[.ca] The New Retirement (ISBN 0670066885)

Not just for those starting Act III:
This book is not just for boomers....it reaches out to those of all ages and gets you thinking NOW about the third act of your life. Very interesting was the health and lifestyle aspect, which most so-called retirement books don't even look at. A must read.

all the statistics you ever wanted to know about retirement:
I started reading this book page by page but by the half way point I just read the chapter summaries. I found the statistics overhwelmed any other message she was trying to convey. I would not recommend this book for anyone looking for any guidance for their own retirement.

Well Written but Poor Financial Advice:
The New Retirement by Sherry Cooper adds value to the recent plethora of literature on retirement income by providing a Canadian perspective. It is well written and easy to follow however Dr. Cooper's book is a disservice to any reader that is looking for advice on how to draw down their nest egg in retirement. While there is a wealth of academic literature suggesting that for an optimal income portfolio, a large portion of most retiree's wealth should be invested in life annuities, Dr. Cooper dismisses these products as `expensive'. Really - compared to what? Dr. David Babbel at Wharton has shown mathematically that `trying to replicate a lifetime income without the risk-pooling of a life annuity will cost 25% to 40% more'. Furthermore, the fees that are built into the life annuity are a small fraction of the 1% to 2% annual fees that an investment dealer would typically charge to manage the portfolio preferred by Dr. Cooper. Indeed a more realistic criticism of life annuities might be that the fees built into the product are insufficient to provide the level of compensation many investment advisors need in order to explain the advantages of life annuities to their clients. Dr. Cooper's list of risks in retirement has some gaping holes. Inflation risk is inadequately dealt with and she neglects to include Sequence of Return risk. To illustrate this risk, examine the impact of a retiree investing in the list of high quality dividend paying stocks that Dr. Cooper illustrates. In the first quarter of 2008, this basket of stocks would have lost about 8.7%. If, after having spent or lost 10% of the portfolio in 3 months, the retiree followed Dr. Cooper's advice and continued to withdraw up to an inflation-adjusted 5% of their initial retirement assets per year, the probability of financial ruin would be quite high. On the other hand, if the retiree chose the same basket of stocks within a hypothetical segregated fund (called variable annuities in the US and in this book) with appropriate withdrawal benefit options to protect against Sequence of Return risk, the retiree would not have lost money. Variable annuities are dismissed by Dr. Cooper as an `ill-suited financial product' sold by `unscrupulous wolves in sheep's clothing ... targeted at retirees'. Protecting your nest egg in retirement involves different and more complex risks than those involved in accumulating the funds needed for retirement. Retirees need to understand these risks, they need to make changes to their portfolio when they begin withdrawing money and they will not find good advice on to how to optimize their retirement income in The New Retirement. Lowell Aronoff CEO, CANNEX Financial Exchanges Limited

Some Sage Advice With a Couple of Caveats:
For the most part, Sherry Cooper, investment vice-president for BMO, offers some helpful tips on how this wave of retiring baby boomers can preparing for the next thirty years of their lives. In her demographic analysis, Cooper repeatedly points to the late boomers (those born between 1955 and 1964) having not faired as well as their earlier counterparts, the early boomers. A freezing of some private pensions, divorce settlements, and economic downturns in the 80s and beyond have all contributed to a declining disposable income within this later group. Cooper then proceeds to lay out a number of strategies that will help a late baby boomerplan for retirement within the next decade. The book is full of formulas and figures that would have retiring Canadians looking at saving as much as 22X normal pre-tax income during their working life in order to retire at a similar standard of living. Well, we all know what a fanciful notion that is: Canadians, just like their American cousins, are not savers, and over a third can't even save 5X. That is why more and more Canadians are opting to stay in the workforce beyond their minimum retirement. It's when Cooper says that new retirees should look at getting as much as 5% on their investment portfolio during their retirement years to keep their savings intact that I smell a rat. The only place where you can get that kind of return right now is in the stock market and that is precisely where Cooper would like to see baby boomers put a hefty portion of their nest egg. That is a bit of departure from the conventional advice that would have my generation park their money in safe and security GICs and annuities. According to her, these two instruments won't cut it because they can't keep up with the rate of inflation. Your money will run out before twenty years. Her recommendations are, of course, biased because of her line of work. However, I see something important emerging in her counsels: like Jeff Rubins for Imperial Bank of Commerce, Cooper is fearful that an aging Canadian society is turning away from investing in the stock market because it is too risky, given the most recent developments with subprime mortgage defaults. Nowhere does she have any strategy for retirees handling rising inflation. That's one baffles even the big boys in Washington: how to grow your retirement portfolio in a climate of rising prices and shrinking currency value , which is where we are now. Overall, she raises enough valid points to get a person like me thinking about when and how I want to enter my retirement years. For the time being, however, I'll hold on to my decent paying job and benefits package.

New, fresh approach to an overworked topic:
I've read several books on retirement planning and they all take one page worth of information and stretch it into a full length book. This book is different in that the information is accessible, concise and easy to find. The first half of the book reviews current demographics of the G8 countries and the economic implications, which made for fascinating but not essential reading. The remainder of the book gets down to the nitty-gritty of how much money you need and when you can safely retire. The "20-25 rule" is a great formula and something you can actually hang your hat on. If you are looking for answers to "how much?" and "when?" this is the only book you need.