Review by Gary Mansfield, JD, Aventura, Florida
Book by Stan Hinden
I was intrigued by this book for several reasons. First, it has actually been published in three prior editions, and as such I felt that it must have some worthwhile information. Secondly, the publisher of the same is The McGraw-Hill Companies, Inc. This publisher is a recognized house, as opposed to many of the other books that I considered that were published by the venerable publisher, “Self.”
Another reason for choosing How to Retire Happy, is that its author, Stan Hinden, has been “happily retired” for 23+ years from his position at the Washington Post where he was a financial columnist. I believe that this is a very important aspect, in that I expect that it would be well written – both grammatically and from a perspective of useful financial information and data. One simply cannot work for more than two decades at a stalwart publication like the Washington Post without having perfected the ability to write well, and in a manner that informs and entertains. Certainly, I would find out that both these criteria were easily met as the book was terribly informative, and quite engaging.
One additional reason that I chose this book to review is that there was a fine foreward published by one John C. Bogle, founder and former CEO of The Vanguard Group (of funds). As such, given that I have heard Mr. Bogle speak on numerous occasions, and respected his opinion, I have chosen this book to review for the course. The fact that Mr. Bogle’s first sentence in his foreword is one-word-long, also had me intrigued to read this book. The word/sentence I allude to is “Congratulations!” Again, based on my prior knowledge of John Bogle, and his renowned financial prowess and substantial successes, I was eager to begin my reading of How to Retire Happy.
In his Preface, Hinden states that his book “is the book I wish I had been able to read before [he] retired.” His reasons for stating this is that his monthly Social Security payment would have been greater, as would his pension and retirement savings account. And, he would have learned earlier on how to become successful in making his money last longer during his, and his wife’s retirement. In fact, this book began as a chronicling of his retirement that appeared periodically in the Post. Hinden, upon his retirement learns quickly that he was, to use his own words, “woefully unprepared” to adequately analyze the issues regarding retirement issues, let alone make the ultimate choices.
Hinden’s book is broken into twelve chapters – which he also refers to as 12 “key decisions” that have to be made by retirees. In each of these twelve, which I shall spend a little time on, the author explains the issues thoroughly; provides a host of “Do’s” and “Don’t’s”; and, uses his own life lessons as a road map for the reader to use as they make their own dozen choices regarding retirement. The author’s wife, by the way, was also had a successful career. Accomplished, in her own right, Hinden’s spouse brought with her pension and retirement funds. And, it turns out, Alzheimer’s disease, which places her in a facility – a play that was not part of their retirement playbook.
- Decision 1 is entitled “Am I Ready to Retire?” Effectively, the author leads the reader down the path of a Fantasy Island retirement, with all the freedom and pleasure it would bring. Quickly though, Hinden brings the reader back to the realities of retirement in order to help them determine if they are, in fact, ready to retire.
- Decision 2 is entitled “Can I afford to Retire?,” and presupposes that the prior decision (1) was answered affirmatively. Early on in this chapter, the key question is defined as whether or not one had enough income to satisfy one’s expenses. If you do, great. If not, one must figure out how to raise one’s income, or in the alternative, lower one’s expenses. Naturally, as one would expect from a financial columnist, Hinden explores issues such as taxes, compounding interest, and other financial planning aspects in this chapter.
- Decision 3 is entitled “When Should I Apply for Social Security?” Again, this is a perfect section for a man whose career was spent writing about money, and issues surrounding the same. Hinden explains Social Security in a manner that is quite interesting – let me restate this – in am manner that makes it as interesting as one can do given the subject manner, and its related statutory requirements.
- Decision 4 is entitled “How Should I Take My Pension Payments?” In this chapter the author focuses on both defined-benefit plans (employer-paid) and defined-contribution plans (employee/employer-paid). The decisions in this chapter relate to analyzing the pros and cons of how one makes the various elections that are tied to receipt funds under the multiple options available to those who have retirement/pension plans sponsored by their employer. To me, this particular chapter was the least relevant of all, as neither myself, my co-workers, or any of my family members have such employer-sponsored pension plans.
- Decision 5 is entitled “What Should I Do with the Money in My Company Savings Plan?” Here, Hinden focuses on specifics related to his 401(k) plan, which he states made it easy for he and his wife to become investors. And as many investor’s before (and for those that have not read this book) them, Hinden discusses one of the mistakes that he made – costing him nearly one hundred thousand dollars – so that reader’s can learn from his costly (to say the least) misstep.
- Decision 6 is entitled “When do I Have to Take Money out of My IRAs?” This chapter, one of the shortest and driest in his book discusses the rules associated with how one determines the appropriate withdrawals from retirement accounts. While not terribly entertaining, a requisite read for any retiree.
- Decision 7 is entitled “How Should I Invest During Retirement?” Hinden opens this chapter with the revelation that only three years into his retirement, he is stunned when he realizes that his retirement savings would be used up within eight years. This lesson was worsened as this revelation was made while he was 72, and his wife 70 years of age. Hinden made the determination regarding his dwindling funds by using an online retirement calculator. Quickly the chapter focuses on how to increase income, while controlling expenses. Hinde issues Five Golden Rules: (i) You Must Learn to Invest; (ii)The Greater the Risk, The Greater the Reward; (iii) Never Try to Outguess the Market; (iv) Go for the Averages; and (v) Spread Your Risk.
- Decision 8 is entitled “What Should I Do About Health Insurance?” Hinden has much to discuss in this chapter of the book, what with his wife’s development of Alzheimer’s disease, her breast cancer surgery and his pre-retirement quadruple heart bypass operation. And, discuss he does. Hinden dissects Medicare, and its very parts A, B, C & D, and makes it and other coverage alternatives (HMOs, PPOs, etc.) understandable to the common man. Detailed, yet not complex examples are provided for even further clarification to the reader.
- Decision 9 is entitled “What Should I Do to Prepare for an Illness That Requires Long Term Care.” Earlier editions of this book had this chapter beginning with Hinden’s biggest fear – that of the deterioration of his, or his spouse’s, health. As stated earlier, Mrs. Hinden was diagnosed with Alzheimer’s in 2007, and her condition worsened relatively quickly. Quickly Hinden learns of the significant costs associated with dealing with debilitating illnesses. Fortunately, his wife Sara had purchase a long term care policy, and the author espouses the benefit of doing the same.
- Decision 10 is entitled “Where Do I Want to Live After I Retire?” The author elicits thoughts of Fantasy Island as his opening remarks for this chapter. Quickly he moves into considerations regarding weather, cost of living and proximity to family members as all being the central determents of where one should live after retirement. Despite his determination and multi-week investigation into moving to Florida, Hinden decided it was best for him to stay put and not join the ranks of retirees in the Sunshine State.
- Decision 11 is entitled “How Should I Arrange My Estate to Save on Taxes and Avoid Probate?” Trusts, wills, healthcare directives, and other estate planning issues are discussed in this chapter. It is clear that Hinden has a bias against probating estates. Estate exemptions between spouses are discussed, as are issues that could affect the remaining spouse including later marriages.
- Decision 12 is entitled “How Can I Age Successfully?” In this chapter Hinden ties retirement to the last quarter of a sporting event, which he says is the most exciting. In Hinden’s world, retirement provides the opportunity to “add points on the scoreboard of your life.” At the latest printing of this book, the author is 85 years old, and still finding life and work enjoyable and rewarding. Hinden finishes off this chapter with the “Do’s and Don’ts of Growing Older. Some of the Don’ts include: (i) Don’t let anger rule your life; (ii) Don’t live in the past; (iii) Don’t become a grumpy old man; and, (iv) Don’t gripe about your birthdays . . . enjoy them. Do’s include: (i) Choosing a retirement activity (part-time job, hobby) that you really enjoy’ (ii) Do exercise regularly; (iii) Do maintain your physical and mental independence; and, (iv) Do keep your sense of humor.
Overall, I truly enjoyed How to Retire Happy, and I would very much recommend it for anyone who is within a few decades of retirement. This statement, I believe, says so much. It says that there is much to plan for one’s retirement years, and that if the planning is started early enough, one’s retirement from a financial, health and overall wellness perspective can be greatly enhanced. For those who start preparing in advance, to those who have just received their final paycheck and are about to begin their retirement journey, there is much to learn in Hinden’s book. The fact that he is 85 and still writing on the subject also says a lot.
