Talking to Christine Benz About Retirement Planning
Sharing my book review of How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement by Christine Benz, as well as a link to our recent discussion about it and a conversation recap.
There are few people more qualified to write about retirement planning than Christine.
She’s the director of personal finance and retirement planning for Morningstar and senior columnist for Morningstar.com. She’s someone whose content I’ve read, learned from, and shared through this blog for many years.
Christine took a unique approach with this book, choosing to interview twenty retirement thought leaders and diving deep with each about a single lesson that they believe contributes to retirement success.
Retirement Lessons
- Preparing mentally for retirement
- Scaling into retirement to increase happiness odds
- Optimizing Social Security
- Deciding how much you can spend during retirement
- Structuring your investment portfolio correctly
- Withdrawing from accounts tax-efficiently
- Planning for healthcare
- A specific retirement planning chapter for women
- And so much more
There’s excellent content in here, and I enjoyed this book and would recommend it to anyone interested in retirement planning.
Christine starts with non-financial retirement aspects because she believes people struggle as much with these as financial decisions.
She then focuses on Social Security and different withdrawal and spending strategies, before pivoting to investment topics.
There are specific planning chapters on health and long-term care, tax-planning, housing, and estate planning.
I had some minor disagreements, which is to be expected with such a broad and personal topic.
While I believe Social Security is important, I don’t think your claiming strategy is a major retirement decision. We discussed this in the podcast.
There are annuity advocates in the book, and a familiar refrain emerged that perhaps financial advisors who are compensated for managing money are an obstacle to broader annuity use.
In my experience, the insurance industry is the main reason people don’t purchase more insurance products. I don’t sell insurance, but it’s hard to get clients to purchase it outside of life and personal liability. Long-term care and disability insurance are under-utilized. I also don’t think anyone frustrated with the home insurance industry these days (a long list) is eager to give an insurance company their life savings in order to get cash back from it over time.
Our Podcast Discussion
Besides what I laid out already in my book review of How to Retire, Christine Benz and I dove into three specific areas in our Wealthy Behavior podcast discussion.
How to Retire Successfully: There’s More to it Than Money
Available through the above link and wherever you get your podcasts
- How much you can afford to spend in retirement: The 4% rule was somewhat ubiquitous in the book. Whether people agreed with it or not, they referenced it when discussing safe retirement withdrawal rates. The rule was originally created to be a failsafe withdrawal rate, which means that if you’re willing to take more risk or be flexible with your spending, you can likely spend more.
- Retirement’s personal side: Christine feels that people need to be prepared personally as well as financially for retirement. She recommends taking time to envision what retirement will be like, thinking about purposeful activities especially if your work is your identity, phasing in retirement if possible, and focusing on relationships (especially for men who struggle in that area more than women).
- Bucketing approach to your retirement portfolio: Bucketing allocates your portfolio to reduce behavioral investment mistakes. Your asset allocation would end up being the same as without a bucketing approach. You invest your short-term needs in cash, intermediate-term needs in bonds, and long-term money in stocks. Maintaining the bucket and knowing how to withdraw from it are important add-on topics, and Christine walked us through them.
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