Retirementology: Rethinking the American Dream in a New Economy Reviews
Sunday, October 30th, 2011 at
12:50 pm
Retirementology: Rethinking the American Dream in a New Economy
“A superb introduction to the necessary financial planning no American over 40 can afford to ignore.” Publishers Weekly “It’s time for many individual investors to make some hard choices. Baby Boomers are learning to deal with the fact that they really can’t have it all--at least not all at once. Retirementology is a great guide to helping them think through their plans for living, saving, and spending.” Marion Asnes, Editor in Chief, Financial Planning magazine “Retire
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Tags: retirementology, dream, economy, reviews, rethinking, american
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Must Read for Retirees to Be,
This book illustrates what I've been telling fellow employees for years - don't rely on anticipated money in the future for it may not be there. Pensions are not guaranteed and it seems Social Security is moving the age for retirement up beyond what many consider a reasonable age for retirement.
Dr. Salsbury gives great examples on how money spent on luxury items today can blossom into nice financial payouts in the future if the money is used for investing more than buying gizmos that often will be passé in the near future.
Another great point is what I've been stressing for years to others - a house is a place to live, not an investment. In fact, it's a money pit until you finally do sell it but many see it as a bank that may pay out in the future. Think about it, if you sell your house you still have to buy another which means the money you thought you'd have won't all be there.
This is a very good book for those in their 30s and I see the only fault to be the title which indicates the book is a retirement primer more than a history lesson. It should be mandatory reading for those starting out in life so they can learn the lessons their parents may not have.
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|A good behavioral finance saving guide,
The focus of Gregory Salsbury's "Retirementology: Rethinking the American Dream in a New Economy" is the psychology of finance also known as behavior economics. Salsbury explains why most of us don't always behave rationally when it comes to money. He not only discusses our self-destructive financial behavior and hidden retirement mistakes but also offers ways to improve financial decisions.
His helpful advice includes:
Retirement should be a process that begins as soon as we engage in earning and investing.
Choosing a lifestyle that eliminates credit card dependence and debt.
Having critical financial health care planning.
Avoiding making big purchases immediately instead of saving to buy them later.
Avoiding the destructive behavior of procrastination, overconfidence, overspending without awareness, discounting the impact of taxes, chasing trends or using the equity in your home as an ATM or retirement plan.
I found Salsbury's new language of retirement with it's many one-of-a-kind terms, descriptions, definitions and scenarios confusing and too academic.
However, the 2008 economy crash makes Salsbury's book a good behavioral finance spending and savings guide for all people not just retirees.
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|How to Think about Money and Financial Decisions, Long Before Retirement,
This is a very readable and critically informative book for the pre-retired. It talks about how to plan for retirement and how to think about money during the pre-retirement years (although many of its points continue to be valid during the retirement years as well). What is so valuable about this book is that it is not just a list of "save this" "invest in that", etc. Instead, it talks about how to think about how you use money and what the effects of various financial decisions are on your future finances. It combines behavioral economics with hard data; for example, there is a nice chart on pg. 24 that shows how setting aside $10,000 per year from age 31-40 ($100,000 total) will provide a much larger retirement nest egg than setting aside $10,000 per year from age 41-65 ($250,000 total), all due to the magic of interest compounding over the years. And then it uses that chart to talk about the psychological tendency to procrastinate when it comes to retirement planning and why people need to get beyond this tendency to put off dealing with eventual retirement.
This is a post-meltdown book, and the effects on retirement and retirement planning are well covered. For example, it talks about the spending boom and consequent lack of savings. It uses the real-estate bust to explain why a house should be considered a place to live rather than an investment. How to think about the rise and fall of investment prices. Why retirement will not be the same as it was for earlier generations.
From the title of this book and its minimal blurb, I thought it addressed how to live and prosper during your retirement years, especially for those who have recently found themselves unexpectedly "retired", and need to rethink their budgeting and spending with not as many funds and benefits as were anticipated. So I was disappointed that it addresses a different audience, but it is full of great points and observations.
There are times the book should provide more information. For example, the chapter about taxes points out the great effects of state taxes and why it might make sense to more to a lower-tax state. But, it could really use a chart giving the tax rates in various states, as well as a discussion of the special retirement deals for US citizens which are available in many other countries.
The one thing I really dislike about this book is the gimmicky use of made-up financial planning terminology and psychological attitudes, such as Hell-thcare, Numbertose, and Retirementology. But the author does use these terms to make some very important points, and perhaps by giving them these kinds of names it will help readers notice and pay attention to them better.
So, this book is better for people who are still earning, rather than those who are already retired. I got this book intending to loan it to my brother-in-law who just recently experienced involuntary early retirement, but for what this book talks about, it is mostly too late for him. Instead, I am going to lend it to my daughter, who is just beginning her adult financial life and is a great planner who can greatly benefit from the advice here about how to think about money and how to make decisions about spending and saving.
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