I met Mike Piper of The Oblivious Investor briefly at FinCon11 and he came bearing gifts. (I guess I was The Oblivious Conference Attendee and did no such thing myself.) I snagged two copies of his newest book, Can I Retire? (I'll offer the second copy to a randomly-picked subscriber of my newsletter soon, so if you're interested, sign up!)
Can I Retire? is part of his “100 Pages or Less” series, and, well, the main text of the book ends squarely on page 99, so it's truth in advertising. His motivation in putting this series together was to give essential information on a particular topic in a size that wouldn't be so daunting to read. He fully admits that his book is just the beginning of answering the question in the title, so with that in mind, I read the book.
I enjoyed it. The book was well written and free of financial jargon, but at the same time I didn't feel like I was in third grade while reading it. It was a quick read; I got through it in maybe 1 1/2 hours, and part of the time I was riding up to a friend's house. Which, again, is the point of the book: It's an approachable and doable introduction to the topic.
Standard topics with some essential details
The topics are nothing terribly mind-blowing:
- Calculating how much you'll need to retire
- The 4% withdrawal rate rule
- Single-premium immediate annuities
- Index funds, exchange-traded funds, bonds
- IRAs and IRA accounts
- Tax consequences of conversions, rollovers, and the like
- Social Security
I picked up a number of things along the way. Here are a couple of them:
- Dollar-cost averaging is a two-edged sword. In a rising market, dollar cost averaging helps to automate the process of buying low (to sell high later). But in a falling (or fallen) market, withdrawing a fixed amount has the opposite effect: selling low.
- The overview of annuities is very good. I knew vaguely what annuities were but Chapter 4 laid the basics out very well, especially the pros and cons of annuities, fixed return vs. variable return annuities, and diversifying annuities.
- Having a tiered risk/reward investment structure in retirement is a good idea. The idea and explanation of having short-, mid-, and long-term investments in retirement was clearly presented. (Long-term in retirement is more than five years out.)
All in all, this was a well-organized introduction to answering the question of Can I Retire? and I recommend it. The Kindle edition is certainly worth $5 if you're new to retirement planning.
