7 Steps to Financial Freedom in Retirement by Hank Paarrott ChFC, AEP, RFC

Estate & Financial Strategies, Inc.
isbn: 978-1-118-09528-7
copyright 2011 by Hank Parrott
John Wiley & Sons, Inc., Hoboken, NJ

I really liked this book. I like his approach of assessing every aspect of a person's financial situation; holdings and expenses, then determining what was needed to live comfortably. I like a lower risk approach as we get older. We have less time to recover from stock market reverses.

He has some interesting articles on his blog http://www.hankparrott.com/blog/

He recommends an holistic adviser to look at all parts;

• investments- don't just consider highest return for your volatility tolerance. Also consider financial situation and retirement.
• Need to consider taxes to maximize return
• Instead of trying to minimize taxes for current year, it may be better to take steps to decrease for future years.
• Also need to consider estate planning
• Insurance can be used to minimize risk but are not a complete solution

He asks questions to help you look towards the future of when you will need the money from your IRAs and how long do you expect to live.

CDs, Annuities, and some Bonds can help protect your retirement savings and also be blended with equities to provide additional growth against inflation and a more stable income stream. You have to balance Safety/Protection against Inflation/Taxes with Potential/Growth.

I've read about CD ladder. He gave an example of 6 months apart for the next two years.

I'd like financial advisers to read p88. I agree with the book that it is better to design your portfolio around needed rated return while minimizing risk, primarily by choosing and appropriate ratio of equities and low-risk fixed investments. NOT by designing a portfolio that maximizes risk based on perceived risk tolerance of the investor derived from a questionnaire. (Side note: I have not yet met a financial adviser that is able to live off their investments. Therefore, I think the purpose of investing for amateurs should be to protect your savings earned from your livelihood.)

I think Markowitz Efficiency Frontier is about asset allocation where certain asset classes of stocks and bonds with a negative correlation are blended to get desired market return while minimizing risk. http://edinformatics.com/investor_education/ talks about allocation. 3 factors are Market(Stocks/bonds), Size (Small/Large Cap), & Value (Growth/Value)

He discusses estate planning and why it is important. http://www.hankparrott.com/helpful-documents/