He calculates the cost of procrastinating and gives it to us with hard dollar examples. And good thing he does it with humor. Otherwise, there’s a bit of sting when you realize that the years you took to finally getting around to investing in your 401(k) might cost you $250,000 over your working life! The book also has some quick shortcuts to calculate what you’ll need in retirement savings, although Ric does give this caveat: If you want a real answer that is more reflective of your personal situation, you should meet with a financial planner.
The book’s plain talk on behavioral finance – and key behavioral biases – was also very well done, and it has a great section on putting news media articles on retirement into perspective, with tips on how to separate hype from reality. In fact, if I could get my husband, “the Pilot,” to read just one section of the book, it would be this one. The section’s basic gist: When you’re investing for a very, very long time, don’t get caught up in responding to the daily news grind. In other words, as Larry Fink pointed out in a recent post, “Tune Out the Noise.”
Lastly, Chapter 22 really hit home for me. The chapter’s “six realities you must acknowledge” get to the heart of why many people are anxious about retirement. For instance, we all really will have a “finite amount of money” in our retirement accounts, and the amount of money we start retirement with is likely the most money we’ll have from then on.
Once we acknowledge these realities armed with Ric’s advice (I’d mention all the realities if I had room), our anxiety might lessen just a bit. At least, that’s what happened to me. So, if you’re feeling nervous about your retirement, I would encourage you to take a look at Ric’s book and stay tuned – I’ll see if I can interview him for a future post.
Sue Thompson, CIMA, Managing Director, is Head of the Registered Investment Advisor Group, overseeing the firm’s iShares and 529 sales efforts with registered investment advisors, family offices and asset managers. Sue is a regular contributor to The Blog. You can find more of her posts here.