Book Review – Five Years before you Retire by Emily Birken

The title of the book intrigued me, since I started out my journey 39 months from retirement (currently with 23 months left, yay!). The objective of the book is to “layout what you need to do in the last few years before retirement to make sure your life post-career is financially comfortable and fulfilling.” It’s a big objective, and one we here in the FIRE community have been talking about for many years. In fact the author writes for several blogs that are in our community.

Please note that this book is aimed at a US audience, so for those readers outside the US, you will need to take the advice and translate to your country’s situation.

The initial four chapters cover some of the basic finance questions that folks who are nearing retirement.

  1. How far away are you?  (calculating current spending, resources, rates of return, calculating money needs)
  2. Saving and Budgeting for next five years (Ideas to maximize your savings and reduce your expenses in order to close the gap)
  3. Income in retirement (the 4% rule, bucket method for withdrawal, required minimum distributions)
  4. Find the right financial planner (Types, pay structures, questions to ask)

While many of these topics are covered in depth in various FIRE blogs, the book puts them all in one spot for easy reading. There are other ways to perform the calculations in the book, and you can search for others that appeal to you more – but at least it gives you an idea of the steps necessary at the time.

The second part of the book covers aspects of the government that need to be included in your retirement planning.

  1. What to expect from Social Security (Mechanics of SS, what you will get, survivor benefits)
  2. Taxes and your Retirement Income (Taxes on Social Security, 401K, Roth, other investments)
  3. What to Expect from Medicare (Part A & B, Drug coverage, additional costs)
  4. Planning for Health-Care Expenses in Retirement (Coverage if you retire early, Medigap, Disability and Long-Term care).

It covers the basics of government support and costs, and is full of good information. The discussion is chapter 8 covers the basics of seeking out health care if you retire before 65, but doesn’t have many details or links. The book still assumes that Social Security and Medicare will be available when you retire (something we are all a highly suspect of at this time).

The final section covers home, family and other considerations as you prepare to retire.

  1. Housing in retirement (paying off mortgage, staying put or moving, reverse mortgages)
  2. The Family Fortunes (discussions with family, estate planning)
  3. Creating a budget on a Retirement Income (Typical day, week & year, anticipated spending, budget)
  4. Common Retirement Pitfalls (Relying on factors outside your control, 9 others)
  5. If you Don’t have enough saved (work longer, cut spending, change plan)

One of the great things about the book is that, at the end of each chapter, there is a countdown of the topics covered in the chapter, and what needs to be done 5 years before retirement, 4 years, 3, 2, and 1). It’s an excellent guide on the important aspects in the chapter. I would recommend this book for those just starting out on their FIRE journey, or if you want to give the book to a friend or spouse who hasn’t embraced the FIRE lifestyle yet.

Grade B+

 

Mr. 39 Months

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