Can I Retire?: How Much Money You Need to Retire and How to Manage Your Retirement Savings, Explained in 100 Pages or Less Paperback – May 13, 2013

I heard about Mike Piper and his books on The Bogleheads online forum. I decided to buy this book and check him out.The author boils down retirement planning to about 100 pages compared to the 370 pages in The Bogleheads Guide to Retirement Planning and Jim Otar's 525 pages in Unveiling the Retirement Myth.By the title, I assumed all 100 pages would focus on the decision on whether or not to retire. Instead, 30 pages focus on this key decision...and the balance of 70 pages focus on the steps to take after you decided to retire. This is ok, but not what I expected from the title.My reading time was about 50 minutes, but I took notes as I went to be able to write this book review. If you subtract the note taking time, my reading time was about 40 minutes.Piper mentions that state guarantee associations exist to back up an insurance company that fails. The soundness of an insurance company is critical if they are paying you a lifetime SPIA. It is extremely difficult to find data about past insurance company failures and whether investors lost money or not on their SPIA's. As we all remember in the Sub-Prime Crash of 2008, AIG basically went bankrupt and Uncle Sam had to bail them out. William Bernstein has correctly pointed out that buying SPIA's may be too risky because of the chance of insurance company failures and inability of state guaranty associations to fill the gap.Piper correctly raises the major issue of conflict-of-interest if you choose to use a financial planner. His example of conflict-of-interest is financial planners not recommending SPIA's because it reduces the amount of assets under the AUM (assets under management) financial model........and therefore reduces the annual income to the financial planner. This can be remedied by negotiating an annual retainer fee which does not depend on the vagaries of a fluctuating stock market or SPIA usage. In the spirit of full-disclosure, I am co-author of Chapter 18...Seeking the Help of Professionals..... in The Bogleheads Guide to Retirement Planning.......and I think our chapter elaborates and does a much better job of explaining the conflict-of-interest issue.One thing I was not aware of until a couple of months ago, is that if you retire between age 55 and age 59.5, you might be better off leaving your money in your 401K versus rolling it over to an IRA. Tax law allows you to withdraw from the 401K without the 10% penalty if you are in this situation. Piper does mention this fact.One thing Piper mentions that I was not aware of.......was that if you own company stock in your 401K plan...you can withdraw it and pay long term capital gains taxes versus higher ordinary income tax rates. I have not heard of this loophole before. Of course, I would recommend being fully diversified and not investing much in your own company stock.......just ask Enron employees what can happen.Piper correctly points out that if you a financial advisor who uses the 1% AUM model (he charges you 1% of assets under management each year) your 4% safe withdrawal rate really becomes 3% because of the 1% AUM fee. Many advisors charge a fraction of 1% AUM, which means your SWR is higher than 3%.Piper repeats the basic financial guide to put dividend paying investments into retirement accounts (bonds, bond funds, TIPS, and REIT's) and stocks in taxable accounts.He also points out your available options if your investment income is not high enough to support you in retirement: Work longer, work part-time in retirement, reduce retirement living expenses, reduce current expenses and save more, annuitize using SPIA's which generate more than 4% (but leave nothing for your heirs), or try to get higher returns from your retirement portfolio.Given the low savings rate and portfolio size of most Baby Boomers, I suspect many of them will tap their equity in their home and use it for retirement living expenses via reverse mortgages. Piper does not mention reverse mortgages as an option.All-in-all, a good little book with practical advice. In our U.S. culture of short attention spans (e.g. 8 sec TV commercials).....maybe more people can learn the very basics of retirement planning versus having to read full length books.

Overall this is a very good book with useful information for anyone who is looking for information about when and whether to retire. My only complaint or negative feeling about the book is with respect to chapter 3 titled "What if 4% Isn't Enough?" and the subject is increasing returns on your investments. In one of the sentences he writes, "even the pros can't seem to get the job done consistently" with respect to professional financial people being able to match or beat the market. Individual investors can do so much better by spending time learning and staying focused on a goal to increase their wealth by investing. I was finally convinced this is true after two professional money managers, one employed by Fidelity and one employed by America's Retirement Store, told me that they did not have time to invest in the types of securities that could bring true wealth to their clients. I translated this to mean that what they do is put their clients on auto-pilot and most people accept measly returns because those in the financial world have convinced them that this is true. My recommendation to individual investors who really want to learn and succeed is visit The Motley Fool website to learn about stock investing and option investing. There will be a learning curve, but after that you can spend a reasonable amount of time managing your financial portfolio. If you make up your mind to succeed with individual investing, you will be successful.

For years I have been trying to get my wife interested in planning for our retirement. She never read any of the other books I've purchased, but she devoured this concise book, and is now invested in understanding our retirement planning ! ! ! THANKS MIKE ! ! !

A very clean distillation of all the key topics. I plan to buy a paperback version to have it handy as a reference.