The New Savage Number | Review

The following review of The New Savage Number was written by Robert G. Strauss.

This book is titled after Savage’s famous 2007 book The Savage Number. This updated 296 page book takes the reader through; how much you need for your retirement (what’s your number?), how to invest your assets both prior and during your retirement, how to withdrawal your assets during retirement and how to protect your assets during retirement and eventually upon your death.

The book is solid in its approach to both planning and investing. It begins retirement planning by emphasizing that you need both a goal and a plan to reach that goal. It moves one from the pre-retirement accumulation phase to the retirement and the distribution phase of our assets.

It aims to answer the following ten key questions:

1. How long will I live? At what age do you want to retire?
2. What will inflation do to the value of my savings?
3. How can I save enough?
4. How should I invest the money I’ve saved for retirement?
5. How much will I spend to live in retirement?
6. How much can I withdrawal each month without running out of money?
7. What’s the biggest danger to my retirement plans?
8. How can I earn money during retirement?
9. How can I retain control of my financial life?
10. What if I have money left over when I die?

Savage emphasizes that government is not the solution to the crisis of our economy nor is it your answer for retirement planning. The book highly recommends using the Monte Carlo process for retirement planning and offers very good websites/free software for the reader. (the best programs that I have found so far)

Diversification is stressed throughout the book for asset allocation. Savage walks through both stock and bond mutual funds and recommends “chicken-money” as part of your portfolio. The book does a good job of addressing both the accumulation and distribution phases of retirement planning and also some very useful strategies during both phases.

Savage stresses that the biggest risk of our retirement assets is not a down-turn in the market but health-care costs. This is especially important for us in our latter years when our health deteriorates. The solution that Savage recommends is Long Term Care (LTC) Insurance. As a result, Savage spends some time dissecting LTC policies for the potential buyer and offers excellent outside resources to pursue.

Finally, Savage addresses Estate Planning for the resources that we may have left for our heirs. Obviously having a will is a must but Savage also has many useful hints that most people may over-look and yet have great financial consequences. I have found this book extremely useful in that I am 56 years old and moving into the phase of life where these issues are becoming critical to address both before and during the retirement years.