Retirement planning entails a series of important decisions, including lifestyle decisions with long-lasting consequences. My guest today, economist Larry Kotlikoff, discusses his new book, Money Magic: An Economist’s Secrets to More Money,Less Risk, and a Better Life, and how to make smarter lifestyle decisions by understanding the true price tags for each of them.
See below for Larry Kotlikoff’s full bio and links to learn more.
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Laurence J. Kotlikoff is a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, President of Economic Security Planning, Inc., a company specializing in financial planning software, a Research Associate of the Gaidar Institute, and a Research Fellow of the Goodman Institute.Kotlikoff is also a New York Times Best Selling author. The Economist Magazine ranked Kotlikoff one of the world’s 25 most influential economists. His website is
Professor Kotlikoff received his B.A. in Economics from the University of Pennsylvania in 1973 and his Ph.D. in Economics from Harvard University in 1977. From 1977 through 1983, Kotlikoff served on the faculties of economics of the University of California, Los Angeles and Yale University. In 1981-82 Professor Kotlikoff was a Senior Economist with the President’s Council of Economic Advisers. Professor Kotlikoff’s writings and research address personal finance, inequality, taxation, Social Security, climate change, investing, healthcare, deficits, and insurance.
Professor Kotlikoff is author or co-author of 20 books, hundreds of professional journal articles, and a multitude of op eds and blogs. His most recent books are Money Magic: An Economist’s Secrets to More Money,Less Risk and a Better Life, You’re Hired, Get What’s Yours – the Revised Secrets to Maxing Out Your Social Security (a NY Times Best Seller co-authored with Philip Moeller and Paul Solman), The Clash of Generations (co-authored with Scott Burns), The Economic Consequences of the Vickers Commission, Jimmy Stewart Is Dead, Spend ‘Til the End, (co-authored with Scott Burns), Generational Policy (MIT Press), The Healthcare Fix, and The Coming Generational Storm (co-authored with Scott Burns). Kotlikoff’s columns have appeared in The NY Times, The Wall Street Journal, The Washington Post, The Hill, The Financial Times, The Times of London, Forbes, CBNC, Bloomberg, PBS NewsHour, The Dallas News, Neue Zürcher Zeitung, the Seattle Times, Vox, Fortune, Seeking Alpha, Yahoo.com, VoxEU, Huffington Post, and other leading media.
Kotlikoff has served as a consultant to the Federal Reserve, the International Monetary Fund, the World Bank, the Harvard Institute for International Development, the Organization for Economic Cooperation and Development, the Swedish Ministry of Finance, the Norwegian Ministry of Finance, the Bank of Italy, the Bank of Japan, the Bank of England, the Government of Russia, the Government of Ukraine, the Government of Bolivia, the Government of Bulgaria, the Treasury of New Zealand, the Office of Management and Budget, the U.S. Department of Education, the U.S. Department of Labor, the Joint Committee on Taxation, The Commonwealth of Massachusetts, The American Council of Life Insurance, Merrill Lynch, Fidelity Investments, AT&T, AON Corp., and other major U.S. corporations. Kotlikoff has provided expert testimony on numerous occasions to committees of Congress including the Senate Finance Committee, the Senate Budget Committee, the House Ways and Means Committee, and the Joint Economic Committee. Kotlikoff’s company markets economics-based financial planning software, including maxifiplanner.com, maximizemysocialssecurity.com, and analyzemydivorcesettlement.com. In 2016, Kotlikoff ran for President as a registered write-in candidate. His platform – You’re Hired – is available at Kotlikoff.net.
For More on Laurence J. Kotlikoff
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On the Biggest Mistakes People Make in Planning for Retirement
“People are focused on their life expectancy rather than their maximum age of life. They think they’re going to die on time. Wall Street is pushing people to focus on your actuarial lifespan. We can’t think about playing the odds with our life because we might live to our maximum age of life, we have to plan for that catastrophic event. This is a catastrophe financially. Emotionally, it’s terrific. You get to see your grandkids for longer, but financially it’s the worst possible outcome – living to your maximum age of life – because you have to keep paying for yourself. So, we’re saving far too little. We’re thinking that our employers are going to take care of us through the 401 (k) somehow [through] the contributions we make and they make, but it’s probably far too little. We need to save. Especially with these low interest rates. We need to save a ton and/or work much longer than we had wanted to do or expected to. So I so talk about this in the book about retirement being financial suicide for most of us. It’s a decision to take the longest vacation of our lives – and every year you retire early, you’re putting yourself in more risk to run out of money.”
On the Risks of Early Retirement
“I’ve run the software under the hood in the book to figure out and to explain to people how much their living standard could drop if they haven’t saved enough and if they have these extra years to finance. So the big risk is running out of money. And the other big risk is being bored. I think you can only play so many golf games. Most people who are retiring early are not physically unable to keep working and I talk about that, based on the data.”
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The views and opinions expressed by guests on The Retirement Wisdom Podcast are those of the guests and do not necessarily reflect the opinions of the host, or of Retirement Wisdom, LLC. The Retirement Wisdom Podcast covers the non-financial aspects of retirement. From time to time we may invite guests who discuss other aspects of retirement planning, solely for educational purposes, not advice. Listeners are advised to consult qualified financial and/or medical professionals on those matters.