CHAPTER 3

IRA Mastery

Thinking is one thing no one has ever been able to tax.

—Charles H. Kettering

When it comes to planning for retirement, times have changed. Prior to the baby boomer generation, people didn’t have 401(k)s or retirement accounts. They worked for decades at one company, built up a pension, and then retired with income for life from their pension and Social Security checks. On top of this they were dedicated savers, putting away thousands in savings accounts that sometimes supplemented their retirement income, but mostly went to their children.

Baby boomers like me have always taken a different approach. We adopted our parents’ save-first mentality, but as fixed pensions became increasingly rare in the private sector, this new generation was forced to take responsibility for their own retirement savings. Accordingly, Congress passed legislation to facilitate this shifting obligation, creating IRAs in 1974 with the Employment Retirement Income Security Act, and 401(k)s with the Revenue Act of 1978. The message from private industry and our government is clear: The responsibility for your retirement is increasingly yours and yours alone. This increased reliance on our savings also means that we’re more concerned with outliving our money. We need our hard-earned nest egg to provide for our retirement years and to act as our own private pension. In the end, we still want our kids to have what is left.

Even as changing times have shifted priorities and practices through ...

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