The Truth About Retirement Plans and IRAs

I will preface this with, "I am an Edelman client", and did receive a copy for free. After reading it, I purchased several more copies for family members, all of whom are in the first few years of their working careers. This book does an excellent job of explaining all the details behind saving for retirement, and most importantly, why it's important to save. He takes the story all the way to how to draft from your IRA/401k/403b after retirement, and how to make your money last your entire retirement. He mentioned pitfalls, such as the dangers of "borrowing" from your retirement accounts, and why it's highly unadvisable. I do see there are a few who did not like this book. To be fair, there are people who will not like it. Those who are very financially literate will surely find it "basic" - it's supposed to be basic. It's designed to educate people, not offer profound mysteries to those already educated in financial matters. Edelman is also very critical of inventments which are a bigger benefit to the broker selling them, than to "you", the buyer. As such, product-pushing financial salespeople, selling annuities and other expensive investments, will also dislike the book. This book isn't for "them". It's for "you". One critic said this is a push for Edelman to get more clients. To be clear, he often recommends, for information specific to your situation, "Talk to *your* financial advisor, and if you don't have one, call us". He does not discourage people who already have their own advisor, provided their advisor is acting as a fiduciary - someone who must operate and advise in *your* best interest, rather than trying to merely make a product off of you. This book is excellent for anyone who is not already well-versed in retirement savings. I would strongly recommend it especially for those just starting in their careers. The more you save "now", the more you'll have when you retire. As Edelman has said many time, "Nobody goes into retirement wishing they had saved 'less'".

The book is very easy to read (except for a couple of sections, and Ric says to skip them if it's not your cup of tea). I love it that he provides the rationale for his assertions as well a data to support them. He doesn't just offer his opinion, although given that he's a leading expert in this field, his opinion might well be considered all the justification needed. He interjects amusing little remarks along the way, often as short footnotes, which make the book even more fun to read. I've already increased the amount going into my retirement account as a result of reading this. But it would have been even better for me to have done that 20 years ago. Still, I've got another 15 years to go till I plan to retire, so all is not lost! Excellent book.

Let me be clear! I believe this book has very useful information to anyone concerned about their retirement. I am not an expert, but simply one of those persons who want to make sure that am I doing the right things now so that when I do retire, I have sufficient income to support me for the rest of my life. That being said, I was very excited to acquire a copy of this book so much so that I pre-ordered it at Amazon, which is something I usually don't do. However, while I found the information usual, I personally got the book because I was interested in one particularly topic: TSP contributions and allocations advice. As a member of the Armed Forces with less than one year of active duty service, I wanted to learn about Ric Edelman's perspectives on specifically investing in the federal government's Thrift Savings Plan (TSP). It literally was the main reason why I preordered a copy of the book as opposed to skimming through it at a bookstore. The reason I gave this review four stars and not five is because I was disappointed that the book did not cover, in more detail, a discussion on investing in the TSP. Even if the answer is, "it depends", which would not be surprising, some general guidance as to what fund or what allocation, specific to TSP, would have been preferable. Of course, from reading the book, I could piece together the fact that stock funds (C, S, I) would be ideal and the 40%, 40%, 20% split he suggests on page 106 is applicable to the funds in the TSP (e.g. 40% in C fund, 40% in S fund, 20% in I Fund). If that's true, it really wasn't clear to me and I would have preferred, and was someone expecting, a more focused discussion just on the TSP. I read the book in order (didn't skip parts 1 or 2) and I used the index to verify that I didn't miss any focused discussion on the TSP (I didn't). It may seem harsh to rate this book 4 stars on what is otherwise, by all indications, a fantastic book that is a wealth of useful information. But, because I was so disappointed as stated above, I chose to give this book four stars. Let me conclude, however, by saying that Ric Edelman remains one of my favorite financial advisors to listen to.

Most of us are woefully unprepared for retirement and don't understand finance in general. Tragically, this stuff just is not taught in high school nor college unless you major in it. Unless our own family teaches us: we are just sent out into the shark infested waters with no preparation. Ric is a fiduciary which means that he is legally obligated to act in the best interest of his clients. Not so with many financial advisors who mostly act in there own best interest. With this book you get the truth so that you can decide for yourself and prepare your retirement. it's a must read. You simply cannot afford to not read this book.

I just love Ric Edelman's books! I have them all, and yes! I do listen to his radio show! I have purchased each of my son's Ric's book "The Truth About Money" as a gift. All of his books are basic, easy to read, common sense information. I would love to tell you I have a million in the assests due to following his information, however, I sometimes just can't get out of my own way! Let me just say that I had adjusted my investments according to info I gathered from my Edelman "Reads" just prior to the horrible market "adjustment" a few years ago and it saved me thousands in my 401K and other investments. While I did lose a little $, it was not nearly as bad as it would have been if I had stayed positioned like I was! I have suggested Ric Edlemans books to all my friends and coworkers. Even if you have a financial manager, education is a powerful thing! Be informed, or be a victim!

Ric Edelman is the standard by which all other advisors are judged. I'm not a client (yet) but I read his books and am a religious listener of his radio show. The one thing that impresses me most about his organization is that THEY invest exactly the same way they ask you to invest. No fancy annuity products nor trendy "buy gold" tactics. This book is the bible for retirement planning and investment particularly for the uninitiated. YOU ( an educated YOU) are your best advisor. This book teaches you how to manage your own finances ( if you choose to do so ) and covers most every aspect. This should be required reading for kids of all ages! Seriously, your teen aged children would benefit immensely because TIME is there friend when it comes to building wealth. Even the "near retiree" will learn how to manage the retirement years from a financial viewpoint.

This book covers all major aspects of investing for retirement and supporting yourself during retirement from those investments. It is easy reading and completely intimidation-free. Ric Edelman writes the way he talks. I think most readers will enjoy the book and find it helpful, as I did. A major strength of the book, along with its writing style, is the clear reasoning he uses to explain his recommendations, and the thoroughness of his explanations. The only criticism I would make is that occasionally he makes an overt sales pitch for his financial planning company, something I think should be kept to the blurbs in the back of the book. This is a very helpful, understandable guide to financial planning for retirement, useful to those just starting to save as well as those in retirement.

Is this a good book? The answer is that it depends. If you are a retirement savings novice, then this book is a good starting point. If you have read the commonly available information and done some of your own research, then this book will not add that much value. I am a big fan of "The Truth About Money", read it about 10 years ago and gained a lot of confidence in how to manage money. I don't have the same feelings for this book. A couple of specific issues: * Edelman is referring to increase in account value through Dollar Cost Averaging (DCA) in comparison with stock market performance without making it clear that a substantial amount of the value increase is from new investments. DCA sounds good in theory, but the most important lesson is that an investor should invest the money as soon as possible as the general direction of the stock market is up. In general it makes sense for salaried workers to make an investment for every pay check due to employer matching and the fact that this is when the money is available to be invested. I personally believe that DCA is hyped up. * Edelman is correctly saying that you should invest your money in the vehicle which generates the best return, which is the stock market. He then muddles the whole thing by talking about balancing and buying bonds. It is almost like someone tried to correct Edelman during the review process and that he caved in to pressure from the reviewers. * The section on spending the money in retirement is muddy and ends up with a "it depends" recommendation. Edelman should state that it is impossible to time the peak of any stock market and that investors should stay in stock as long as they can take the risk. If you have a healthy retirement account, then you can take a lot more risk than in you just have the money you need to scrape by. It looks like there is a more in-depth description in chapter 24. * There is another flaw in the sections about how to manage the money that is in the account. Edelman is writing as if old money is different from new money; nothing could be further from the truth. Money in a retirement account is fungible, there is no difference between new money or old money. I believe that this is a significant flaw which leads to confusion. * The section on Roth IRAs is weak, it fails to take into account the difference between marginal tax rate and average tax rate. It is very likely that the average tax rate at retirement will be lower than your marginal tax rate at the time the retirement contribution is made. Hence it makes sense for most people to not choose tha Roth option. There is however one exception; if you are early in your carreer and make a lot less money than you expect in retirement, then it makes sense to put the money into a Roth. As an example, if you can afford making retirement contributions while you are a student, then you are likely in the 0% tax bracket and can make retirement investments tax free. * The discussion section about moving funds from past employer 401(k) to an IRA forgets that there are some 401(k) plans that have good options and low fees. I believe that Edelman's advice is too black-and-white, IRAs are not always better. My recommendation is that each investor looks at the options available and the fees before making a move. The ETF sidebar is shallow, do you really think you should choose an ETF over a mutual fund just because it is cool and you people do it? Take a look at comparable mutual funds and ETF from Vanguard and you will see that they are very comparable. * In Chapter 22 Edelman again miss the important difference between marginal tax bracket and the effective tax rate. Your 401(k) is not worth 40% less if your marginal tax is 40%. Overall the book is a comprehensible collection of good advice, but it brings little new information to the table for people with knowledge. I recommend that the issues listed above are resolved in a re-print.