Book review: Retire on Less Than You Think

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Halfway through Fred Brock's book Retire on Less Than You Think: The New York Times Guide to Planning Your Financial Future, I was mentally drafting a review that would call it good but kind of basic for most Wise Bread readers. Then it clued me in to an oddity of federal law that could make the difference between keeping or losing my health insurance. That one bit is not only worth the price of the book, it could easily be worth my entire life savings. Actually writing the review, I realized the book is full of bits like that. I happened to know most of them already, but I've been studying this stuff for years. I have to say this is a must-read book for anyone who hopes to retire before they're 65.

[Updated to add: A revised version of this book has come out since I wrote this review. Check out Retire on Less Than You Think, Revised Edition: The New York Times Guide to Planning Your Financial Future.]

Brock spends nearly a third of the book on one rather obvious idea: You can retire on less if you spend less money! This will, perhaps, not be a great revelation to the average Wise Bread reader. To be fair, though, the book is aimed at affluent New Yorkers (and affluent folks from other east and west coast cities) who would be shocked at the notion that they might live anywhere other than where they do. Perhaps it is important for those readers that he so patiently makes the case that you can spend less money without reducing your standard of living at all--and that you can spend a lot less money if you're willing to make only slightly more drastic changes in the way you live.

In fact, the best parts of this book are in this area, because Brock talks about actual people who have retired on less money than some people might consider possible. He covers a pretty wide range from barely frugal at all to pretty darned frugal (such as Elton Pasea who saves enough of his $1200 a month from social security and a pension to take annual bicycling vacations in Europe).

Brock goes to quite a bit of effort to debunk the notion that you'll need to be able to replace 70% or 80% of your pre-retirement income from savings or your pension in order to retire. Rather, you need to replace that fraction of your spending (which had better be less than your income, if you're hoping to retire early).

After making the case that early retirement is within the reach of almost anyone who lives on less than they earn, he gets into the good stuff. There's a chapter on simplifying your life that's good, if a bit basic. A chapter on deciding where to retire with some good resources for finding someplace affordable and some sound advice on choosing to live near family and with access to things you want to do. There's a section on analyzing your assets, with some good info about reverse mortgages for people who own a house. There's a chapter on health insurance that had that great tidbit for me. It rounds things out with a chapter on social security and then some worksheets, suggested resources, and an excellent index.

(The tidbit for me, by the way, had to do with the the federal law HIPAA. That's the law that prompted all of your doctors and pharmacies to start giving you privacy notices. It also assures that, if you change employers and go from one group plan straight to another, the new plan can't exclude coverage for preexisting conditions. (I knew that part.) It also (and this was news to me) requires insurers to offer coverage to anyone who has left a job, continued their coverage under COBRA, and then exhausted the COBRA coverage. I'm still covered under my employer's insurance as part of my severance package, but I hadn't been planning on exhausting the COBRA coverage--I'd been planning to use that only as a back-up in case I had trouble finding insurance. I didn't understand that by getting an individual policy earlier, I'd lose access to guaranteed, non-cancelable insurance! That one point is probably of interest to only a small number of people, but it's critically important to anyone leaving a job and not yet eligible for Medicare.)

Retire on Less Than You Think by Fred Brock. It's a short book--you could read it in an afternoon. But in addition to advocating for the idea that a simplier life lets you follow your bliss--to retirement or where ever else it might lead you--there are dozens of bits of information that could spell the difference between a happy retirement and having to go back to work in your old age.