Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Spend 'til The End by Laurence Kotlikoff & Scott Burns
Old 06-08-2008, 05:32 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
Spend 'til The End by Laurence Kotlikoff & Scott Burns

I pre-ordered from Amazon, received last week and finished it yesterday. I would highly recommend this book by Laurence Kotlikoff & Scott Burns.

By way of background: I am a Bernstein, Bogle, Boglehead disciple. This book is just as credible but it's quite different and their conclusions differ in fascinating ways too. It also addresses more topics regarding the $ aspect of planning/retiring than any other book I have read.

The central theme is consumption smoothing. The goal is to maintain the same standard of living throughout your life - including avoiding a shift, up or down, in standard of living when you retire. They (pretty persuasively) contend that conventional tools will more often than not result in a (possibly radical) shift.

ESPlanner (Kotlikoff) is used for all the calculations and it is mentioned several times in the book. There is a brief sales pitch in the last chapter, but I would not characterize the book as simply an ESPlanner sales tool.

It is not written as an economic text book, it's an easy read, not intimidating at all. If you're hoping all the (ESPlanner) calculations will be spelled out in detail so you can enhance your personal spreadsheets or other tools, you will be disappointed. I am very good at developing Excel tools and I have an elaborate spreadsheet of my own. After reading this book, I am convinced there is no way I could ever do a spreadsheet that encompasses all the (real) variables, there are just too many. There are lots of scenarios examined, the results are shown (calculated by ESPlanner), but not the calcs.

I am sure it will be different for each reader, but the chapters that were most enlightening to me were Fire Your Job, Does It Pay to Play, Fire Your Broker (something we all know) and the last 10 chapters in Part V: Preserving Your Living Standard.

Again, I think it's a tremendously worthwhile, provocative read. From the perspective of an Economist vs just a Financial Advisor. Just one graph from the book (below) to pique your interest, I've never seen a recommendation like this (before you dismiss it, you'd have to read the explanation). My 2¢...
Attached Images
File Type: jpg scan0001.jpg (47.7 KB, 153 views)
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-08-2008, 07:36 AM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,949
This book sounds very interesting! I must admit that the graph is puzzling. I can't imagine why I would want more of my assets in equities at 75 than today, at 60.

As one who is thinking of upping my spending in ER to maybe twice or three times what I spend today, I am genuinely interested in reading any reasons why I shouldn't. So far, the only reason I have come up with is that my ER home might fill up with stuff too fast so that I won't have room to buy more.

I will definitely pick up a copy and look through it, when it is available at my local Barnes and Noble.

Thanks!
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-08-2008, 07:47 AM   #3
Recycles dryer sheets
barbarus's Avatar
 
Join Date: Aug 2007
Posts: 433
Quote:
Originally Posted by Want2retire View Post
As one who is thinking of upping my spending in ER to maybe twice or three times what I spend today, I am genuinely interested in reading any reasons why I shouldn't.
Good gravy w2r, what have you got planned?
Sounds like some fun times ahead for you.
__________________
Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
barbarus is offline   Reply With Quote
Old 06-08-2008, 08:11 AM   #4
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,949
Quote:
Originally Posted by barbarus View Post
Good gravy w2r, what have you got planned?
Sounds like some fun times ahead for you.
Well I don't exactly know! With my recent inheritance I will have more income than I had planned on having in ER. I agree; some fun times ahead for me. I have thought about it and really don't want a McMansion or world travel. Some spending that I have been thinking of is to hire a gardener or landscape company so that I don't have to do yardwork if I don't want to. Maybe I would hire a maid (though I feel conflicted about that due to privacy concerns). I plan to furnish and decorate my home in a way that I think is beautiful and to my taste. I love artwork. I want a Wii!!! I plan to ramp up my spending gradually, though, so that I don't go nuts with it and still recall what I believe to be important in life. Besides, moderation in all things.

Anyway, I would be interested in reading this book to see what they have to say about spending more in ER than while working.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-08-2008, 08:54 AM   #5
Recycles dryer sheets
barbarus's Avatar
 
Join Date: Aug 2007
Posts: 433
Spending time and money on art sounds like a grand whay to do retirement. Something uplifting and enlightening. A decent, pleasing pursuit. Good for you.

I like to play the imagination-games that most people do about what I'd do with a lot of money.
I'm sure it's too late for any major changes for old Barbarus, but there's the old standby of helping some family members I'm sure I'd carry out.
Mostly, money just means a lack of worry to me.
We're going to see this in a powerful manifestation phenomenon over the next few years.
__________________
Consult with only myself as your adviser or representative. My thoughts should be construed as investment advice of the highest caliber. Past performance is but a pale shadow and guarantee of even greater results in the future.
barbarus is offline   Reply With Quote
Old 06-08-2008, 09:07 AM   #6
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
I'm on page 30!
__________________
Buckeye is offline   Reply With Quote
Old 06-08-2008, 09:16 AM   #7
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,949
Quote:
Originally Posted by Buckeye View Post
I'm on page 30!
Ooh!!! So tell us about it! I just went to amazon.com and read their review, but there are zero customer reviews so far.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-08-2008, 09:17 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
Quote:
Originally Posted by Buckeye View Post
I'm on page 30!
IMO, it gets better and better...

I bought ESPlanner Plus this morning and plugged in (most of) my numbers. Preliminary standard of living calc says we could afford to spend 61% more than we are now and in perpetuity. I will have to finalize my numbers and comb through the results in detail before I believe it, and still probably won't spend any more. The detailed plan (with Monte Carlo analysis) is 131 pages...I like that kind of detail.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 06-08-2008, 09:51 AM   #9
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by Midpack View Post
IMO, it gets better and better...

I bought ESPlanner Plus this morning and plugged in (most of) my numbers.
Obviously, the sales pitch worked!

I am #1 on the wait list at my local library. I'm glad to hear it's out so I should get my email soon. I've considered buying their software but I don't know what it would really tell me that I don't already know or at least feel in my gut. I believe I can dramastically increase my spending now. I would like to but for more travel. My family situation limits the travel. I have more "stuff" than I want now.

The nice thing about travel is that it will naturally fall off when I am no longer physically able to do it. That cash will be ready to cover my assisted living.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 06-08-2008, 09:55 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
Quote:
Originally Posted by 2B View Post
Obviously, the sales pitch worked!
Yes, although I was on the fence leaning toward buying it anyway. After reading the book, I'd defy anyone to construct a spreadsheet on their own that will duplicate what ESPlanner does. I thought I was well on the way with my spreadsheets until I read STTE, there's no way I could. Seems like a small price to pay for a more in-depth analysis.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 06-08-2008, 09:58 AM   #11
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by Midpack View Post
The central theme is consumption smoothing. The goal is to maintain the same standard of living throughout your life - including avoiding a shift, up or down, in standard of living when you retire.
I will definitely buy the book. I have been a believer in consumption smoothing for many years. In the past 4 years our income has increased over 50% yet our spending has remained virtually unchanged. I also don't plan to either spend more or less in retirement, but rather retire when I can afford to keep my modest pre-retirement lifestyle.

I have a few reasons to do so: 1) if my spending increases significantly each year, I keep moving the FIRE goal posts back each and every year. That, I believe, is the reason why most people will never reach FIRE. 2) I don't want to have to drastically cut my lifestyle upon retiring. During our working years, our income has increased much faster than inflation. If our spending increased as fast as our income, then a cut in lifestyle at retirement seems unavoidable. Plus, once retired, we will be lucky if our income keeps up with inflation so yearly gains in lifestyle would also be reduced dramatically.
__________________
FIREd is offline   Reply With Quote
Old 06-08-2008, 10:29 AM   #12
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,949
Quote:
Originally Posted by FIREdreamer View Post
I will definitely buy the book. I have been a believer in consumption smoothing for many years. In the past 4 years our income has increased over 50% yet our spending has remained virtually unchanged. I also don't plan to either spend more or less in retirement, but rather retire when I can afford to keep my modest pre-retirement lifestyle.

I have a few reasons to do so: 1) if my spending increases significantly each year, I keep moving the FIRE goal posts back each and every year. That, I believe, is the reason why most people will never reach FIRE. 2) I don't want to have to drastically cut my lifestyle upon retiring. During our working years, our income has increased much faster than inflation. If our spending increased as fast as our income, then a cut in lifestyle at retirement seems unavoidable. Plus, once retired, we will be lucky if our income keeps up with inflation so yearly gains in lifestyle would also be reduced dramatically.
I can really relate to what you are saying. After my divorce (=financial disaster) ten years ago, I decided the only way to retire was to reduce my standard of living until my expenditures while working were reasonably consistent with my projected retirement income. So that is how I have lived.

It turned out that an unexpected windfall will change my projected retirement income, but I think the principle holds and is a good way to prepare for ER.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-08-2008, 10:54 AM   #13
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 332
Quote:
Originally Posted by Midpack View Post
IMO, it gets better and better...

I bought ESPlanner Plus this morning and plugged in (most of) my numbers. Preliminary standard of living calc says we could afford to spend 61% more than we are now and in perpetuity. I will have to finalize my numbers and comb through the results in detail before I believe it, and still probably won't spend any more. The detailed plan (with Monte Carlo analysis) is 131 pages...I like that kind of detail.
I am thinking of buying ESPlanner. I understand it has an evaluator for repaying and refiling for SS retirement benefits? I am wondering how comprehensive that feature is. Did you get the Plus! version or the standard?

I am currently reading Retirement Income Redesigned which is excellent but it is really for financial planners which I am not.
__________________
cashflo2u2 is offline   Reply With Quote
Old 06-08-2008, 11:30 AM   #14
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 332
As a matter of fact, I would go so far as to say the book Retirement Income Redesigned is a tour de force in retirement income spending and swdr books and is probably the only one would really need (but I'll still probably buy the Spend 'till the End book).
__________________
cashflo2u2 is offline   Reply With Quote
Old 06-08-2008, 11:30 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,281
Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard
__________________
RonBoyd is offline   Reply With Quote
Old 06-08-2008, 01:40 PM   #16
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Sounds interesting, however, I question its worth to someone already retired (8 yrs.) single with no kids at home anymore. My personal situation says to take SS at 62. Is there really any benefit for me? I mean what's left to smooth?
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 06-08-2008, 02:15 PM   #17
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
cashflo2u2 - I purchased ESPlanner two years ago but I didn't get a lot from it so I asked for a refund which I received immediately. I see the webiste currently gives you a 10-day period to request a refund. I looked back at the emails Dr. Kotlikoff sent trying to clue me in on what the software was meant to do but I wasn't capable of understanding what he was saying at the time.

ESPlanner had more power than I knew how to use. I have learned a lot in the last 2 years so I will probably try it again after reading "Spend 'til the End."
__________________
Buckeye is offline   Reply With Quote
Old 06-08-2008, 03:47 PM   #18
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by cashflo2u2 View Post
As a matter of fact, I would go so far as to say the book Retirement Income Redesigned is a tour de force in retirement income spending and swdr books and is probably the only one would really need (but I'll still probably buy the Spend 'till the End book).
Found a few excerpts and an original article on the web. It sounds like the very framework of Lucia's Buckets of Money, though with much less tied up in cash (bucket 1). The concepts are almost identical and it was written in the 1980;s, it appears.

Lucia made it cute, probably made more money off it, but clearly wasn't the originator of this approach. I'm gonna buy the Evensky book.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 06-08-2008, 04:19 PM   #19
Full time employment: Posting here.
 
Join Date: Feb 2006
Posts: 987
Quote:
Originally Posted by cashflo2u2 View Post
I am wondering how comprehensive that feature is.
Here's some info (very little ):

ESPlanner Support :: View topic - Consider Repaying and Reapplying for Social Security?

- Ron
__________________
rs0460a is offline   Reply With Quote
Old 06-08-2008, 08:30 PM   #20
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 332
Rs, thanks for thank link. I am a little bit different in that my dear wife is a little bit older than I am (in years only, still a hottie) and she started SS on her own and then was increased to 50% of mine when I was eligible. So if I opted to pay back I am not sure whether I would have to pay back some portion or all of her benefits from the point she qualified to raise to half of mine. And if I had to pay hers back would she have to refile and then be kicked up to half of my new rate, etc. etc. Too complicated and I am not sure E$Planner would cover all this. Will have to email him with questions I think.
__________________

__________________
cashflo2u2 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
ESPlanner/Scott Burns 2B FIRE and Money 43 03-11-2008 08:23 PM
Scott Burns on PBS Sunday & Sunday Telly FIRE and Money 4 06-26-2007 10:21 AM
Scott Burns burns Home Depot REWahoo Other topics 17 03-06-2007 10:09 PM
Burns: Every $1 you do not spend = $50 invested mickeyd FIRE and Money 21 07-25-2006 11:36 PM
Decided..not waiting til year end! Donzo Hi, I am... 7 06-19-2006 06:35 PM

 

 
All times are GMT -6. The time now is 10:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.