Customer Reviews

Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard--Today and When You Retire

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Kotlikoff is a very interesting writer/economist. His previous book The Coming Generational Storm: What You Need to Know about America's Economic Future is a must read for anyone interested in the actuarial position of Social Security. Now, Kotlikoff and Burns focus on financial planning. To investigate it, Kotlikoff developed a sophisticated program (ESPlanner). Its underlying methodology is "consumption smoothing" that consists in evening out your discretionary income over your lifetime.

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.

The authors are at their best when dealing with the intricacies of Social Security and Medicare. They explain unique strategies to maximize consumption smoothing such as Social Security double dipping. Similarly, you can come ahead by giving to a Charitable Gift Fund because it markedly reduces your taxes on Social Security benefits. They stress how rapidly Medicare premiums are rising and how we should boost savings even during retirement to withstand that fiscal shock.

Many of their other recommendations make good sense. Those include holding stocks in taxable accounts and bonds in tax advantaged ones (IRA, 401k) to lower your tax burden. They recommend using index funds instead of regular mutual funds to save on costs and boost returns. Diversify your 401k holdings away from your employer's common stock to reduce your own portfolio risk. They also suggest that marriage is a good deal from a tax standpoint in most cases. Their chapter on how to hedge against potential increase in taxes and inflation and upcoming cuts in Social Security benefits is very good. Their chapter on long term care is excellent.

But, some of their investment advice is less sound. Kotlikoff recommends inflation indexed Treasuries (TIPs) as a safe investment that is guaranteed to keep up with inflation (just as Robert Shiller did in Irrational Exuberance). But, on an after tax basis TIPs are unattractive. The yield they offer above inflation is really low (< 1.5% for 10 year TIPs). When inflation is higher than 3% you incur negative real returns after tax. This is because the entire return (inflation + yield) is fully taxable by the IRS. Also, TIPs with longer maturities offer little extra yield that does not compensate for the increase in interest rate risk. Thus, with TIPs it is questionable you can preserve capital let alone grow it. As a better alternative, I suggest medium term Munis.

Occasionally, they make errors. Upon retiring, Kotlikoff recommends converting your 401k into a Roth IRA because you may hit the 28% AMT that is lower than the 35% maximum tax rate. But, you don't "benefit" from the AMT because your tax liability is always the higher of the AMT or your regular taxes. Also, Kotlikoff suggests people's living standards go up when home prices fall because they save on insurance premium and property taxes. But, they don't. Insurance premiums are based on the replacement costs of the house. And, property taxes are based on assessed value. Replacement costs are always lower than the home market value. Assessed value almost always is lower too. Thus,in the majority of cases declining home prices will not save you money.

The authors make other questionable statements. Supposedly, on a consumption smoothing basis, a plumber maintains a higher living standard than a doctor. I don't believe that. Also a college education supposedly provides little financial benefits vs just high school. Meanwhile, figures from the US Census indicate that college grads make nearly twice as much as high school grads. I ran the numbers and calculated the NPV of a college education was several hundred thousand dollars. Also, they suggest that having a second child cost either little or is a cost saver. That's pretty hard to believe too.

Occasionally, the authors appear to contradict themselves. Late in the book, the authors share that per the Employee Benefit Research Institute 56% of retirees spend either the same or more than their pre-retirement level. This contradicts the authors' position that the financial service industry advocated replacement rate of 70% of pre-retirement earnings is too high. The mentioned survey instead suggests it may be too low.

In another chapter, the authors oversell the concept of annuitizing assets and reverse mortgages. That's where they push consumption smoothing too far. By annuitizing your assets and getting a reverse mortgage, you wipe out your estate leaving nothing for the next generation.

This financial planning book is a bit too erratic. To build a robust foundation, I recommend instead The Random Walk Guide To Investing.

A little background on myself before I start the review: I have read over 200 books on investing, so I count myself lucky if I learn 1 new thing for each new book I read. I have read quite a few columns by Scott Burns and generally agree with him on his ideas. I have read several papers and articles by Kotlikoff. I have not read any prior books written by either of these gentlemen. I have been a fan of index fund investing since 1990.

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.

Kotlikoff asks how well Americans really know the subjects they are taught in our educational system, like geography. He points to surveys where these percentages of 18-24 year olds can not find these countries on a world map:

11%..............US
29%..............Pacific Ocean
58%..............Japan
69%..............England
85%..............Iraq

Kotlikoff says that if Americans don't really learn geography in an educational system designed to teach them geography.......then how will they ever learn basic investing skills.

Kotlikoff does devote quite a bit of time to behavioral finance.

Kotlikoff blasts the financial planning traditional rule-of-thumb that people should assume they will need about 80% of the income in retirement that they had their last working years. He argues that using the 80% rule causes too many people to save too much and some people to save too little. He criticizes the source of the 80% rule, the AON-Georgia State studies because they take survey income just prior to retirement, and then adjust it to retirement spending. He argues this methodology is not accurate enough and the financial products industry wants an 80% rule-of-thumb because they make more money based upon higher savings and investments.

Some pundits of Kotlikoff's idea the 80% rule-of-thumb is really the rule-of-dumb....argue that the 80% rule-of-thumb may be too low because future retiree health care costs are rising so much faster than inflation.

I have long advocated that some group should survey Americans just prior to and then during their retirement years. All of the financial data must be corroborated using financial statements since most Americans have no idea of their specific spending or investing lives. Such a study would be expensive........and maybe that is why it has never been done (to my knowledge).

I was a little surprised at Kotlikoff's statistic that 33% of homeowners get no federal tax break on their property tax and mortgage interest.......because these do not exceed the standard deduction limits.

Kotlikoff argues that everyone should pay off their mortgage. I completely disagree with this recommendation. For his financial analysis, Kotlikoff only uses bonds as the investment you would make if you did not pay off your mortgage. My calculations, and calculations done by many others......show that one is likely to earn 2 to 3% after-tax on the spread between the cost of the money (mortgage cost after tax) and the return of the money (60:40 portfolio in low cost index funds)after-tax. Once you get close to retirement, many people pay off their mortgage to give them peace of mind in retirement.........I have no argument with this if it gives you peace of mind.......but financially it is not the best decision.

Kotlikoff also presents the little known option of starting to withdraw Social Security, then later stopping the withdrawals........paying the government back......and then collecting higher payments for the rest of your life. From a behavioral finance point of view, I doubt many people would ever take this option. I also know of one case where this was done recently...........and it took an incredible amount of paperwork hassles to get it completed.

Kotlikoff also suggests using an income smoothing approach to get fairer divorce settlements. A few years ago I had personal experience helping a family member through a much contested divorce process. I was surprised to learn that the law does not require the use of net present value to fairly divide defined benefit pension plans. The law in Illinois only requires that the two parties reach an agreement which both parties think is equitable.......and the judge had to agree it is equitable. The customary practice in the courts of Central Illinois is to value pensions based upon the current cash out value of the pension........and not on the present value of the pension. In theory, I have no problem applying Kotlikoff's income smoothing approach to divorce........but in reality.....it will probably not be accepted in a contentious divorce battle.

Before reading this book, I was aware of using a charitable gift fund (e.g. from Vanguard) as an estate planning tool. I was not specifically aware that in many cases it gives the donor a higher lifetime net income after tax. I will be checking this concept out a little further through other sources.

I disagree with Kotlikoff's assertion that conventional financial planning recommends that your asset allocation to stocks versus bonds should change dramatically over time (e.g. using the Rule of 100). Bengen's work, the Trinity Study, and many others have shown retirees should hold at least 50% stocks in their portfolio to protect against inflation. Of course, if your portfolio is more than large enough to support your retirement living expenses, then you don't have a need to take as much risk and you could drop below the 50% stock allocation.

Kotlikoff argues that people's asset allocation should be adjusted about 4 times throughout their lives based upon changes in human capital and Social Security payments.

Another widely accepted rule-of-thumb that Kotlikoff blasts is the 4% safe withdrawal rate rule. It says that one should not withdraw more than 4% of your portfolio (with an annual inflation adjustment) to prevent outliving your money. The 4% rule is also based upon a 30 year retirement period and having at least 50% stocks in your portfolio (Bengen and Trinity Study).

Kotlikoff blasts the 4% SWR rule because it ignores pensions and Social Security. I completely disagree with this assertion. What idiot would ignore the retirement income from pensions and Social Security? Here is a typical application of the 4% SWR for a 64 year old couple who plan on retiring next year:

Current income........$100,000

Income Needed at Retirement......80% of $100K = $80K (this is 80% replacement rate rule)

Income from pension.......$40K

Income from SS............$28K

Income Shortfall.....$80K - $40K pension - $28K SS = $12K

The 4% SWR says you need a portfolio equal to 25X the amount of income you need to generate. So this couple needs a portfolio of 25 x $12K = $300K.

Kotlikoff also points out the well known phenomena that just because the historic return of stocks has been 10% per year.....you can not withdraw 10% of your portfolio each year. The reason is the sequence of returns may cause you to outlive your money. If the stock market has a Bear market during the first few years of your retirement, then your portfolio does not have time to recover to acceptable levels. William Bengen pointed this out back in 1994.

So if Kotlikoff's income smoothing approach is the best thing since sliced bread, then why has virtually none of the traditional financial planning industry accepted it? Why don't the Vanguard or Fidelity web sites offer an ESPlanner equivalent calculator? Kotlikoff would argue it is not accepted because if it was.......people would not save and invest as much........and the financial industry would lose profits.

I think there are several reasons his income smoothing approach has not been better accepted. One reason is there are already alterative financial planning software packages used by planners which give the same information (see May 2005 issue of Financial Advisor magazine story IS ESPLANNER+ BETTER? By Joel P. Bruckenstein)

Kotlikoff assets that traditional financial planning methodologies result in many people saving too much money and some people saving too little. With our US national savings rate now at 0%, do we really want to tell people they don't have to save as much for retirement? I also assume (I have never used ESPlanner) that ESPlanner requires some time by the user to enter more data than traditional web site planning calculators. With the US citizen's short attention span (witness 8 second sound bites on TV)......how many people will take more time to enter data into ESPlanner versus a quick Vanguard or Fidelity calculator?

Kotlikoff does correctly argue there are too many variables involved in retirement planning for the average person to consider. I would argue that Kotlikoff's ESPlanner might give a false sense of security to its users.......because there is no way to know future asset class returns, correlations between asset classes, inflation, tax policies, life spans, etc. It may be a better trade-off for people to quickly use a conventional web site calculator with a Monte Carlo analysis and get a general idea of their condition versus spending a lot of time on ESPlanner. I would also agree with Kotlikoff that the 80% replacement ratio is too general a rule-of-thumb.....it is probably close enough for people just starting their working careers.......but once you get within 5 years of retirement.....you should determine your real spending needs in retirement. You can use TurboTax to project exactly how much income you will need to have in retirement.....considering your pension, Social Security, and investment income.


Over-all, this book was readable. Time will tell if Kotlikoff's income smoothing approach will gain traction as a new tool in the financial planning toolbox.


In this age of full disclosure, it can be noted that I am the author and publisher of the book INDEX MUTUAL FUNDS: HOW TO SIMPLIFY YOUR LIFE AND BEAT THE PROS. This book is an introduction to the concept of index funds is and is sold on Amazon. I am also a contributing author to the book THE BOGLEHEADS GUIDE TO RETIREMENT PLANNING available from Amazon with an estimated release date of October 2009. I have also written 21 short stories on investing which are also available on Amazon.

If you want practical ideas on long term passive investing, read some of the books below:

The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing

Overall a decent primer on how to think about personal finances from an economics point of view - with a caveat - much is controversial. I agree with the concept that your standard of living is the starting point to base financial decisions. It always has been, however the loss of pension programs for people to sustain their standard of living has changed how people need to think about funding that standard of living once they no longer work. This change has caught many in the baby boom generation off guard and hopefully younger generations will learn from this.

I also agree that a blanket income replacement ratio is nonsense for planning purposes and that individuals need to explicitly determine what their standard of living currently is and what level they wish to sustain when no longer working. The financial industry cuts the problem with a cleaver (with income replacement ratios) and then works with a scalpel on what is left (spreadsheets and calculators galore in office or online) as it relates to this point.

The use of index funds (Vanguard or Dimensional Fund Advisers from their website) to obtain asset class returns is another area of agreement. However, their asset allocation suggestions are very controversial.

Utilizing a mortality age ("maximum age of life") instead of longevity ("expected age of death") is also prudent advice given people are living longer; which means by definition that the expected age of death is getting older! In fact this being such an important point - I'm mystified that they don't explain how to determine maximum age of death (not really mystified, since you can buy their software which might tell you - not sure since the book is silent on what the software does) ... readers can go to the National Center for Health Statistics [...] and search "life tables" which will easily explain how to determine probability of living to a given mortality age based on your current age. A factoid for example: people ages 55 to 75 in U.S. have an approximate probability of 10-12% (range corresponds to age range) of living past age 95; and approximately 20-30% chance of living past age 90.

The above are just a few examples of agreed upon points in the book.

So the reader is aware, many planners and economists take issue with the author's assertions about many topics, and readers can follow the logic of many of their arguments and decide for themselves, if they are knowledgeable about the pros and cons of the debate, where they may agree or disagree with some philosophical differences. The reader should be aware that things are not as dogmatic as the authors may imply - and seem to give strength to their arguments by bashing the financial industry at almost monotonous frequency. Magically, the software and website touted in the book will perform complex calculations only they can provide. In other words, the book is a thinly veiled marketing piece for this software and website.

I came away fundamentally disappointed in the book in that it provided very little actionable points with most requiring their software to see just how their process may work. Also, subtle and at times, blatant use of fear are a turn off. Overall, a decent primer on how to think about money in many areas of personal finance; however major areas lacking are the need to buy their software to do the complicated calculations they claim need to be made to apply their concepts correctly; and, not balancing their discussion to point out what areas may be controversial and why. It would have been a better read had they included such discussion and dropped the monotonous sales pitch for their software.

Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?

The greatest value of this book is that it got me to "think outside the box" that has been built for me by decades of financial writers, employer 401(k) seminars, and retirement guides. It is a popular introduction to a new way of thinking about financial planning called "consumption smoothing," advocated in particular by BU professor Laurence Kotlikoff. I think almost everyone should read it. We are all sick from an overdose of the conventional wisdom and this book is therapeutic.

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.

Unfortunately, there is a hidden subtext: you need computer software to make sensible decisions. Kotlikoff and Burns are, of course, associated with such a piece of software, ESPlanner, which they disclose in their introduction. The book seems to go out of its way _not_ to sound like an ad for ESPlanner. But the result is a lack of any guidance at all. Most financial books will give some rules of thumb, some worksheets, some links to free online financial calculators. This book gives you reasons for distrusting such aids. Its hypothetical characters are forever going "to the computer" or "making an analysis" to evaluate some course of action and excitedly reporting their discoveries: "do you realize that we gain only $3,607 a year of lifetime spending for each additional year of work?" It doesn't say how he "makes that analysis." We must assume it is ESPlanner. It does not tell how I (who happen to own a Mac and thus could not run ESPlanner even if I wanted to) could "make that analysis."

Now, the book has a metaproblem of its own. I've long suspected that tools such as Fidelity's Retirement Income Planner or Financial Engines, suffer from grotesque overprecision. Even the uncertainties of the stock market pale by comparison with the uncertainties in one's personal life. It's fun to extrapolate the consequences of a difference between a mutual fund with an 0.2% and an 0.5% expense ratio, compound them out for twenty years, and see how many dollars that is, but I've never been sure it's meaningful.

The book's central tenet is that we should focus on consumption (how many dollars per month we have to spend throughout various stages of our life) and on "consumption smoothing" (equalizing standard of living throughout our various life stages), as opposed to mindlessly piling up the biggest heap we can by age 65, or calculating what age for claiming Social Security will pay us the largest number of total dollars. I agree with that.

But it then contains an assumption, not very carefully presented, that our happiness depends on smoothing that consumption; that it is a terrible thing if our standard of living varies by 25% from one part of our life to another. I'm not at all sure I buy that.

And then it contains the worst assumption of all: that by using a tool (like ESPlanner), we can succeed, in some meaningful way, in planning our financial life course--quantitatively--over a period of fifty years or more.

Of course, this is the same assumption the retirement workbooks of the world make: "Choose column A if you think stock market annual returns for the next thirty years will average 6%, B for 8%, C for 10%..."

After reading the book, I am torn between two courses of action:

a) run right out out and buy ESPlanner and a computer to run it on and trying to dig out twenty years of records...

b) luxuriate for a few days in analysis paralysis and a sense of utter inadequacy at the ignorant way I've led my financial life for forty years... then snap out of it, shrug and say Eh! I'll put 30% in a stock index fund, 70% in a bond fund, have my wife claim Social Security at 62 and try to delay mine as long as possible because some article I read said that's what fashionable couples are doing these days, and hope for the best, and go take a walk in the sunlight.

Kotlikoff (an economist) and Burns (a syndicated financial columnist) offer an approach to financial planning that purports to resolve a lot of questions - how much do I need to save, what should I invest my money in, should I own a house or rent, etc. - based on one basic principle: consumption smoothing.

For readers who want to implement the recommendations, a computer program called ESPlanner is available that will do most of the work for them. The cost is minor in comparison to the fees and commissions for conventional investment, insurance and retirement planning services. Furthermore, according to the authors, "all conventional financial advice" is "wrong."

The central premise of the book rings true to me, i.e., some people needlessly deprive themselves by over saving and under consuming while they are still young enough to enjoy it. More people do just the opposite, of course, but we're talking individual cases here and not overall averages. And I certainly cannot see why people should give high priority to preserving an estate for their descendants unless their own needs are being comfortably taken care of.

Running down various financial decisions that people make, the authors argue in favor in paying off the mortgage instead of making other investments, choosing a Roth vs. conventional IRA, deferring Social Security until the maximum age of 70 in order to enjoy an enhanced pension, and investing the majority of their available funds (or 100% for those with a low tolerance for market volatility) in inflation indexed Treasury bonds (TIPs). Whether or not one chooses to agree, it is useful to have a reference that lays out some arguments that many readers may not have considered. More than enough reason to buy the book and keep it around.

K&B put a bit too much faith in the federal government, however, and surprisingly so given that they have argued elsewhere (e.g., in The Coming Generational Storm, 2004) that the government is overextended and will inevitably come a financial cropper.

#What sense does it make for lower income people to decide not to work because they would lose tax and healthcare benefits? Suppose these goodies are taken away at some point, because they are not affordable, and the people have forgotten how to work.

#Should an investor assume the government would shield him (or her) from economic loss on TIPs if inflation rose to double-digit levels or worse? As the inflation adjustment is classed as taxable income, even under current law, there is surely no warrant for describing the return on these securities as "risk-free."

#If Social Security benefits are unsustainable, wouldn't it make sense to claim the benefits that are offered at the earliest possible point rather than waiting until age 70? "Get it while the getting is good."

Also, given the possibility of unexpected medical expenses, investment reverses, and the like, the idea of depleting capital to smooth consumption throughout retirement may not be quite as sound as the authors suggest.

There's been some very good early press on this book. See, for example, the Washington Post article (copied below) as well as this comment in a recent article in the New York Times:

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Even if the parents have money left over, the ones who didn't have custody of the children may be less inclined to pass an inheritance on to them. "The ties that parents have with kids and their interest in supporting them could well be weakened by the fact that they haven't spent much time with them," said Laurence J. Kotlikoff, an economics professor at Boston University and the co-author of "Spend 'Til the End," which gives readers a new way to think about financial planning.
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http://www.nytimes.com/2008/06/21/business/yourmoney/21money.html?em&ex=1214193600&en=6425b01af144e3d7&ei=5087%0A

from the Washington Post:
SPEND 'TIL THE END The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire By Laurence J. Kotlikoff and Scott Burns | Simon & Schuster. 319 pp. $26

With a different view of spending, economics professor Laurence J. Kotlikoff and financial writer Scott Burns stress that what matters is not how much one spends but rather the standard of living that it enables. In their new book, Spend 'til the End, they argue that most people could achieve and sustain a higher standard of living throughout their lives.

This book's greatest contribution may be the inclusion of often overlooked topics, such as the timing of payouts and deductions. The authors analyze when, how and in what order to start taking payouts from various retirement savings plans, as well as when and whether to choose your own or spousal Social Security benefits. Making the wrong choice could significantly increase your tax bill and reduce the tax benefits of charitable contributions and other deductions now and for years -- or decades -- to come.

Another neglected topic they cover is the problem of outliving your money. Kotlikoff and Burns advocate making spending decisions based on the maximum age to which you might live, not the lower, average life expectancy that most financial planners use.

How can a consumer optimize his standard of living? Kotlikoff and Burns tout their software program "ESPlanner," which is available online for a fee. They claim that the late Nobel Prize-winning economist Franco Modigliani endorsed it. Whether their software lives up to the authors' promises is never proven. What is shown is that Kotlikoff "is president of the company and has a financial stake in the software."

To preface, I am a semi-active stock trader, a long-time reader of Scott Burns column, and a recent reader of the authors' 2004 book, "The Coming Generational Storm." In my opinion, their earlier book is more of an eye-opener and better written, and since their prognostications came true, lends credence to their theories. Reading it would certainly clarify ideas in this book, but "Spend 'Til the End" is still a must-read follow-up.

This book sets out to debunk the insipid and misleading retirement advice given by web-based questionnaires like Fidelity's myPlan. They show that the idea that a replacement income goal of 80% is not based on any real academic research -- if people use this simplistic number as their guide, they could either end up saving way too much or much too little.

The authors also question if you really need to starve yourself today in order to feast in the future, describe how Uncle Sam will steal much of your savings if you're not careful, and how you should strive to enjoy a consistent living standard throughout your life, something the authors call "Consumption Smoothing."

As a result of reading this book, I am pushing my employer about offering a Roth 401(k) in addition to the traditional one. The authors' two books explain why this is a good idea.

If other reviewers complain that this book acts as a commercial for one of the author's software products, I partially agree, but I believe there is a lot to be gained here without buying the software. As for me, I still plan to purchase the download in the near future.

Spend til the end is a must have book that examines, diagnoses and prescribes cures for the illogical and ill advised financial advice inflicted on ordinary americans by the army of brokers, dealers,wealth managers and financial planners (aka sales people) carrying fancy titles such as CFA, CFP, CFC, CIMA etc. It exposes the advice given by these sales people who prescribe Financial "Rules of Dumb" for savings and investing, which results in unnecessary oversaving or undersaving, consumption disruption, and risky investing. Spend til the end offers a better approach, Consumption Smoothing, which if followed, allows individuals to maximize their spending power, smooth their living standard and price their passions. The subject of Consumption smoothing will be new to most without significant studies in Economics. But the tenets of consumption smoothing, that individuals want to maintain their standard of living over time will resonate with most readers. Read this book, and buy a copy for your financial planner. If your planner is not willing to educate herself about consumption smoothing, the advice they prescribe is not good for your financial health. Fire them! One major light bulb moment after reading this book is that individuals need to diversify all of their resouces, not just their financial assets. This means individuals should take into consideration their non financial assets, such as the ability to earn a living, Social Security, and Medicare. You will not see headlines about this approach on the cover of your favorite financial magazine, because those magazines have one goal in mind, to sell more magazines. Leave the magazine on the shelf and read this book. You will improve your life.

Kelvin
Chicago, IL

This is a good no-nonsense book for those planning retirement. It offers solid advice, good relevant examples and gives alternates in planning how to survive in comfort through retirement.

While the book reads well and holds your attention it is also a great handbook to hold onto. It gives websites, addresses for agencies and resources to monitor your progress as you prepare for retirement income.

The book is written in laymans language and has a friendly "folksy" approach, rather than a accountant's manual. Good solid advice.

Financial advice books in the past have left me with a vague notion that I need to save one million dollars before I retire, and by then I guess I'll know how to manage it. "Spend 'til The End" is much more in-depth and comprehensible. The initial chapters were so engaging that by the time the authors got to the nitty gritty, I was hooked, and willing to spend some time with them, going over retirement planning point by point.

Several concepts stand out and have given me a base for further research.

1.) I assumed Medicare premiums to be nominal payments drastically reduced to fit into old folks' budgets. This is a grossly false assumption on my part. Actually, Medicare premiums are rising so much faster than inflation that they are going to represent a hefty chunk of change when my own retirement rolls around.

2.)Social Security benefits vary according to the age when you begin taking it. Previously, I had only a hazy idea that I needed to seriously consider at what age I might retire. Now I realize that age of retirement could have a direct correlation to my standard of living.

3.) I must seriously ask myself, "Am I really going to spend less in retirement?" Conventional advice says that you have only to replace 60-80% of your current income. The thing is, with all of that free time, am I really going to spend less money? Or am I going to want to participate in activities that must be funded, like socializing at nice restaurants with my old geezer friends, or traveling with my aged husband to all of the places we couldn't afford in youth?

4.) Past generations only thought they would be retired a few years before death. Greater numbers of people are living to ages 90 or above, meaning you have to plan to live 30 or more years into retirement. Living longer creates a need for better planning and more precise estimates of monthly income and taxes. My complacent notion that I will figure it all out when it rolls around could literally be the death of me if my lack of planning leaves me unable to pay for food or medications!

Additionally, the authors add their voices to the growing number of financial advisors who are building the case for the use of no load/low cost index funds as the primary vehicles of retirement investment. Commonly held assumptions about mutual fund accounts are questioned along with the popular dictum to strategize your asset allocation by your age.

On the debit side, in order to check some of their calculations you would need a copy of the esplanner, which they developed, and constantly refer to in the book, but which you have to purchase for around $150.00 online. Also, calculations are written in an unwieldy paragraph form. Calculations would be more quickly grasped if they were line-itemed in a workbook format. However, even though I have to take their calculations at face value, I must give the book high ranking due to the authors ability to make engaging,thought-provoking and comprehensible, one of the driest subjects in the world. Now I am giving serious thought to issues I previously dismissed, which I imagine is the whole point of the book.