Why this may be the only retirement book you’ll ever need

In an era when everyone with a checkbook fancies himself a money guru and blogger, it’s refreshing to see “How to Make Your Money Last” by Jane Bryant Quinn updated and reissued.

Jane eschews the typical and bland bromides, such as “eat ramen” and “save more,” that often passes for financial advice these days for practical, actionable information organized by the topics retirees and those close to retirement need to grapple with and understand, such as Medicare, Social Security, pensions and more.

For example, in the book she delivers a great takedown of cash-value life insurance when sold as “free” retirement income, when the reality is it’s a complex, fee-laden product pitched to unsuspecting consumers who may not recognize the pitfalls.

And if this one book isn’t enough to sate your appetite, I’d add the following to your bookshelf: “Medicare for Dummies” by AARP alum Patricia Barry, whose in-depth knowledge of the health-care program is stunning. There’s also “Social Security for Dummies” by another former AARP staffer, Jonathan Peterson.

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How to reduce the taxes on your Social Security benefits

But back to Jane. To those unfamiliar, she is the real deal on all things money, having practically invented the Personal Finance genre before it become a thing. Now, after decades of writing for Newsweek, Bloomberg News, CBS MoneyWatch, Woman’s Day, Good Housekeeping and AARP (whew!), she’s decided to take a step back (ok, retire) and spend some time overseas.

I chatted with Jane recently on how it felt to make the big leap to the next chapter of her life. The following is condensed and edited from a longer conversation.

Rick Levinson: How does it feel after a lifetime of working to not be working?

Jane Bryant Quinn: It takes a particular approach. I think that if I were still in New York and I just stopped working I would feel at loose ends. I think I would be not quite sure what to do with myself. I think I would probably have had a difficult transition. In fact, I might have signed up for working another year! You can’t tell.

But making a different life for myself all of a sudden and coming to live in Rome for a year, this has eased my transition tremendously because I had something hugely new to do and do right away.

Many people, of course, when they retire, they already have something new that they want to do.

RL: What did you do about health care? (Medicare generally will not cover Americans overseas.)

JBQ: Let me tell you what we did. And it was an eye opener! We looked for international health insurance, and you can get a policy. It doesn’t cover pre-existing conditions, of course. It’s like insurance in the U.S. before the ACA.

There are a lot of companies that sell international insurance. We took huge deductibles, we took big copays and paid how much? Well, we’re older people so, for my husband and I, it would be $26,000 for the year. And we looked at each other and we said, ‘You know, I’ll bet we can buy a lot of health insurance in Italy for $26,000.’

So what happened is I got pneumonia. So I can test this. I can tell you that my visit to a doctor cost me 90 euros, which is, you know, a little over, what, $100? I needed a CAT scan, too… I paid for my CAT scan as an uninsured person in Italy, 152 euros [around $165 U.S.].

And so what do you do when you’re uninsured? You say ‘Thank God I am in a country that believes health insurance is a right, not a privilege.’ So even as an uninsured person in Italy, my costs for a major illness were very low.

RL: Any advice in the book that you haven’t followed or wish you had followed?

JBQ: I follow my own advice.  I would say when I was younger, I learned the things that I learned to put in my book, that I didn’t save enough money, and I had a stock broker that was ridiculous.

But once I came to understand more about personal finance, and index investing, and what a fiduciary means, and where you can find good advice, and I absorbed the fact that the market goes up even after it goes down. It goes back up again. So I didn’t have to sell.

And once you learn these things, I’ve pretty much put my personal finances on autopilot, just the way I suggest in the book.

So a proper asset allocation between stocks and bonds, and making regular contributions while you’re working, and being in index funds that follow the market, not trying to buy individual stocks, all of these things work and they not only work, they’re easy.

They’re sometimes hard for people to do because you can’t believe it’s that easy, but simple things, when it comes to investing, simple things are actually sophisticated.

And buying this stock here, and that stock there, or master limited partnerships or whatever else is going on, that sounds sophisticated, but it is not, it’s a sucker’s game.

RL: A lot of people are worried Social Security won’t be there for them. Do you share that view?

JBQ: I do not share that view. I simply don’t believe that any Congress that wants to be re-elected is going to let Social Security run down. Social Security is there even if nothing is done. Now, 2035 is not all that far away [when promised benefits could be cut by 20% if Congress doesn’t act.] Can you imagine telling your grandmother that her benefits are going to be cut by 20%? No way. Now, certainly we need either higher taxes or benefit adjustments to keep the system going for five more generations. But it’s going to be done.

Might benefits be adjusted down if you are 20 years old today? Possibly.

So the idea that Social Security will go broke is an idea promulgated by people who want to privatize it, people who want to cut benefits for older people. They are not people who have your best interest in mind when they tell you Social Security is going broke. It won’t go broke. It will be there. It will certainly be there at present rates for older people and people near retirement.

RL: Did you use a planner? As an expert, I assume you probably did it on your own?

JBQ: I did not do it on my own.

I asked a planner when my husband retired and then also when I retired: With no money coming in, other than our savings and what we have, how much can we as a couple afford to spend? And if I died and my Social Security check is gone, for example, how much would my husband have to live on? If he dies, … how much I would have to live on? And that’s pretty technical.

I actually asked my accountant to do it, and then I asked the person who manages my pension fund. By the way, I’m managing it through index funds.

I believe in a manager who does that. Because they do financial planning, too, so I really had two opinions. And that’s the number you need, okay? This is how much I can spend in a year, and if we go to Rome, you know, will I spend more than that? You know, if I will, I can’t go to Rome. And if not, then I can go to Rome. I mean, so literally you know, emotionally or mentally, it’s actually a very simple thing. How much do I have to live on?

I make my budget fixed by how much I have to live on. Period.

(Disclosure: I worked with Jane Bryant Quinn at Bloomberg News and AARP, the advocacy group for older Americans.)