Swedroe: Make Your Retirement Money Last

February 01, 2016

Whether you are planning to retire, or are already retired, Jane Bryant Quinn’s “How to Make Your Money Last: The Indispensable Retirement Guide” is one of the best “investments” you can make.

Ms. Quinn is one of the leading journalists in personal finance. She clearly cares very deeply about helping investors find the right answers and avoid being sheared like sheep by the wolves that populate the investment landscape. Her writing is crystal clear, making technically difficult concepts understandable for the layperson.

Her book begins with an important question: “Now that you can do whatever you want, what do you want to do?” She notes that while learning how to stretch your available assets and “rightsize” your life are the first steps toward retiring well, it’s important to ensure that when you retire from your job, you don’t retire from life. She writes that retirees must find new challenges that will fulfill them emotionally and intellectually, while at the same time keeping them well-connected to society.

A Guide To Retirement

The first chapter of her new book discusses five states of retirement: preretirement, the honeymoon, disenchantment, reorientation and stability.

Her second chapter is about rightsizing your life (finding that happy place where the annual income you expect matches or exceeds your annual spending), and she observes that “you’re never afraid to open your bank statement when you’re living within your means.”

Chapter three focuses on making the right decision about when to take social security, emphasizing an important point that far too many people fail to consider—the role of social security as longevity insurance. This chapter in particular is extremely well done.

Chapter four is all about helping you make the right choices when it comes to health insurance.

And chapter five addresses pension plans and making smart decisions about whether to take them as annuities or as a lump sum.

Building on the previous topic, chapter six is about “buying your own pension,” and undertakes an in-depth examination of the role of annuities, both immediate and deferred. Ms. Quinn raises all the right questions and gives readers the information they need to make the right decisions.

As always, she tells it straight. She recommends that investors avoid the slew of bad products created by the insurance industry, including expensive and complex variable annuities (they are products meant to be sold, never bought). She also shows you how to deal with the issue of variable annuities if you already own one.

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