By middle age or thereabouts, it is a good idea to know a bit about each of several issues relevant to retirement planning other than investing. The relevant topics include estate planning, annuities, social security, health insurance, among others. Knowing a bit about each will help one know which applies to one’s situation and when to learn more. Removing the unknown unknowns is a good idea.
Enter The Bogleheads’ Guide to Retirement Planning. In 20 chapters–each roughly 16 pages–it covers all the essential topics relevant to retirement planning, not just investing. Therefore, before you or your spouse is ten years from retirement The Bogleheads’ Guide is recommended reading (assuming you’ve already had a sound retirement investment plan for decades).
The Oblivious Investor reviewed The Bogleheads’ Guide last October and I agree with his broad sentiments:
I’ve read books that are intended to be “all you need to know about personal finance.” And I’ve read books that are intended to be “all you need to know about investing.” But The Bogleheads’ Guide to Retirement Planning is the first book I’ve read that’s “all you need to know about planning for retirement.” Note the distinction: This book is not about saving/investing for retirement. It’s about planning for retirement (and everything that’s a part of such planning). The best part about the book, in my opinion, is the breadth of topics covered.
Of course, each topic is treated rather briefly so one would need to turn to other sources for details. (Indeed, it doesn’t suffice as a guide to investing, but the other Boglehead book, The Bogleheads’ Guide to Investing, nicely fills the role.) Each chapter of The Bogleheads’ Guide to Retirement Planning ends with a list of further reading so it serves as a guide to the broader literature as well.
It was a particularly fun read for me because I know (in a sense) some of the authors through their participation on the Bogleheads Investment Forum. A few of them have a had important impacts on my own investment planning, notably tfb (of The Finance Buff) and EmergDoc (Jim Dahle). Another nice touch is that the book includes a chapter on dealing with financial disasters. Since a good portion of the population will face one (divorce, bankruptcy, and the like) it makes sense to be armed with a bit of information about what to do, if only to have a good idea of where to turn for help.
I did find it rather amusing that most chapters include the boilerplate advice to consult a paid professional. That’s odd coming from the Bogleheads who are notorious do-it-yourself-ers. Many readers and most full-blown Bogleheads will not need a professional to assist with some areas, like investment planning or taxation issues. All they need are some good books and a good place to find the details, like the Bogleheads Investment Forum. Seeking professional advice makes good sense for almost everyone in some areas for which legal precision is required, like estate planning.
In conclusion, my recommendation is that young investors read The Bogleheads’ Guide to Investing. That’s all one needs for retirement investment planning, though there are other good books too (many reviewed by The Finance Buff). As retirement approaches, or earlier if you’re just interested, complete your base of knowledge with The Bogleheads’ Guide to Retirement Planning.