From The Library: How To Retire With Enough Money And How To Know What Enough Is, A Clear Answer In 116 Pages, By Teresa Ghilarducci

This is the sort of book that reminds me that sometimes what determines whether a book is published or not is not the quality of the writing or the information contained within it, but the reputation or status or credentials of the author.

Here’s the sum total of the instructional part of the book:

Go to the AARP retirement calculator, pluck in your information, and see how much money it tells you you need to save. (Actually, the AARP calculator is pretty poor — it tells you a dollar amount but doesn’t help you back into a retirement savings percentage. She also recommends dinkytown.net but this site isn’t especially user-friendly. And neither of these sites factor in the risks involved — of a market crash, for instance, or healthcare expenses.)
Save that money. Just spend less money than you earn. In particular, “have a nice home in a modest neighborhood” — which misses the fact that most middle-class readers are likely to perceive that as what they’re already doing.
Invest in index funds, and don’t get suckered into anything else. Allocate this 50/50 stocks/bonds, or go with 70% or even 100% stocks if you’re younger. (No, she doesn’t give any more concrete advice than that. Nor does she discuss Target Date funds that are likely offered by your employer.)
Maybe buying a home doesn’t make sense for financial reasons, but it probably does for other reasons.
Pay off your debts before putting your available funds into savings — this holds true, she says, for mortgages as well (she greatly simplifies here — there are significant reasons not to do this as well).
Try to avoid taking Social Security until age 70. (She’s right, here, since deferred-to-70 Social Security is the best value you can get in terms of a lifetime annuity that adjusts with inflation. I would go further and say that even if you retire before then, you should spend down other assets first.)
Once you retire, spend down your assets at a rate of 3 – 5% per year, or use the IRS Minimum Required Distribution tables, or guess your life expectancy and work backwards.

That’s it. I could have written that.

But that’s not what the book is about, really. Here message is this:

Employers used to be good-hearted and provide pensions for their employees. Now you’re on your own because they’re mean. (She misstates how prevalent, and how generous, DB pensions were in the past, to make her point, as well as treating the rise of 401(k) plans as a blatant cost-saving measure rather than recognizing that there are multiple reasons for their rise — DB plans became more costly, due to new funding regulations and rising longevity, there’s a much bigger focus on risk in the corporate world than in the past, and, in the end, a job-hopping employee benefits much more from a DC plan than a half-dozen partial DB plan accruals.)
Virtually all financial planners stand ready to rip you off, so watch out.
The real way to have enough retirement income is to get involved politically, fighting for politicians to keep and enhance Social Security, funding this by eliminating the wage base (she neglects to mention that this quashes fully the notion that Social Security benefits are “earned” and “insurance” and transforms it into a simple welfare/redistribution program), keep and strengthen Medicare and Medicaid, and implement her Guaranteed Retirement Accounts, which she touts as, well, guaranteed. (Her GRA proposal, which she described in a book, When I’m Sixty-Four, has similarities with my proposal for pooled accounts, except that, without explicitly saying so, she seems to presume that the government would directly guarantee rates of return by making up the difference, and she doesn’t provide specifics on how generous a rate of return, or how conservative an annuity conversion assumption, she expects.)

So, basically, this book is a bait-and-switch, to persuade the reader of her policy proposals. But at least it’s priced at only $12.95.

Sigh. Someday I’ll write my own book.

Image by Raysonho @ Open Grid Scheduler / Grid Engine (Own work) [Public domain], via Wikimedia Commons