Retire on Less Than You Think

While waiting on a flight recently I decided to peruse the bookstore. A book titled “Retire on Less Than You Think” caught my eye. I bought the book and found a good 179 page read on destroying some of the myths and fears of retiring.

The premise of the book I agree with whole heartily. People are told through the media that one must have 70 to 80 percent of your preretirement income before they retire, which in many cases works out to 1M dollars or more. That is just not true, however, the people in the financial services industry are hoping you will believe this so you will keep working and sending them your money.

In the first chapter is “Do You Really Want to Retire?” “The basic idea behind this book is simple and straight forward: you can retire sooner and on less money than you think, and live quite well, if you are willing to make a few relatively painless lifestyle changes.”

The author Fred Brock points out how the meaning of retirement has changed. Today it means reinventing your self, taking on new challenges or a new career.

“What the Experts Say You Need versus What You Really Need” is the second chapter. This is the chapter that gets into the nuts and bolts of what it really cost for you to live in retirement. Here is a quote from page 31. “Well, when you retire you don’t have to save for retirement anymore. So right now I’m living on hundred percent of my preretirement disposable income, which was only thirty-five to forty percent of my total salary.”…”When people say you need X percent of preretirement income, it defies explanation. It’s a huge mistake to base these projections on income rather than expenses. The only sensible way is to compare your expenses, preretirement and postretirement. For financial planners to ignore these common-sense considerations raises questions about their objectivity.”

On page 47 is a true story about “The Happiest Guy in Texas”.
“I call Elton Pasea a mutual fund salesman’s worst nightmare. I interviewed Pasea, who is eight-one and a native of Trinidad, in 1998 for my first “Seniority” column in the New York Times. At that time, he was living quite nicely in Nederland, Texas, on $1,200 a month: $700 from Social Security and $500 from a union pension.”

““But it’s difficult for me to spend thirteen hundred dollars a month, “he said. “It takes very little for me to live. However he does not stint when it comes to bicycles. He has spent about $3,000 on his two high-performance road bikes and related equipment. Music is another passion. An amateur musician who used to play the clarinet, Pasea sometimes splurges on CDs – modern classical (his “first love”) and jazz. And the reward of such a Spartan life? “I’m the happiest guy in Texas,” Pasea said.”

Chapter three is about “Cutting Back and Simplifying Your Life”. This is a chapter all ages should read because we all have to much stuff and buy things we never use.

The next chapter is on “Where Will You Live? If you live in Mobile County, Alabama you can skip this chapter, however, I would suggest skimming and feeling very smug. Here is an example why. “Late in 2001, Bill and Donna Taaffe learned that the annual taxes on their ninety-three-year-old home in Maplewood, New Jersey, a suburb of New Your, would nearly double to $15,800 ($1,317 a month) in the coming year from $8,200 ($683 a month) because of a reassessment.”

Here is a list Alabama is listed is last place. On page 87 is a list of “State and Local Taxes” This is from the Tax Foundation’s list, ranked from highest to lowest according to the per-capita amount: Coming in number one is New Jersey ($1,519 and dead last Alabama ($210). (This is a good thing)

I didn’t agree with everything in the book, but I did have to dig to find something I didn’t like. On page 104 the author has a very informative section on Reverse Mortgages. I have done my own independent study on reverse mortgages and can’t imagine any situation where I can recommend a reverse mortgage. There are too many expenses fees and people that want to get their hands on your equity in your home. If you absolutely have to use the equity in home to live on then sell your home and move in an apartment using your equity to pay your rent. That’s just me, you may agree with Fred Brock and get a reverse mortgage and live happily every after.

I highly recommend everyone read “Retire on Less Than You Think” by Fred Brock. If you do read the book you will retire sooner, and be better informed in all phases of retirement. He has listed many additional references and web sites so you will be fully informed so you can retire sooner and on less money than you think, and live quite well. I have run out of space, the book has so much more than I have covered here. Please read the book. No, Fred Brock is not a relative of mine nor have I ever met him. He has a crystal clear vision of retirement free of fear and doubt that you will not hear in the mass media.

Book: Retire on Less Than You Think
By Fred Brock

- Ron Mitchell, President

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