The New Retirement by Sherry Cooper adds value to the recent plethora of literature on retirement income by providing a Canadian perspective. It is well written and easy to follow however Dr. Cooper's book is a disservice to any reader that is looking for advice on how to draw down their nest egg in retirement.

While there is a wealth of academic literature suggesting that for an optimal income portfolio, a large portion of most retiree's wealth should be invested in life annuities, Dr. Cooper dismisses these products as 'expensive'. Really - compared to what? Dr. David Babbel at Wharton has shown mathematically that 'trying to replicate a lifetime income without the risk-pooling of a life annuity will cost 25% to 40% more'. Furthermore, the fees that are built into the life annuity are a small fraction of the 1% to 2% annual fees that an investment dealer would typically charge to manage the portfolio preferred by Dr. Cooper. Indeed a more realistic criticism of life annuities might be that the fees built into the product are insufficient to provide the level of compensation many investment advisors need in order to explain the advantages of life annuities to their clients.

Dr. Cooper's list of risks in retirement has some gaping holes. Inflation risk is inadequately dealt with and she neglects to include Sequence of Return risk. To illustrate this risk, examine the impact of a retiree investing in the list of high quality dividend paying stocks that Dr. Cooper illustrates. In the first quarter of 2008, this basket of stocks would have lost about 8.7%. If, after having spent or lost 10% of the portfolio in 3 months, the retiree followed Dr. Cooper's advice and continued to withdraw up to an inflation-adjusted 5% of their initial retirement assets per year, the probability of financial ruin would be quite high. On the other hand, if the retiree chose the same basket of stocks within a hypothetical segregated fund (called variable annuities in the US and in this book) with appropriate withdrawal benefit options to protect against Sequence of Return risk, the retiree would not have lost money. Variable annuities are dismissed by Dr. Cooper as an 'ill-suited financial product' sold by 'unscrupulous wolves in sheep's clothing … targeted at retirees'.

Protecting your nest egg in retirement involves different and more complex risks than those involved in accumulating the funds needed for retirement. Retirees need to understand these risks, they need to make changes to their portfolio when they begin withdrawing money and they will not find good advice on to how to optimize their retirement income in The New Retirement.

Lowell Aronoff
CEO, CANNEX Financial Exchanges Limited

This book is not just for boomers....it reaches out to those of all ages and gets you thinking NOW about the third act of your life. Very interesting was the health and lifestyle aspect, which most so-called retirement books don't even look at. A must read.

Finally a book that is very easy to read and understand and not just for boomers, but for everyone, including young adults. As Dr. Cooper said, “Healthy older brains are better at dealing with complex situations that you have dealt with for many years, having the benefit of so much experience. Emotions can be more easily controlled, and the opportunity to feel joy and have peace of mind is greater than at any other time in our lives.” This book is very positive and will change the way you think about retirement and to enjoy the last chapters of your life. It is a definite must read for everyone.

This book adds much value to the typical "how to save for retirement" book. While you'll get some very good advice along those lines, you'll also get additional insight on how retirement is changing, what the impacts will be, and other important issues that are often overlooked like health and wellness. You'll find plenty of new insight in these pages.