Three Not-So-Bad Things on Aging and Longevity

For 30 years, Jean Chatzky has been everywhere—reporting on financial news and dispensing helpful tips for saving and planning for retirement. You’ve seen her on TV (the TODAY Show), radio, podcasts, newsletters and digital platforms. Heck, for all we know, she may have snuck into your home last night and rebalanced your portfolio. And now, she is this month’s special guest on TNSB.

1. One thing I believe:

That “managing money is not rocket science.” The key, Chatzky tells us, is developing good habits and sticking with them. Most people don’t like talking about money—or even thinking about it—so part of the key is to develop routines that put you in touch with your money decisions. Among the Chatzky recommendations: keep records and create a routine around them; take advantage of new technologies that sustain good habits; seek out support from others; and reward yourself for good behavior. And you don’t need to recreate the wheel—instead, pay attention to the collective wisdom that has developed over the years. Some of the rules of thumbs that have developed, like saving 15% of each paycheck for retirement, may or may not make sense in every case, but they are great ways to build steady habits that will serve you in the long run.

One rule of thumb that has gone away, Chatzky tells us, is the old construct that you have a full year past the wedding date to send a gift. This, to be clear, has absolutely nothing to do with retirement or anything related to this newsletter, but it has completely thrown us for a loop. According to?the experts at Brides Magazine, you’re now supposed to send it before the wedding if you can! So, you’re welcome for this public service announcement and apologies to lots of friends and family members for our terrible breaches of etiquette in the recent past.

Jean Chatzky Fun Fact #1:?Before she became a financial celebrity, Jean went to cooking school. She tells us that it is no problem for her to whip up a dinner party for 25 guests at the drop of a hat. Color us impressed, and a little hungry.

2. One thing I've learned:

That we need to embrace the role of technology in managing money. Jean has?learned from behavioral scientists?how human behaviors can get in the way of sound financial planning, like treating a tax refund as a windfall rather than as a return of your own tax overpayment. How do we account for that? Set a few smart rules and then let technology do the rest. It’s why auto-enrollment and auto-escalation are such a key part of retirement savings now and why using a robo advisor (or a real advisor) can help people be more effective with their money.

Jean Chatzky Fun Fact #2:?Along with fellow financial expert Karen Finerman, Jean has launched the Investing Club for Women. Every Monday night at 8 PM ET, Karen and Jean meet with club members to discuss investing strategies and tips. Find Jean and Karen at investingfixx.com.

3. One bold prediction:

That longevity is the biggest financial risk out there, and not many people realize it. Well, readers of this newsletter certainly do, but sadly that does not include most people just yet. In fact,?according to research?from our friends at the Stanford Center on Longevity, 2 out of 3 pre-retiree men underestimate the life expectancy of an average 65-year-old man, and half of women similarly underestimate the life expectancy of the average 65-year-old woman. That can lead to a whole host of bad decisions about savings rate, the right age of retirement, and when to start taking Social Security.

And speaking of Social Security, the recent dust-up over Social Security has reminded us that people approaching retirement age may have to adjust some of their expectations about Social Security income. Recent projections suggest that by 2034, the Social Security Administration will need to start making adjustments in Social Security payout, absent action of Congress. It’s not that Social Security is going broke, as some people would have it, but it does mean that with the retirement of the large Boomer generation, there will be more retirees and fewer workers—which means less money going into the Social Security trust fund, and more going out. You do the math. Of course, there are a number of sensible ideas for increasing Social Security revenue in the coming years but that will require Congress to finally address this politically fraught topic. At the least, you can count on Congress to wait until the last moment possible before dealing with it.

What advice from Chatzky stuck with you the most? Let us know in the comments below!