Alicia H. Munnell

So far, so good. I just retired and the first day has been quite good. It makes me laugh when people earnestly ask me, “Now what are you going to do?” If you’re sixty-five and retiring, you can say that. At eighty-two, my view is like, isn’t there a time when you just can play and do nothing but be frivolous and have fun?

Try everything. For fun, I play bridge (but seriously play, because I like it). I have friends and family to see. I buy books and put them by my bedside. I think I might try reading some of those books. That sounds like fun. I’m trying Pilates. I’m going to see plays and concerts. I’m going to try everything. And then I’m going to have a happy life.

Sometimes it’s better to ignore your friends’ advice. When I was at the Federal Reserve Bank of Boston, there was a retirement plan. Basically the smart thing to do would have been to keep my money in it and then, when I turned sixty-five, take the benefit. But I was going to work in the Clinton administration and economist friends told me I should take the benefit then, because I could invest the money so much better than the people running the plan. So I took the money out of the benefit plan. And I spent the money. Now I have a benefit from the Federal Reserve Bank that is very small. That was not a smart move.

Social Security equals peace of mind…. My view is that life is fun and interesting and complicated and people shouldn’t have to spend a lot of time worrying about their retirement. They’ve got kids to help with homework, soccer games to go to, friends to see, books to read. That’s why Social Security is pretty easy, as you are in the program already and you just contribute throughout your lifetime. It forces us to do in a collective way what we would fail to do if left on our own. 

…and it’s not going anywhere. If you look at both the Republican and Democratic platforms, they were very clear that they’re not going to cut Social Security or Medicare. There’s a lot of scary language going about, but I think both sides recognize that American people—old, young, Republicans, Democrats—value this program. It’s not in anyone’s interest to go take a chainsaw to it. It does have a shortfall that needs to be fixed, but that can be done in a constructive fashion and I’m confident that more level thinking will hold.

You’ll be happy in retirement, but you’ll probably wish you’d saved more. Studies show that 40 to 50 percent of Americans will not be able to maintain their preretirement standard of living. But if you survey people directly and ask, “How happy are you in retirement?,” everybody says, “I’m great. It’s fine.” So perhaps older people are just generally happier, less likely to sweat the small stuff. On the other hand, if you phrase the question in terms of, “Is there anything you regret about the decisions you made?,” a lot of people will say, “I wish I had saved more or I wish I had joined my employer’s retirement plan when I was younger.”

Absolutely, positively contribute to an employer retirement plan. The problem with our retirement system is that if you take a snapshot of the private sector workforce at any moment in time, only half the people who are working are covered by an employer plan. There’s a huge group who never pick up any savings plan along their way, and others who move in and out of plans. So they have very modest balances in their 401(k) accounts. If you do have access to an employer plan, don’t opt out! Most of these plans have an employer match and so you want to put in enough money to get the full match. And then you’ll be doing pretty well. 

While you’re still working, keep track of your spending. Having a budget is one of the best things that you can do—for young people, for people mid-career, for everybody. I was just on a call with someone who counsels young people and she asked them, “How much do you spend?” They have no idea how much they spend on Ubers, on beer for the weekend, on going out. 

Read during the day. The reading thing is hard because when I read a page or two, it’s usually in bed and then I fall asleep. So I think I have to sort of engage in daytime reading. ◽