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The author of The Graying of America (1980), which cast a cold eye on private and government pension programs, now charts a self-protective course for prospective retirees--faced, as Jorgensen sees it, with a continuing price spiral. The first requisite, he insists, is a thorough reading of any applicable pension-plan description and careful calculation of all anticipated receipts--a process made easier by the worksheets and case histories incorporated in the text. To offset indicated shortfalls, Jorgensen favors vehicles affording tax deferral--in particular, IRA (now open to all) and, for the self-employed, Keogh Plans (on which the contribution-limits have been doubled); another possibility, for those fortunate enough to qualify, is the professional corporation. Self-directed accounts are urged because trustees are no longer fully responsible if hoped-for gains don't materialize. Within this framework, Jorgensen assesses investment options--few of which meet his exacting standards. Owing to inflation, 1000 on the DJIA would be just 370 in 1966 dollars, thereby ruling out equities; and gold, for all its mystique, ""has become just another commodity."" Diamonds and postage stamps (barred by law from self-directed IRAs) are chancy at best; transaction costs cut into returns on high-yielding discount bonds. Almost by a process of elimination, Jorgensen's choices center on tax-deferred annuities and money-market funds, which accord with his injunction against lending for longer than six months. He also counsels going into debt, which can be repaid at a later date in depreciated dollars (but unlike most advocates of leverage, he is strongly against ""borrowing from yourself"" via a second mortgage or other device keyed to real-estate appreciation). Though the outlook is grim, the text is leavened with light touches--making this a relatively painless way to acquire some very practical advice.

Pub Date: May 1st, 1982
Publisher: Scribners