How to Retire Well and Well Off

In their new book "Fiscal Fitness," fitness guru Jack LaLanneand investment adviser Matthew J. Rettick team up to offer "8 Steps toWealth and Health" that they believe will help readers live well intotheir retirement while having enough money to enjoy it. According to a statistic in their book, 57 percent of seniorshave assets below $5,000, or less than the cost of one month of nursinghome care. And only 19 percent of elderly people claim assets equal tothree or more years of the average cost of nursing home care."The problems we have in America with obesity and the factthat we're just eating up Medicare and Medicaid with medical expensesbecause we're not in good shape amounts to a national catastrophe,"says Rettick, CEO of Nashville, Tenn.-based Covenant RelianceProducers. "The No. 1 fear used to be dying shortly after retirement.But that's been replaced by the fear of outliving one's assets."Your health and your finances are intertwined, the bookinsists, and lack of physical and fiscal fitness is all about risk.Follow these 8 steps, the authors say, and you'll be ready to leverageyour longevity. Step 1. Eat right: long-term insurance for your bodyOne of every five Americans -- approximately 72 million people-- will be 65 or older by the year 2030. What you do now determines ifyou are physically or fiscally flabby, the authors say. This stepoffers instruction on what to eat, how to prepare it, and what vitaminsand mineral supplements will help insure your health.
"I just bought a new Corvette," says LaLanne. "Would I putwater in the gas tank? How about your human machine? You put the wrongfuel in the human machine, and it's not going to run properly. We havemore fat American people than ever before in our history. Did you everthink about 'FAT?' Fatal. Awful. Trouble." Rettick, 54, has adopted hiscolleague's advice, shedding 20 pounds in the last year and a half."I started thinking, 'I'll just eat smaller amounts,'" saysRettick, "but that didn't work because I still loved the fries andhamburgers." When eating in restaurants, Rettick says, he now asks thewaiter for suggestions for low carb, low fat foods. "If I'm going tocheat a little bit, I have two or three pieces of dark chocolate atnight. Everything in moderation."Step 2. Exercise for life -- building your body'sbank accountBeing fit prevents diseases, says LaLanne, and the dividendsinclude saving on medical expenses and ultimately, long-term carecosts. In Step 2, LaLanne offers common sense, easy head-to-toeexercises and stretches for men and women."Everybody has an excuse: 'I've got a little pain my back, andI can'texercise,'" LaLanne mocks. "There may be 10 exercises you can't do, butthere's 100 you can do. Get in the pool! If your spine is screwed up,you can still work your legs and your arms, can't you? You've got 640muscles in your body, and every one of them is different. I'm not asstrong as I was when I was 21, but I'm going pretty damn good for 93.That's what counts."
Rettick found he couldn't keep hiscommitment to thehealth club, so he installed a small gym in his house, walking thetreadmill 30 minutes every other day, and lifting weights on thealternate days. "Everybody has to find his optimal time to work out.You just have to find out what it is you're willing to do, and make acommitment to follow through. No matter how far down you arephysically, exercise can immediately improve your life." 3. Think positive -- you can reverse theaging processThe most important commitmentto getting your body or your bank accountin shape, the authors say, is to replace the "I can't" mind-set with apositive attitude. In Step 3 LaLanne and Rettick address the defeat ofnegative self-worth and depression, and encourage social connectionsand keeping an active mind. "Our big message is that it's never toolate, no matter what age, to control your health and your wealth,"Rettick says. "We also want to see you get excited about the betterperson you can become, both from the physical side and the financialside. You just have to make small changes." No matter how bad you'redug in financially, he says, you can dig out, as Rettick did in theearly 1990s when he was two mortgage payments behind and saddled withmounting credit card debt. Then he remembered the positive thinkingbooks that inspired him as a young man: "Think and Grow Rich," byNapoleon Hill, "Psycho-Cybernetics," by Maxwell Maltz, and DenisWaitley's tapes on the psychology of winning.
"To maintain good physical health,"LaLanne says, "the correct mental attitude has to go along with it." 4.Plan ahead -- peace of mind and financial security is worth itPeace of mind equals quality of life, saysRettick. "If you don't payattention daily to your body, you won't live long. If you don't payattention to your finances, your money won't last long. And if youdon't do either, you're at the mercy of charity." This step covers thebasics of investing, and points a finger at financial sharks. Rettick became interested in financialservices and retirees after watching his own family struggle in the1980s. First, his maternal grandmother was diagnosed with Alzheimer's,and over the course of seven years lost not only her mental andphysical capacities, but also her finances, and ended up living with arelative. Then in 1986, both of Rettick's paternal grandparents becameill and entered a nursing home. His grandmother lived only two years,but his grandfather, "being a tough old German," spent 12 years inprivate care. "I learned firsthand how without properplanning you lose everything. You become a prisoner of the state,almost. That just really got under my skin, and I developed a passionfor helping people avoid this process. Because with the proper steps,you don't have to go through this. Now I tell people how to avoidpaying unnecessary taxes, how to avoid probate, how to stretch assetsto last an entire lifetime."
5.Insure your future -- for long-term care

"In my speeches to seminars or groups,I'll say, 'We depend oninsurance for a lot of things in our life. How many of you have lifeinsurance?'" Rettick says. "A good amount of hands go up. 'How manyhave automobile insurance?' All their hands go up. 'How many of youhave homeowners insurance?' All their hands go up. Then I'll say, 'Allright, how many of you have something will affect one of every two ofyou, which is long-term care insurance?' And only three or four handsgo up. It's interesting how we insure the things that have a lowlikelihood of happening, but don't insure the one thing that has a highlikelihood of happening. People don't want to think about ending upsomewhere like assisted living or a nursing home. But almost half ofthose Americans who are married and reach age 60 will live to age95. 

"If you buy a long-term care insurancepolicy, you want to get as closeto what the true cost of care is today as you can. And make sure youhave an inflationary rider because the experts say that with inflation,the cost of care today will double in 10 years, and potentially triplein 20 years. I would shoot for the moon and get lifetime coverage, say$140 a day with a 5 percent inflationary rider. That would be ideal."

The best line of defense is to have agood long-term care policy, Rettick says. But according to AARP, about25 percent of all applications from ages 55 and above don't qualifybecause of pre-existing conditions. One possible alternative is amodified endowment contract, or MEC, a life insurance contract that issimilar to an annuity in terms of tax-deferred accumulation of yourinitial premium. However, in an annuity, if the owner passes awayduring the annuity's accumulation stage all deferred income taxes ongrowth become due. MECs can avoid that by including a "rider" designedto pass the entire account value to your beneficiaries income tax-free.6.Annuities -- the path to retirement securityAnnuities often get a bad name, if only inthe press, says Rettick,primarily because they're subject to ordinary income taxes, instead oflower capital gain treatment. "ButAlbert Einstein said the eighth wonder of the world was the miracle ofcompounding interest," Rettick says. "So even after paying taxes,you're going to have more money to spend than if you had that money inthe bank in a CD, where you're paying taxes every year on thatinterest. For money that you don't want at risk, this is an idealaccount." Rettick advocates fixed indexed annuities which are tied to apopular equities index such as the S&P 500.
7.Investment management -- maximum returns, minimal taxes, fees"When you go looking for a financialadviser, you'll find there arelots of different designations out there, some of which are importantand some of which are not especially valid," says Rettick. "Look forsomebody who is insurance and securities licensed. Your normal CFPdoesn't understand Medicaid. If you ask somebody what he specializes inand he says, 'I help anybody age 20 to 100,' then he's a generalist,not a specialist. Find somebody who focuses on the pitfalls ofretirement and the challenges of making sure your money lasts,especially if you have a catastrophic illness. 8.Tap your home's equity -- you've earned it"Reverse mortgages once looked like a fad,but they are now endorsed bythe government," says Rettick. "If you have a house that's worth$200,000 and it's debt free, that's a good thing. The bad part is thatit's not generating any income. If you don't need any additional money,then leave it alone. But if someone needs to pay for long-term care orsupplement his Social Security income, a reverse mortgage company willeither provide a lump sum of 60 (percent) to 70 percent of the housevalue, or a monthly income stream that will last for life. Once thatperson passes away, the house is sold and the company recoups itsinvestment plus interest. The balance goes to the heirs. However, insome situations, you might want to compare an equity line to a reversemortgage, even though the equity line might have a high interest rate." Alanna Nash is a freelance writer based inKentucky.Bankrate.comis the Web's leading aggregator of information on financial productsincluding mortgages, credit cards, new and used automobile loans, moneymarket accounts, certificates of deposit, checking and ATM fees, homeequity loans and online banking fees. Visit Bankrate.comto get the tools and information that can help you make the bestfinancial decisions. 
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