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Spend 'Til the End: Raising Your Living Standard in Today's Economy and When You Retire Paperback – January 5, 2010
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Top Customer Reviews
Per the authors, the financial service industry ignores consumption smoothing methodology for several reasons. First, it is really complicated. It includes many variables (mortgages, change in member of households, AMT, Social Security benefits taxation, etc...). Second, it reduces retirement savings needs. Third, it reduces the investment risk you need to incur to reach your goals. Thus, consumption smoothing would cut into the sales of financial products.
The authors spare no one in the financial service industry. The mutual fund managers don't earn their fees as 70% of them routinely fall behind the stock indexes. And, the 30% that beat the market change every year. Thus, the 30% who beat the market are just Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. Hedge funds don't have a chance to make up for their high fee structure (1% management fee; 20% of returns). Insurance salesmen care more about their commission than your finances.Read more ›
Before I read this book, I was also aware that Kotlikoff sells his own software package ESPlanner for $150 a copy plus $50 annual update fee ($200 for Monte Carlo version plus $50 annual update fee).
My first comment is that my perception is that Kotlikoff wrote the majority of this book. I base this upon the early writings of Kotlikoff and Burns that I have read.
I have long known that index funds usually beat roughly 70% of the actively managed funds in any given year......and my gut intuition is that similar statistics apply to the latest rage.....hedge funds. Kotlikoff points this out in a slightly different way saying that if 70% of mutual funds with the managers paid 1% of assets per year and 0% of the profits can't beat their appropriate index.......then there is no way a hedge fund charging 2% of assets per year and taking 20% of the profits will ever beat out index funds.
Kotlikoff also expresses the lack of financial literacy of Americans in a new way. I already knew that almost all Americans received no education in investing in our high school and college system. I used to get a kick out of the periodic investment tests that Money magazine used to give to average Americans..........and they consistently received grades of F on the test.Read more ›
But I'm going to devote the rest of this review to knocking it.
It is a popular introduction. Too popular. The breeziness of the writing style goes beyond the Strunk and White's worst nightmare. Schticks like naming hypothetical characters "Bill and Hillary" or "Donald and Ivana" or "Dr. Ruth" annoy and distract me like the scraping of a fingernail on a blackboard. The book is replete with dialog like "I'm going to convert!" "You found Jesus?" "Not quite. I'm going to convert all my 403(b) money to a Roth IRA to save taxes." Ewwwwww!
What I take from this book is that our financial lives contain such unexpectedly complicated interactions that few decisions can be intuited or considered in isolation. For example, the financial aspects of a mortgage: the interest is deductible, but only if you itemize... and interest decreases with time while the standard deduction, being inflation-indexed, increases with time. So for many families, the tax savings on interest deductibility last for only a few years. But there are other complexities as well; by the time I finished the chapter on the tax and consumption-leveling implications of a mortgage, my head was spinning. I was glad that I paid off my mortgage long ago and don't need to think this stuff through.Read more ›
Most Recent Customer Reviews
Well reasoned contrarian perspective on most if not all financial aspects of planning for retirement. I highly recommend.Published 6 months ago by Eric Bohr
Book gives lots of Interesting ideas but you need to exercise the discipline to make it work. Good book!Published 14 months ago by Krishan Singh
Provides extraordinary clarity into impact of decisions that affect your quality of life.
Highly useful preparation for talking to a Financial Planner.
Kotlikoff takes on conventional wisdom in a thoughtful discussion of how to get the most out of your retirement savings. Read morePublished on January 2, 2014 by Big Bad John
I have been a fan of Scott Burns' investment articles for years and bought this book because it was recommened by him and co-authored with Professor Kotlikoff. Read morePublished on April 26, 2013 by Hutch
The focus of the book is in part about consumption smoothing and in the end it steers the reader towards the planning calculator developed by the author that follows this concept. Read morePublished on December 30, 2012 by Steve
Sure wish i had read this 40 years ago. Probably takes a few reading for some of this to sink in tooPublished on November 26, 2012 by David Latham
Save just enough to be able to spend consistently for the rest of your life: That's the sensible premise of this book. Read morePublished on October 11, 2011 by Smitty