Business and Personal Finance © 2007

Chapter 15: Retirement and Estate Planning

Chapter Summaries

• The sooner you start planning and saving for retirement, the faster your assets will accumulate.
• Estimating your living expenses is the first step of retirement planning. Housing needs will depend on your desires and your health.
• Social Security provides a regular monthly income payment but is not meant to cover all retirement expenses.
• Employer pension plans include two types: A defined-contribution plan is an individual account for each employee into which an employer contributes a specific annual amount; a defined-benefit plan specifies benefits based on total earnings and years on the job.
• Personal retirement accounts include regular IRAs, Roth IRAs, SEP plans, Spousal IRAs, Rollover IRAs, Education IRAs, and Keogh plans.
• The various types of wills include simple wills, traditional marital share wills, exemption trust wills, and stated dollar amount wills.
• The several types of trusts include credit-shelter trusts, disclaimer trusts, living trusts, and testamentary trusts.
• One common characteristic of many estates is joint ownership of property between spouses.
• Estates are taxed with estate taxes, estate and trust federal income taxes, inheritance taxes, and gift taxes.