- Paperback: 336 pages
- Publisher: Simon & Schuster; 1 edition (January 5, 2010)
- Language: English
- ISBN-10: 1416548912
- ISBN-13: 978-1416548911
- Product Dimensions: 5.5 x 1 x 8.4 inches
- Shipping Weight: 10.6 ounces (View shipping rates and policies)
- Average Customer Review: 34 customer reviews
- Amazon Best Sellers Rank: #857,005 in Books (See Top 100 in Books)
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Spend 'Til the End: Raising Your Living Standard in Today's Economy and When You Retire 1st Edition
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"Enlightenment Now: The Case for Reason, Science, Humanism, and Progress"
Is the world really falling apart? Is the ideal of progress obsolete? Cognitive scientist and public intellectual Steven Pinker urges us to step back from the gory headlines and prophecies of doom, and instead, follow the data: In seventy-five jaw-dropping graphs, Pinker shows that life, health, prosperity, safety, peace, knowledge, and happiness are on the rise. Learn more
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From Publishers Weekly
Kotlikoff and Burns (coauthors of The Coming Generational Storm) turn conventional retirement planning wisdom on its head in a feisty financial guide that questions the financial benefits of college and argues delaying filing for Social Security benefits. Unfortunately, many provocative insights are buried beneath fairly recondite economic analysis. Math-phobic readers may be unable—or unwilling—to follow along as the authors couch their methods to maximize spending power in a number-heavy narrative with awkward case studies that fail to properly personalize the financial challenges new retirees may face. According to the authors, truly sophisticated planning is best left up to computer programs (such as the one Kotlikoff himself has developed and offers online at ESPlanner.com). Readers in search of a user-friendly primer might be put off, but there are nuggets of useful information to be mined—the authors efficiently address Roth IRAs and provide an eye-opening exposé of the duplicity rampant in the personal finance industry. Intrepid readers able to navigate through the numbers will be rewarded—if they keep from drowning in the evidence. (June)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to an out of print or unavailable edition of this title.
In The Coming Generational Storm (2005), the authors presented a dire warning about the consequences of the $51 trillion debt America has amassed, forecasting huge tax obligations and the collapse of the U.S. economy as we know it. Here they take a more cheerful tack, guiding the would-be retiree on the most efficient ways to maintain a decent standard of living during the golden years. Eschewing the standard financial advice to use replacement income as a guide on how to save, they instead accomplish this by analyzing spending habits, utilizing consumption smoothing as a way to ensure that you neither starve yourself in old age nor end up with more money than you need by depriving yourself during your working years. Through a long series of useful examples, they dispel many of the myths surrounding whether one should pay off the mortgage early; begin taking Social Security at 70 or at 62; maximize savings in a Roth, 401(k), or regular IRA; or even hold mutual funds at all. These exercises are sure to create new rounds of discussion as they turn much of the conventional financial wisdom on its head. --David Siegfried --This text refers to an out of print or unavailable edition of this title.
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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.
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?
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.
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Highly useful preparation for talking to a Financial Planner.