Comments on: Review: The Smartest Retirement Book You’ll Ever Read

By: Angel

Angel — Sun, 18 Jul 2010 14:49:32 +0000

Thank you for this article. It touches on the basics, but some of us need the basics! :)

By: Andy

Andy — Wed, 14 Jul 2010 03:38:17 +0000

There seems to be a slew of retirement/investing books out now as authors and experts seek to leverage the fear folks feel (real and perceived) from the financial crisis fallout. The advice above seems solid, but really nothing new. Still if it is well written and easy to understand it is better than most.

By: Georgia

Georgia — Tue, 13 Jul 2010 23:49:42 +0000

Trent – the limit of $250k on FDIC insurance is just the minimum. You could insure over 2.5 million in one institution when the limit was $100k. The $250k is per account and per person. You/Spouse can have 2 accounts in your individual names and one in joint. That’s $750k right there. Then you can set up one acct. per child with you as joint & your wife on another joint. For you, that’s now up to a total of $2,250k. Then there are trust accts., POD accts., etc. I guess no one informs the customer anymore. We had this all explained when we started work at the Savings & Loan.

There is a possibility that it has changed some, because it’s been 24 years since I worked there. But don’t panic until you have went on the govt. website and read the info on this.

By: mashford

mashford — Mon, 12 Jul 2010 14:35:39 +0000

The comments on TIPS being too volatile is new …
-Many advise TIPS for inflation protection
-Is he talking about TIPS funds or buying TIPS directly?

By: WendyH

WendyH — Mon, 12 Jul 2010 12:56:44 +0000

It also doesn’t hurt to play “what if” your retirement doesn’t go as planned.
re Eleven: Don’t forget regular medical care costs for spouses not yet to retirement age – my FIL needed to retire early because of a disability, and my MIL (who had already retired early) ended up going back to work just to get affordable medical coverage.

re Twelve: if you have a spouse and children, and have property that you want to keep in the family, please consider a trust or living will or something simlilar so that it isn’t considered an asset to be sold to pay for medical care. Especially important with diminished mental capacity of the owner! I have a neighbor who is spending lots of money on lawyers right now trying to keep the family property (he is 5th generation).

By: Kate

Kate — Mon, 12 Jul 2010 12:00:13 +0000

Why does it have to be so hard to save for retirement…IRA, 401(k), mutual funds, annuities, Roth and then get into this versus that. It should not have to be so difficult, which leads me to believe that is part of the reason why so many people don’t do it or delay doing it. I’m not saying that people shouldn’t be held accountable for not doing it, though. It just shouldn’t be so difficult.

By: Carey

Carey — Mon, 12 Jul 2010 11:52:03 +0000

deRuiter – your comment would have been fine without the tin-foil hat stuff. Your knowledge on the IRA conversion is sound, but your political ignorance is staggering.

By: deRuiter

deRuiter — Mon, 12 Jul 2010 09:37:59 +0000

The advice about turning your traditional IRA into a ROTH this year is superb. Anywone with financial savvy is doing it this year because there is no penalty. Yes, you must pay income taxes on the money (DO NOT PAY THE TAXES WITH THE MONEY IN THE IRA, PAY WITH OTHER SAVINGS!) Income taxes and other taxes are going to EXPLODE onto the scene beginning Jan 1,2011. Paying the relatively low income taxes of today, instead of the monstrous, punitive taxes which are kicking in Jan 1, you will save tons of money. Every taxpayer is going to be crushed come Jan 1. The reason our puny economy is not doing worse, is because mid and high earners are paying the taxes on their traditional IRAs this year to shelter income. There is a lot of this conversion happening, and the taxes from it are flowing to the US Treasury. Corporations are doing the same thing, shifting profits from next year to this year. As a result our economy does not look as pitiful as it is. Come Jan 1, 2011, all this activity will be over, and the real conditon of our economy, which will worsen due to the higher taxes, will probably tank, collapse, become a depression. A president of the United States who has to go with teleprompter on TV and announce that he is pro business, is NOT! The administration drive to nationalize all industry and business does not favor capitalism. Nationalized health and cap and tax, bans on American oil productin are intended to whittle America down to size by impoverishing American producers (workers.) Folks, shift your traditional IRA to a Roth this year and protect yourself from the punitive taxes which are arriving in less than six months. Redistribution of wealth, here we come. If you’re planning to sell investment property, or expensive assets, SELL THEM BEFORE JAN 1, 2011. Take your profits before the insatiable governemtn takes them from you next year.

By: MakingAMillionDollars

MakingAMillionDollars — Mon, 12 Jul 2010 07:19:10 +0000

First I would like to note on #8 the statement that if you have a pension don’t take a lump sum but spread it out. My question is if a company like GM can go Bankrupt, wouldn’t the pension fund be wiped out too? I would rather take my chance with the lump sum. Also, I thought I would note I have changed my strategy a bit lately in regard to tax deferring my 401K. If you get taxed on it you can take it out without penalty and of course with no tax since you have already paid it. The beauty is you still get the company match. The reason why I am doing this is that I would rather have the portion I can pull out which is my own money completely liquid. This is primarily due to this new economy and being prepared for the unexpected. Looking at things way in the future may not apply these days.

By: almost there

almost there — Mon, 12 Jul 2010 03:47:27 +0000

Sheila, yes you can have cash in an ira or 401(k) but it is called a money market account. Most 401(k)s don’t give a cash option. I opted for the target retirement funds for my Ira much to my dismay.

By: Romeo

Romeo — Mon, 12 Jul 2010 03:32:46 +0000

Sheila,

I suppose the 1/3 of your retirement portfolio in cash means to have 1/3 of your investment in an index fund comprised of treasure bonds. A great way to take advantage of the 1/3, 1/3, 1/3 rule but taking out the guess work is a Lifecycle fund. A Lifecycle fund is usually managed such that the closer to your retirement age the more invested the fund is in government bonds and notes.

By: Jack

Jack — Mon, 12 Jul 2010 03:03:42 +0000

I’m certainly not a financial guru, but it seems to me that when people talk about investments not keeping up with inflation, they often fail to take into account the wonderful joys of compounding.

I also see that you put Treasury Bonds into this category, yet the Vanguard Long-term Treasury Fund has returned 8.27% since inception (1986) & 11.25% year to date. Based on the DJIA’s performance over the past 10 years, most index stock funds have probably lost money, whereas investing in treasury bonds would have gotten you an average of 7.84% per year.

I know that what you write about above has been the standard thinking for several years, but I can’t help but think we’re in new times. The crookedness of big-business continues to be exposed, and I can’t help think that there are too many “black swans” out there that can turn things on their head (once again!).

By: Alex Posicionamiento Web

Alex Posicionamiento Web — Mon, 12 Jul 2010 02:30:44 +0000

When people reaches the age of retirement not all is financially secured. There are those who still need to find a way on how they will be financially secured. This article is really great because it would allow people who are in the age of retirement to know more about ways on how to earn after retiring. This article is not only important for people who are in the age of retirement but for everyone else because they can easily plan what they would do in the future or in the near future.

This is a great article! Thanks!

Alex

By: Sri

Sri — Sun, 11 Jul 2010 23:19:12 +0000

Another great review! I like that you outlined it – something that I should reserve or request in my library.

By: DIY Investor

DIY Investor — Sun, 11 Jul 2010 23:00:05 +0000

I’m a Solin fan. Your readers might enjoy the talk he gave to Google employees on “The Smartest Investment Book You’ll Ever Read”. In my opinion it is very wise advice for investors. In the talk you’ll hear how he chooses his titles.

http://www.youtube.com/watch?v=Y0LSG2omvEg

By: Sheila

Sheila — Sun, 11 Jul 2010 22:59:01 +0000

What does “keep 1/3 of your retirement portfolio in cash” mean exactly? Is “cash” an option within a 401(k) or IRA?

By: Carey

Carey — Sun, 11 Jul 2010 22:47:28 +0000

I don’t get all the concern about inflation eating away at your retirement savings. You can’t avoid inflation. And the only way to mitigate it, obviously, is to do whatever you can to earn a higher return on your savings… which you should be doing anyway. So what’s the point?

I don’t ignore inflation, but I don’t worry about it either. It’s like getting older – it’s inevitable, so stop worrying about it.

Most of this book seems like common sense – especially section four, “Cash Made Simple”. Of COURSE you should put your savings in an FDIC insured bank. Are there really any banks out there that aren’t FDIC (or NCUA) insured? Is this something that people really need to be told?

I agree with the author that it’s not wise to buy TIPS. Any protection you get from inflation is negated by the premium you have to pay to buy the bond – a premium priced in by other buyers who are probably a lot smarter than you.

By: Dalrock

Dalrock — Sun, 11 Jul 2010 20:26:02 +0000

Good stuff. On immediate annuities (SPIAs) one should consider inflation protection. I think Vanguard used to link to one offered by AIG. I’m not sure if this product exists any more. I think I read that TIAA Cref offered something similar. Worth looking into at least.

Also, there are similar products which insure you against running out of money if you live to a specific age. They don’t get a lot of press but they seem like something people should consider. Basically you are buying longevity insurance.