In the aftermath of the 2008 stock crash, the title of Derek Foster’s latest book The Worried Boomer: No Pension? Not Wealthy? Here’s YOUR Plan is some good marketing. Despite the promise of novel solutions to the problem of not being prepared for retirement, Foster offers sensible but fairly standard advice: spend less, save more, and work longer. Those who don’t like long books will be happy with 170 pages of large text and generous white space.
A couple of the most common themes in the book are a recommendation to invest in dividend stocks and repeated plugs of Foster’s previous books.
An amusing contradiction is that Foster’s web site and a couple of his previous books are called “Stop Working,” but he devotes a chapter in this book to the financial benefits of continuing to work past retirement age.
One interesting fact I learned is that the Saskatchewan pension plan is open to all Canadians and not just Saskatchewan residents. Some people may prefer this as a lower cost option to saving in an RRSP with a mutual fund salesperson.
Foster includes a “Retirement Action Workbook” that takes you through the calculation of your projected retirement income from various sources. He treats both dividends and interest income as retirement income, but this is misleading. With interest income, inflation is eroding your principal. With dividends, your principal typically grows enough to cover inflation (over the long run), but is more volatile. An 80-year old can afford to spend all the (after-tax) interest income, but someone who retires young can’t afford to erode principal in this way.
This book is clearly written and uses language that is accessible to most people, but I suspect that most readers would be mildly disappointed.