Foreword

Retire Secure for Professors 

by Burton G. Malkiel*

Professor of Economics Emeritus, Princeton University

“There is no one better than Jim Lange to provide outstanding retirement and tax advice for academics. Retire Secure for Professors should be on the top of your personal reading list.”

―Burton G. Malkiel, Professor of Economics, Princeton University and Author, A Random Walk Down Wall Street, 12th ed. 2019

Academics saving for retirement and living off their accumulated savings are urgently in need of sound, unconflicted advice in negotiating the complex set of investment and tax issues that can make the difference between a comfortable and stress-free retirement and a difficult one.

Investment and tax “experts” have always been active in offering their services, but their advice has often been designed to maximize their fees rather than to optimize results for their clients. Conflicted and misleading information existed long before the Internet, but social media has vastly increased the scale, severity, and impact of misinformation as digital platforms have extended their reach and become more central to our lives.

Educators have characteristically gravitated to peer-reviewed, empirically-based material to get information they can trust. But how does one find a trusted source? As a retired college professor, let me assure you that if you follow the sound advice provided by Jim Lange in this book, you will be sure to know that you are taking the right financial steps to increase your and your family’s financial security. This book provides exactly the information you can trust.

In my own publications designed for a wide audience, I have tried to distill decades of historical evidence on financial markets to facilitate practical, evidence-based investment decisions. These include broad diversification to contain risk, strategies to minimize costs and the use of index funds as the primary investment vehicles. Jim Lange builds on these investment concepts to provide serviceable rules for optimal retirement planning and minimization of taxes.

While his advice is applicable for all individuals, the recommendations in this book are specifically tailored for educators who have saved through investment vehicles such as TIAA and CREF. TIAA, a fixed-income investment vehicle, has been offered to educators for a century. CREF, a provider of equity funds, has been serving the educational community since 1952. Lower-cost Vanguard funds have more recently become available for academics.

Chapter 2 provides specific guidance on how to select the best distribution options from TIAA, CREF, and other investment accounts so as to get the most out of the assets you have. In Chapter 3, advice is presented on when allocating a portion of your retirement money to an annuity is appropriate. The pros and cons of alternative strategies are clearly presented, and illustrations from Lange’s over 30 years of experience will help readers identify elements that resonate with their own personal situations.

The book is completely up to date. It chronicles the potentially disastrous consequences of the 2020 SECURE Act for owners of well-funded TIAA, IRAs, and other retirement plans. This section of the book should spur action to protect your heirs from the onerous tax consequences that could seriously undermine your efforts to leave your family a bit of a financial legacy. And excellent advice is delivered in Chapter 6 on The Best Estate Plan for Most Married University Faculty Members. 

Some of the most useful material in the book concerns Roth IRA conversions. I have not seen a better discussion of the advantages and potential pitfalls of converting your IRA into a Roth. In general, there can be enormous value in conversions for both retirement plan owners and their heirs, but the book is very clear on the caution such decisions deserve.

There are many more gems in this book.  Guidance is given on charitable giving, family gifting, life insurance, and estate planning strategies. The practical and tested advice that is offered will serve college professors and other educators extremely well. No one does it better and explains it more clearly than Jim Lange.

*Author of A Random Walk Down Wall Street, 50th-anniversary edition, 2022,
and Professor of Economics Emeritus, Princeton University.