Living Off Your Money shows exactly how to live off one’s savings, identifying a set of modern best practices for investing well during retirement with stocks and bonds. It’s common knowledge few people save enough for retirement. What’s unfortunate is those who do, rarely invest it well during retirement. To a degree, this squanders what has been diligently saved. There are too many wrong answers and not enough right ones for retirees, and it’s difficult to discern which is which. The art and science to getting it right is explained in this book. While suitable to any dedicated reader, this book is oriented towards experienced investors, showing not only what works best, but the evidence why. It focuses on the global market data to demonstrate exactly what’s right, and what’s wrong, with many well-known retirement practices. Side-by-side comparisons of strategies are provided, for each step of retirement investing. Complete pragmatic guidance is supplied, adding up to everything needed to safely live off your money.
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Mlabjr –
I find the book interesting and full of data. The problem is the web site and link’s are outdated and broken. When I tried to apply what I learned I could not get off the ground with the spreadsheet. For me this makes it hard to really understand how to apply. I searched for the inputs needed, but could not really find. Very frustrating to spend so much time reading and not be able to apply. Would not buy again unless they took the time to keep the spreadsheet/link’s updated.
Amazon Customer –
I was commenting on a Wall Street Journal article about Investing and Retirement and someone already there replied back to me with the suggestion to buy this book. What wonderful advice! Even if you don’t use the methods in the book, I felt like I was back in College going thru it. It’s not for the casual or faint of heart. But if you are a DIY person on your finances you will learn alot. I saw some complaints in other reviews about how link are broken or the website is old and not updated. The spreadsheet (which is free) gives specific links and instructions on where data may be found. What’s happened is that some of that data companies accrue and want to charge you for it! That’s where using these new fangled AI agents can help you. My current fav is Perplexity AI. I used it to fill in the missing data I needed to do a test run of the spreadsheet. All the math and table look ups are in the spreadsheet. Once you start using it it becomes very simple. The only issue is…does it work? I have no idea as I’m still 6 years out (hopefully) from retirement. But regardless I feel much more informed and feel like I can quiz a CFP or the like more. Knowledge is Power. Retire well!
david folts –
Want to drill down into various strategies to determine how much you should be taking out when retired? This is the book for you. An extremely well thought out tome that does much to advance the field of retirement spending!
Amazon Customer –
Interesting book, very detailed and analytical. A good lesson in broad diversification of your hard earned money but still need to bear in mind systemic risks which as the author points out, is not factored in. In other words, starting with the recommended strategy in 2010 would lead to a different outcome compared to starting in 2018.
gm0 –
I was starting to consider DIY pension drawdown. Early 50s. So exactly the target audience for this book.
This book is the best by far, that I have found that examines the subject practically and compares different and relevant approaches. No pseudo religion. Nothing for sale except the book. McClung brings data. Lots of data. More importantly he brings interpretation and step by step analysis. He shows why (and when) you should take one approach over another based on what is more important to you – based on how things performed across all the historical record (back testing, of multiple markets (to avoid tuning and data mining bias). He simulates failure markets (beyond the historical record) and tests again. The book has an engineering / cook book approach – it’s about “how to do it” after a long explanation as to “why” do X. If you don’t like this detailed narrative style of communication (lots of data tables) then you will hate the book. It is very far from an easy read. If you lack attention span this will not work for you. You will also need to learn the jargon of pensions and drawdown or it will be baffling. It’s not the first book or blog you should read about drawdown. I took more than one read through to grasp most of what he is saying and to reach the point where I could see confidently what I would choose among the options presented.
So it will either be a big step on education for DIY pension drawdown or it will cure you of the notion entirely that you want to do it yourself.
Minor gaps/negatives from a UK perspective
There are a couple of US focused chapters on guranteed income and US bonds ladders (TIPS) which are of lesser interest to a UK pensioner. The principles about mixing drawdown and guaranteed income are considered so this is still useful
It doesn’t cover UK tax specifics – pensions, IHT, ISAs, CGT, LTA and all the other tax code alphabet soup. Will need to self educate on that elsewhere – internet forums, government communications etc. It matters but you can add it on top.
P Armstrong –
Thorough and data heavy. I found it very useful but heavy going as a lot of justifying technical data is strewn through the text. Might have been better to delegate the technical stuff to appendices. Nevertheless, this book is almost unique in its focus on how best to draw down a portfolio in retirement.
Bennie D. Tate –
This is an excellent book that is full of detailed, data-driven, practical advice. My only criticism of the book is that many of the suggested strategies are fairly complex. Fortunately a spreadsheet is available for free from the website that allows you to apply any or all of the harvesting rules with little difficulty. My plan is to start out using a number of recommended strategies from this book for the first several years of retirement and gradually move to a more simplified investment and harvesting strategy that my wife will be able to follow if I precede her in death.
jhiggs –
First off, I have not been this excited to leave a review for a very long time! For years I’ve been an avid ready of investment and retirement books. However, over time I began feeling like much of the information I was consuming was redundant, and the level of depth/specificity was lacking. So I began using financial advisor forums for recommendations… I saw this book mentioned a couple times and was lucky to find it here on Amazon.
Long story short – I am blown away. Far and away the most complete and detailed treatment of the topic of retirement income strategies and recommendations I have ever read. To say this book is well researched is an understatement… it’s more like a labor of love for this author and WE are the beneficiaries! The learnings and practical tactics in this book are hard to put a price on… easily tens to hundreds of thousands for the type of folks who are students of investing – no exaggeration. Not a bad investment of time and $40ish bucks!
So who is this book for? This book looks and reads more like a university-level textbook than a mainstream financial book. For this reason, I think it’s best fit for someone with a solid foundational knowledge of finance and investing (you don’t need to be an expert, but honestly this would have a casual, hands-off investor a bit overwhelmed in a hurry).
Bottom line, if you’re more hands-off and desire to follow the blanket advice of taking 4% inflation-adjusted annual withdrawals, then this book is NOT for you. If you are an active manager of your portfolio and looking for a highly-researched strategy to realizing an annual income well in excess of the 4%, then put this book in your cart right now. Seriously, it’s a no brainer!
PS – I know this probably sounds like a planted review for this book. I assure you it is not. I have no tie to this author (had never even heard of him before reading this)… I just feel strongly that it’s a game changer for folks like me looking for a more substance than the mainstream financial press is providing. Hope you enjoy!
Richard –
This is an excellent – although at times complex – book about retirement income generation. For me it covered a number of threads/ideas/concepts I have been thinking about but had not yet managed to pull together into a complete strategy or approach to retirement income. After reading it I immediately ordered a copy via Amazon for my brother who lives in the USA.
Broadly:
1) It tests several portfolio management approaches (called harvesting). It recommends the best ways to get an income from your portfolio;
2) How to deal with varying portfolio returns given that there are sequence of return risks using stock and shares;
3)How to decide upon an initial withdrawal rate. This was the bit in the book I found the hardest to follow;
4) What will make up a good retirement income portfolio. The USA leaning of this book means this chapter may not always suggest investments available in other countries, but the principles are useful to read about;
5) Thinking about the cost and approach to get a minimum guaranteed income to cover essential living expenses. This was probably the least important chapter because of the USA focus of the book.
Tests and comparisons, that he calls surveys, are conducted using mainly one set of USA based historical returns but are cross tested with a different set of USA figures plus UK and Japanese historical data.
Anne Rawls –
Complex subject with detailed solutions. Not for person with no financial background
Adam Donaldson –
The majority of today’s DC scheme pension holders are walking into an uncertain pension future. For some reason I have always found pensions intriguing, thus I have ended up being more informed than most people I know. As I am now approaching retirement, my focus has shifted from learning about accumulation and instead spending/drawing down my pension and how soon I can retire. I knew very little about how DC pensions perform in retirement, and have been on a huge learning journey over the last 6 Months, this book has been hugely helpful in making me aware of the risks but also the possibilities of my investment and how to squeeze every last Pound from your pension. Scary but exciting. A must read for all people retiring on a DC Pension, especially Drawdown. A Tip. These are probably the most important four words you want to learn about when drawing down your pension. *Beware of sequencing risk*
Alan D. Legrand –
I think this is a really great book.. Every other on book retirement investments i have read have either been about the proper ratio of Stocks to Bonds or about the need to purchase annuities. None have really provided
actionable plans
This book is different. Its focused on the level of sustainable income that can be generated by a portfolio once withdrawals begin
It works through examples of multiple different models: Buckets, Annual Rebalance, multiple others, and its own Harvesting.
Many books on retirement talk about a 4% withdrawal guideline. This book has a formula that allows you to estimate this rule for your portfolio. HR = R – (I +wr)/ It presents the formula then works through numerous examples. Again its still just a guideline.
It covers a lot more. Its results are always explained and backed up by a lot of numerical modeling based of past Historical Markets.
It too much to take in in one reading. You will need to read it through multiple times.