Decumulation

Focus on Retirement: A Book Review

Retirement Income for Life: Getting More Without Saving More is a Canadian-based book by Frederick Vettese.  It is a National Bestseller.  The updated Third Edition was released in 2023.  I’ve recommended this book to a few readers already.  It’s time to recommend it to all of you in my age group.

While most retirement books focus on accumulation, few focus on what comes after.  This book assumes the saving phase of your life is over or nearly over.  Rather, decumulation is about turning the savings you already have into a steady income stream that will last for the rest of your life.

Part 1: Identifying the Decumulation Problem utilizes and fictional couple on the verge of retirement to introduce the reader to the difficulties faced when one shifts to drawing down their nest egg.  This Part 1 assumes the example retirees do everything ‘by the book’ yet run out of money.

Part 2: A Five-Part Solution introduces five ways our fictitious retirees can enhance their strategy to ensure they don’t run out of money.  The solutions include reducing fees, risk transfer to the government through CPP and OAS planning, consideration of an annuity for greater risk transfer, use of a free calculator to forecast retirement income, and a backstop if needed to generate income.  Each may or may not work for your situation, but the gains for the example retirees are provided.

Part 3: Exploring Other Situations looks through a range of circumstances including retiring single, early retirement, not ready to retire, a spouse dying young, and high-net-worth couples.

Part 4: Tying Up Loose Ends and Part 5: Making It Happen do as their section titles indicate.  They address a few other moving parts in a decumulation strategy then talk about how to action your plan.

Throughout, definitions are provided where needed, charts and graphs are used to enhance descriptiveness of the book, then it closes with three useful Appendices.

It’s a bit of a thick read, being all financial in nature.  But if consumed in smaller bites, there is a great deal relevant of Canada-specific information to help you Be Prepared.