The Truth about Retirement Plans and IRAs by Ric Edelman (a book review)

April 15 is the last day to contribute to your retirement account for 2015, so I thought I’d talk about this book, which is a reference published in 2014.  Although the book covers various retirement plans, the information is applicable to those who want to save money in general because it discusses various investment products. This is a must read for those earning any amount of money. You don’t have to earn over $5,000/year to get started with a basic IRA.

The book is easy to read and follow and in the end, sums up 36 take-aways. I won’t list them all, but I highlight six that might make you pause and consider looking at your financial condition and see how you can save some money for your later years. The earlier you start, the more money you can look forward to. You can start as early as 18.

As presented in the book, pp. 255-258, here are my top six take-aways:

  1.  You can accumulate wealth even if the stock market is falling.
  2.  Many employers offer free money to employees who save for retirement at work. If your employer is among them, make sure you do whatever you can to get your share of that free money—and if your employer isn’t so generous, consider changing jobs.
  3. To guesstimate how much money you’ll need when you enter retirement, add a zero to the annual income you’ll want in retirement and then double that figure. The result is a good indication of the amount you’ll need in total savings and investments when you first retire.
  4.  Your goal is to contribute as much of your pay to your retirement plan as you are allowed to on a pre-tax basis. If that’s not possible, just contribute as much as you can—even if all you can manage is $10.
  5.  Never borrow from your retirement plan.
  6.  Don’t invest emotionally. Too often, this causes people to incur massive financial losses.

I’ve listed below two classics for some additional reading.
      – The Intelligent Investor by Benjamin Graham
      – Street Smart Investing, A Price-Value Approach to Stock Market Profits by George B. Clairmont & Kiril Sokoloff

Granted, they tend to get a little dry. But remember, you are your own best advocate for your cash and countless others will want a piece of your money. If that sounds cynical, it is not meant to be; it just means that you must rely on yourself to understand where your money is being invested and if it is working in the way you want it to. One other reading suggestion that may lead to additional reading is an online article called The Rise of the Robo-Advisor—Should You Use One? (source: Investorjunkie.com).

One last take-away (part of the 36): “Unlike many members of prior generations, you can’t assume that your employer or the government will provide you with all the income you’ll need in retirement. You must save for your retirement yourself.”

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10 thoughts on “The Truth about Retirement Plans and IRAs by Ric Edelman (a book review)

      • Good point! Investing in precious metals takes consideration, however, silver works great if you want to counter inflation. But it’s not as simple as an IRA or 401k. You have to buy low and sell high (when it comes to precious metals) — and that tends to mess people up.

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        • By simple I mean the basic way to get the highest return is a mix of equities s (stock), with a high % of stocks the farther u r from retiring. Also, it would be a varied mix of stocks with a group of growth stocks and another of value-based stocks, along with high cap, etc. I recommend reading more about it and I believe u would get a better return than Turing to commodities. If u wish to trade commodities, I suggest going by way of looking to see if there is an index fund.

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          • I’m not sure what an index fund is, but I’ll look into it. I prefer to invest in tangibles (when it comes to silver). I’m not educated about stocks, however — you seem to know quite a bit!

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          • I think you would find stocks interesting. You wouldn’t have to invest in individual stocks. You can invest in mutual or index funds. Yes, I highly recommend you read up on it. I think if you can be well versed in silver, you can easily be well versed in stocks, etc. You’re a smart person. BTW, stocks are tangibles. Sure, you might not have them in your physical possession, but they are as tangible as silver and easier to liquidate, i.e., cash out. Consider me always eager to learn with a desire to know as much as I can in the world we live in. I have yet to find time to do simple coding and drawing!

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          • I’ll definitely keep an open mind about stocks. I assumed stocks would be more difficult to liquidate, but that proves my ignorance! Haha — thanks for writing the post and taking the time to comment!

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