Tuesday, October 21, 2008

Sherry Cooper's "The New Retirement"

I was not impressed by this latest book by Sherry Cooper. She claims this is the result of her efforts to plan her own retirement, but I find it thin on material. Her best advice is in Chapter 9 "How Much is Enough? Nest Egg Arithmetic" and it boils down to a simple rule of thumb: you need to have enough financial assets (in addition to your home) such that you can live on withdrawing 4% a year. E.g. if you need $60,000/year pre-tax, then you need to have $1.5 million in an financial assets that are diversified, and this means 40% large cap, 20% small cap, and 40% intermediate bonds. That's the heart of the advice. In addition she works through some numbers to show people just how hard it is to save enough.

The rest of the book is filled with fairly obvious "advice" about lifestyle and meaning in life. I found chapter 11 "Health and Happiness in Act III" just too much to take. It is just too full of smarmy advice about career and "giving back" and the psychology of an "integrated personality". That is material I would expect in a self-help psychology book, not a retirement book.

The early material about the financial state of the world is not very interesting. Maybe for a completely naive person seeing this material for the first time it might be an eye-opener, but still, is it really relevant to planning your retirement. All the material about how wonderful DB (Defined Benefit) versus DC (Defined Contribution) retirement plans is a nice rant about the gold-plated government worker and big industry unionized company pensions plans, but it does nothing to help the poor fellow like myself without a DB plan. All it does is make us feel worse than we already are by rubbing our noses in how much we have to save to try to "keep up" with those who have these deluxe retirement plans.

On the whole, it was a fairly mediocre read. Too bad. I've enjoyed Sherry Cooper's articles and her previous books. I even enjoyed her website where she has posted her articles and has a very nice little Java-based retirement calculator.

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