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Can I Retire? How Much Money You Need To Retire And How To Manage Your Retirement Savings
How to use annuities to minimize the risk of outliving your money How to choose which accounts (Roth vs. traditional IRA vs. taxable) to withdraw from each year When it makes sense to use a Roth IRA conversion to save on taxes How to choose an appropriate asset allocation for your retirement portfolio How to minimize taxes by proper use of an asset location strategy How to reliably pick winning mutual funds This is hands down the best overview of what it takes to truly retire that I've ever read. (And as a bona-fide personal finance junkie, CFA, and 15 year veteran of the financial services industry - I've read a lot of books on the subject). In less than 100 pages & in jargon free English, this gem of a book nails the key issues of: (1) How do you identify your "number" - that amount you must have saved to be able to safely nibble away on your nest egg in retirement with low odds of outliving your money (2) exactly how to draw down that nest egg - from asset allocation to what Michael smartly calls 'asset location' (what investments to put in which accounts & in what order to access funds from those accounts). If you are trying to get a handle on whether or not you can retire, this book is an absolute must read. Five stars!! There are plenty of books telling you how to invest for retirement, not so many discussing the even more complex matter of funding your retirement. Two sources, both mentioned by Mike Piper, are the Bogleheads' Guide to Retirement and Jim Otar's nearly 600-page tract, which is designed for financial professionals and makes for nearly impenetrable reading. Now we have another guide by Mike Piper. Anyone who follows ObliviousInvestor.com knows that Mike has a gift for conveying difficult concepts in concise, clear language, and by and large this little book is no exception. It explains clearly why 4% is probably the maximum safe withdrawal rate from a retirement portfolio (some would say 3% is the maximum, but that requires having a larger nest egg), why purchasing a fixed annuity is a wise option for people who have underfunded their retirement, why TIPs and short-term bonds are the best choices for retirees investing in bond funds, and much more. There's a lot going on here in 100 pages, and the book really deserves several readings so you can apply the information in each chapter to your own situation. But I had a bit of trouble putting everything together at times: e.g., for the non-annuitized portion of your portfolio (which could be all of it), Mike recommends having two years of cash in what he calls a "spending bucket." But it wasn't clear to me if so much cash is needed for people have purchased an annuity or have other safe sources of funding. I wasn't clear either if what he calls the "sequence of returns" risk when one has 50/50% stock/bond portfolio would decline if one allocates more conservatively, and how that would affect a safe withdrawal rate. In short, I think a couple of larger case studies pulling all the concepts in the book together would be very helpful. This book is geared towards people who already have a decent retirement account rather than those who will struggle on nothing but social security, and it deals exclusively with the funding aspects of retirement, which is more than enough to cover without attempting to deal with other major retirement issues like insurance and estate planning. Even so, it is not as thorough as a larger book can afford to be, saying nothing for example about reverse mortgages. And it falls short in one key area related to funding, which is that Mike says very little about pensions and social security. These are major sources of funding for many if not most retirees and can have a substantial impact on withdrawal rate, asset allocation, spending buckets, and taxes. Mike briefly mentions social security at the end but then tells us only that it's "complicated," but it's probably no more complicated than any of the topics he did cover in greater depth. I wish at least the basics of social security had been addressed - perhaps in lieu of discussing index funds and ETFs, which are more germane to general investment advice and have been covered many times elsewhere, including Mike's previous books. I also wish he had made a stronger case for the financial benefit of working longer, as every retirement calculator I have tried suggests that there's no better way to improve your chances of success than to work even a year or two beyond what you've planned. But even if this book doesn't answer all the questions raised, it goes far towards answering many of them, and should thus be a big help to anyone seriously planning for retirement. Article Directory: http://www.articledashboard.com financial planning for retirement www.pandaikaya.com/money/can-i-retire-how-much-money-you-need-to-retire-and-how-to-manage-your-retirement-savings.html |
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