[Erik]

I am looking for a book recommendation about investing and drawdown strategies for someone who is newly retired.

My mom and aunt are in this position and I would really like to help them make solid financial moves.

Thanks in advance!

[Rick]

Tough topic for a book.
We see hundreds to thousands of books on accumulation as the variables are better suited to a book. Save more.

Spend less. Invest in long term inflation vesting assets. Use your tax advantaged accounts. Etc etc.

But decumulation hits the variables with easily a 25x if not 100x multiplier.

So, any book on decumulation shades towards one of two things. First is the most common things to address which make it rarely applicable to any one reader.

Or second to concepts so vague that while they apply to many people the advice is not detailed enough to be overly helpful.

One huge reason that the 4% rule became immensely popular is it managed to be applicable enough in a sea of non very applicable decumulation concepts.

I would probably start with the 4% rule for that reason and see how that resonates with them.

[Amy]

You might try Wade Pfau’s Retirement Planning Guidebook. It’s more like a dense academic textbook but will give you a lot of information.

Not a book, but the Risk Parity Radio podcast has some good discussions on withdrawal strategies.

It’s a lot easier to digest than Pfau’s book. Here is a great episode.

I also highly recommend the podcast for learning what kind of portfolio to hold in retirement.

Episode 253: A Taxonomy of Withdrawal Strategies And Analyses Of Their Components

[Ron]

Lots of allocations will work. I’d do from 40-60% stocks if they are not attuned with allocations and managing risk. I’m retired and I am at 72% stocks, but I have a good understanding of the historical patterns of my allocation.

I did not panick when my total available liquid assets dropped nearly 30% after I decided to retire.

Note any good brokerage can give you a good fund mix that will manage risk, either in one fund that self adjusts or a mix of funds that rebalances periodically. You don’t have to spend much for this.

A lot of people here do risk parity allocations, but if they’re not into different asset classes, I recommend (no affiliation with ChooseFI, just a personal recommendation from my own experience and thinking) doing something simple, stocks and bonds, maybe the bonds being US treasuries.

I’d decide what cash cushion amount makes them comfortable, measured in months to years of living expenses. Of course maybe they are pulling, go above the cushion, and then as they spend get back down to the minimum level of cash they want on hand, preferably in a HYSA.

Some people like this 4% thing, but to me that just sets your target for accumulation. If you pull 4% and don’t spend it all, pull less the next time.

Do they have any income streams like Social Security? Personal I don’t see any reason to wait for the “higher payments” later, but everybody will do their own thing.

Instead of having all my cash cushion sitting there, I invest it and I just add Social Security to those investments.

If you can afford to wait to age 70 to pull Social Security than if you start collecting at age 62, 100% of the payment can be added to investments, right?

Other things: are they selling something of value during retirement, like a house?

Do they have income streams from rentals? Do either want to do any small part time jobs for fun? Do either have a pension? Are taxes even an issue?

I say “are taxes an issue” because for me they have not been a consideration at all. I’ve been early retired for 11 years and federal and state income taxes have been 0% almost every year. It’s related to my spending level, which is low, partly because I have a paid off house.

I create about $25K in income each year (use the term “create” because, yes, in some situations you can decide what your income will be each year).

So, you might say a couple needing $50K a year to live might also be in a low income tax consideration situation. $100K a year? Maybe not. $200K a year?

No. With a medium to large pension? Probably tax much more of a consideration. Have $1M, $2M in a traditional IRA? Taxes a big issue.

Of course read and get advice, I’m just doing a brain dump of my experiences 11 years into LeanFI retirement. When I started I didn’t even know what LeanFI was and didn’t know I was finally retired.

I have about 50% higher liquid net worth than when I started early retirement, so potentially I could transition to the other FI (where I can spend like a Kardashian the term excapes me).

Best of luck!

[Matt]

I’d recommend just going to a fiduciary, advice- only CFP. It really is a custom thing based on too many variables and assumptions to cookie cut for everyone.

The underlying finances matter… how much available and coming from what types of accounts, etc.

The invested portfolio allocation, goals, any SS or pension, etc.

[Scott]

It’s a second or third semester book if you will, Retirement Planning Guidebook by Wade Pfau though it does go into the weeds, but it is comprehensive.

Second book would be “10 Costly Medicare Mistakes You Can’t Afford To Make” by Danielle Roberts (CEO of Boomer Benefits) for a deep dive of all things Medicare.

[Jeff]

I looked and looked and couldn’t find anything. When I first retired the first withdrawal question I had was when do I withdraw for expenses for the upcoming year?

Is it 1/1? What if the market’s down?

Do I I wait until the middle of the year? Do I use my cash reserves until the following year? I had to guess.

Thankfully it worked out for me.

[Author]

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