Financial planning to live ’til 95 and beyond
Tess Vigeland: And finally this hour, the financial wisdom that can come with age. Denby Brandon Jr. has been counseling people about their finances for more than half a century. He’s the author of the definitive “History of Financial Planning,” and one of the creators of the Certified Financial Planner designation. Thank you so much for being with us.
Denby Brandon: It’s really good to be here.
Vigeland: You are 83 years old and you are still working. I hope it’s not because you didn’t save enough for retirement.
Brandon: Actually we do practice what we preach. So the truth is that I really haven’t had to work for about 25 years. But believe it or not, when I suddenly realized I didn’t have to work any more, I couldn’t find anything I’d rather do. And so I just have no present plans for retiring and that’s been about 18-20 years ago.
Vigeland: All right. What are some of your financial issues right now? We’ve been profiling money issues throughout the decades. What do you think is unique to your 80s?
Brandon: Well, as life progresses you need to plan for and attempt to cope with what I call “new normals” that in finance and life that actually become periodic realities. In the 80s people are trying to decide, should I stay in a private home? Should I go to a retirement community? Questions of where to live. But the basic issue always is: Will I have an adequate income for as long as I’m on the road of life? But the problem with answering that question is that we don’t know how long that road of life is going to be for anybody. You know in life, we are tenants without a lease, subject to eviction without notice, you know. We don’t know what’s adequate because we don’t know what might happen along the way, but we do think that planning does make a difference.
Vigeland: You mention, of course, that we are all subject to eviction from this lifetime and I think that’s something that people struggle with throughout the years. That despite all the calculators that are available, all of the studies that you can read about how much you should save for retirement — people just don’t know how much they need to sock away.
Brandon: That’s absolutely true. And let me tell you what the honest answer to that is. When people do retire, it’s really an adventure and you really don’t know for a few years how much you really need. So you can have numbers, but until you really experience it, you don’t really know. And since people are living longer, we really need to plan for that next decade and maybe even further.
Vigeland: Well then, is the advice as simple as plan as if you are going to live to be 100 years old? And if you don’t get that far, then well, maybe someone is going to get a really nice chunk of change when you depart.
Brandon: Absolutely. For every client, we use the number 95 as a minimal.
Vigeland: Really?
Brandon: Yes. You just can’t tell how long anybody’s going to live and we would say at least to 95, and you better have some surplus even then.
Vigeland: I want to quote something that Ron Lieber wrote in the “Your Money” special section on this, this week. He said, “If we could tackle these things when they first present themselves” — these financial issues — “they wouldn’t become problems that last for decades.”
Brandon: I would even go much deeper than that. All through life, “normal” changes. And if you plan for it and try to get skills to cope with it, you are a lot more likely to be able to deal with the effects with it. It’s a long process that wins the day. There’s no pill, but there is a process that improves your odds of coping well.
Vigeland: Denby Brandon has been in the financial services for the last 60 years. He literally wrote the book on financial planning. Mr. Brandon, thank you so much, it’s been a pleasure speaking with you.
Brandon: Thank you.
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