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Tuesday, March 28, 2017

Book Review: The New Retirement

Posted by Tim Stobbs on June 11, 2008

Well I finally got around to reading a copy of The New Retirement by Sherry Cooper. I had been sort of interested in the book after reading a couple of articles on the internet about it. I have to say you can tell Sherry is an economist by training. The books tends to read like a text book for long stretches.

The good news is some of data she presents is rather interesting. Also she presents a nice back and forth comparison to the US system which provided some little education tidbits for me to chew on. Like just how underfunded the Social Security program is. The general theme of the book is as follows: baby boomers are going to be demand in the workplace and most don’t have enough saved for retirement so they should consider working part time for a few years during the start of their retirement (where money in = money out) and then phase into a traditional retirement afterwards.

Generally I agree with her basic idea. It can work out for people that haven’t saved enough, at the same time her examples are amusing for me. She likes to use $50,000/year as an income requirement during the retirement years and at one point she comments that $28,000 to $32,000/year won’t be enough in retirement. I smiled at those and then laughed out loud when she brought out that completely useless rule of thumb that says you need 60 to 70% of your pre-retirement income to live comfortably (I’ve previously stated I think the rule is garbage).

The book was written by someone from inside the wealth machine, as such, Sherry’s opinions are coloured by that experience. So overall I won’t suggest people send the time to read this as a retirement planning book, yet if you are interested in economic treads and what the boomers will do to things it does present a few interested bits of data to chew over.  She also provides a bit of information on happiness in retirement which is useful to read.   Be warned that the book is textbook like, so it isn’t a nice easy read for most of the book.

Comments

5 Responses to “Book Review: The New Retirement”
  1. PC says:

    The assumption had always been that boomers need and will work longer. Why is it impossible the other way around? They’ll drastically lower their standard of living. By that I mean people start to down size, society as a whole goes back to smaller cars, eat out less etc. Green living is a strong force as well.

  2. I suspect that many boomers will be forced to work later in life. I think businesses will give them big incentives to stick around, like extending benefits or increasing pensions or just plain cash. It’ll just be too lucrative even if they are relatively set up.

    There is a huge demand for workers and the boomers are retiring faster than we can give birth to or import new ones.

  3. Canadian Dream says:

    PC,

    I agree that people assume they all want to keep working when I can see a fair number of people going ‘to hell with this’ and just retiring to a more simple lifestyle.

    TS,

    Incentives will keep some around, but I can see a major shift to consulting type setups or part time work for some. I think the full time boomer after 65 is still going to be a rare event.

    Tim

  4. Lise says:

    I went to check out your linked article (garbage rule). You mention you haven’t given much thought to later life care… beware! Neither had I, and then I got hit with a progressive disease a few years short of 50. Because I will need home care or equivalent later on, I’ve had to postpone my retirement.

    When I figured out my retirement income needs, my figure was quite high — more than I was planning on before I got MS.

    I’m kicking myself for not having taken long term care insurance while I could. It’s expensive, but worth it I think.

    All to say: any solid retirement plan should consider multiple scenarios. If you’re planning on earning income through part-time work, consider what if you couldn’t work? If you’re thinking your house will be paid, what if you’ll need to move into assistant housing?

  5. Canadian Dream says:

    Lise,

    Sorry to hear the bad news. I have a friend who’s mother has MS and I totally understand what you are facing. I agree most plans should consider health issues before going ahead, but at the same time it isn’t reasonable to plan for everything.

    For example, according the MS Society of Canada there is approximately 75,000 people with MS or 0.22% of the general Canadian population. So that means 99% of us don’t have MS. Planning for MS specifically is really not worth the average persons time. It’s horrible if you do get it, but there has to be some reasonable planning.

    I think instead the average person should look at their family tree’s medical history and determine what are likely health issues for them and do some planning around those. If you know high blood pressure killed all your grandparents you might want to look into the risk factors and reduce them now.

    For example, in my case I will consider it almost a miracle if I get to my death without getting type 2 diabetes. It’s that common in my family tree. So I am making sure to keep off extra weight, don’t smoke and try to eat a balanced diet now.

    Perhaps the way to approach the part time work in retirement is to plan for it to cover the extra nice to have items. That way you can still have a basic retirement if you can’t work.

    Tim

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