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Unveiling The Retirement Myth Book Review

There are so many books about saving, investing, and building your portfolio, that it is rare to find a good book about spending down your portfolio, or the distribution stage.

The book Unveiling The Retirement Myth [1] by Jim Otar does a great job on explaining the distribution stage, in detail, with actual numbers.

You can buy the print version at Amazon, but it’s pretty pricey at $50. (My library system didn’t carry it.) Or you can download the pdf from his website Retirement Optimizer [2] for a reasonable $5.99. I chose the pdf version and was very pleased.

I really liked this book, so much so that I read all 525 pages in 2 days. I couldn’t put it down. The book uses numbers and examples to help illustrate his points, which actually makes it a quick read.


I will warn you. The beginning of the book will scare you. It highlights how your portfolio will fail in an unlucky sequence of returns. But the book eventually pulls it together to show you ways to handle it. Here are my big three takeaways:

Luck and the Sequence of Returns. One of the most important factors in whether or not your portfolio will survive distribution is luck. The most important luck factor being the sequence of returns (the next two factors are inflation and reverse dollar cost averaging). The first part of the book is stuffed with examples of how your portfolio will fail. It’s a harsh reality, but he’s able to make a good point.

Sustainable Withdrawal Rates. In order to handle the sequence of returns the focus then is on using an appropriate SWR. He drives home the point that SWR matters most to your portfolio survival and it is the only factor more important than luck. Asset allocation and rebalancing don’t matter nearly as much.

Zone Strategy. He pulls all of the information together at the end to discuss the zone strategy. The zone strategy determines if you have sufficient savings for retirement by placing you in a colored zone. The zones are based on SWRs and annuity rates based on ages. If you won’t have enough money at retirement, much of the zone strategy is used to determine when to purchase annuities for lifelong income and export the risk to an insurance company.

More Takeaways

I wanted to share some of the additional thoughts that I bookmarked as I was reading. While they were great takeaways, it’s hard to keep them in context without reading the entire book. These are the concepts that I found interesting and wanted to revisit in the future:

Rebalancing Guidelines. He shared his rebalancing guidelines for accumulation portfolios more than 5 years away from beginning distributions: Rebalance whenever the equity percentage exceeds its target by 5%. Repeat several times a year if necessary. He has a few more guidelines, but the one I found interesting is when he concludes to rebalance at end of the presidential election years only when you are within 5 years of retirement or in the distribution phase.

Withdrawal Days. To account for seasonality, if you withdraw annually from your portfolio, he concludes that the best time to do so is at the end of January. If you are forced to make RMDs, but you don’t need the money, make your withdrawals in December.

Graduated Asset Allocation. He has an interesting suggestion for asset allocation for beginning investors to eliminate behavioral risk in the early years. It’s essentially to start off conservative when you are just starting out to avoid knee jerk reactions during a market crash.

Leverage. He covers a chapter on leverage strategy, which I liked seeing the analysis. While he discourages it, he does show some guidelines including when to liquidate and when to use a trailing stop.

SWRs. Based on his research, he does share some simplified sustainable withdrawal rates. For 20 years (5.2%), 30 years (3.8%) and 40 years (3.1%). It’s nice to see someone addressing the SWR and breaking it down by year. He also breaks it down later in the book by age. This should help people understand where the 4% rule comes from, and why not everyone can use 4% as a withdrawal rate. He specifically reminds you not to round up!

Strategic Asset Allocation. Otar summarized optimum asset mixes for those building growth in their portfolios: equity/fixed income allocations for 30 years to go (70/30), 20 years to go (60/40), and 10 years (50/50). The 70/30 mix is the most aggressive he uses to maximize growth, noting how often the market spends in sideways trends. He doesn’t like target date asset allocation or using the efficient frontier. However, even after sharing the optimum asset mixes, he again reminds you that asset allocation isn’t the most important factor, luck is, so you don’t have to be perfect about asset allocation.

Effective Growth Rates. When determining how much you’ll need to save for retirement in the accumulation stage, he factors in unlucky, median, and lucky effective growth rates for different asset allocations and time horizons. It’s a good reminder for people who are used to using average growth rates in projections.


Every book has cons. This one included. I didn’t care for some of the investment strategies he discussed including active investing and market timing; I’m still a believer in index investing at low expense ratios. However, it was still interesting to read his analysis in those areas. In addition, because of the way he presents the math in the examples, you are able to eliminate the parts you don’t agree with (like active investing) and still use the data to focus on the important takeaways like SWRs and the sequence of returns.

In addition, there was a lot of discussion on various types of annuities that I didn’t really care for. But when you incorporate the annuities with the zoning strategies, it could be helpful for someone who is considering the purchase of an annuity.


Overall, I thought the book was a very good resource not only for those nearing the distribution stage of your portfolio, but also very eye-opening for anyone in the accumulation stage of your portfolio. It earned a permanent place on my short list of great books.

Have you read Otar’s book? What did you think?