Book Retirementology. Gregory Salsbury. Retirement Finances
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“Retirementology - Rethinking the American Dream in a New Economy” by Gregory Salsbury addresses the retirement finances crisis that was profoundly amplified by the 2008 market and economic crash. Salsbury recognized that the existing approaches to retirement planning were insufficient given seismic shifts in financial markets and retirement portfolios. Many people need to adjust their expectations for retirement age, retirement savings, retirement income and retirement expenses. Retirementology is a retirement book that provides a new way of thinking about retirement planning by integrating investing psychology and behavioral finance.
RATINGS FOR RETIREMENTOLOGY BY GREGORY SALSBURY
Goodreads 3.3/5.0
Amazon 4.0/5.0
RETIREMENTOLOGY – KEY THEMES OF RETIREMENT PLANNING AS A BEHAVIOURAL PROCESS, NOT A FIXED EVENT
Behavioral Biases Shape Financial Outcomes. Retirementology profoundly argues that when it comes to money, people don't always behave rationally. It introduces the critical field of behavioral finance, which focuses on how investor psychology – including attitudes, biases, and emotions – impacts financial decisions and behavior. Concepts like overconfidence, where individuals may believe they know more or can control more than they actually can, and myopic loss aversion, which highlights that losses hurt significantly more than gains satisfy, are central to this understanding. Retirementology asserts that recognizing these inherent psychological traps is a fundamental step towards making more prudent financial decisions and can prevent individuals from sabotaging their financial future.
Retirement is a Lifelong Process, Not a Fixed Event. Challenging the popular "retirement zone" concept, the book emphasizes that planning for retirement is far more than a task for the few years immediately preceding or following retirement. Instead, the author posits that retirement should be viewed as a continuous process that begins as soon as an individual engages in earning, saving, spending, borrowing, or investing. Every single fiscal decision throughout one's life is inextricably bound to and can profoundly impact future retirement lifestyles. The book highlights that waiting until later years leaves individuals highly susceptible to unforeseen events, as exemplified by the 2008 financial meltdown. Therefore, starting early and consistently applying financial discipline across all life stages is paramount for building a solid foundation.
The New Economy Demands a Realistic Rethink. Written in the wake of the 2008 financial meltdown, Retirementology stresses that traditional assumptions about retirement, prevalent during periods of economic expansion, are now fundamentally challenged. It reveals how reliance on home equity as a retirement account proved perilous for many, as values significantly declined. The book identifies escalating taxation as a major emerging financial challenge for Boomers, far beyond a mere annoyance, due to mounting national debt and changing policies. Furthermore, the soaring costs of healthcare and the increasing burdens of familial financial support are presented as significant threats to retirement plans. The book encourages readers to abandon "great expectations" based on past bull markets and to adopt a more pragmatic and resilient approach to their financial future.
“Retirement should be viewed as a process”
“Retirement is over”
RETIREMENTOLOGY – SALSBURY FRAMES ASPECTS OF RETIREMENT PLANNING, RETIREMENT FINANCES AND RETIREMENT LIFESTYLE
Behavioral Finance and Irrationality: The book deeply explores behavioral finance, a relatively new field focusing on how investor psychology influences financial decisions and behavior. Salsbury illustrates that people don’t always behave rationally with money. Key biases discussed include:
Myopic loss aversion: The tendency for people to psychologically weigh losses twice as heavily as gains, leading to fear-driven decisions.
Overconfidence: Actions based on an exaggerated estimation of one’s knowledge, skill, and good fortune, often leading investors to believe they know more than they do.
Illusion of control: The belief that one can control or influence outcomes over which they have no actual control.
Recency effect: Giving more importance to recent events than to past ones, influencing investment decisions based on short-term market fluctuations.
Procrastination: A psychological bias that prevents people from engaging in day-to-day activities that would result in long-term benefits, like signing up for 401(k)s early.
Herding: Chasing trends and making investment decisions based on what "everyone else is doing".
"Retirement is Over" and "Retirewent": Salsbury introduces the provocative idea that for many, "The retirement crisis is over," because "Retirement is over". This highlights the severe impact of the 2008 meltdown, turning a crisis into a "real mess". He coins "retirewent" as a term to describe what happened to the retirement hopes and dreams of Americans after the meltdown, often leading to people taking on second jobs.
Beyond the "Red Zone" (The NoZone): The book strongly challenges the prevailing notion, popularized by financial firms, that the "red zone" (five years before and after retirement) is the most critical period for planning. Instead, Salsbury introduces "The NoZone", emphasizing that retirement planning is a lifelong monetary process that "requires attention much earlier than a handful of years prior to retirement...and will certainly continue well into retirement". He advocates for starting early to leverage the power of compound interest, arguing that the early twenties are the most critical years for retirement planning.
The Spending Mentality ("Gold Dust on Sushi"): Named after the extravagant Japanese practice of sprinkling gold dust on sushi, this section exposes America's "carpe diem spending mentality". It details how overspending, reliance on easy credit, and a negative savings rate led to high debt and bankruptcies. Salsbury introduces "damnesia" as the "prepurchase state of forgetting how badly it will feel when the damn credit card bill arrives". He highlights that household debt doubled from 2000-2007, reaching $13.8 trillion, and that Americans were spending 14.5% of their disposable income just to service debt.
Home as an Investment ("House Money"): The book directly challenges the long-held belief that a house is a solid long-term investment, particularly after the significant declines in home values post-2006. Salsbury introduces "equimortis" as the "dangerous condition that can occur from counting on one's home appreciation for retirement money". He discusses the "wealth effect", where rising home values made homeowners feel wealthier than they were, and the "house money effect", where people treated home equity like "windfall money" and spent it recklessly on renovations, vacations, or new cars.
Family Financial Support ("Family Matters"): Salsbury examines how the evolving family structure impacts retirement planning, particularly the financial burdens associated with supporting multiple generations. He coins "kinphobia" as the "fear of having to dig into retirement money to financially help one’s family". The concept of the "Club Sandwich Generation" highlights the increasing number of Baby Boomers simultaneously raising children and providing financial support for aging parents, a situation compounded by increased longevity and the meltdown.
The Taxation Challenge ("The Tax Man Will NOT Come Knocking"): Given the massive U.S. deficit (e.g., $1.42 trillion in 2009), Salsbury argues that taxation is "emerging as the single largest financial challenge for Boomers". He introduces "taxadermy" as the "painful process of being taxed to death by the government". The book highlights proposed tax increases, the impact on states like California, New York, and New Jersey, and the often "hidden taxes" in everyday expenses.
Healthcare as a Retirement Saboteur ("Under the Knife"): Salsbury dedicates a chapter to the escalating costs and complexities of healthcare, introducing "hellthcare" as what Medicare has become for many. He stresses that healthcare costs are rising at four times the rate of inflation and pose a significant threat to even the best-laid retirement plans. He advocates for individuals to take personal responsibility for healthcare planning, rather than solely relying on potentially changing government programs.
Overcoming Financial Complexity ("Lost in Translation"): Salsbury addresses the overwhelming amount of conflicting financial information and large numbers that can lead to "paralysis by analysis". He coins "finertia" as "paralysis by analysis brought on by trying to comprehend contradicting and confusing financial information" and "number numbness" as being "simply overwhelmed by numbers presented". He emphasizes the importance of working with a "holistic adviser" to navigate this complexity and make rational decisions.
Living "Long-Term Smart®" (LIVE): The book culminates with the concept of living "long-term smart", which involves addressing four key challenges represented by the acronym LIVE:
Longevity: Planning for a much longer retirement than previous generations.
Inflation: The "invisible tax" that erodes purchasing power, especially for those on fixed incomes.
Volatility: The inherent ups and downs of the market that can significantly impact portfolios.
Expectations: Shaping realistic expectations for retirement, moving away from unrealistic dreams.
PERSPECTIVE OF GREGORY SALSBURY, AUTHOR RETIREMENTOLOGY
Gregory Salsbury, Ph.D., brings a unique blend of academic rigor and practical industry experience to "Retirementology". As the Executive Vice President of Jackson National Life Distributors LLC (JNLD) and a sought-after speaker on investor behavior, adviser best practices, and retirement, Salsbury's background is deeply rooted in the financial services industry. His advanced degrees—a master's in communications, a second master's in communication technologies, and a doctorate in organizational communication—equip him to analyze and articulate complex financial concepts through the lens of human behavior and decision-making.
His previous work, "But What If I Live? The American Retirement Crisis®," established his reputation as someone providing a "wake-up call" for Baby Boomers regarding their undersaving and overspending habits. This book builds on that foundation by integrating the severe impact of the 2008 meltdown. Salsbury's perspective is heavily influenced by his interviews with pioneers in behavioral finance, notably Dr. Daniel Kahneman, a Nobel Prize winner, which shaped the "ology" (psychological) element of the book's retirement vision.
Salsbury's approach is not just about financial mechanics; it's about the "human agent" in finance. He advocates for a proactive, rational, and informed decision-making process, constantly urging readers to acknowledge and mitigate their psychological biases when planning for retirement. His dedication to his mother, a "survivor of the World's Great Depression," underscores his belief that lessons from past economic challenges can inform current solutions.
“Your home is not a retirement account”
“Controlling spending is the single most important ingredient to wealth”
RETIREMENTOLOGY PROVIDES ORIGINAL, DEEP, PRACTICAL INSIGHT ON RETIREMENT FINANCES AND RETIREMENT LIFESTYLE CHOICES
Originality and Fresh Perspective: The book's greatest strength lies in its innovative fusion of behavioral finance and retirement planning. It avoids being a typical retirement planning guide by focusing on the "why" behind financial mistakes, providing a deeper understanding of human behavior.
Unique and Memorable Terminology: Salsbury's creation of "one-of-a-kind terms" like "Retirementology," "retirewent," "damnesia," "equimortis," "kinphobia," "taxadermy," "hellthcare," and "finertia" is highly effective. These terms simplify complex behavioral and economic concepts, making them easier to grasp and remember, which enhances the book's overall accessibility and impact.
Depth of Insight: The book doesn't just summarize financial problems; it delves into the psychological underpinnings of irrational financial decisions, drawing on academic research and real-world observations. This provides readers with a richer understanding of their own decision-making processes.
Timely and Relevant Content: Published shortly after the 2008 financial crisis, the book directly addresses the amplified challenges facing pre-retirees and retirees, making it highly pertinent to the economic climate of its time and offering lessons for future downturns.
Practical and Actionable Advice: Despite its theoretical foundation, each chapter concludes with actionable "Improve Your Retirementology IQ" sections, offering concrete takeaways and steps to address spending, taxes, healthcare, and overall financial planning. The emphasis on partnering with a qualified financial adviser is also a practical recommendation.
Strong Research Basis: Salsbury substantiates his arguments with diverse sources, including focus group interviews (ages 25-70), academic research from renowned behavioral economists like Daniel Kahneman, Amos Tversky, Richard Thaler, and Shlomo Benartzi, and numerous economic and financial reports and polls from reputable organizations.
Engaging and Accessible Writing Style: Salsbury employs a conversational tone, making complex topics digestible for a broad audience. He uses relatable analogies (e.g., hot dog stand story, casino chips), hypothetical scenarios (Herb's journey, Susan versus Sally), and even a "Right Brain: Left Brain" dialogue to illustrate cognitive biases. This approach ensures that the book is not just informative but also enjoyable to read.
RETIREMENTOLOGY MAY OVERGENERALIZE THEMES AND RELY ON STALE ECONOMIC DATA
Breadth Over Depth in Specific Solutions: The book emphasizes a shift in mindset and general strategies for managing money. However, as it explicitly states, it is "not a typical retirement planning book". This means that while it provides excellent conceptual frameworks and urges readers to partner with an adviser, it does not offer highly detailed, step-by-step guidance on specific investment products or complex financial instruments. Readers looking for a comprehensive "how-to" guide might find this aspect somewhat lacking.
Reliance on Anecdotal and Hypothetical Examples: While the anecdotes and hypothetical scenarios (e.g., the hot dog stand story, "Herb", "Jim and Jack's BBQ") make the book engaging and illustrative, they are not direct empirical evidence. The author does state that hypothetical names, people, and situations are used to illustrate points. While effective for clarity, some readers might prefer a higher proportion of direct data or case studies that are not hypothetical.
Potential for Overgeneralization of Psychological Biases: While behavioral finance is a valid field, applying generalized psychological biases to every individual's financial behavior can sometimes feel like an oversimplification. Salsbury himself notes that the division of the brain into intuitive and reasoning systems is "often overly simplified". A reader deeply entrenched in rational economic theory might find some of these behavioral explanations to be broad strokes.
Dated Economic Statistics: As the book was published in 2010, many of the specific economic figures, such as GDP percentages, unemployment rates, deficit numbers, and market indices (e.g., 2009 deficit, 2008 job losses, specific stock prices, consumer confidence index figures from 2007-2009), are now historical. While the underlying behavioral principles and challenges remain timeless, the precise numerical context is no longer current. This is an inherent limitation of any book dealing with contemporary economic data, but it means readers should focus on the enduring lessons rather than the specific figures.
“When it comes to money, people don’t always behave rationally”
“Behavioral finance plays such a key role”
WHO SHOULD READ RETIREMENT FINANCES BOOK RETIREMENTOLOGY BY GREGORY SALSBURY?
"Retirementology" is primarily targeted at Baby Boomers (born 1946-1964) who, as the book highlights, are largely "undersaved, overspent, and unprepared" as they commence retirement. But its insights are broadly applicable to a wider demographic, including pre-retirees and retirees ranging in ages from 25 to 70, as evidenced by the book's focus group participants. The book would particularly benefit:
Individuals feeling overwhelmed by retirement planning or the sheer scale of financial decisions, especially those experiencing "number numbness" or "finertia".
Anyone interested in understanding the psychological biases that impact their financial behavior, as it clearly explains behavioral finance concepts for the "lay" reader.
People concerned about the impact of current and future economic conditions (e.g., taxes, healthcare, inflation, market volatility) on their long-term financial security.
Those seeking to re-evaluate their financial habits—earning, spending, saving, borrowing, and investing—to better align them with retirement goals.
Readers who prefer a conceptual understanding and mindset shift rather than a prescriptive, step-by-step investment guide, as the book encourages partnering with a financial adviser for personalized guidance.
WHAT RETIREMENT FINANCES BOOKS ARE SIMILAR TO RETIREMENTOLOGY BY GREGORY SALSBURY?
Gregory Salsbury's previous book, "But What If I Live? The American Retirement Crisis®," serves as a direct precursor, sharing the foundational concern about retirement preparedness before the 2008 meltdown. Similar books on financial independence, retirement finances and behavioral economics:
"Choices, Values, and Frames" by Daniel Kahneman and Amos Tversky: A collection of seminal academic papers from two pioneers in the field, which directly influenced Salsbury's "ology" perspective.
"Beyond Greed and Fear" by Hersh Shefrin: Another key text in behavioral finance, exploring how psychological biases affect investor behavior.
"Nudge" by Richard Thaler and Cass Sunstein: A popular work that explores how subtle "nudges" can influence economic decisions, mirroring Salsbury's interest in overcoming irrationality.
Works by Shlomo Benartzi and Meir Statman: Salsbury cites their research on investor behavior, particularly regarding 401(k)s and myopic loss aversion.
"Investment Madness" by John Nofsinger: Recommended by Salsbury himself as a good introductory book on behavioral finance for the "lay" reader, suggesting a similar target audience and accessible approach.
"Against the Gods, The Remarkable Story of Risk" by Peter Bernstein: Recommended by Salsbury for understanding risk, a crucial element in investment decisions.
"The Millionaire Next Door" by Drs. Thomas Stanley and William Danko: Salsbury references this classic, which emphasizes frugal living and disciplined spending as key to wealth accumulation, aligning with "Retirementology's" focus on curbing overspending.
HOW DOES RETIREMENTOLOGY COMPARE TO OTHER BOOKS ON RETIREMENT FINANCES AND RETIREMENT LIFESTYLE?
Unique Integration of Behavioral Finance with Post-Crisis Reality: While other books cover retirement planning or behavioral finance separately, "Retirementology" explicitly blends these two disciplines against the backdrop of the worst economic crisis since the Great Depression. This dual focus offers a more holistic and timely understanding of why people struggle with retirement planning, beyond just a lack of financial literacy. It’s not just about what to do, but how psychological biases have been amplified by recent events and how to counteract them.
The "Retirement is Over" Framing: Salsbury's provocative assertion that "Retirement is over" and the introduction of "retirewent" immediately sets a different tone than typical optimistic retirement guides. This stark framing compels readers to confront the severity of the challenge and rethink deeply ingrained assumptions about their post-work lives.
Emphasis on Retirement as a "Continuum," Not a "Zone": The book actively deconstructs the "red zone" fallacy popularized by some financial firms, arguing instead that retirement planning is a lifelong behavioral process. This unique perspective shifts the focus from last-minute adjustments to a consistent, disciplined approach from one's earliest earning years, emphasizing the power of early action and compound interest.
Original Lexicon (Reterminology): The development of a distinct vocabulary for the "new language of retirement"—terms like "damnesia," "equimortis," "kinphobia," "taxadermy," "hellthcare," "finertia," and "monelistic"—is a unique differentiating factor. These coined terms provide a memorable framework for understanding the psychological traps and challenges, making complex ideas more accessible and fostering a new way of discussing retirement issues.
Focus on the "Why" of Financial Misbehavior: Unlike many financial advice books that simply tell people what to do, Salsbury's book digs into the behavioral and psychological reasons why people make poor financial decisions (e.g., overconfidence, myopic loss aversion, procrastination). This approach aims to equip readers not just with information, but with an understanding of their own cognitive pitfalls.
RETIREMENTOLOGY BY GREGORY SALSBURY – CONCLUSION – RETIREMENT FINANCES
"Retirementology: Rethinking the American Dream in a New Economy" is a timely, insightful, and highly accessible guide that fundamentally challenges conventional thinking about retirement planning. Gregory Salsbury successfully navigates the complex interplay between human psychology, individual financial decisions, and the harsh realities of the post-2008 economic landscape.
The book excels in its unique blend of behavioral finance principles with practical retirement advice, illuminated by its memorable "Reterminology". It serves as a powerful wake-up call, particularly for Baby Boomers, to confront past overspending, unrealistic expectations, and the dangers of procrastination. Salsbury's core message—that retirement is a lifelong process, inextricably linked to all monetary behaviors, and must be approached with realistic expectations and proactive planning—is compelling and actionable.
While some of the specific economic statistics are dated due to its 2010 publication, the underlying behavioral insights and principles are timeless and universally applicable to anyone seeking to build a secure financial future. The book thoughtfully highlights critical challenges like taxes, healthcare, and family financial dynamics, providing a framework for understanding and mitigating these risks. By advocating for self-awareness of psychological traps and stressing the importance of professional guidance, Salsbury empowers readers to move beyond merely wishing for a comfortable retirement to actively planning for one.
Ultimately, "Retirementology" is likely valuable reading for those who feel "zoned out" or overwhelmed by financial complexity. It offers the clarity and impetus needed to cultivate a "monelistic" (emotionally sound and realistic) approach to money, setting the stage for a more secure and worry-free "Golden Years".
“Retirement portfolio losses hurt 2.25 times more than gains satisfy”
“Overconfidence tricks us into thinking we are better”
FREQUENTLY ASKED QUESTIONS ABOUT RETIREMENTOLOGY BY GREGORY SALSBURY
How does psychology, or "behavioral finance," affect people's financial and retirement decisions?
Behavioral finance is a field that studies how investor psychology—including attitudes, biases, and emotions—influences financial decisions and behavior. It challenges the traditional economic assumption that people always act rationally with money. The book illustrates this irrationality with examples like people driving long distances for small coupons or not selling inherited, poor-performing stock. Key behavioral finance concepts explained in the book include:
Expected Utility Theory: The traditional economic view that people behave predictably to maximize their monetary gain, which is often contradicted by real-world behavior.
The "Human Agent": Dr. Daniel Kahneman's concept that factors like "perceptual bias, complexity, and emotions like pride and anger" can override logical financial decisions.
Myopic Loss Aversion: The psychological tendency to feel the pain of losses approximately twice as heavily as the joy of gains. This can lead investors to be overly fearful of loss and make overly conservative decisions.
Mental Accounting: People assign different purposes or "labels" to different pools of money (e.g., emergency fund, fun money), which can lead to suboptimal financial decisions, such as keeping low-interest savings while accruing high-interest debt. This bias also causes people to discount the true impact of taxes.
Layering: The use of "proxies for money" like credit cards or room charges, which creates psychological distance between individuals and their spending, making money "more and more opaque to consumers".
Wealth Effect & House Money Effect: The wealth effect describes how rising home values made homeowners feel wealthier and spend accordingly. The house money effect refers to a gambler's tendency to take greater risks with money perceived as "winnings" or "windfall," leading to reckless spending of home equity gains.
Regret and Pride: Emotions that can lead investors to "buy high and sell low," pulling money out of the market when it's down and waiting for highs to re-enter.
Herding: The tendency to follow market trends because "everyone else is buying those shares," which can contribute to market bubbles and subsequent crashes.
Overconfidence: An "exaggerated estimation of one’s knowledge, skill, and good fortune," leading investors to believe they know more or can control more than they actually can.
Illusion of Knowledge: The false assumption that new information will always support existing beliefs, even if it contradicts them, especially regarding complex topics like healthcare.
Anchoring: Tying current beliefs about health or costs to past experiences, without adjusting for future changes due to aging.
Number Numbness & Bigness Bias: Being "overwhelmed by large numbers" to the point of apathy and overlooking incrementally small numbers (like 1% or 2% inflation) that accumulate to significant amounts over time.
What are some of the biggest financial mistakes people make that impact their retirement?
Procrastination: Many people delay starting retirement planning, often feeling overwhelmed or lacking urgency, leading to significant missed opportunities for compounding interest.
Overspending and Debt Accumulation: Americans have been spending excessively on luxuries that become necessities, leading to a negative savings rate, high debt (e.g., $850 billion in credit card debt by 2008), and record bankruptcies. Many spend impulsively and treat credit as savings.
Mismanaging Credit Balances: Keeping emergency savings in low-interest accounts while carrying high-interest credit card debt, effectively losing money due to the interest rate differential.
Over-reliance on Home Equity: Treating homes as personal ATMs and relying on appreciation for retirement funds, which proved disastrous during the housing bust, leaving many "underwater".
Emotional Investment Decisions: Allowing emotions like fear, pride, or euphoria to dictate investment choices, often leading to the detrimental pattern of "buying high and selling low".
Ignoring the Impact of Taxes: Failing to account for taxes and inflation in financial planning, often underestimating the "bite" taxes take out of earnings and investments, and not realizing that receiving a refund means giving the government an interest-free loan.
Lack of Family Financial Communication: Spouses often disagree on spending limits, and adult children neglect discussing estate planning or eldercare finances with parents, leading to confusion, conflict, and financial strain for all generations.
Mishandling Inheritances/Windfalls: Treating "found money" either too sentimentally (holding onto unprofitable assets) or too recklessly (spending it frivolously like "house money"), often dissipating the wealth rapidly.
Underestimating Healthcare Costs: Being overconfident about future health and not adequately planning for the significant and rising costs of medical care and long-term care in retirement, which can "sabotage your retirement plan".
What practical steps or strategies does the book suggest to improve one's "Retirementology IQ" and prepare for retirement?
Personal Assessment and Realistic Expectations: Conduct a personal assessment to define what you want and need for retirement, being realistic and objective about desired lifestyles and their costs.
Start Early: Recognize that retirement planning is a lifelong process that should begin as early as possible to leverage the "power of compound interest".
Budget and Curb Spending: Develop a clear budget (even "mental budgeting") to prioritize needs, identify discretionary spending, and live within your means. This is cited as the "single most important ingredient to building wealth".
Eliminate High-Interest Debt: Prioritize paying off high-interest debt before focusing on low-interest savings.
Optimize Insurance Deductibles: Increase deductibles on auto and home insurance to lower premiums, freeing up funds for retirement savings.
Control Checking Account Balances: Avoid keeping excessively large sums in checking accounts, as this can reduce accountability for spending.
Automate Savings and Increase Contributions: Utilize financial automation, such as direct payroll deductions to 401(k)s, and consider programs like Save More Tomorrow (SMarT) to automatically increase contributions with raises.
Understand Risk Tolerance and Set Long-Term Goals: Clearly define your financial objectives and the level of risk appropriate for your timeframe. Develop long-term financial goals, as opposed to short-sighted reactions to market fluctuations.
Diversify with Asset Allocation: Implement an asset allocation strategy to spread investments across different asset classes, reducing overall risk. View your portfolio holistically and as a long-term tool.
Regularly Evaluate Your Plan: Periodically review and adjust your financial plan (at least annually) to account for changes in risk tolerance, financial resources, and life circumstances.
Manage Your Mortgage Strategically: Consider overpaying your mortgage principal to save on interest and shorten the loan term. Also, explore refinancing options.
Rethink Homeownership: Do not rely on home appreciation to fund retirement; view your home as shelter. Consider renting as a viable and potentially advantageous option, especially for retirees or those needing to relocate.
Improve Family Financial Communication and Planning: Foster open discussions about money within the family, set spending limits, and educate children on financial literacy. For inheritances, avoid the "three-and-out" dilemma by planning and communicating about asset transfer and beneficiary designations (using the B.O.S.S. acronym: Beneficiary, Owner, Spouse, Survivor).
Plan for Healthcare Expenses: Overcome overconfidence in health and actively plan for increasing medical costs in retirement. Determine future coverage needs, consider disability and long-term care insurance, and keep meticulous records of medical expenses.
Strategize for Taxes: Understand your tax position and consider strategies like tax harvesting (offsetting gains with losses) and converting to a Roth IRA for future tax-free income. Leverage tax-deferred accounts and consult an adviser to maximize deductions and plan distribution schedules.
Develop an Income Strategy: Focus on converting accumulated assets into a sustainable "flow" of income for life, and determine a reasonable withdrawal rate (e.g., 4% annually).
Work with a Holistic Adviser: Partner with a qualified financial adviser who understands both asset accumulation and the more complex distribution phase of retirement, helping navigate emotions and complexity. The best advice is "irrelevant if you procrastinate and don’t act on it".
“Taxation is emerging as the single largest financial challenge”
“Financial support decisions for extended families may have an impact”
ABOUT GREGORY SALSBURY, AUTHOR OF RETIREMENTOLOGY – RETIREMENT FINANCES
Gregory Salsbury, Ph.D. is Executive Vice President of Jackson National Life Distributors LLC and a speaker on the subjects of investor behavior, adviser best practices, and retirement.
Salsbury received a master's degree in communications from the University of Illinois, and a second master's degree in communication technologies from the Annenberg School of Communications. He received his doctorate in organizational communication from the University of Southern California and is published in the areas of sales, marketing, employee motivation, behavioral finance, and retirement. From his work and experience as a long-standing executive in the financial services industry, Salsbury was uniquely positioned to craft a visionary view of retirement’s future. His landmark book, “But What If I Live? The American Retirement Crisis”, was a wake-up call for a generation of undersaved, overspent, and unprepared Baby Boomers.
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