Paychecks and Playchecks

Book Review by Daniel R. Murphy

Title and Author: Paychecks and Playchecks – Retirement Solutions for Life by Tom Hegna

Synopsis of Content:

This book focuses most on the way to use life insurance, and in particular, a life insurance annuity, to provide for a more secure retirement income. However there is more to it than that.

The first four chapters outline the limitations, risks and problems with retirement planning. He points out that traditionally a retirement plan included three legs:

Social Security, a company pension, and a lifetime of savings. He then points out the problems with all three. Social Security is beset by significant problems for the long term and will almost certainly end up paying less to retirees than it has in the past.

Company pensions are disappearing quickly and some that do exist fail. Unlike our grandparents who could work for a company all their career and then depend on a pension throughout their old age this is no longer available to most people except in a very few industries and government workers. As for government workers, he points out that the pension obligations in the public sector are not adequately funded and may also end in disappointment.

Savings have suffered a number of problems. Many people have lost a lot of money due to market corrections in the late 1980s, 2000 and 2007-2008. As a result many are squeamish about equities and have moved their money to banks where they are earning virtually nothing. The other problem with savings is that since no one knows how long they will live there is no way to calculate how to pay out savings over the retirement period so that one does not either run out of money by withdrawing too much or leave too much behind.

Chapter five then offers a solution to this by advising that people use an annuity to guarantee some income for their entire retirement period. Because of the way annuities are structured they can benefit more than one person, such as paying out to a surviving spouse. And they avoid the uncertainty of the length of life by pooling that risk among millions of people.

The remainder of the book discusses Life Insurance, Long-Term Care Insurance and Estate Planning.

The book does not discuss how much an annuity will actually cost although for illustration purposes it often refers to $100,000. Obviously this would limit who can benefit.

The book does a pretty good job of analyzing the comparative strengths and weaknesses of annuities, life insurance and other investments. There is no doubt that the author, who has long been in the insurance business, is biased in favor of annuities and insurance. However he does spend some time discussing some of the risks with annuities and talks about good and bad annuities. It is about as balanced a book as one can expect to find from a cheerleader for annuities for retirement.

What I found useful about this book:

The book goes into considerable detail about the different types of annuities available, their pros and cons. It also discusses the things to watch out for, the questions one needs to ask an agent before buying and the importance of knowing something about the viability of the insurance company you buy from.

Readability/Writing Quality:  

The book is well written and well organized. The details about annuities and different types of insurance is at times technical and might glaze over the eyes of some people who are not accustomed to this kind of financial discussion.

Notes on Author:

Tom Hegna has spent his entire career in the insurance industry, much of that with MetLife and then with New York Life where he became first vice president in 2010. He retired from New York Life in 2011 and now works full time speaking, writing and training.

Other Books by This Author:

Retirement Income Masters: Secret of the Pros

Related Website:

Three Great Ideas You Can Use:

  1. Become aware that retirement options have changed in the 21st century. One cannot depend solely on Social Security and savings to insure a comfortable retirement. One way to augment retirement income is through the wise use of an annuity.
  1. Consider annuities as part of a risk management plan. While some are better than others they are not as a whole bad despite some bad press.
  1. Seek out a good professional who specializes in retirement planning including the use of annuities. Do your homework and if you select an annuity make sure you know as much as you can about the company.

Publication Information:  

Title and Author: Paychecks and Playchecks by Tom Hegna

Copyright holder: 2011-2012 by Tom Hegna

Publisher: Acanthus Publishing, Boston, MA.

Wishing you well,

Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.