Retirement Rules

Second, I’d like you to help me write a book. Here’s the idea.

I recently read a book by bestselling author Michael Pollan called “Food Rules: An Eater’s Manual.” In it he argues that eating has gotten overly complicated. Basically, there are too many diet books, food pyramids, health claims, so-called experts and weird ingredients that you can’t pronounce. He attempts to cut through the clutter and lay out some simple rules (some of which were submitted by readers or date back to advice that grandma gave), that are easy to understand and follow for the majority of people.

As I read the book, I couldn’t help but see parallels with the financial planning industry. It too has gotten extremely complex with endless products, research, regulation, advice, articles, experts, contradictory claims, credentials, DIY options and fee structures. All of that exists to help people prepare and yet 57% of the population reports having less than $25,000 saved for retirement. Obviously, the complexity does not seem to be helping. We need a Vince Lombardi “This is a football” type moment to get us back to the basics.

So today, I’m inviting all of you to offer up your best retirement planning advice. Maybe it is something that your parents or grandparents taught you. Maybe it’s something that has worked particularly well in your situation. Maybe it’s something that you learned the hard way and you want to help others avoid the same mistake. Whatever it is, either email me or scroll down to the comments section and type it in. It doesn’t need to be long. A few sentences or a short paragraph would be ideal.

Once I have enough entries, I’ll compile them all, choose the most helpful, combine duplicates, edit them for clarity, write some of my own and then lay them out into an ebook which I’ll make available for free in a future article. If you’d like your idea attributed to you in the book, be sure to include your name with your comment. Sound good?

Your turn

I’ll list some potential topics below. Feel free write about one of those or start a new one. My only request is that you keep it simple and try to focus on rules that will work for the vast majority of people.

Should you have an adviser or go it alone?
Rules for saving
Rules for investing
Finding purpose and fulfillment
What percentage should you save?
Asset allocation rules of thumb
Withdrawal strategies
Habits of effective retirees
Importance of discipline in staying on track and saving enough
Social Security
Medicare
Pensions
The importance of friends
Estate planning
Caring for aging parents
Debt
Spending and budgeting
Insurance and Annuities

Thanks for the help!

~ Joe

Photo by Sacha Fernandez. Used under Creative Commons License.

3 Comments

Dan on January 10, 2014 at 12:26 pm
Not spending $1 is worth more than earning an extra $1.
When my earnings increase by $1, that dollar will be taxed at some point, either now or later (if put it in a tax-deferred vehicle). Because of taxes, that dollar is in effect worth less than a dollar. However, when I decide to not spend a dollar, I get the full benefit of retaining that dollar. I’m not taxed more just because I choose not to spend it. So, what’s worth more: (a) finding a way to earn an extra dollar or (b) not spending a dollar I already have? Because the answer is (b), I spend less time figuring out how to make an extra buck and more time evaluating my purchases. A penny saved is actually more than a penny earned.
Joe Hearn on January 10, 2014 at 3:29 pm
That’s a great one Dan. Thanks for sharing. I really like the ones that go against conventional wisdom a bit and cause people to think. I’ve had a ton of email responses with other ideas as well, so we’re off to a good start.
- Susan Skinner on January 12, 2015 at 3:32 pm
  1. When I consider spending $1 (or any amount), I ask myself questions like, “Where will I store it?”, “Is this healthy for me to eat?”, “Is it worth the $2 to $4 I’ll have to earn to pay for it?” and/or “Will it make my life better?”
  2. Since cars are often people’s second biggest expense, watch that like a hawk. Don’t figure what your fuel cost is, rather remember what the federal government reimbursement rate for mileage is. If you have to drive 10 miles further to save $10, you have just made yourself poorer. How? Well, your round trip is 20 miles and the 2015 federal rate is $.573 for a total of $11.46. So, you have spent an addition $1.46 and if you take that times two or four your have to earn to make that money, the trip cost you an extra $2.92 to $5.84!