The Number: What Do You Need for the Rest of Your Life, and What Will It Cost?
by Lee Eisenberg
Reviewed by Beth Lyons
In a nutshell, The Number is about, well, the number, about how much money you need before you feel like you can retire. It's more a cultural history of money, debt, retirement, and old age than it is a straightforward guide to balancing your mutual funds. But, if you're starting to think about retirement, this is highly recommended reading.
Like a good journalist, author Lee Eisenberg gathered information from numerous sources -- doctors, philosophers, retirees, and financial planners of every stripe, including some who specialize in lifestyle planning, a recent niche within the larger discipline. And, although some of the facts and figures are outdated since its release in 2006, The Number is eerily on track regarding Americans and their dangerous debt loads, the fragility of the housing market, and how bull markets turn into bear markets turn into bull markets.
Two factors are changing the face of retirement planning. The first is our ever increasing lifespan. The average American can expect to live into their 80s, and with advances in medicine many people will live well into their 90s. That means planning for more post-work years than our grandparents and great-grandparents had to. The second factor is the cultural shift in what retirement can mean for individuals. In fact, toss out that word retirement; people are now downshifting or transitioning. In other words, many people are viewing their time after age 65 as a chance to take up a second career, for instance, or get involved in community politics or help an NGO deal with AIDS in Africa. (These days retirement is apparently anything but relaxing!)
Because of the changing landscape, Eisenberg posits that "the number" is a personal decision, based on how you live right now and how you want to live when you retire. For example, if you want to golf every day or move to an area that has a higher cost of living, your number will be significantly larger than someone who plans to work part time or simply hang out with their grandkids.
Since everyone's situation will be different, there's no right answer for what "the number" should be, but there is a wrong answer for how to get there. Eisenberg invites you to consider your relationship with money and with your credit cards, in particular. He calls it "Debt Warp," the way you can get into a mindset where it's just fine to have $8,000 in credit card debt. (In this way, he'll remind you of money gurus like Suze Orman and Dave Ramsey.) He takes his generation, the Baby Boomers, to task for not saving or planning for retirement and then moves on to solutions for people of every age. Even if you're in your 20s, The Number offers helpful insight. Because, as any financial planner will tell you, it's never too early to start saving for retirement.
Beth works in customer service for Powells.com and reviews books for Lifevisions.net in her spare time. She has 23 years before she can draw Social Security, which explains why she's reading finance books. For everyday money advice, Beth likes Dave Ramsey. Her favorite personal finance blog is Get Rich Slowly, and for 401k advice she consults 401kRollOverAnswers.com.