Book Review
Title: "Retirementology: Rethinking the American Dream in a New Economy"
Author: Gregory Salsbury, Ph.D.
Publisher: FT Press, 2010; 240 pages; $17.99

It is my real estate fixation, perhaps, that has led me to believe that most people use the phrase "The American Dream" to refer to homeownership or the happily-married-with-two-kids-a-dog-and-a-housedom vision. We all know that version of the American Dream — or at least the house and kids elements thereof — has undergone a wholesale rethink in light of the foreclosure crisis and the recession.

However, it is also logical to conclude that the retirement plans and dreams of many Americans have also been undone and rethought, in light of portfolio plummeting recessionary forces, and advances in American life expectancies.

Many who were planning to retire at 65 are now accepting that they might work the rest of their lives or, at the very least, are being faced with some hard decisions about when, where and how they will ever be able to retire.

Retirement and investment adviser Gregory Salsbury, Ph.D., seeks to step into this space and offer some thought leadership for wannabe retirees in his new book "Retirementology: Rethinking the American Dream in a New Economy."

Salsbury’s angle is to take a behavioral economics approach to understanding the psychological underpinnings of retirement decision flaws, and offer an action plan for changing the way you thinking about and plan for retirement while a change of course still has the potential to benefit your lot in later life.

Salsbury paints a stark picture of America’s retirement dilemma by relating the text from the first two slides of a keynote presentation he recently made. The first read: "The retirement crisis is over." The second explained that this is because "Retirement is over."

Salsbury’s solution is what he calls "retirementology" — a study of the intersections between retirement planning and psychology. A dozen focus groups Salsbury conducted and the post-bubble recommendations he derived therefrom form the basis of this book.

In Chapter 1, Great Expectations, Salsbury describes the "romantic illogic" of the average American when it comes to retirement matters, including the clearly false expectations of so many that they will retire with plenty, despite having no retirement plan, and even the popular false belief that their quality of life will rise after retirement. Salsbury explores the various psychological pitfalls related to these bizarrely inaccurate expectations, including procrastination, overconfidence and the illusion of control; shows readers how these items actually prevent them from achieving a prosperous retirement; and then offers some assessment tools to correct inflated retirement expectations.

Chapter 2, Gold Dust on Sushi, covers America’s chronic overspending and debting habits, and how they keep us addicted to paychecks, and offers a very interesting analysis of the psychology of layering — spending proxies for cash vs. cash itself — and how the addition of degrees of separation between our spending and actual paper money encourage overspending.

Here, Salsbury also offers a little chart that ought to be turned into a purse/pocket guide: He shows how much you would end up with over 20 years if you saved or invested the funds from foregoing various purchases.

Chapter 3, The NoZone, offers insights on how to avoid waiting too long to plan for retirement and how to avoid myopic investment mistakes. One of these insights is a very astute, alternative definition of retirement; instead of looking at it as an isolated event, Salsbury says, "Retirement is a monetary process that takes a lifetime of preparation that is predicated by a lifetime of behavior when it comes to your spending, borrowing, saving and investing."

He cautions that it is those who wait too late to start retirement planning that end up with problems when an unforeseen expense or market crash comes a’ calling.

Chapter 4: House Money, examines the fallacious reasoning behind Americans’ irrational real estate behavior over the last decade, and offers some alternatives for retirees, including early mortgage payoff strategies and seriously considering renting and relocation as viable options.

Chapter 5: Family Matters, discusses a variety of issues in which family and finance intersect, from how parents, spouses and children interact around money, to estate planning.

Chapter 6: The Tax Man Will NOT Come Knocking (He Will Kick The Door Down) educates readers about the myriad coming increases to the federal income tax and the threat they pose to retirement reserves, without the strategic use of tax deferred vehicles.

Chapter 7: Under the Knife, tackles health care issues; Chapter 8: Lost in Translation, makes a case for working with a professional adviser who can help decipher convoluted financial matters; and Chapter 9: Long-Term Smart sketches out Salsbury’s proprietary set of key priorities he argues should drive your retirement planning.

I’m going to have to differ with Salsbury’s characterization of "Retirementology" as a book on "rethinking" the dream of retirement. Rather, it is perhaps the best specimen I’ve ever seen on "reality checking" that dream, calling us collectively out on the half-baked theories and chronic thought errors that are robbing so many of us of the retirement cushion we could be creating.

In addition to diving very deep into these fallacies — I promise, you’ll recognize yourself or your thoughts in one or all of them! — Salsbury compellingly provides a thought-fix and behavioral prescription for correcting these retirement planning errors before it’s too late.

And, according to Salsbury, if you’re breathing and could be earning, and you’re not retirement planning, you should be. So, grab the book, and get to work (so you don’t have to work forever).

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