with a financial advisor.
We bared our assets and asked him what it would take to be
confident about a second-half life that met expectations?
just a house we liked; decent standard of travel and leisure;
education and health costs covered. We were in good shape,
he said?still, littered across his printouts were a lot of ifs,
maybes, and who-the-hell knows."
"My wife and I sat down
The Number: A Completely
Different Way to Think About the Rest of Your Life
Sound familiar? A new book, (Free Press; 2006), by former editor Lee Eisenberg, examines the complex, evolving, and anxiety-ridden world of planning for retirement. It is not a number-crunching guide, nor is it meant to be read with a calculator. Rather, it's an insightful, irreverent, and often humorous viewâ€”filled with practical adviceâ€”on the state of retirement, investors, and the financial services industry today, particularly as 77 million baby boomers approach this life-changing event.
Physician's Money Digest
The Number itself, as you might guess, represents that golden sum that supposedly ensures a happy post-career life. But as Eisenberg points out, it's a concept much larger than its face value. On a personal level, it incorporates fear of poverty and loss of healthâ€”or on the flip side, dreams of relaxing under sunny skies. Yet these issues are tied to an environment that has changed from one of safety with Social Security, Medicare, and pensions to one of rugged individualism and financial self-management. "The rules radically changed," Eisenberg tells , "yet no one issued a press release."
Indeed, retirement has become "the biggest do-it-yourself project ever," says Bob Reynolds, COO at Fidelity, in . Boomers, of which Eisenberg is one, got caught in the shift, leaving many future retirees unprepared. But whether they were unlucky or unwise is debatable, Eisenberg says. "People didn't get the enormity of it for a long timeâ€”most didn't handle the transition early enough." According to the book, only 1 of 4 workers age 55 and older have invested assets of more than $100,000; 1 of 3 has less than $50,000.
Such "Number chasers" fall into four personality types, according to Eisenberg:
â€¢Procrastinators enter their 40s and 50s in a cloud of avoidance and denial about the years ahead, or simply do not understand investing.
â€¢Pluckers often pull ephemeral, albeit specific, Numbers from the air with little attention to developing a realistic plan.
â€¢Plotters crunch every practical aspect of their financial history, hoping to cement their Number in black and white.
â€¢Probers visualize their Numbers not as an end, but as the means to pursuing dreams and passions.
"Where are doctors? I don't know," Eisenberg ponders. "I think they're part plucker and part plotter." Of course, he says, "There are procrastinators in every field of endeavor."
Eisenberg found himself chasing his own Number when, after nearly 30 years in the New York publishing industry, he left to join Wisconsin-based clothing company Lands' End for a lucrative position as executive vice president and creative director. While in New York, Eisenberg had been downshifting his career with a consulting position at Time, Inc. But he was worried about the Number. "The question of whether we had achieved a sufficient Number, whether we had enough to shelter us from life's jolts, nagged at me more days than not," he writes.
Shortly before leaving his position at Lands' End in 2004, he began asking people about their post-career readiness. It was then he discovered the Number was the "last taboo" and the idea for the book was born. In , Eisenberg's years as a publishing guru serve him well. After hundreds of interviews and countless research, he offers up interesting stories, humorous descriptions, and clever catch phrases. Just some of the topics he delves into include:
â€¢The LostYears. The period during a person's 20s, 30s, and 40s when little money is saved, nor a plan developed.
â€¢DebtWarp. A sense of entitlement run amok through credit cards and low interest rates. "We think we're prosperous, fat, and happyâ€”but in fact, we're leveraged to the hilt," Eisenberg says.
â€¢Millionaires Under House Arrest. People with a net worth of seven figures, but 20% or more of that Number comes from their home value.
â€¢The New Rest of Your Life. The changing state of retirement, including downshifting and living longer.
â€¢Lifestyle Relapse. The fear that "you'll find yourself penniless, a geriatric ward of the state, imprisoned in a nursing home, nobody to swab your drool, your bodily functions in disarray."
Eisenberg never writes, "Stop spending money," but there are few who won't feel a squeamish familiarity for getting caught up in our "iPod for an iPod" culture when reading the chapter on Debt Warp. By the same token, Eisenberg tells his book is not antimoney, and admits he's wearing a $150 tie. Rather, it's meant to be a book about balanceâ€” saving as well as spending.
A large focus of emphasizes balance in another important wayâ€”the meaning behind the money; in other words, what is the Number really for? Eisenberg relates his six "Uncertainty Principles," the last of which is "uncertainty over what money is good for." The answer isn't a boat, spa vacations, etc, since these items do not bring meaning to one's life. "The problem is many of us don't know what to go shopping for spiritually," he says. "I can't imagine there are too many intelligent people for whom golf will be enough."
mentions that things such as community standing, relevance, and engagement (on an intellectual, spiritual, and emotional level) are of utmost importance. "I think that would be a biggie for docs," Eisenberg says. And his conclusion is that these "meaningful" pursuits often cost less than we think. He writes, "What if the life we want, really want, requires less, not more money? Why not, then, figure out what we want, what's truly meaningful to us, and then do a financial plan to light the way? Trouble is, traditional financial planners don't ask about the spirit."
When asked what would be the one thing he would want a physician-audience to take away from the book, he answers, "If they're [fairly wealthy], they've really only solved half of the equation." The other half, he says, is, "How much [do I need] and what do I need it for?" It's important, he stresses, to answer that second question first.