Great book on retirement

[rpguy4]

A friend of mine was telling me about book he had read about retirement, that discussed how to be happy in retirement. I've been struggling with what I will do in retirement, (other than playing golf), and wondering if I would be really happy not working.

The book is titled "You can Retire Sooner than you Think" by Wes Moss.
Its a quick read, about 230 pages.
I read it last weekend, and I thought it was very well done. It gave some great advise. I picked it up at our local library, and definitely would recommend it.

Has anyone else read this book ?
Any other recommendations ?
(Disclaimer - I am not affiliated in anyway to Wes Moss or his company.)

 

[Jpg1717]

Another good book is Work less, Live More by Bob Clyatt

 

[ETFs_Rule]

I believe the number one risk to retirees is being taken advantage of by non-fiduciary "advisers". So I would recommend "The Lies About Money" by Ric Edelman. The only thing I disagree with Ric is that he keeps talking about the need to find a "fee-based" adviser. With fee-based the potential is there for the adviser to double dip by recommending commission-based products. The solution is to find a fee-only adviser, if you need help of course.

 

[prudent_one]

I liked some of it, didn't like other parts. Don't like the concept of "bucketing" funds because I think it adds needless complexity. Don't like the recommendation about owning rental real estate as though it's so simple to make it work. Don't like recommending a 4% WR as though it's foolproof.

 

[ETFs_Rule]

I liked some of it, didn't like other parts. Don't like the concept of "bucketing" funds because I think it adds needless complexity. Don't like the recommendation about owning rental real estate as though it's so simple to make it work. Don't like recommending a 4% WR as though it's foolproof.

What's the alternative to 4%? Drop it down to 3% I guess. By the way that 4% is supposed to be a very conservative worst case withdrawal rate.

 

[ERD50]

... By the way that 4% is supposed to be a very conservative worst case withdrawal rate.

I guess it depends on how you define all those terms.

Is a 5% historical failure rate 'very conservative'?

And that is based on a 30 year retirement - many ERs (especially couples) will have a better than 5% chance of that one/both of them will live longer than 30 years. Actually, it's a 44% chance for two 60 year olds.

https://personal.vanguard.com/us/insights/retirement/plan-for-a-long-retirement-tool

IMO, that 4% number gets thrown around way too liberally. Best to think a little deeper about it.

edit/add: It comes to 3.34% historically, for 100% safety and 40 year retirement (5% chance for 60 year old couples). Not such a huge price to pay for that extra security, IMO.

-ERD50

 

[ETFs_Rule]

You're supposed to reevaluate what you take out after every year. If you have to take out less then you have to take out less. Nothing you can do about it.

 

[Samz]

After seeing another string on this board "What was your magic number?" Survey says $800K. I checked this book out of the local library myself. I did not buy a copy.

I was mostly interested in the "Enjoying the rest of your life" chapter (e.g. What in the Hell Am I Going to DO All Day? WitHaiGtDAD) and he gave a few ideas based on some retiree surveys...

One thing I was on the fence about his advice was where he said people who do solo things (writing, fishing etc) may not be as happy as others that do more social things.

I love to hike, both solo and with groups. My solo hikes can be a little on the "mindful" side and when I can go on a local hike on my own and not even see one other person while out in the woods, I think that is awesome. But I enjoy hikes in a group too - gives me that tribe / being in a pack, feeling of accomplishment too. I planning to to try trout fishing soon, but in a very scenic area and it will most likely be part of a solo hike so I'll see how that goes. Music seemed to be a "big" thing for retirees...but I don't feel that after I retire I'll be any more into music then vs now. So I was not so impressed with the WitHaiGtDAD ideas from the book.

He also had some basic rules of thumb on how to calculate how much you need to save. Based on his surveys he had the average spending level at $53K per year.

He has an interesting Bucket System on how to allocate your investments.

He stressed dividend paying stocks as one of his "buckets" and another with Energy Royalty Trusts (publicly traded oil and gas trusts - gas lines?) and MLP stocks (energy storage companies) which were new to me an something I plan on coming back to study.

 

[prudent_one]

When you read up on MLPs, make sure you examine how the income taxes work.

 

[RunningBum]

You're supposed to reevaluate what you take out after every year. If you have to take out less then you have to take out less. Nothing you can do about it.

I don't hear a lot of talk about that with the 4% "rule". It seems to me that the mindset is mostly that even you've had a down year or two, things will probably rebound and you'll be fine taking 4%+inflation year after year. How do you know if you have to take out less early enough to help? That sounds more like a variable percentage withdrawal.

 

[ERD50]

You're supposed to reevaluate what you take out after every year. If you have to take out less then you have to take out less. Nothing you can do about it.

I don't hear a lot of talk about that with the 4% "rule". It seems to me that the mindset is mostly that even you've had a down year or two, things will probably rebound and you'll be fine taking 4%+inflation year after year. How do you know if you have to take out less early enough to help? That sounds more like a variable percentage withdrawal.

I'm confused as well.

If by 'the 4% rule', ETFs_Rule is talking bout the Trinity Study type plans, and the default in FireCALC, then there is no re-evaluation every year. You start with your chosen withdraw amount (a % of initial portfolio) and adjust for inflation every year.

That's how 'the rule' works - obviously people can adjust as they see fit, but that's the baseline to go from.

Maybe he is addressing some other method?

-ERD50

 

[Midpack]

Again, what some original SWR authors have said all along:

The authors of the [Trinity] paper did not mean for their scenarios to be applied rigidly or uncritically. The article makes this very important statement:

The word planning is emphasized because of the great uncertainties in the stock and bond markets. Mid-course corrections likely will be required, with the actual dollar amounts withdrawn adjusted downward or upward relative to the plan. The investor needs to keep in mind that selection of a withdrawal rate is not a matter of contract but rather a matter of planning.
​

Nisiprius requested clarification from Professor Philip L. Cooley, senior author of the Trinity study:

What the "4% SWR" means is not that you can treat a portfolio as if it were a guaranteed annuity. I think all the [Trinity] authors meant is that if it is late 2008 and your stocks halve in value, you don't need to halve your spending instantly. It's OK to cross your fingers and continue spending according to the 4%-then-COLAed plan, even though it means dipping into capital, and it's OK to go on doing that for a while.​

Professor Cooley's response:

You have hit the nail on the head! I've tried to explain that thought to journalists but they don't seem to get it. You've got it. Stay flexible my friend!, which is the advice we should give to retirees.​

Safe withdrawal rates - Bogleheads

One of the brightest members here re-evaluates every 5 years. I plan to do the same, though that could change if/when we're faced with extreme or unprecedented circumstances.

 

[Cricky]

It's an interesting book but some of Moss's math needs double-checking. For example, in "Stretching the 4% Into 5%" (granted, with a title like that, many here may just skip this section): "If you’re generating 4 percent per year but taking out 5 percent per year, you are technically dipping into your original principal by 1 percent a year. How long will your money last now that it’s being depleted by 1 percent per year? It would take 100 years." Well, no; it'll take more like 40 years; you're only depleting it by just 1% that first year. This may still be fine, but it is quite different.

And, to double down: "If, every single year, you generate 4 percent in income and take out 5 percent each year while simultaneously increasing the amount you need by the amount of inflation— how long does your money last? The answer is 42 years." Again, no; assuming 3% inflationary increases, your money will last between 22 and 23 years. (If inflation is only 2%, you'll get another 3 years or so.)

These seem like simple mistakes; maybe they're the only ones, and maybe they've been fixed (I have the Kindle version of the book, which I got when it first came out). But they sure reduce my confidence in the author's financial recommendations.

 

[boatfishandnature]

After seeing another string on this board "What was your magic number?" Survey says $800K. I checked this book out of the local library myself. I did not buy a copy.

I was mostly interested in the "Enjoying the rest of your life" chapter (e.g. What in the Hell Am I Going to DO All Day? WitHaiGtDAD) and he gave a few ideas based on some retiree surveys...

One thing I was on the fence about his advice was where he said people who do solo things (writing, fishing etc) may not be as happy as others that do more social things.

I love to hike, both solo and with groups. My solo hikes can be a little on the "mindful" side and when I can go on a local hike on my own and not even see one other person while out in the woods, I think that is awesome. But I enjoy hikes in a group too - gives me that tribe / being in a pack, feeling of accomplishment too. I planning to to try trout fishing soon, but in a very scenic area and it will most likely be part of a solo hike so I'll see how that goes. Music seemed to be a "big" thing for retirees...but I don't feel that after I retire I'll be any more into music then vs now. So I was not so impressed with the WitHaiGtDAD ideas from the book.

He also had some basic rules of thumb on how to calculate how much you need to save. Based on his surveys he had the average spending level at $53K per year.

He has an interesting Bucket System on how to allocate your investments.

He stressed dividend paying stocks as one of his "buckets" and another with Energy Royalty Trusts (publicly traded oil and gas trusts - gas lines?) and MLP stocks (energy storage companies) which were new to me an something I plan on coming back to study.

If you like solo hiking, you will love fly fishing for trout. Kind of gives you another reason to be by yourself outdoors in a beautiful area, immersed (literally) in nature...

 

[Rosie]

Hi folks -

Yesterday I subscribed to a service called BookBub (www.bookbub.com) which sends out lists of free & deeply discounted e-books based on the subscribers' preferences.

Anyhoo, You Can Retire Sooner Than You Think showed up this morning in the first mailing I received -- the Kindle version is currently available for $1.99 on Amazon.

I have no idea how long this price is good for (it could have been at this price for months, for all I know) but I thought I'd pass the info on, in case anyone is interested in this book.

 

[martyp]

It you are interested in the non-financial aspects of retirement then a book that I used and loved and is often recommended by members of this forum is "How to Retire Happy, Wild, and Free" by Ernie Zelinsky.

Another book I liked was "The Retirement Maze" by Rob Pascale. The authors interviewed a lot of people and it discusses how well people fare in retirement depending on their personality and work history.