Personal financial planning / G. Victor Hallman, Jerry S. Rosenbloom.

Format:

Book

Author/Creator:

Hallman, G. Victor.

Contributor:

Rosenbloom, Jerry S.

Language:

English

Subjects (All):

Finance, Personal.

Physical Description:

xv, 623 pages ; 23 cm

Edition:

Seventh edition.

Place of Publication:

New York : McGraw-Hill, [2003]

Summary:

Over the past quarter century, the six previous editions of Personal Financial Planning have helped more than 135,000 individuals invest and protect their hard-earned income and savings. Through economic recessions, stock market booms and busts, presidential administrations, social upheavals, and technological revolutions, authors and respected personal finance authorities Victor Hallman and Jerry Rosenbloom have continued to update this classic, ensuring accurate and up-to-date guidance for Americans looking to invest their money, protect their families, plan for their estates and retirement, and thus strengthen their futures. Now, with Personal Financial Planning, Seventh Edition, Hallman and Rosenbloom provide vital new material to reflect the latest trends in financial planning. Issues that didn't exist three years ago but now take center stage are introduced and thoroughly explained. In addition, the authors revisit and expand the extensive coverage that has made this book the benchmark reference against which all other financial planning books are measured. New to this substantially restructured and revised edition are in-depth explanations of the 2001 tax law, explanations of changes in IRS minimum distribution rules, planning guidelines for the repeal of the GST estate tax, descriptions of the new 529 education plans, and more. With its all-encompassing treatment of family financial matters and an easy-to-reference layout, Personal Financial Planning, Seventh Edition, will pay for itself time and again. Authoritative, comprehensive, and up to the minute, it is an irreplaceable source of information for anyone concerned with building wealth in today's noguarantee financial environment.

Contents:

Part 1. Coordinated Financial Planning 1

Focus on Objectives 4

Need for Personal Financial Planning 5

Steps in the Planning Process 6

Use of Financial Planning Statements 7

2. Setting Financial Planning Objectives 12

Organizing Objectives 12

Adjusting Objectives for Inflation and Possible Deflation (Recession or Depression) 23

Adjusting Objectives to Changing Tax Laws 24

Part 2. Using Insurance Effectively 27

3. Personal Insurance Principles and Selecting Insurers 29

Personal Risk Management 29

Considerations in Choosing an Insurer 30

Considerations in Choosing an Agent or Broker 34

4. Life Insurance and Social Security 36

Sources of Life Insurance Protection 36

Social Security 38

Types of Individual Life Insurance Contracts 42

Definitions of Life Insurance for Income Tax Purposes 55

The Life Insurance Contract 57

Planning and Using Life Insurance 62

Substandard Risks 64

Nonmedical Life Insurance 64

What Actions Can an Uninsurable Person Take? 65

Group Life Insurance 65

How Much Life Insurance Is Needed? 67

5. Health Insurance 70

Sources of Health Insurance Protection 70

Disability Income (Loss-of-Time) Coverages 71

Medical Expense Coverages 79

Individual Health Insurance Policy Provisions 90

Medical Savings Accounts 92

Health Reimbursement Arrangements (HRAs) 93

6. Long-Term Care Insurance and Medicaid Planning 94

Nature of Exposure 94

Basic Planning Approaches 95

Long-Term Care Insurance and Other Arrangements 95

Medicaid Planning for Long-Term (Custodial) Care 101

7. Property and Liability Insurance 109

Property Insurance 109

Personal Liability 110

Homeowners Insurance 112

Automobile Insurance 116

Other Property and Liability Policies to Consider 120

Insurance Companies and Premiums 122

Part 3. Investments and Investment Planning 125

The Basic Investment Objective 127

Investment Directly or Through Financial Intermediaries 127

Investment and Speculation 129

Factors in the Choice of Investments 130

Security of Principal and Income 130

Rates of Return 137

Marketability and Liquidity 146

Diversification 146

Tax Status 148

Size of Investment Units (or Denominations) 148

Use of Collateral for Loans 148

Callability 148

Freedom from Care 149

9. Common Stocks 150

Some Measures of Value for Common Stocks 150

Information About Common Stocks 154

The Investment Process 155

Diversifying a Common Stock Portfolio 157

Periodic Review 157

Decisions Concerning Selling Common Stocks 157

Dollar-Cost Averaging 158

The Mechanics of Buying and Selling Common Stocks 158

Margin Accounts 160

Selling Short 160

Securities Investor Protection Corporation 161

Investment Categories of Common Stocks 161

Some Theories of Common Stock Investment 164

Common Stocks and Market Cycles 166

The Case for Long-Term Investments in Common Stocks 166

10. Other Equity Investments 174

Real Estate 174

Oil and Gas (Natural Resource) Ventures 182

Other Tax Shelters 182

Impact of Passive Activity Loss Rules 183

Put and Call Options 184

New Issues or Initial Public Offerings (IPOs) 186

Commodity Futures Trading 186

Art, Antiques, Coins, Stamps, Gold, and Other Precious Metals 188

11. Fixed-Income Investments 189

Types of Fixed-Income Investments 189

Ways of Taking Returns from Bonds 189

Corporate Bonds 191

Municipal Bonds (Munis) 192

U.S. Government Obligations 196

Market Discount Bonds 199

Zero-Coupon Bonds (Zeros) 200

Preferred Stocks 201

Guaranteed Principal Fixed-Income Investments 202

Liquid Assets 204

Conversion Privileges in Fixed-Income Securities 204

Bond Ratings and Investment Quality 204

Strategies for Investing in Fixed-Income Securities 207

12. Mutual Funds and Other Investment Companies 209

Kinds of Investment Companies 209

Why Invest in Mutual Funds? 209

Disadvantages of Mutual Funds 210

Types of Funds

Some Planning Considerations 210

Regulation of Investment Companies 213

How to Invest in Mutual Funds 213

Distributions from and Exchanges of Mutual Funds 214

Mutual Funds and Their Investment Objectives 215

Getting Information About Mutual Funds 222

Mutual Fund Performance 222

Mutual Fund Expenses 225

Factors Involved in Selecting Mutual Funds 226

Planning Considerations for Mutual Funds 227

Tax Aspects of Mutual Funds 227

Exchange-Traded Funds 230

Hedge Funds 230

13. Asset Allocation Strategies and Models 232

Fundamentals of Asset Allocation 232

Steps in the Asset Allocation Process 233

Personal Factors and Asset Allocation 233

Investment Objectives 235

Investment Policies 236

Possible Asset Classes to Be Considered 237

Investment Vehicles to Be Considered 237

Return-Risk Considerations 239

Allocations Within Asset Classes 243

How Investments (Asset Classes) Should Be Held 243

Illustrations of Asset Allocation Strategies 245

Part 4. Income Tax Planning 255

The Federal Income Tax on Individuals 257

The Federal Income Tax on Corporations 273

Pass-Through Business Entities 277

Federal Income Taxation of Trusts and Estates 278

State and Local Income Taxes 280

15. Basic Income Tax Saving Techniques for Individuals 281

Eliminating or Reducing Taxes 281

Shifting the Tax Burden to Others 287

Allowing Wealth to Accumulate Without Current Taxation and Postponing Taxation 288

Taking Returns as Capital Gains 290

Taxation and the Capital Gains Lock-in Problem 290

16. Charitable Giving 300

Basic Tax Principles 300

Planning Techniques 302

Part 5. Planning for Retirement and Capital Accumulation Plans 317

17. Employer-Provided Qualified Retirement Plans and Social Security Benefits 319

Economic Problems of Retirement Years 319

Steps in Planning for Retirement Income 319

Sources of Retirement Income 320

Characteristics of Employer-Provided Retirement Plans 322

Pension Plans 333

Profit-Sharing Plans 336

Savings (Thrift) Plans 338

Stock Bonus Plans and Employee Stock Ownership Plans (ESOPs) 344

Hybrid Qualified Retirement Plans 345

Retirement Plans for the Self-Employed (HR-10 or Keogh Plans) 346

18. Other Employer-Provided Retirement Plans and Other Employee Benefits 351

Other Employer-Provided Retirement Plans 351

Other Employee Benefits 358

19. Individual Retirement Accounts and Annuities (IRAs) 361

Types of IRAs 362

Planning Issues for IRAs 372

20. Planning for Taking Distributions from Qualified Retirement Plans and IRAs 377

Taxation of Benefits from Qualified Plans and IRAs 379

Planning for Distributions from Qualified Retirement Plans and IRAs 397

21. Individual Investment Annuity Contracts 406

Fundamental Purposes of Annuities 406

Types of Individual Annuities 406

Parties to the Annuity Contract 409

Phases of Annuities 409

Investment Returns on Annuities 410

Expense Charges on Annuities 412

Withdrawals and Loans 413

Exchanges of Annuities 414

Annuity Distribution (Payout) Options 414

Annuity Death Benefits 414

Split-Funded Annuities 415

Taxation of Nonqualified Annuities 416

Other Individual Annuity Arrangements 418

Using Life Insurance Values to Provide Retirement Income 418

22. Employee Stock Compensation Plans 420

Types of Plans 420

Statutory Plans 421

Nonstatutory Plans 424

Provisions of Stock Option Plans 428

Valuation of Stock Options 431

Some Caveats Concerning Stock Options and Other Plans 434

Planning Issues Regarding Stock Options and Other Stock Plans 434

Part 6. Estate Planning 437

Objectives of Estate Planning 439

Methods of Property Disposition 440

Property and Property Interests 441

What Is Meant by the "Estate"? 448

Settling the Estate 452

Trusts in Estate Planning 454

24. The Transfer Tax System 462

Impact of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) 462

Applicable Credit Amount (Unified Credit) and Applicable Exclusion Amount 463

Federal Gift Tax 464

Federal Estate Tax 472

Federal Generation-Skipping Transfer (GST) Tax 480

25. Lifetime Giving and Sales Within the Family 486

Making Lifetime (Inter Vivos) Gifts to Noncharitable Donees 486

Sales Within the Family 503

Loans to Family Members 506

26. Marital Deduction Planning, Postmortem Planning, and Estate Liquidity 507

Marital Deduction Planning 507

Postmortem Estate Planning 522

Estate Liquidity 524

27. Life Insurance in Estate Planning 526

Taxation of Life Insurance 526

How to Arrange Life Insurance 533

Gifts of Life Insurance 540

28. Revocable Living Trusts, Other Will Substitutes, and Property Management Arrangements 544

Revocable Living Trusts as a Will Substitute 544

Joint Property with Right of Survivorship 548

Property Management Arrangements to Deal with Physical or Mental Incapacity 549

29. Financing Education Expenses 552

Importance as a Financial Objective 552

Nature and Growth of Education Costs 552

Estimating Education Costs 553

Financial Aid Considerations 554

Tax "Breaks" for Education Costs 555

Strategies in Planning for Education Costs 557

30. Planning for Business Interests 572

Potential Issues 572

Characteristics of Closely Held Businesses 573

Types of Business Entities 573

Check-the-Box Regulations 581

Income Tax Basis in Business Interests 582

Factors in Choice of Entity 583

Disposition of Business Interests 588

Retention of Business Interests 598.

Notes:

Includes index.

ISBN:

0071419446

OCLC:

51728707

Online:

Contributor biographical information

Publisher description