Two authors examine the preparations that must be made before one retires. Or not.
BY RICHARD PACHTER
Retire? For some it's not a viable option. For others, it's a possibility, but their financial well-being is the prime determinant of the timing. Two new books examine retirement from the perspective of the critical issue of investing self-directed retirement funds and the option of pursuing a different path that would offer an alternative to total withdrawal from the workforce.
The Smartest 401(K) Book You'll Ever Read. Daniel Solin. Perigee. 240 pages.
For poor slobs like me, 401(k) and 403(b) plans need to work very hard. Though a friend recently joked that she thinks that she can probably afford to retire in the year 2525, there's a chance that circumstances may prove otherwise. Another buddy told me that he has three retirement funds sitting with three ex-employers. Nice. Both of these comedians ought to pick up this useful new book by Daniel Solin, pronto!
I reviewed his previous tome, The Smartest Investment Book You'll Ever Read: The Simple, Stress-Free Way to Reach Your Investment Goals when it came out about a year and a half ago, and this one is a worthy successor. Instead of going on to other subjects or bigger things, Solin focuses on retirement savings plans. It's a fertile topic and his advice seems sensible enough, though it's touted on the jacket as being ''controversial'' and ''challenge(ing) some basic assumptions.'' Well, maybe I'm missing something, but Solin's admonitions to keep fees and expenses low, use index funds and diversify seem pretty solid.
Solin also isn't afraid to be specific, which is very nice, too, so look for some very sharp criticism of several funds (including TIAA-CREF) and investment instruments such as annuities. He provides a few model portfolios, rails against professional investment advisors and politicians, and suggests ways to augment retirement plans with additional investments. This book also provides several work sheets and questionnaires, making matters a bit easier, so one's excuses for inaction becomes a bit weaker.
If you're considering reading this book, I'd suggest doing so quickly, as things change, but much of what Solin writes is very solid and useful. If you haven't taken a recent look at what your own retirement investments are doing and -- perhaps even more important-- how they are put together, reading Solin's smart little book might provide the impetus for action.
Retire Retirement: Career Strategies for the Boomer Generation. Tamara Erickson. Harvard Business Press. 192 pages.
Erickson's premise is similar to my friend's who plans to work forever; those reaching the traditional age of retirement need necessarily not do so. The author proposes ways to adjust one's compensation and expenses to accommodate this. She also offers insights into strategies and options, such as location, transportation and lifestyle choices. Sure, they're all related (if not defined) by economic factors, but Erickson puts them all into a larger context, which is very useful, too.
Though primarily aimed at boomers, I suspect that much of Erickson's advice can be adapted to others, too, as the ongoing changes in the economy and our culture continue to alter the nature of work and the relationship between employers and employees.
Originally published 6/23/08 in The Miami Herald