Every year, new books are published that are worth your time to read over and over again. This year’s standout book is the just-published How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement by Morningstar Director of Personal Finance Christine Benz.
While most of us think of the term “retirement planning” as an exercise in determining whether you have enough money to quit your job, Benz takes the concept of retirement planning to a broader level. Ta. An expert herself, she discusses not only financial issues, but also the psychological and practical aspects of retirement planning, with 20 well-known (and lesser-known but profound) experts in each field. We interviewed experts.
Yes, there is good advice on balancing investments and withdrawals, as you would expect in a retirement planning book. But this entertaining book goes far beyond “the numbers,” or achieving financial goals. Rather, this is a guide for planning every aspect of a whole new phase of your life.
How do you start thinking about this transition? Benz interviews Fritz Gilbert, author of the blog “Retirement Manifesto.” Start thinking at least five years in advance. As you get closer, Gilbert suggests “starting to say no to everything” to clear your calendar and head. His advice ranges from intentionally having friendships outside of work so that your life doesn’t stop on your last day at work, to scraping your work computer and collecting everything that previously arrived in your work email. This ranges from re-subscribing to newsletters and personal groups. It disappears.
Longevity researcher Laura Carstensen offers similar advice. Your lifespan is written in your genes or “in the stars,” but your work and social networks play a role in not only extending your lifespan, but also enjoying it. “Work is good for people,” says Carstensen. “That’s not how we work.” This short chapter will definitely make you want to read it twice. Is your work your only identity?
David Blanchett, a leading retirement researcher and financial planner, advises looking ahead to how your spending will change in retirement. I mean, what’s the point in saving money for a trip when your health may change in 10 years and make it impossible? Part of your retirement lifestyle is to is to enjoy. And plan to spend your money wisely, but actually spend it while you still enjoy it.
In an interview with financial planner Nathan Guyton, Benz explains in detail how to create a spending plan. Mr. Guyton created a flexible retirement spending system called Guardrails. We recognize that your investment income and spending needs can change in any given year, and we help you create a system that creates a retirement income stream that meets your needs.
And speaking of spending, the chapter with author Ramit Sethi is titled “Give Yourself Permission to Spend on Things That Matter to You.” It is based on the idea of a simple life in retirement. This isn’t about splurging, it’s about deciding where and how to focus your interests and money. Yes, it could be travel, but it could also be working with a charity. The idea is to give your life a purpose and make a plan for it. He points out that even if you have a limited budget, it’s important to prioritize where you put your money. This chapter describes the joys of retirement, bucket lists, and penny-pinching.
Renowned financial planner and author Mary Beth Franklin has been interviewed extensively about Social Security planning. She advocates waiting as long as possible to make a payback, certainly until you reach retirement age. But more importantly, this chapter describes strategies for couples with uneven incomes and the potential to maximize the surviving spouse’s income.
Perhaps one of the most profound and thought-provoking chapters is Benz’s interview with renowned finance professor and author Wade Pfau. In this chapter, you will be guided to consider your own personality traits as they impact your retirement lifestyle. Depending on your own psychological approach to money and spending, you will need different planning approaches. (No wonder many couples disagree!)
Do you take a “safety first” approach to your retirement income, or can you tolerate the uncertainty of a “probability” approach? From a practical standpoint, more security Do you need an income, or do you want to rely more on the upside potential offered by stock investments? Sure, you can visit Pfau’s website and fill out the “RISA Survey” to see how it affects your approach to retirement. We recommend that you determine whether this will have any impact.
I have only just scratched the surface of the wisdom and methodical thinking contained in this easy to read book. Since I wrote my retirement book nearly 25 years ago (The Savage Number: You Really Need to Retire?), the concept of retirement has taken on new meaning, and for those planning a fulfilling life. We have gained new options. stage of life.
And Christine Benz’s “How to Retire” is the most helpful guide. That’s the brutal truth.
(Terry Savage is a registered investment advisor and author of four best-selling books, including The Savage Truth About Money. Terry answers questions on his blog at TerrySavage.com.)
