Customer Reviews

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

5 star:		(4)
4 star:		(3)
3 star:		(2)
2 star:		(1)
1 star:		(1)

 

 

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!

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.

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.

I am in my mid fifties. I have a MA in economics on top of an engineering degree. I was never very interested in investing as an economics student when it was merely a academic subject. I focused on other parts of my study of Economics. Now that I am older and trying to determine if I am indeed able to retire now I am finding the subject of investments much more fascinating and "Your' Fifty...." Extremely informative and helpful in showing me how retire in some comfort and with some confidence that I can sustain that comfort in the face of taxation and inflation throughout the "second half".

I have read several other retirement investment books since this one and found that this one was the best of the lot. I highly recommend it to anyone who planning retirement savings plans or anyone wondering about retirement right now.

I wouldn't have read this book because I am not yet fifty, not far from it, but why hurry things! But there I was in my freinds house and I picked it up to see if maybe it had something for a young guy like me (45 years old). I couldn't put it down and my friend wouldn't let my borrow it, says he dosn't loan out reference books. Anyone, man are woman who hopes to retire before they die should order this book today! Also another good book for people who are thinking about the other half of their lives is "THE SECOND COMING OF AGE" by: Curtiss De Vedrine

Schwab's book provides solid and practical information for those of us who no longer can be called young no matter what the definition is. Unfortunately, helpful financial books that target Baby Boomers and older folks are in shamefully short supply! For readers who want another indepth look at the financial issues that face older investors, I'd suggest another excellent book-the Retirement Bible. Like Schwab's book, the Retirement Bible provides advise on recommended portfolio withdrawal levels and devotes an entire chapter to discussing in what order money should be withdrawn during retirement. Unlike Schwab, Lynn O'Shaughnessy, the author of the Retirement Bible, suggests that Roth IRA money should ideally be touched last. I definitely agree with her opinion and many financial experts do too. What I also like about the book is that she demystifies a lot of estate planning issues, which books written by attorneys hopelessly fail at. You can't go wrong getting either of these books.

This is a book that everyone should have in their personal development library. Is it a great read or does it have cutting-edge insights? Probably, no. But wisdom is wisdom and doing what's right with your money is more a matter of principle than fancy strategy. If your strategy is too far removed from this book, then you're probably taking on far more risk than you should. I think that a lot more should have been written about wills and trusts for estate planning. That's an area that would have only taken another 10 pages, but would have completed the works and is something that everyone over 50 with bucks needs to know well.

well, I was very disappointed with this book. Full of "fill in the blanks and do your own math" it really had no BIG ideas to glean. And I suppose I should not have been surprised that the underlying secret to retirement planning from Mr Schwab (who happens to be a guy who owns a stock brokerage business) is to be 90% invested in stocks FOR THE REST OF YOUR LIFE!!! Because you may live a very looooong time and you sure wouldn't want to OUTLIVE YOUR MONEY! The fill in the blanks forms were simplistic and the whole approach was nothing more nor less than you would learn when you meet with any run of the mill stock broker for the first time. A bunch a estimates and blanks to fill in and no ideas beyond staying fully invested. Crap. I truly expected and hoped for better... well, now I've got one to sell. And no, I did not fill in the blanks already.

This book might be too simplistic for savvy and experienced investors, but for those with less knowledge, it could be very helpful. Basic rules and guidelines are well explained and good, commonsense advice given.

This book makes financial planning over fifty sound so wonderfully simple and straight forward. However, as a counsellor both in business and life skills, I can assure you that many clients who sit across from my desk have no disposable income to plan or invest for their future. By the time they are fifty, many are no further ahead than they were twenty years ago and a good number are further behind. If you have been a single mother for the best part of your life, struggling just to pay the rent and put food on the table, "the working poor" with little or no child support, there IS nothing to "plan for your future." Your future consists of trying to survive day to day without any extras....period.

The book may be of value to those privileged individuals who have been fortunate to have had a lucrative career or a savings account at the local bank, but the book is certainly not written for everyone. As one woman said to me, "financial advisors, insurance, estate planning...the only thing I can plan is my grocery list - which brand of mararoni and cheese is going to be on sale next week." In this case the book serves only as a constant reminder of what the individual does not, and may never have. While the book does have merit, it is not one I could recommend to everyone.