A few years ago, I met Dr. Barbara O’Neill in a Lyft, of all places.
We had both won a conference scholarship for articles we had written. We were headed to the same celebratory event. Our ride — packed full of scholarship winners — was supposed to take less than ten minutes.
It ended up taking over an hour.
And yet, I was only marginally annoyed by the gridlock traffic. The conversation I had with these well-deserving awardees was stimulating to no end.
Yes, I felt inferior in their presence.
Dr. O’Neill in particular was smart. It wasn’t just her academic resume that impressed me, though it surely did.
It was very quickly clear that Dr. O’Neill wasn’t just familiar with the most-recent research; she was effective at communicating economics and personal finance at an extremely high level.
She was one of those people who is simultaneously interesting and interested. By the end of our odyssey, I had gained so much nuanced insight from her expertise.
Beyond her own expertise, she asked attentive questions about each of the other awardee’s work; I remember being impressed that although she had such an incredible depth of knowledge, she was still actively seeking to learn more.
Flipping A Switch: Your Guide to Happiness and Financial Security in Later Life
I’ve been following her work with rapt attention ever since. When I found out Dr. O’Neill was writing a book, I absolutely knew I had to read it.
I was not disappointed. Flipping A Switch is a real-life guidebook to navigating the changes that come along with retirement.
As I read, I could see the same things that initially attracted me to her work that day. I saw the educator and communicator in her via the comprehensive action-step checklists at the end of every chapter.
I saw the academic in her through her thorough research and willingness to point out common misconceptions where they contradict the most recent studies.
Her compassion for others was evidenced in her acknowledgement of privilege and systemic obstacles throughout her book where appropriate.
Who should read Flipping a Switch?
Dr. O’Neill makes no qualms about her target audience: She is writing to a privileged group of people. She acknowledges that appropriately throughout the text without trying to make the text ‘one-size-fits-all’.
Specifically, the book professes to be best for those who already have at least $250,000 saved for retirement. Especially if you’re closer to traditional retirement age, it is even more appropriate if you have saved in excess of $1M.
O’Neill acknowledges that this excludes 77% of the American workers and some of the reasons for most Americans not being able to save that amount of money.
However, I feel like a lot of personal finance bloggers and readers may fit into this demographic, or are actively striving to fit into it soon.
Things I Learned from Flipping a Switch
I love reading books that expand my view. And Flipping a Switch did just that. Here are just a handful of the things I learned in its pages.
The 4% rule isn’t doctrine.
A lot of times when we talk about retirement, we apply the 4% rule. The 4% rule says that if you withdraw 4% of your investments per year over a 30 year period, you shouldn’t run out of money.
But recent research doesn’t support the 4% rule. According to a study that’s been around since 2013, Dr. O’Neill says, the 4% rule only works out 50% of the time.
A 2.8% withdrawal rate is far safer, with a 90% chance of not running out of money before you pass away (assuming that’s within 30 years.)
Rethinking the costs of aging.
There’s this misled though pervasive idea in the world of FIRE (Financial Independence/Retire Early) that if you just take care of your health, you’ll never get sick and therefore not need to worry about healthcare costs.
I know. I roll my eyes hard anytime someone makes that argument, too.
But in the pages of Dr. O’Neill’s book, for the first time I saw someone shut down this argument with hard money facts.
“Healthy older adults incur higher lifetime health care costs than those who are sick,” she explains, citing a study from the Center for Retirement Research at Boston College.
She notes that the longer you’re around, the higher your annual healthcare costs climb. As we get older, our bodies eventually deteriorate; you can’t escape the financial consequences of that fact — even if you cycle everyday and eat nothing but salad.
Of course, a longer life is more desirable, even if the costs of healthcare are higher by inherent fact that you’re paying them over a longer period of years.
But going all out on a healthy lifestyle doesn’t mean you’ll have a less expensive life in terms of healthcare costs. In fact, it could mean the opposite. It’s important to plan accordingly.
Younger people report being victims of fraud more often than older people.
If you’re age 60 or older, you’re 20% less likely to report being a victim of fraud than younger adults according to the FTC.
I was a little surprised by this stat read in the pages of Flipping a Switch. Whether younger adults are more apt to report or are actually more often victims ended up being beside the point.
Because the amount of money fraud victims over the age of 60 reported lost was much, much higher than the money lost by younger victims.
This chapter talked explicitly about different types of scams. Reading Dr. O’Neill’s words, I felt like I got a feel for the motivation and tactics of the scammer rather than just ‘What to watch out for as a potential victim.” And that type of perspective is incredibly helpful for generalizing safety rules into any medium, whether it be snail mail, email or someone you meet in person.
Other Topics Covered
These are just a few of the myriad things I learned in the pages of Flipping a Switch. Dr. O’Neill addresses so many retirement transition issues in this book, including but not limited to:
- Why the 100-(Your Age) Rule isn’t necessarily the best option for asset allocation.
- Social Security benefits and Medicare enrollment.
- Investing in later life.
- Philanthropy and estate planning.
- Social transitions in retirement.
- Finding fulfillment after full-time work.
- Deciding where to live in retirement.
- Handling wildcard events.
- Finding happiness.
- Estate planning.
- Time management in retirement.
Yes. If you’re ever planning on retiring, this book is helpful in every last respect. It prepares you financially, on top of guiding you through a bunch of other life transitions.
If you haven’t started saving for retirement yet and want to learn how to make that happen, this isn’t the right read for you — yet.
But if you are planning on saving up a significant amount of money for retirement, this book can guide you through what your money can do for you across all the many transitions in later life. You’ll want to take every page under consideration!