Reading Your Way To Comfy Retirement

My fellow baby boomers, dreaming of retirement: I have a grave message. Eight years after moving to Florida, a land of easy, if spiritually comatose, living, I can tell you that I've seen our future. The cliches are all true: When we're old and retired, we will drive too slowly, except when in reverse; we'll constantly be waving to passers-by, especially if they're strangers; and when we're targeted by advertisers, it won't be for cell phones or elliptical exercise machines. What do I mean? A brightly lighted roadside sign recently grabbed my attention with this message: "20 DISPOSABLE BED PADS $10.99."

This is scary, I know, but down here in LeisureLand it gets worse. You could wind up "retired" to a job. The other night at a south Miami rib joint, I was waited on by the kindliest woman, who looked to be celebrating three-digit birthdays. The shocking whiteness of her hair made me wonder: Why wasn't she at home being served her own half rack of babybacks by her doting great-grandchildren?

The answer, as usual, is money. To retire takes whole slabs of the stuff. So book publishers know they've got generations of anxious readers ready to trade a few bucks today for advice on how to stash a million before the paychecks stop. Here then is my next warning: Most personal-finance books stink. Especially avoid those with titles like THE DIE BROKE COMPLETE BOOK OF MONEY, by Stephen M. Pollan and Mark Levine (HarperBusiness, $29.95), a 575-page pasteup of disjointed and just plain bad ideas, such as "the best retirement is no retirement at all."

Given the marketing muscle behind it, you may not be able to miss YOU'RE FIFTY--NOW WHAT? (Crown, $24), by Charles R. Schwab and ghostwriter Bo Caldwell. At least Schwab, the 63-year-old multibillionaire Wall Streeter, knows the topic. He focuses on real tasks that people nearing or already in retirement must tackle, such as creating a "paycheck" from savings. His rule of thumb: Start by taking no more than 4% to 5% of your savings each year. With helpful worksheets, glossary, and appendix, the book is digestible without being pabulum. Most of his advice is sound. Yet, as you already may suspect, the trouble here is that some tips are tainted by the author's day job as founder and maximum leader of the nation's largest discount brokerage firm. For example, Schwab highlights the Schwab 1000 Index Fund--a good fund, but one that costs more than twice as much as fair alternatives. He also advocates a lifelong commitment to keeping at least 50% of your assets in stocks--an aggressive stance that many planners would dispute.

The two best new retirement guides are by amateur investors that America's publishers at first spurned. One, THE INTELLIGENT ASSET ALLOCATOR (McGraw-Hill, $29.95), was originally published by author William J. Bernstein at his Web site, (Note: BusinessWeek is also published by The McGraw-Hill Companies.) A practicing neurologist in remote coastal Oregon, Bernstein comes to the problems of saving and investing not from a broker's perspective, but as someone who had to figure this out himself, from first principles up. He introduces readers to an imaginary Uncle Fred, who helps to guide us through lessons in statistics, probability theory, diversification, portfolio management, and the superiority of cheap "value" stocks over shares in growth companies. None of this is easy, nor does Bernstein treat it that way. But he is refreshingly respectful of our time, packing maximum thinking into minimum pages. The real genius here is how he engagingly spends 142 pages conveying the theory underlying an intelligent investment strategy and a bare 31 pages on how to execute it.

A spiritual cousin of Bernstein's book, J.K. LASSER'S YOUR WINNING RETIREMENT PLAN (Wiley, $16.95), is due out in May. It springs from earlier, self-published guides that author Henry K. Hebeler sold via his Web site, Like Bernstein, this retired top officer of Boeing Co. came to the topic as a smart guy who wanted to approach the retirement problem in a sounder fashion than those offered by Wall Street's "experts." Unlike Bernstein's book, however, this one is more practical than theoretical. Talking turkey to his fellow retirees, he notes that nothing in the work world prepared him for "the barrage of baloney I was hearing from hawkers of financial material." Hebeler cuts through all that with straightforward discussion of such realities as what happens to your nest egg when you start taking money out, an effect he calls "reverse dollar cost averaging." The unhappy upshot is a lower-than-expected investment return, something few financial pros will pencil out for you. With Hebeler, you get an aerospace engineer's precision and respect for downside risk.

A new book-and-software package, ECONOMIC SECURITY PLANNER (MIT Press, $64.95), was written by a trio of accomplished academic economists--B. Douglas Bernheim, Jagadeesh Gokhale, and Laurence J. Kotlikoff--with Lowell Williams, plus help from the National Institute of Aging. So I looked into it with high hopes. Its aim is to "smooth" your standard of living by helping you set the right savings and insurance levels. "Your saving, not your life style, adjusts to your economic circumstances," it promises. Yet because too much of the underlying thinking went unexplained, I finished the program not knowing whether to put stock in its advice. The hard-to-follow book wasn't much help, either. I hope new editions will be better.

No retirement book will have you turning pages as Elmore Leonard would, but there's tedious and then there's odious. GETTING STARTED IN RETIREMENT PLANNING (Wiley, $19.95) is one such dreadful book. For starters, it's all in green ink, to set a hopeful mood, I guess. Authors Ronald M. Yolles and Murray Yolles also pile banality ("retired investors most often fail by succumbing to either fear or greed") upon platitude ("knowledge is power"). What was really wrong came clear only when I got to Part 4, "Enjoying the Good Life," and turned the page to find the first topic thereunder: "Estate Planning--Arranging to Help Your Loved Ones After Your Death." If you hunger to be locked in a windowless room with two of the world's most boring advisers, buy this book. Downright dangerous is WEALTHBUILDING: INVESTMENT STRATEGIES FOR RETIREMENT & ESTATE PLANNING (Wiley, $34.95). The authors, David R. Reiser and Robert L. DiColo, of PaineWebber's Providence (R.I.) office, suggest using a pro from a major investment firm as the COO--chief operating officer--of your portfolio. They also spell out seven topics that you should cover with such a prospective adviser. I was shocked--shocked!--to see that none of the seven suggests finding out in advance how much the adviser's service will cost you.

For many people, saving for retirement means contributing to and managing a 401(k) account. A basic but useful guide to these company-sponsored accounts is THE SCARBOROUGH PLAN: MAXIMIZING THE POWER OF YOUR 401(K) (Corinthian, $24.95). Author J. Michael Scarborough's firm specializes in teaching employees how best to exploit their company retirement benefits. Beyond such staples as advice on asset allocation, he lays out what features make for a good plan and, if yours falls short, how to noodge your company into coming up with something better.

A generation ago, few people fussed with employers about retirement-account vesting schedules and all. But Corporate America and Uncle Sam have pretty much moved this responsibility onto our shoulders. It's a heavy burden. And no matter how many retirement investing guides get published, the plain truth is that to invest well, most people first have to work hard and save their income very, very well.

Which leads me to my last bit of advice: Saving for retirement is easiest when you keep your dream (or nightmare) at the front of your mind. In that way, I'm blessed. Off I-95 near my home is a giant flea market marquee that flashes, "USED WHEELCHAIRS."

Before it's here, it's on the Bloomberg Terminal.