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Retire earlyForum overview » Planning for early retirement » Retire early 
 
 randy (moderator)
Posted 2005-09-06 15:15:55 Nice article Choosing when to retire? 'Early' reviews options By Kerry Hannon, Special for USA TODAY You won't find the answer to the question of when to retire in Steven Silbiger's Retire Early? You might, however, find yourself thinking about the prospect of retiring, particularly if you're looking ahead to age 62 — and this book can be a place to start. Silbiger says age 62 is when 56% of retirees begin collecting Social Security. Retire Early? Make The Smart Choices, by Steven Silbiger; Collins, 212 pages, $19.95. That might not be in their best interest. Retiring is one of the most critical financial decisions workers have to make. The timing has an impact on Social Security options, pension payouts, and investment and lifestyle choices. To say it's tricky to wade through the murky scenario is an understatement. Choosing when to retire is the $100,000 question (or more), says Silbiger, 43, whose aim is to lead his readers through the byzantine world of Social Security benefits and financial planning. His qualifications: He worked as a CPA for a national public accounting firm and is a graduate of the Darden Graduate School of Business at the University of Virginia. The author of The Ten-Day MBA spends the bulk of the slight book explaining how Social Security benefits work today and how the system is likely to change. "Taking the Social Security check early at age 62 versus age 65 currently costs recipients 24% of their monthly benefits, and that penalty is going up to 30%," he writes. "Unexpected taxes and additional penalties can literally take away the rest." A common misunderstanding is that the reduction for early retirement affects just the early retirement years, he says. "In fact, the reductions for early retirement are permanent and last throughout your retirement." Silbiger delivers a synthesis of retirement writing researched and published by financial journalists, non-profits and government groups. He distills these findings and reviews the basics of retirement. There's also a selection of resources scattered through the book that offer places to tap for more help with retirement questions. To beef up the book's contents, there are dozens of charts and worksheets to use to estimate your Social Security benefits by year of birth, spousal benefits, your overall retirement needs and how long you might live in retirement, for example. Perhaps the best advice you'll find in Retire Early? is that regardless of your early retirement decision, "creating an investment withdrawal plan that minimizes your chance to run out of money is the key to your successful retirement and peace of mind. It may be a simple concept in theory, but it has many complexities," he writes. Moreover, investing for retirement is different than investing during retirement. It's important not to put your plan on autopilot. "You must be willing to do the midcourse corrections if returns or spending projections change," he reminds readers. It's all about discipline. The discipline of a low initial withdrawal rate helps new retirees to manage spending through their first years out of work. Withdrawals must be reviewed periodically and adjusted throughout retirement. Silbiger gives readers the oft-repeated advice that when it comes to tapping retirement assets, it's important to defer as much of the tax bite as possible for as long as possible. "Use assets in taxable accounts first, and then dip into your IRA and 401(k)s." There's a chapter entitled "Which Retirement Investments are Right for You?" It zips from bank CDs and money-market accounts to fixed annuities and life insurance, but there is not enough substance for it to be considered real help in choosing. He makes a strong pitch for hiring a financial planner and tells readers how to find one. A hefty section on the future of Social Security might be a reference for those confused by the rhetoric being bandied about as President Bush presses for Social Security reform. Silbiger boils down the proposals to fix Social Security, from increasing the payroll tax for employees to the individual investment accounts that are a key element of Bush's proposal.. But the chapter bounces from analysis to analysis, and in the end is baffling. There's also a gap in the discussion of IRAs, which is surprising, because so many workers have been forced to retire early, or have been downsized. Many have rolled over sizeable 401(k) plans into IRA accounts in the last five years, and they will be struggling to figure how to withdraw those funds wisely in retirement. Roth IRAs, too, receive scant attention. Silbiger says he wrote this book because he couldn't find a book or even an article on the question of whether people should retire early and take an early retirement check from Social Security. He decided to use his "skills and experience to research and solve the Social Security Question for you." He doesn't. But maybe he'll inspire you to find an answer.
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