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The Rule of 30

A Better Way to Save for Retirement

ebook
1 of 1 copy available
1 of 1 copy available

With the cost of buying a home or renting an apartment soaring to previously unseen heights, how can Gen Y even begin to think about saving for retirement? Are your knees knocking? Are you nervously biting your nails? Maybe you don't need to be.

In The Rule of 30, personal finance expert Frederick Vettese provides a surprising — and hopeful — answer to balancing the costs of living with the costs of saving for retirement. Through conversations between a young couple and their neighbour, a retired actuary, the couple and the reader discover:

  • How the future investment climate will differ from the recent past and why it requires a different approach to saving
  • The problem with saving a constant percentage of pay
  • The Rule of 30 and why it is a more rational and personalized way to save
  • Whether investing in real estate is a viable alternative to investing in stocks
  • The impact renting versus owning your home has on your retirement savings
  • The Rule of 30 changes the mindset from saving the same flat percentage of pay to saving when it is most convenient to your situation. In most cases, it means less saving early on while mortgage payments are high and children are costly, and more saving later when our earnings are at their highest and expenses at their lowest.

    Saving for retirement is a high priority, but it is not the only priority in life. It is time to dispense with old and often unrealistic myths like "just save 10% of your take-home pay." The truth is we should save differently throughout our pre-retirement years — and The Rule of 30 is a road map for doing so.

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      • Publisher's Weekly

        July 26, 2021
        When considering how much to save for retirement, the 10% rule of thumb is outdated, argues actuary Vettese (Retirement Income For Life) in this quirky if uneven survey. Now that defined pension plans are largely a thing of the past, he writes, people need to take on the responsibility (and risk) of planning their own retirement. To explore how to do so, Vettese presents a modern-day parable of a clueless early-30s couple and their retired-actuary neighbor, Jim, who leads them on a “financial odyssey.” Vettese’s lessons come as “Jim” leads the couple through financial planning topics such as identifying a realistic retirement income target, early mortgage payoffs, whether to rent or own, and tax planning: things come down to ditching a flat savings percentage in favor of saving when life is most amenable to it, averaging to about 30%. This is a good lesson in and of itself, but the wise mentor/young mentees model hamstrings the impact: not only does it feel forced, but it proves a significant distraction. And American readers will struggle to connect, as Vettese does calculations using account types and terms that will be unfamiliar and irrelevant. This feels like a missed opportunity.

      • Library Journal

        October 1, 2021

        Personal finance expert Vettese follows up his Essential Retirement Guide with this savvy advice book on determining how much money to save to enjoy a comfortable retirement. Vettese writes that today's defined contribution plans, with virtually no workplace coverage, have transferred most of the saving responsibility to individuals, which means that workers will need to closely examine their spending needs and habits and individually determine how much money they need to save for their retirement. Vettese's view is that it is reasonable to save less in lean times and save more when flush with cash, in order to end up having saved 30% of one's salary per year by the time retirement rolls around. The keys to his advice are having the personal discipline to regularly "pay oneself" in savings before spending on discretionary expenses and starting early with saving. Vettese's parable of a young couple working with a retired actuary helps readers connect with these principles. Note that the book focuses only on Canadian governmental programs (Canada or Quebec Pension Plan), investment account tools, and terms that will be unfamiliar and possibly irrelevant in the U.S. market. VERDICT Recommended only on demand for the public libraries serving communities with Canadian customers.--Dale Farris, Groves, TX

        Copyright 2021 Library Journal, LLC Used with permission.

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    • English

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