"Get a Life: You Don't Need a Million to Retire Well" by Ralph Warner

[Life_is_Simple]

This is a NOLO Press book, updated 2004. A lot of this book talks about non-financial prep for retirement. I will skip to Chapter 8: "How Much Money Will You Need When You Retire?"


Articles in the daily press, commentaries by financial planners, and "retirement kits" published by mutual fund and insurance companies all tell us that to live comfortably after retirement we will need a big annual income for at least 30 years... These "you'll need at least $1 million to retire happily" articles more accurately reflect the biases of the investment industry than they do the spending patterns of real retirees...

He says retirement articles written by the investment industry typically have 3 misconceptions:

Hugely unrealistic assumptions of what retirement income you need (e.g., 70%-80%).
Statements that Social Security will be a teeny part of your retirement income
You will have zero inheritance.

He said most retirees get along fine on 40%-60% of their pre-retirement income. However, you should run the numbers of your own case. He assumes that some expenses will go down in retirement: mortgage, work clothes and transportation, child-related. Some expenses go up: health care, travel (possibly).

So look at likely income, expenses, consider inflation, and then create a plan to close the gap if needed. Then he shows ways to run the numbers.


Ok, this is me talking... To a lot of us, this is what we are doing, and it may not be new information. But it was nice to hear someone say that the people from the investment companies have an agenda, and they are trying to scare us into buying their products.

[ApatheticNoMore]

He says retirement articles written by the investment industry typically have 3 misconceptions:

Hugely unrealistic assumptions of what retirement income you need (e.g., 70%-80%).
Statements that Social Security will be a teeny part of your retirement income

Maybe "teeny" is exagerating, but even AARP says in 30 years chained CPI will have lead to the loss of a month of retirement payments compared to now (and that would be at the start of when I could collect, not the end). I think chained CPI is sneaky enough that it's impossible to even predict exactly.


You will have zero inheritance.

well what are we supposed to do, count on it? When there are so many unknowables? Like long term care, it can get expensive, you think I wouldn't cash all my potential inheritance out to provide long term care at the end if needed? I know I absolutely would. Because it's not *MY* money to begin with!!! But if I inherit of course I will accept the money. There's a principle in accounting called "conservatism", in that context it has nothing at all to do with politics, it means making the most "pessimistic" (least favorable for financial reports) assumptions in accounting for revenues/assets/expenses. I think I'm that way.


He assumes that some expenses will go down in retirement: mortgage

well I'm in the second half of my 30s and have never done anything but rent all my life ... so I don't know if I'm every going to live in a paid off house. :\


work clothes and transportation

I could see that


child-related.

I don't have kids


Some expenses go up: health care, travel (possibly)

health care yea ....


But it was nice to hear someone say that the people from the investment companies have an agenda, and they are trying to scare us into buying their products.

no doubt, but the future is looking incredibly uncertain to me (futures so bright I gotta wear shades - haha)

[catherine]

I read his book, and I agree that a retirement paradigm shift is in order.

Like ANM I did take exception to the whole inheritance expectation, but I think his point in the book is that there are other income sources that may become part of the picture for some people.

But a lot of what he said makes sense. The expectation that everyone should fit into the pigeon hole of "work yourself to death so that you save up more money than you need and then you can stop working 20 years before you die" is unrealistic. Just as the concept of "family" is becoming multidimensional these days, I believe that everyone will approach their "golden years" differently. There is no one size fits all, and Warner's book points that out.

I've had to come to peace with knowing that my retirement savings are going to be minimal, and my work life is going to be extended, and I'm perfectly OK with that.. it feels good not to succumb to the fear mongers.

[Lainey]

I've read Warner's book too and recommended it on these forums. Besides what's stated above, he also discusses the intangibles: having a community of family and different-age friends.
He gives real-life examples of couples, widows/widowers, etc. who have all navigated their retirement well. It's a great read.

[try2bfrugal]

I enjoyed the Warner book as well. I also like Retire on Less Than You Think, Retirement on a Budget and of course YMOYL. I really try to study those as well as any book I can find on simple living. All of those resources have helped us to really trim our expenses without negatively impacting our quality of life.

[Tussiemussies]

Thanks for posting about these different books, since my husband will retire and keep woring in a sode business, I think these will help us think over aspects in a different light.

[chrisgermany]

I like this book, too.
A lot of the info how much you need to retire is coming from the financial industry. So no wonder that they focus on the financial side of retirement and stress that you hardly can save enough.
But it is just as important to have something to retire TO.

I'd also recommend Ernie Zelinski's "How to retire happy, wild and free. Retirement wisdom you won't get from your financial Advisor".
The exercise of drawing your "get a life tree" is extremely helpful IMO.

[try2bfrugal]

The main thing I got from the different books is that it make it much easier to retire if you live in a low cost of living area. Most retirement income sources like investment income, Social Security and pensions are the same no matter where you live, so if you can move to a lower cost of living area you can often retire much sooner than a higher cost place.

It seems obvious now, but it took reading these kinds of books a few times for the full impact of the difference between expenses in a high cost of living area and a low one to really sink in for me.

[oldhat]

This is a topic of special interest to me right now since I'm trying to decide at what point I can stop full-time work. Clearly, the financial companies have a vested interest in making you think you need more money to retire than you do, since the more you have in their funds, the more money they make. The estimates they give with their online retirement calculators seem pretty inflated to me. I've read several of the books mentioned in this thread (though not Warner's), and their arguments strike me as more sensible. Your expenses go down in retirement: lower taxes, no commuting, fewer clothing costs, mortgage probably paid off if you own a house, etc. Most people probably need less than they think.

Of course, there's another advantage some of us have over conventional retirees--simple living. Those of us who have been following an SL lifestyle for years are already developed the habits needed to live on less and still enjoy satisfying lives, so going into retirement there's no painful transition involved. In this context, cultivating the attitude that you don't need a lot to be happy is a win-win, since you not only can save more and get yourself to retirement quicker, you are also better equipped to enjoy it once you get there.