The Prudent Professor Planning and Saving for a WorryFree Retirement from Academe eBook Edwin M Bridges Brian D Bridges
Download As PDF : The Prudent Professor Planning and Saving for a WorryFree Retirement from Academe eBook Edwin M Bridges Brian D Bridges 
“Strengths of this book include its readability and accessibility to further information. Retirement is approached from the ‘what you put in is what you will get out’ philosophy, encouraging the reader to learn what options are best suited for themselves. TIAA-CREF traditionally has been the retirement choice of many individuals in Higher Education. The detailed discussion of this plan puts retirement into perspective to individuals who use TIAA-CREF’s services. For individuals with a different retirement plan, The Prudent Professor still gives insight to the retirement process and its details…As a young professional, The Prudent Professor is an excellent resource. A crash course in financial planning and what to expect (based on today’s economic situation) when approaching retirement is explained very well.”?NACADA Journal
“There is so much in this book, that any brief statement falls short in doing it justice. Most professors feel too busy to actively plan the finances of retirement, and instead they put most of their trust in TIAA or other private or state pension plans to get it right. Professor Bridges shows that neglect courts financial disaster in the golden years and provides a readable narrative of practical guidance to avoid pitfalls and get it right."?Henry M. Levin, Professor Emeritus, Stanford University, and William Heard Kilpatrick Professor of Economics and Education, Columbia University
“If you’re like me, planning for retirement is right up there with going to the dentist and doing taxes on the enjoyment index. The Prudent Professor, however, is a great read on a tough topic. The writing is simple, direct and persuasive. The tone is conversational. The examples are clear, and thorny problems are discussed in a straightforward manner. Ed Bridges clarifies all of the issues in a patient way that left me wishing I had this book a decade ago.”?William G. Tierney, University Professor & Director, Center for Higher Education Policy Analysis, University of Southern California
The Prudent Professor Planning and Saving for a WorryFree Retirement from Academe eBook Edwin M Bridges Brian D Bridges
I bought and first read this book back in 2011 and found it informative and useful. I just reread it (from a new vantage point four years closer to retirement), and I think it's even better. Financial advice books usually become outdated fairly quickly. This one has held up well. It's aimed mainly at those who have retirement accounts with TIAA-CREF (T-C) . Among its strengths are its comprehensive coverage of the topic and the fact that it takes a critical, analytical look at T-C as a retirement provider, considering both pros and cons, strengths and weaknesses. While Bridges provides factual information about the various T-C options and alternatives, he also doesn't hesitate to describe his own experience as a retired professor with a T-C account--the good as well as the not-so-good.He concludes that those who have T-C as their only option can build a solid financial plan for a secure retirement. But he also explores options (mainly using Vanguard) for those who are able to move their money, or part of it, from T-C to another company when they retire. Bridges' book was published in 2011, so he brings a long perspective to his analysis, taking into account market bubbles as well as the massive market contraction of 2008-2009, which occurred shortly after he retired, His is not a "retire-rich" book but rather a book that builds a convincing case for how academics with T-C accounts can enjoy comfortable retirements without worrying about running out of money.
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The Prudent Professor Planning and Saving for a WorryFree Retirement from Academe eBook Edwin M Bridges Brian D Bridges Reviews
This father-and-son book is a personal finance book that is oriented towards professors. Its unique feature is that it has several chapters related to TIAA-CREF products and policies.
It is based on the personal experiences and choices of the author and the research that the author did for those choices. It covers many personal finance topics, but the depth of their coverage is quite variable.
The author has a preference for indexed mutual funds, but also recommends low cost, low turnover actively managed funds. He is an admirer and follower of John Bogle's philosophy of investing.
The information about TIAA-CREF products and policies should be welcomed by people in academia and non-profit institutions who are familiar with these products. The author's personal experiences with TIAA-CREF and Vanguard are often compared.
The description and evaluation of TIAA Real Estate and REITs in Chapter 9 are shallow and confused. TIAA Real Estate's low correlation with REITs is indicated as a problem, but it is indeed a plus. If one wants REITs exposure, they can be purchased separately. The fact that the income is included (or embedded) in the price is notes as a problem, but all TIAA-CREF variable annuities have this feature; most other variable annuities also have the same feature because distributions from these tax-deferred products are quite restricted.
The selected quotations from Morningstar's Discuss forums can be identified easily from search, so they should be appropriately attributed. For example, the quotes in Chapter 12 are from "painter" (post# 2081257, 1/3/06) and "raywax" (post# 2081310, 1/2/06). Similarly, the quote at the end of Chapter 27 is from "daryll" (post#2248145, 9/26/06).
The book also has several unfortunate errors. Hopefully, these can be fixed in future printings or editions.
i. A rule of thumb is mentioned for brokerage/transaction costs (Chapters 9, Chapter 21, Appendix I) multiply the turnover rate with 1% and add that to the operating expense ratio. This significantly overestimated these costs vs. the data that can be found in the fund SAI. For example, the brokerage/transaction cost used for CREF Stock is 0.49% (2008), while the SAI indicates it as 0.113% (2008), 0.072% (2009) and 0.069% (2010). So, the author uses 0.56 + 0.49 = 1.05% as the total cost for CREF Stock when it should have been 0.56 + 0.113 = 0.67%. Then the author uses the incorrect total cost to compare CREF Stock to a Vanguard index fund combination to arrive at astounding differences over 30 years. There are three problems here incorrect estimation of total costs, cost comparison of a non-index fund with an index fund, and ignoring the fact that fund performances as reported are net figures.
ii. It is mentioned in Chapter 9 that the author could not use Morningstar's X-Ray tool for TIAA-CREF variable annuities, but there are internal Morningstar tickers that allow one to just do that. For example, the internal Morningstar ticker for CREF Stock is "FVUSA000IZ" that can be entered in Morningstar Portfolios to get some (but not all) related data; the URL for the Quote page is
[...]
Similar internal tickers exist for all TIAA-CREF variable annuities within Morningstar and these can be substituted in the URL above to access their Quote pages.
iii. At the end of Chapter 9, it should be noted that the rates for TIAA Traditional for IRA accounts opened before and after 10/11/2010 are now drastically different.
iv. In Chapter 24, it is mentioned that TIAA Lifecycle-Retirement Income (TLIRX) is available for annuity income. This is not correct. It is available for annuity income only in TIAA Access Variable Annuities which is a very small part of TIAA's annuity business; it is not available in TIAA's or CREF's larger general annuity business. Actually, I wish it was.
v. In Chapter 24 example, it is mentioned that AIR (assumed investment return) is subtracted from positive returns and added to negative returns. This is not correct. AIR is always subtracted from returns, whether positive or negative. So, if the actual return is -10%, then the net after AIR of 4% is -10 - 4 = -14%. The precise formula in Appendix L is correct. An additional complication is that mortality and expense factors affect the annuitized income calculations, and often, the net annuitized income changes cannot be obtained from the corresponding accumulating annuity returns just by subtracting the AIR.
vi. In Chapter 24, and Appendix N, the misleading nature of averages for returns over multiple years is mentioned. But this is a problem that can be fixed easily by using the geometric average instead of the arithmetic average. An alternative is to first change the annual returns to logarithmic annual returns and then the arithmetic average will work fine; for an annual return of i%, the logarithmic annual return i* = ln (1 + 0.01*i).
vii. In Chapter 25 and Appendix D, the use of RiskGrades at [riskgrades.com] is mentioned. Unfortunately, this free tool will not be available after 6/30/11 due to the acquisition of RiskGrades by MSCI.
On the whole, this book is recommended for anyone who owns TIAA-CREF products, or is contemplating buying them. The general personal finance material is an added bonus.
After reading the reviews of The Prudent Professor --in particular Stan's review (Morningstar Post #3060274) and yogibearbull comprehensive evaluation (on )--I purchased this book. As a professor approaching retirement, this book impressed me. It is thorough yet eminently readable--filled with insights and sound advice, including the author's suggestions about how to maximize retirement income and financial security (i.e., Chapter 21).
In particular, the author's extended discussion of annuities (i.e., Chapters 12, 23, and 24) is worth the price of the book. I found his discussion illuminating and his simplified calculation for estimating payouts from TIAA-CREF's variable annuities especially useful (p. 323). Professor Bridges illuminates how the payouts from the stock variable income annuity vary depending on the market environment (e.g., periods of prosperity, wild market swings, and prolonged declines). In addition, Professor Bridges reports data on payouts with different allocations to TIAA Traditional and CREF Stock, as well as the payouts for a friend of his between 1984 and December 2009.
After discussing the book (and aforementioned reviews) with a colleague, he followed up on a few of yogibearbull's suggestions and encountered some problems. For example, when he searched for the internal tickers for the variable annuities on Morningstar, he could not locate them. After a call to Morningstar, he learned that they were available only as Advisor products (quite expensive and beyond my budget). When he tried to locate the percentage of the total costs attributable to the brokerage/transaction costs for the CREF investments, he again encountered some difficulty. Oh well. Professor Bridges use of turnover to estimate these costs seemed reasonable. I intend to use his approach while heeding his assertion that the actual transaction costs may be less, possibly much less.
All things considered I strongly recommend The Prudent Professor for anyone who is saving or planning for her or his retirement--especially professors, regardless of their proximity to retirement. I wish I had access to this book decades ago.
I bought and first read this book back in 2011 and found it informative and useful. I just reread it (from a new vantage point four years closer to retirement), and I think it's even better. Financial advice books usually become outdated fairly quickly. This one has held up well. It's aimed mainly at those who have retirement accounts with TIAA-CREF (T-C) . Among its strengths are its comprehensive coverage of the topic and the fact that it takes a critical, analytical look at T-C as a retirement provider, considering both pros and cons, strengths and weaknesses. While Bridges provides factual information about the various T-C options and alternatives, he also doesn't hesitate to describe his own experience as a retired professor with a T-C account--the good as well as the not-so-good.
He concludes that those who have T-C as their only option can build a solid financial plan for a secure retirement. But he also explores options (mainly using Vanguard) for those who are able to move their money, or part of it, from T-C to another company when they retire. Bridges' book was published in 2011, so he brings a long perspective to his analysis, taking into account market bubbles as well as the massive market contraction of 2008-2009, which occurred shortly after he retired, His is not a "retire-rich" book but rather a book that builds a convincing case for how academics with T-C accounts can enjoy comfortable retirements without worrying about running out of money.
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