Spend 'Til the End: The Revolutionary Guide to Raising Your Living Standard--Today and When You Retire | 
| Authors: Laurence J. Kotlikoff, Scott Burns
Publisher: Simon & Schuster
Category: Book
List Price: $26.00
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Avg. Customer Rating:  16 reviews
Sales Rank: 51507
Media: Hardcover
Number Of Items: 1
Pages: 336
Shipping Weight (lbs): 1.2
Dimensions (in): 9.2 x 6.2 x 1.3
ISBN: 1416548904
Dewey Decimal Number: 332.024
EAN: 9781416548904
ASIN: 1416548904
Publication Date: June 10, 2008
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Condition: Brand New. 100% money back guarantee. All books shipped from Strand Bookstore, New York City, USA.
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Product Description
Rich or poor, young or old, high school or college grad, this book, written by economist Laurence J. Kotlikoff and syndicated financial columnist Scott Burns, can change your life for the better! If you follow the advice in this book, it will raise your living standard (possibly by a lot), improve your lifestyle, and help you spend 'til the end. And it will completely transform your financial thinking, turning every bit of conventional financial wisdom on its head. If this sounds like a revolution in financial planning, you got it. So do The New York Times, The Washington Post, The Wall Street Journal, USA Today, Time, Consumer Reports, and other top publications that have been featuring the authors' economics-based "consumption smoothing" approach to financial planning. Spend 'Til the End substitutes economic wisdom for the "rules of dumb" that currently pass for financial advice. In the process it indicts the investment and financial-planning industry for giving most people saving and insurance targets that are much too high and then convincing them to invest in risky mutual funds and expensive insurance policies. The result is that most people are scrimping and saving during the years when they could be spending and enjoying their money -- and with no sure payoff. Easy to read, this book is packed with practical and often shocking advice on whether to work, how to pick a career, which job to take, where to live, what sort of house to buy, how much to save, when to retire, which kind of retirement account to use, whether to have kids, whether to divorce, when to take Social Security, how fast to spend down your assets in retirement, and how to invest.
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| Customer Reviews: Read 11 more reviews...
 Engaging and Comprehensible on one of the World's Driest Subjects: Retirement Planning November 2, 2008
Financial advice books in the past have left me with a vague notion that I need to save one million dollars before I retire, and by then I guess I'll know how to manage it. "Spend 'til The End" is much more in-depth and comprehensible. The initial chapters were so engaging that by the time the authors got to the nitty gritty, I was hooked, and willing to spend some time with them, going over retirement planning point by point.
Several concepts stand out and have given me a base for further research.
1.) I assumed Medicare premiums to be nominal payments drastically reduced to fit into old folks' budgets. This is a grossly false assumption on my part. Actually, Medicare premiums are rising so much faster than inflation that they are going to represent a hefty chunk of change when my own retirement rolls around.
2.)Social Security benefits vary according to the age when you begin taking it. Previously, I had only a hazy idea that I needed to seriously consider at what age I might retire. Now I realize that age of retirement could have a direct correlation to my standard of living.
3.) I must seriously ask myself, "Am I really going to spend less in retirement?" Conventional advice says that you have only to replace 60-80% of your current income. The thing is, with all of that free time, am I really going to spend less money? Or am I going to want to participate in activities that must be funded, like socializing at nice restaurants with my old geezer friends, or traveling with my aged husband to all of the places we couldn't afford in youth?
4.) Past generations only thought they would be retired a few years before death. Greater numbers of people are living to ages 90 or above, meaning you have to plan to live 30 or more years into retirement. Living longer creates a need for better planning and more precise estimates of monthly income and taxes. My complacent notion that I will figure it all out when it rolls around could literally be the death of me if my lack of planning leaves me unable to pay for food or medications!
Additionally, the authors add their voices to the growing number of financial advisors who are building the case for the use of no load/low cost index funds as the primary vehicles of retirement investment. Commonly held assumptions about mutual fund accounts are questioned along with the popular dictum to strategize your asset allocation by your age.
On the debit side, in order to check some of their calculations you would need a copy of the esplanner, which they developed, and constantly refer to in the book, but which you have to purchase for around $150.00 online. Also, calculations are written in an unwieldy paragraph form. Calculations would be more quickly grasped if they were line-itemed in a workbook format. However, even though I have to take their calculations at face value, I must give the book high ranking due to the authors ability to make engaging,thought-provoking and comprehensible, one of the driest subjects in the world. Now I am giving serious thought to issues I previously dismissed, which I imagine is the whole point of the book.
 Take it with a grain of salt October 29, 2008
1 out of 1 found this review helpful
Kotlikoff (an economist) and Burns (a syndicated financial columnist) offer an approach to financial planning that purports to resolve a lot of questions - how much do I need to save, what should I invest my money in, should I own a house or rent, etc. - based on one basic principle: consumption smoothing.
For readers who want to implement the recommendations, a computer program called ESPlanner is available that will do most of the work for them. The cost is minor in comparison to the fees and commissions for conventional investment, insurance and retirement planning services. Furthermore, according to the authors, "all conventional financial advice" is "wrong."
The central premise of the book rings true to me, i.e., some people needlessly deprive themselves by over saving and under consuming while they are still young enough to enjoy it. More people do just the opposite, of course, but we're talking individual cases here and not overall averages. And I certainly cannot see why people should give high priority to preserving an estate for their descendants unless their own needs are being comfortably taken care of.
Running down various financial decisions that people make, the authors argue in favor in paying off the mortgage instead of making other investments, choosing a Roth vs. conventional IRA, deferring Social Security until the maximum age of 70 in order to enjoy an enhanced pension, and investing the majority of their available funds (or 100% for those with a low tolerance for market volatility) in inflation indexed Treasury bonds (TIPs). Whether or not one chooses to agree, it is useful to have a reference that lays out some arguments that many readers may not have considered. More than enough reason to buy the book and keep it around.
K&B put a bit too much faith in the federal government, however, and surprisingly so given that they have argued elsewhere (e.g., in The Coming Generational Storm, 2004) that the government is overextended and will inevitably come a financial cropper.
#What sense does it make for lower income people to decide not to work because they would lose tax and healthcare benefits? Suppose these goodies are taken away at some point, because they are not affordable, and the people have forgotten how to work.
#Should an investor assume the government would shield him (or her) from economic loss on TIPs if inflation rose to double-digit levels or worse? As the inflation adjustment is classed as taxable income, even under current law, there is surely no warrant for describing the return on these securities as "risk-free."
#If Social Security benefits are unsustainable, wouldn't it make sense to claim the benefits that are offered at the earliest possible point rather than waiting until age 70? "Get it while the getting is good."
Also, given the possibility of unexpected medical expenses, investment reverses, and the like, the idea of depleting capital to smooth consumption throughout retirement may not be quite as sound as the authors suggest.
Retirement planning October 6, 2008
0 out of 1 found this review helpful
A very well written and interesting book. I like and have used many of the ideas and techniques recommended by the authors. I have followed Scott Burns' columns in the Dallas Morning News for years.
This is a book that should be read by someone who is in their 30-40s to help them plan for a successful retirement.
Future Shock August 20, 2008
Our lives, including our financial lives, are a complex, ever changing dynamic. This book, along with the authors ESPlanner computer program, will allow everyone to look at the long term effects of their current financial decisions. Most financial planning advice is based a generalities and simplistic rules of thumb and don't handle the long term, variable needs of our changing families. Spend to the End deals with these needs and how to maximize living standards throughout our complex lives.
Important, stimulating, regrettably flawed August 15, 2008
8 out of 9 found this review helpful
The greatest value of this book is that it got me to "think outside the box" that has been built for me by decades of financial writers, employer 401(k) seminars, and retirement guides. It is a popular introduction to a new way of thinking about financial planning called "consumption smoothing," advocated in particular by BU professor Laurence Kotlikoff. I think almost everyone should read it. We are all sick from an overdose of the conventional wisdom and this book is therapeutic.
But I'm going to devote the rest of this review to knocking it.
It is a popular introduction. Too popular. The breeziness of the writing style goes beyond the Strunk and White's worst nightmare. Schticks like naming hypothetical characters "Bill and Hillary" or "Donald and Ivana" or "Dr. Ruth" annoy and distract me like the scraping of a fingernail on a blackboard. The book is replete with dialog like "I'm going to convert!" "You found Jesus?" "Not quite. I'm going to convert all my 403(b) money to a Roth IRA to save taxes." Ewwwwww!
What I take from this book is that our financial lives contain such unexpectedly complicated interactions that few decisions can be intuited or considered in isolation. For example, the financial aspects of a mortgage: the interest is deductible, but only if you itemize... and interest decreases with time while the standard deduction, being inflation-indexed, increases with time. So for many families, the tax savings on interest deductibility last for only a few years. But there are other complexities as well; by the time I finished the chapter on the tax and consumption-leveling implications of a mortgage, my head was spinning. I was glad that I paid off my mortgage long ago and don't need to think this stuff through.
Unfortunately, there is a hidden subtext: you need computer software to make sensible decisions. Kotlikoff and Burns are, of course, associated with such a piece of software, ESPlanner, which they disclose in their introduction. The book seems to go out of its way _not_ to sound like an ad for ESPlanner. But the result is a lack of any guidance at all. Most financial books will give some rules of thumb, some worksheets, some links to free online financial calculators. This book gives you reasons for distrusting such aids. Its hypothetical characters are forever going "to the computer" or "making an analysis" to evaluate some course of action and excitedly reporting their discoveries: "do you realize that we gain only $3,607 a year of lifetime spending for each additional year of work?" It doesn't say how he "makes that analysis." We must assume it is ESPlanner. It does not tell how I (who happen to own a Mac and thus could not run ESPlanner even if I wanted to) could "make that analysis."
Now, the book has a metaproblem of its own. I've long suspected that tools such as Fidelity's Retirement Income Planner or Financial Engines, suffer from grotesque overprecision. Even the uncertainties of the stock market pale by comparison with the uncertainties in one's personal life. It's fun to extrapolate the consequences of a difference between a mutual fund with an 0.2% and an 0.5% expense ratio, compound them out for twenty years, and see how many dollars that is, but I've never been sure it's meaningful.
The book's central tenet is that we should focus on consumption (how many dollars per month we have to spend throughout various stages of our life) and on "consumption smoothing" (equalizing standard of living throughout our various life stages), as opposed to mindlessly piling up the biggest heap we can by age 65, or calculating what age for claiming Social Security will pay us the largest number of total dollars. I agree with that.
But it then contains an assumption, not very carefully presented, that our happiness depends on smoothing that consumption; that it is a terrible thing if our standard of living varies by 25% from one part of our life to another. I'm not at all sure I buy that.
And then it contains the worst assumption of all: that by using a tool (like ESPlanner), we can succeed, in some meaningful way, in planning our financial life course--quantitatively--over a period of fifty years or more.
Of course, this is the same assumption the retirement workbooks of the world make: "Choose column A if you think stock market annual returns for the next thirty years will average 6%, B for 8%, C for 10%..."
After reading the book, I am torn between two courses of action:
a) run right out out and buy ESPlanner and a computer to run it on and trying to dig out twenty years of records...
b) luxuriate for a few days in analysis paralysis and a sense of utter inadequacy at the ignorant way I've led my financial life for forty years... then snap out of it, shrug and say Eh! I'll put 30% in a stock index fund, 70% in a bond fund, have my wife claim Social Security at 62 and try to delay mine as long as possible because some article I read said that's what fashionable couples are doing these days, and hope for the best, and go take a walk in the sunlight.
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