‘Retirement is not a math problem,’ says one of retirement’s top math experts
If you want to debate whether one investment yielding 4.5% is better than a less risky investment yielding 4.2%, you can usually count on an answer from Christine Benz, who writes a regular column as director of personal finance and retirement planning for Morningstar.
But if you are expecting that approach from Benz’s new book, “How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement,” you’re in for a shock. The book is a departure from the nitty-gritty of investing strategy and toward the emotional side of retirement. In the book, Benz has 20 podcast-like conversations with an array of other retirement experts like Mary Beth Franklin on Social Security, Ramit Sethi on optimizing happiness and Jean Chatzky on what women need to do differently.
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“Retirement is not a math problem,” Benz told MarketWatch. “People might be surprised to see a book from me that is half nonfinancial — maybe not even half. But I feel like people are overly focused on the financial and not enough on the nonfinancial.”
This is a message that an enormous amount of people need to hear as they approach retirement — not just the 10,000-plus a day who will turn 65 over the next few years as baby boomers age, but also the younger generations behind them. Most of these people have largely had to manage financially for themselves over the last 30 years, as 401(k)s and other self-directed retirement plans have replaced pensions. Benz has been helping people navigate the ins and outs of the financial-services industry for most of that time, and now she’s poised to help them over the emotional hurdles, too.
Part of the epiphany for the book came when Benz was hosting a conference a few years ago for the John C. Bogle Center for Financial Literacy, the foundation started by the late Vanguard founder, and with the website forum devoted to his investing philosophy, Bogleheads.org. She was listening to a presentation by Michelle Singletary, the nationally syndicated personal-finance columnist, that focused on giving to people in her community and raising her kids. “It was a deep conversation,” Benz recalled. “I was crying, I was laughing — everyone was. It was so funny.”
Afterward, someone came up from the audience to ask a question. They said, “I just want to get your take on small value stocks. How much of a portfolio should go in small value?” Part of Benz was impressed by the person’s passion, and part was frustrated that they didn’t take the time to let the bigger message sink in.
“The longer I do this, the more I feel like that is small ball and we shouldn’t let it occupy too much of our time,” Benz said. “So I’m hoping that message comes through in the book.”
Still learning about retirement
What made this project different from previous books Benz has written — like “30-Minute Money Solutions” or “The Morningstar Guide to Mutual Funds” — was that Benz found she also needed to take a step back to look at the big picture of retirement and think about things differently than she had been.
She also learned a few things. “That was one part of the process that was just a joy,” she said. “I think probably as I step back and think about the whole project, I was probably reducing retirement planning too much to just financial and investment planning.”
It’s natural that her attention was focused there, of course. But Benz said that as she talked to the experts in her book, she started to understand the importance of the softer aspects of retirement planning, like finding your purpose and thinking about your legacy. “Individual investors also underrate all of those things,” she said.
Benz found some key questions she needed to ask herself, and uses the book to encourage others to ask:
“I had underrated these as components of successful retirement,” said Benz. “I have been toiling too much on the financial piece, and the book, I hope, really emphasizes the importance of considering these factors.”
One clear way that her talks with 20 experts changed her thinking was in how Benz thought about how her own retirement would look. “I had assumed I would have a hard stop, like the traditional retirement my dad had. He sold his business to his partner and he just basically stopped,” Benz said.
But now that she’s thought more about it, Benz wants something a little more fluid. That might mean working, technically — but a different kind of work. She has been trying on a few things with mini-retirements, or sabbaticals, from her day job at Morningstar, where she has been since 1993. “I want to try to continue to do the aspects of my work that make an impact,” she said. “I want to work in education, and so I’ve been thinking more about that. And I think about shedding the things I don’t enjoy as much.”
Another challenge ahead for Benz is making the transition from a lifetime of saving to spending down that nest egg. Figuring out how much it’s safe to spend — and on what — involves a lot of decisions about what’s important to you and what you expect from the future.
In one chapter of the book, retirement expert Jamie Hopkins talks about adaptability and how you can’t assume that the way you are today is how it will be forever.
“You need to get in front of some of the changes, and that includes pondering some not-so-happy considerations — like if you won’t be able to do stairs, maybe don’t stay in your big house,” said Benz.
With flipping the switch from saving to spending, Benz urged people to consider whether you can address that pre-emptively, too. She and her husband are starting to think about that piece of the puzzle right now.
“We’re going to look at what we’ll get from Social Security, and we’re gravitating toward an annuity to make up the difference for our cash-flow needs,” she said. “I know that it’s going to be a challenge for me to transition into spending.”
Got a question about investing, how it fits into your overall financial plan and what strategies can help you make the most out of your money? You can write to me at . Please put “Fix My Portfolio” in the subject line. You can also join the Retirement conversation in our .
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