For decades, the retirement savings advice has been consistent:

Save more than you spend.
Invest the difference wisely.
Max out your 401(k).
Reach your number.

But then something strange happens.

You retire.

Suddenly, the behavior that helped you become financially secure doesn’t answer the question of how you’re going to use that nest egg to fund your retirement. The skills required in the “Withdrawal Phase” are different than those you’ve learned in the “Accumulation Phase.”

That is the problem Jean Chatzky tackles in The Forever Paycheck: The New Retirement Strategy to Spend More, Worry Less, and Never Run Out of Money (Amazon Affiliate Link). Published in September, the book focuses on what Chatzky calls the missing half of retirement planning: turning accumulated assets into a sustainable income stream. I just finished reading the book, and today I’m sharing what’s inside.

Bottom Line: If you’re within 5 years of retirement, you’ll want to read this book

TLDR: Go ahead and order the book now – you won’t be disappointed (Amazon affiliate link).

Jean Chatzky just published her latest book, focused on the skills needed to turn your investments into a Forever Paycheck. Today, we take a look inside.
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The Forever Paycheck

Jean is a legend in the personal finance community, as demonstrated by the highlights of her work:

CEO of HerMoney
Spent 25 years as Financial Editor of NBC’s Today Show
Columnist for AARP
Award-winning journalist and broadcaster
New York Times and WSJ best-selling author
A “Fierce Advocate” for financial literacy.

In short, she’s a true expert, and this book focuses on helping readers solve a problem she finds lacking in today’s financial literature: How to turn your investments into a paycheck.

The level of research Chatzky conducted in writing this book is impressive, with 37 pages of footnotes supporting everything she presents. The 41-page appendix on Insurance (annuities) and Investments justifies the price of the book, and will provide whatever level of detail you need to decide how to create your own retirement paycheck.

Impressive work, Jean.

From Nest Egg To Paycheck

The central concept is deceptively simple: retirees need to think less about their portfolio balance and more about the paycheck that portfolio can generate.

That may sound obvious, but it represents a significant psychological shift.

During our working years, money arrives in our checking account every couple of weeks. We save X% off the top, then pay the bills, buy groceries, take vacations, and occasionally splurge with whatever’s left. We don’t normally agonize over every dollar because we know another paycheck is coming. Over time, our portfolio keeps growing.

Retirement reverses that equation.

Instead of receiving a paycheck, we may be staring at a $1 million IRA and wondering, “How much can I safely take out of this?” We’ll withdraw money to cover our spending, and over time our balance may go down after decades of continual growth.

How to spend from a portfolio is a harder and more emotional question than what we faced during our working years of accumulation.

Chatzky’s solution is to recreate the paycheck.

This book’s value is the breadth of alternatives it offers to create “The Forever Paycheck.” Rather than focus on one solution, she offers a broad array of menu options to choose from, depending on your personal risk tolerance and preference for control over your investments.

I love the fact that she wove in the RISA profile work by Wade Pfau (ground-breaking work that I featured in “My Evaluation of a Powerful New Retirement Tool: RISA”). The RISA profile is a perfect framework for outlining the various options to create your paycheck, and provides a reader-friendly flow to the content.

A Step-by-Step Guide to Building Your Forever Paycheck

Chatzky provides a step-by-step process to determine both your projected spending and income, including convenient templates to walk you through the process. The following quotes from the introduction are a good overview of the book’s approach:

You’ll use proven tools and strategies to envision the life you want to lead in retirement.
You’ll delve into the psychology of The Forever Paycheck.
You’ll start building your Forever Paycheck by sizing up the foundation you’ve already built.
You’ll look at the current cost of your life…to determine what your base paycheck will cover.
You’ll conduct a personality assessment that will determine the right products/strategy for you.
You’ll explore both investment and insurance products that can be used to generate income.
You’ll investigate your legacy goals.
You’ll put the whole thing together.

That’s a long list, but Chatzky delivers on the promise.

Highlights of The Forever Paycheck

Rather than go through each item of the above outline in detail, I’m presenting below some of the key highlights that resonated with me.

1. It’s Not A “One-Size-Fits-All” Solution

Chatzky’s strong research and avoidance of a “one-size-fits-all” approach makes this book valuable to anyone on the cusp of retirement. The book walks readers through different ways of creating reliable income based on their circumstances and preferences. Her focus on the RISA profile, and the tools appropriate for each personality style, allows you to determine for yourself which approach “feels right” for you.

2. The Role of Annuities

Perhaps the biggest headline from the book will be Jean’s apparent reversal on her opinion of annuities. While she admits she’s had a bias against annuities during her career in personal finance, that position has evolved as she’s focused on the tools available to create a retirement paycheck. For certain personality types, and certain situations (e.g., no pension), there is value in evaluating the role annuities may have for you.

The underlying question isn’t, “Should you buy an annuity?” Rather, it’s “How can you create enough dependable income that you feel comfortable spending the rest of your money?”

That’s a much better retirement-planning question, and Chatzky presents a balanced view on annuities. I expect this book will generate a lot of discussion on the topic, and we should welcome it as we objectively review the pros and cons of all of the tools in the retirement paycheck toolbox.

3. The Psychology of Spending

Perhaps the most interesting part of The Forever Paycheck isn’t actually the investment advice. It’s the psychology behind spending. Chatzky points out that retirees can have plenty of money and still be afraid to spend it.

The problem is particularly apparent when comparing people with pensions to those with retirement savings sitting in 401(k)s and IRAs. A pension feels like income. A retirement account feels like something that must be protected.

Retirees with pension income tend to spend substantially more than people with similar resources held primarily in defined-contribution accounts. Chatzky’s argument is that the structure of the money matters—not just the amount of money.

That’s a powerful observation.

By weaving the psychology of spending into the discussion of financial options, she elevates this book from a purely financial discussion to a more holistic one that encompasses the very real psychological impact of spending in retirement. The reader will benefit as a result.

4. The Role of Social Security

Chatzky emphasizes the importance of deciding when to claim benefits rather than treating Social Security as an afterthought. Her framework considers factors such as age, marital status, and work history, while recognizing that personal circumstances can justify claiming earlier. This is important because Social Security is effectively one of the most accessible forms of lifetime income available to many retirees.

Delaying benefits can increase the eventual monthly benefit, but there is no universal answer that works for everyone. Health, longevity expectations, cash-flow needs, and family circumstances all matter.

Chatzky presents these decisions as part of a larger income strategy rather than as isolated optimization exercises, and it works well. Social Security is not a stand-alone decision, and she does a nice job of weaving it into the broader discussion of developing the right strategy to create lifetime retirement income for you.

5. What Do You Want Your Money To Accomplish?

Another thing I appreciate about The Forever Paycheck is that it doesn’t treat retirement as a purely mathematical exercise. The book asks readers to consider what they actually want their money to accomplish.

That includes questions about family, personal growth, independence, healthcare, estate planning, and helping adult children. The book also addresses the psychology of “enough” and the difficult question of whether money should be spent during your lifetime or preserved for heirs.

That is an important message for anyone approaching retirement, and not enough coverage is given to the broader questions we should all answer as we’re determining how (and why) to establish our Forever Paycheck.

Conclusion

There are plenty of excellent books about accumulating wealth. There are also books about Social Security, investing, early retirement, safe withdrawal rates, and behavioral finance.

The Forever Paycheck (Amazon affiliate link) occupies a slightly different space. Its primary concern is the transition from wealth accumulation to retirement income. That’s a transition that deserves much more attention, and I applaud Chatzky for writing an excellent book that addresses this “missing half of retirement planning.”

The book is designed for the ordinary retiree rather than the professional financial planner. It includes quizzes, worksheets, examples, and explanations of concepts that can otherwise seem intimidating, including Monte Carlo analysis and retirement-income strategies.

The book is an attempt to bridge the psychological gap between knowing you have enough and actually feeling comfortable using it. Ultimately, I think the most valuable idea in The Forever Paycheck is bigger than any particular withdrawal strategy, which I’ve attempted to summarize below:

“Your retirement savings are not the destination. They’re the fuel.”

We spend decades obsessing over our retirement number. But the number itself isn’t the objective. The objective is what the money allows us to do.

This book will help you use your money in a way that fuels the life you worked so hard to build.

Isn’t that what retirement is really all about?

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