Spend 'til The End by Laurence Kotlikoff & Scott Burns

[Midpack]

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¢...

 

[W2R]

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!

 

[barbarus]

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.

 

[W2R]

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.

 

[barbarus]

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.

 

[Buckeye]

I'm on page 30!

 

[W2R]

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.

 

[Midpack]

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.

 

[2B]

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.

 

[Midpack]

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.

 

[FIREd]

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.

 

[W2R]

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.

 

[cashflo2u2]

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]

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).

 

[RonBoyd]

Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard

 

[Bikerdude]

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?

 

[Buckeye]

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."

 

[Rich_by_the_Bay]

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.

 

[rs0460a]

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

 

[cashflo2u2]

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.

 

[shiny]

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.

You are so sweet!

Regardless of the smoothness of our income, I aspire to having DH think I'm a hottie after I'm old enough to draw social security.

 

[cashflo2u2]

I bought this book and am almost through it. I was shocked to find an extemely flawed bit of advice on page 177. When talking about insurance company risk in purchasing annuities it states: "Today Vanguard -the giant and highly secure mutual fund/insurance company - offers reasonably priced annuities that are fully protected against inflation." The clear inference here is that VG is standing behind and issuing the annuities. I had a financial planner once that made that neophyte conclusion and I called him on it. Embarrassingly , he admitted he was not aware that AIG was the one issuing the annuity. I was surprised to see the same error in this book!

 

[Gotadimple]

I'm still reading . . .

I found part 1 interesting, as they describe behavioral economics and making choices based on weighing current and future rewards. Part 2 was boring -- preaching to the choir about what economic activities to take part in (don't overspend on a house, consider why you need all THAT stuff, etc.).

I suppose this would be more helpful to those who haven't yet figured out how best to manage their money. The plugs for ESP Planner are a bit distracting.

-- Rita

 

[CuppaJoe]

....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¢...

Love that graph. I read the book and that graph shows exactly what I've done over the years. (I'm just now on the point of Retirement). And I plan to do the rest of the graph as I get older. He's definitely preaching to the choir.

 

[Notmuchlonger]

I'm still reading . . .

I found part 1 interesting, as they describe behavioral economics and making choices based on weighing current and future rewards. Part 2 was boring -- preaching to the choir about what economic activities to take part in (don't overspend on a house, consider why you need all THAT stuff, etc.).

I suppose this would be more helpful to those who haven't yet figured out how best to manage their money. The plugs for ESP Planner are a bit distracting.

-- Rita

I agree. Halfway through it. Decent book. Could have left out the excessive ESP plugs