Ernst & Young's Personal Financial Planning Guide

554 Pages·2004·2.57 MB·English

by  Ernst & Young, Martin Nissenbaum, Barbara J. Raasch, Charles L. Ratner

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Ernst & Young’s
Personal Financial
Planning Guide
Fifth Edition
Revised & Fully Updated
Martin Nissenbaum
Barbara J. Raasch
Charles L. Ratner
John Wiley & Sons, Inc.
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Ernst & Young’s
Personal Financial
Planning Guide
ffirs_ey.qxd 8/16/04 3:48 PM Page ii
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Ernst & Young’s
Personal Financial
Planning Guide
Fifth Edition
Revised & Fully Updated
Martin Nissenbaum
Barbara J. Raasch
Charles L. Ratner
John Wiley & Sons, Inc.
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This book is printed on acid-free paper.
Copyright © 2004 by Ernst & Young LLP. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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CONTENTS
Acknowledgments / vii
About the Authors / ix
Introduction / 1
PART 1 THE FUNDAMENTALS OF FINANCIAL
PLANNING
1 Taking Charge of the Financial Planning Process / 9
2 Building Wealth to Meet Your Goals / 39
3 Building Wealth Through Investment Planning
Set Your Financial Goals; Understand Investment Vehicles / 57
4 Building Wealth Through Investment Planning
Understand Financial Markets and Concepts; Develop an
Investment Strategy / 81
5 Building Wealth Through Investment Planning
Implement Your Strategy; Monitor Your Investments / 93
6 Building Wealth (Concluded) / 103
7 Protecting Your Family and Assets Through Life Insurance / 123
8 Protecting Your Family and Assets Through Health,
Disability, Property/Casualty, and Auto Insurance / 145
9 Providing for Your Family Through Estate Planning / 165
10 Estate Taxes and Deductions / 177
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vi CONTENTS
11 Gift Tax Fundamentals and Generation-Skipping
Transfer Tax / 197
12 Sophisticated Estate Planning / 209
13 Estate Liquidity, Powers of Attorney, and Living Wills / 223
PART I1 THE LIFE EVENT APPROACH TO FINANCIAL
PLANNING
14 Getting Married / 237
15 Raising a Family / 267
16 Coping With Divorce / 291
17 Being a Single Parent / 315
18 Buying and Selling a Home / 327
19 Funding a College Education / 353
20 Taking Advantage of Employment Benefits / 377
21 Starting Your Own Business / 391
22 Dealing With Your Parents / 427
23 Losing Your Spouse or Life Partner / 447
24 Planning for Retirement / 471
25 Planning for Retirement: Health Care and
Insurance Needs / 493
26 A Few Words in Parting / 523
Index / 527
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ACKNOWLEDGMENTS
SPECIAL THANKS TO
James S. Turley, Global Chairman and Chief Executive Officer of Ernst &
Young LLP; James S. DiStasio, Americas Chief Operating Officer; Mark A.
Weinberger, Vice Chairman—Americas, Tax Services; Curt Fochtmann,
Global Director of Human Capital; David J. Kautter, Director of National
Tax Department; Charles R. Kowal, Director of Personal Financial Counsel-
ing; Jay D. Nibbe, Managing Partner of Markets–Tax; William Arnone; Elda
A. Di Re; David Gerson; Glenn M. Pape.
OTHER ACKNOWLEDGMENTS
James J. Biles; Lynn P. Finkelstein; Robert J. Porter; Debra Englander and
Janice Weisner of John Wiley & Sons, Inc.; and Jon H. Zonderman for his
editorial assistance.
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