter 8 Play It Smart When It Comes to Personally Owned Real Estate 133
Your Home and Your Future 133
Buying Other Real Estate 147
A Final Word 153
Chapter 9 Give Uncle Sam His Fair Share—But No More 155
Tax-Free Municipal Bonds 156
Tax Management of Stock Portfolios 157
Real Estate 157
Roth Conversion 159
Incorporating Your Business 162
Tax-Credit Investing 164
Choosing Smart Location of Assets 166
A Final Word 168
Part IV Live Happily Ever After
Chapter 10 Craft a Workable Withdrawal Strategy 173
Beware of Averages 174
Pitfalls Abound 176
Getting Set Up 177
Drawing Down Your Total Retirement Resources 179
Keeping Taxes Low 183
A Few More Thoughts about Stocks 187
A Final Word 191
Epilogue Keep Your Eye on Enjoyment 193
About the Authors 197
Recommended Resources 199
Index 203
