The value of debt in retirement : why everything you have been told is wrong

338 Pages·2015·21.13 MB·English

by  Thomas J. Anderson

The Value of Debt
in Retirement

The Value of Debt
in Retirement
Why Everything
You Have Been Told Is Wrong
Thomas J. Anderson
Cover design: Wiley
Copyright © 2015 by Thomas J. Anderson. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Anderson, Thomas J. (Certifi ed investment management analyst)
The value of debt in retirement : why everything you have been told is wrong /T homas J. Anderson.
pages cm
Includes bibliographical references and index.
ISBN 978-1-119-01998-5 (hardback); ISBN 978-1-119-02001-1 (epdf);
ISBN 978-1-119-02000-4 (epub) 1. Finance, Personal. 2. Retirement—Planning. I. Title.
HG179.A5597628 2015
332.7084′6—dc23
2014049407
Printed in the United States.
10 9 8 7 6 5 4 3 2 1
This book is dedicated to two very special sets of retirees
who have given me the insight and unconditional love
necessary to write this book:
Grandpa John & Grandma Kay Kay
Marty & Julianne Smith

Contents
Foreword xv
Acknowledgments xvii
Introduction xxi
Part I: Basic Ideas and Core Concepts
Chapter 1: A Better Path 3
A Successful but Controversial Debut 4
The Fifth Indebted Strength 7
Who Can Benefi t from This Book? Not Only
Millionaires! (But They Can, Too) 9
Everyday Example #1: Immediately
Better Credit Card Debt 11
Getting beyond the ABLF and Focusing
on Retirement 12
Notes 14
Chapter 2: Debt in Retirement: Conventional Wisdom,
Right and Wrong 17
What Some Popular Retirement Books
Get Right—and Wrong—about Debt 18
vii
viii contents
The “Good versus Bad” Debt Camp 19
Bach Where We Started: The Irresolutely
“Against Debt” Camp 20
The (Very Small) “Sometimes It’s Okay to
Have Debt” Camp 21
Everyday Example #2: A Bridge Loan over
Troubled Quarters 22
Notes 24
Chapter 3: Why and Whether to Adopt a Holistic
Debt‐Inclusive Approach in Retirement 27
A First Look at the Three Main Types of Debt:
Oppressive, Working, and Enriching 28
Seven Rules for Being a Better Debtor 30
In the Company of Longer Life Spans 31
Winging Your Way to a Successful Retirement:
The “Whole Chicken” Approach 33
Everyday Example #3: A Holistic
Business Recipe for Success 35
Notes 37
Part II: The Power of Debt in Reducing Taxes,
Increasing Return, and Reducing Risk
Chapter 4: Returning to the Return You Need 43
Cash Flow and Incoming Money: The Ultimate
Key to Resource Management 45
You Have to Get Your Numbers Right! 46
Regardless of Your Net Worth, Distributions
Are Rarely Constant over Time in Retirement 49
How Much Can You Safely Take Out? 52
How You May Be Able to Increase Your
Rate of Return 54
How Is This Possible? A Big‐Picture Overview 56
Risks and Problems 57
Everyday Example #4: Retiring the
“Loan” Survivor 58
Notes 60