You're Fifty-Now What?: Investing for the Second Half of Your Life [Hardcover]

Charles Schwab (Author)

Book Description

Publication Date: December 26, 2000

Think of sports: a football game, a round of golf, a tennis match. Or think of a play, or an opera. Now think of the halfway mark in that event -- the halftime, the intermission -- when everyone takes a breather and wonders the same thing: What's going to happen in the second half?

We have a similar point in our lives, often around our fiftieth birthday, when we begin to wonder about our second half. If you're at or approaching that age, you probably think about how much money you're going to need so you can have the kind of life you want. Charles Schwab, bestselling author of Charles Schwab's Guide to Financial Independence, offers you advice and support for getting there.

For more than twenty-five years, Charles Schwab has been passionate about demystifying investing. In a user-friendly style, You're Fifty --Now What? offers a mix of clear and workable advice about how to accumulate and grow your money. Through simple worksheets, understandable language, and a healthy dose of encouragement, you learn how to take control of your financial life. You'll find answers to your questions, including help with estate planning and charitable giving.

His message emphasizes that the goal is not just financial security, but also the peace of mind that comes from knowing you're prepared. He takes you step-by-step through a process that will enable you to see where you are financially today and where you want to get so that the second half of your life can be as fulfilling as you hope.

One hundred percent of the author's profits from this book will be donated to a charity that benefits seniors through The Charles Schwab Corporation Foundation.

Dear Reader,
We have a point in our lives when we find ourselves wondering about the second half. The age differs from person to person. For some it comes in their late forties, for others it's in their early fifties. When we reach that age, we feel different. We may sense a change coming and we want to pause and to think about what we've accomplished and what we still hope to do.
So what does this have to do with investing?

A lot. A sound investing strategy is what gives you the means and the courage to do what you want. The issues may seem daunting. But it can be done. It has to be done, because while getting older isn't a bad thing, being unprepared for it is. And by not understanding the financial part of your future, you sabotage yourself and you limit your choices.

Start today, maybe even right now. Take control of the second half of your life. Dream about it, wonder about it, think boldly about what you want. And take the first step, which is usually the hardest. Once you get started, the satisfaction you feel will keep you going. But don't delay in your preparations. The best is yet to come.

Charles R. Schwab
from the prologue

Editorial Reviews

Amazon.com Review

As boomers reach midlife faster than a new Beatles CD can climb the charts, many are wondering if they'll have sufficient resources to comfortably make it through their golden years. Investment guru Charles Schwab's You're Fifty--Now What? addresses these concerns with a step-by-step road map to help the middle-aged assess where they're at, determine where they want to go, and pick the proper mix of investments to get there. "While getting older isn't a bad thing," Schwab writes, "being unprepared for it is. And by not understanding the financial part of your future, you sabotage yourself and limit your choices." Not surprisingly--given the author's background as founder of the discount brokerage that bears his name--the book contends that you have to remain an active investor for the rest of your life in order to make it financially over the long haul. To do so, it advocates using as aggressive an approach as you can comfortably handle, centered on a combination of broad-based index funds and actively managed mutual funds or individual stocks.

With plenty of easy-to-use worksheets, Schwab helps you take stock of everything you've accumulated, determine how much it costs you to live now, and estimate what it will take to maintain that lifestyle into the future. The latter is determined by calculating everything from projected housing and tax obligations to food and entertainment expenses, while life-expectancy tables, inflation adjustment factors, and investment return rates allow you to see where you stand versus where you need to be. Schwab then addresses reaching these goals through a proper investment mix. (Sidebars explaining the basics guide even novices through these critical steps.) Additional chapters detail ways to develop a regular long-term cash flow, and suggest how to monitor its progress while making adjustments when necessary. There is also information on financial advisors, insurance, estate plans, and charitable giving, adding up to a wealth of specifics presented in a manner that virtually everyone should be able to understand and follow. --Howard Rothman

From Publishers Weekly

Founder and chairman of a famous international brokerage, Schwab offers sound advice on basic personal finance topics faced by boomers and retirees, including estate planning, retirement cash flow and pension plans. The investing sections target inexperienced investors, with definitions of stocks and zero coupons, and worksheets for retirement budgets and portfolio benchmarks. A useful appendix includes advice on reading mutual fund prospectuses and selecting insurance. Schwab's breezy, non-threatening style and advertising backed by his company should ensure high visibility and bestseller list appearances. (Jan.)
Copyright 2000 Reed Business Information, Inc.

See all Editorial Reviews

Product Details

• Hardcover: 336 pages
• Publisher: Crown (December 26, 2000)
• Language: English
• ISBN-10: 0609605623
• ISBN-13: 978-0609605622
• Product Dimensions: 9.4 x 6.2 x 1.2 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 3.7 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #1,318,294 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

164 of 165 people found the following review helpful:

5.0 out of 5 stars The Best Book on Financial Planning for the Over 46 Age Set, January 1, 2001

By 

Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
(VINE VOICE)    (HALL OF FAME REVIEWER)    (TOP 100 REVIEWER)   

This review is from: You're Fifty-Now What?: Investing for the Second Half of Your Life (Hardcover)

My biggest complaint about most books on financial planning is that they try to cover everyone with one approach. Mr. Schwab's book is a pleasant exception to this rule. By at least focusing on those of around middle years (46 through 56), he can be more specific and make the information more relevant to each reader. Naturally, I would like to see future books be even more focused than this one, but Mr. Schwab has certainly moved in the right direction.

I found this book to be vastly superior to "52 Weeks to Financial Fitness" by Marshall Loeb, which was also recently published, for people in this age category.

Mr. Schwab's profits as author from this book are all being donated to the Charles Schwab Corporation Foundation to provide for the needs of seniors.

The book is divided into two parts: First, planning for the rest of your life; and second, getting organized to implement that plan.

The planning section is very well done because it covers materials at a level of perspective that goes from the needs of most beginners to handling the needs of all but the most sophisticated people. Fundamentals are covered in sidebars so as not to clutter-up the main text for those who do not need the information. The subjects covered include how much money you will need in total, determining the value of what you have available, estimating the gap between your needs and resources, understanding how to think about asset allocation in your investment funds, establishing the proper cash flow to match your needs, and readjusting your investment mix over time.

Each section is clearly written and provides formats to make it easier for you to assemble and think about your information. I was particularly pleased to see Mr. Schwab challenge some conventional wisdom about financial planning. Many people use a rule of thumb that you will need 70% of your preretirement income. In practice, many people find that they spend more than that because some costs go up more rapidly than inflation, like medical care, or they take on new interests. Mr. Schwab suggests 90%. I think even that may not be conservative enough. I think a better assumption is to have the percentage grow over time, slowly. Eventually, it will probably exceed 100%.

In addition, many people will tell you to plan on spending 6% of your assets each year after you have to start drawing on them. Mr. Schwab wisely suggests that 3-4% will be more appropriate for most people. I liked that advice very much.

The advice on investing is much more conservative than you would expect from someone who heads an on-line brokerage house. But appropriately so. He suggests you stay in common stocks as long as possible, because you may well live much longer than you think. But he has all but 10% of your portfolio in either no-load index funds or conservative bond and cash positions. If you skip the idea of owning any individual stocks, the advice is quite appropriate for the average person. It also has you reducing your exposure to stocks over time, as the years appraoch when you will need the income. So even if stocks stop performing well (as some warn) in the next few years, you will be relatively safe.

Part II of the book gets you into deciding whether you need a financial advisor or not, and how to select and work with one. It also looks at the most important questions about insurance, estate planning (get thee to a lawyer), and how to handle your donations so they bring you the most satisfaction and least after-tax cost.

The book has several other nice qualities. It emphasizes the rest of your life as being the "second half" rather than the downhill slide or some other negative concept. In sports, we all know that the winners are usually those who play the second half the best. Also, at half-time, the coach often makes adjustments that lead to winning performance. It is a very nice metaphor for financial planning at this stage in life. "What do I want for the second half of my life?" is the key question posed in the beginning of the book for you to consider.

I also liked the optimism of the book. Rather than focusing on the fear that people have about outliving their money, the book emphasizes the potential for good things to happen. You may live longer, and think of all the good things that could follow. "Anything is possible" was my favorite line from the book, which followed examples of wonderful accomplishments by seniors of advanced years.

Unless you already have been through this exercise recently with a financial advisor, I suggest that you get the book and use the exercises.

Further, I suggest you take even more time to think through the possibilities that the post child-rearing and tuition years may offer you. It's almost like getting to start over again, but with much more in the way of resources and wisdom.

Look for and find the best choices!

54 of 55 people found the following review helpful:

4.0 out of 5 stars A good resource for us aging boomers., March 19, 2001

By 

John "John" (PHOENIX, AZ USA) - See all my reviews
(VINE VOICE)   

This review is from: You're Fifty-Now What?: Investing for the Second Half of Your Life (Hardcover)

I've read many personal finance books and none of them was perfect. Every person's situation is different and what works for one person may not work for another. However, out of all of the books that I've read in this genre, this was one of the better ones.

The book is intended for someone that is in the later stages of their working life who expects to retire in the not too distant future. Although the title of the book implies that it was written for someone in their 50s, the book is really intended for anyone that is in the latter half of their working career. I am in my forties and felt that this book had a lot to offer. Schwab offers advice on how to invest in preparation for your retirement, and what to do with your investments after you retire. Although the book does not assume that everyone has built up a nice nest egg by the time that they're fifty, it acknowledges that those that haven't are going to have a some of catching-up to do.

Schwab does have an aggressive bias when it comes to investing. He recommends a portfolio that is heavily weighted in stocks even after you retire. This is contrary to the traditional weighting recommended by most other sources. His rationale for this approach is that retirement is much longer now than in the past. People are living longer. The returns that you get with a traditional conservative portfolio may not last your lifetime. He also feels that the income that you'll need after you retire is often understated by many financial planners. Although we live longer, the older we get the more unexpected expenses we may incur (medical, long-term care, etc). Although he acknowledges the risks with this approach, he points out that there are risks with the conservative approach also - that your savings will run out when you need it most.

In addition to investing, Schwab covers other topics such as types of insurance that will make your retirement years less risky for you and your family (life, health, disability, long-term care, etc).

Schwab includes a chapter on charitable giving and stresses how important it is for all of us to give back to their community. Like other texts, he summarizes some of the tax advantages of giving, but he truly seems to believe that those fortunate enough to have accumulated some wealth need to consider returning some of it to a cause that they believe in. I thought that this chapter was nice touch and a departure from the "show me the money" attitude that is the cornerstone of most personal finance books.

This book is not perfect and may not be for everyone, but if you are in the latter half of your working career, I think that you will enjoy and benefit from this book.

76 of 84 people found the following review helpful:

3.0 out of 5 stars Good overview of planning issues - with limitations, January 13, 2001

By 

Ron A Rhoades (Lecanto, FL United States) - See all my reviews

This review is from: You're Fifty-Now What?: Investing for the Second Half of Your Life (Hardcover)

It's good to see a book like this focused on the issues confronting retirees, and those approaching retirement. The book provides a very broad and general overview of the issues involved.

I applaud the author's advice to consider a 4% annual withdrawal rate from investments. In my experience, many financial advisors, influenced by the prolonged bull market, have suggested higher rates.

I caution against following every opinion in this book, however. Three broad suggestions by the author stood out as troublesome, in my view:

First, that "you're better off including individual stocks and stock utual funds in your retirement account (where taxes are deferred) and bonds in your regular account (which is currently taxable." (Page 184.) Adopting a contrary strategy, and minimizing taxes on the equity portion of your portfolio (held in a regular account), can in my view yield far superior results, from both a financial planning and estate planning perspective.

Second, the statement "If you have a Roth IRA, I sugest you withdraw from it first [to generate retirement income] since your withdrawals are not taxed." This statement completely ignores the tremendous long-term benefit of tax-free growth, and I completely disagree.

Third, the suggested asset allocation models are too simplistic -each individual's own asset allocation should be affected by many factors, only some of which are discussed in the book.

While a brief discussion is made of Modern Portfolio Theory and probability analysis (Monte Carlo), more insight into these areas could have been provided, given their utility.

The foregoing comments illustrate the limitations of any book seeking to address the very complicated tax, actuarial, financial planning, asset protection planning, and estate planning issues confronting the retiree today. Despite this, I recommend the book (with reservations) to both retirees, and those approaching retirement, who need to increase their knowledge of basic planning concepts. There is tremendous value in each person educating themselves on financial planning concepts. Just don't take this (or any) one book as gospel.