Jane Bryant Quinn had under her belt something many authors would salivate over – a book that after ten years was still selling consistently. So, no, she didn’t have to revise — let alone completely rewrite — her phone-book-sized classic, Making the Most of Your Money. But she spent more than a year doing it anyway. Why? As Quinn explained she had last updated the book in 1997. Then, housing prices were headed up. People were incredibly optimistic. Today, we have a whole new ballgame. I had the opportunity to visit Quinn in her Manhattan apartment and I asked her how her advice has changed in the last decade, what surprised her most as she reported anew and what it means to Make the Most of Your Money Now.
JEAN CHATZKY: How has your advice changed since 1997?
JANE BRYANT QUINN: It hasn’t, in terms of pure advice. It’s become relevant again … but I do think [people] are more willing to listen now, certainly on the subject of debt. They are very leery of Wall Street. They’ve been burned twice, in the 2000 and 2007-2008 collapses. And they’re going to find that even if they don’t want to listen right now, conditions are forcing them to.
CHATZKY: What is the best move an individual can make right now?
QUINN: Pay down your debt. That’s No. 1. Actually, first, if you’re in a retirement plan, save for your retirement. Put away enough to get the company match. Second, with the money you have left, pay down your debt. That’s the biggest thing most people have to face today. Once that happens, your next priority is to invest.
CHATZKY: For retirement?
QUINN: People are not in good shape for retirement. In fact, they’re in much worse shape than they think. I’m particularly worried about many older people who have been pushed out of their jobs and now can’t find new jobs. They’re taking whatever buyout is offered, living on their savings and hoping to find part-time work. They’ll face severe constraints unless they develop a budget for their future and cut back on their spending right now. I’m very concerned that we will see even more of this in the future. People used to say I didn’t have enough savings so I’m going to work till I drop, but if your company shoves you out the door when you are 55 or 60, then what?
CHATZKY: Then we’ll see people living less well than they anticipated.
QUINN: Yes. Their Social Security will be much more important to them than they had expected in their working years. Their kids — their adult children — are going to have to start kicking in, being helpful to parents who haven’t saved enough money. But something also has to be done about hiring older people. This is an experienced body of people, they’re smart, they’ve worked all their lives — to suddenly remove them doesn’t make much sense. We need their skills.
CHATZKY: What surprised you most as you did the research for this revision?
QUINN: The way new products are being brought to market to help people through their retirement years. When I wrote the book, originally, the emphasis was building up the retirement money. Now, as this generation gets older, it becomes critical to figure out how to make savings last for life. This becomes a very individualized question and insurance companies, banks, all kinds of companies are presenting ideas — so I spent much more time on that.
CHATZKY: They’re marketing annuities left and right.
QUINN: Let me just say that I hate all tax-deferred annuities, all these fancy annuities that are guaranteeing you an income for life. Anything that has a really high fee is something you should stay away from. Anything you don’t understand is something you should stay away from. If you find yourself paying three or four percentage points in fees, you need to understand that you cannot make money that way.
CHATZKY: Did you find any new products you do like?
QUINN: Immediate-pay annuities, I do like. They will give you a guaranteed stream of income for life and they aren’t as complicated. But you want to be 75 or so before you buy them, because of the risk of inflation and because the older you get, the better the sense you have of your health. And I think target-date retirement funds are terrific. They’ve been bad-mouthed but I think that’s because people don’t understand how they’ve worked. They give you a mix of stocks and bonds that’s age appropriate for you and get rebalanced consistently. This is what a professional manager would do for you, but you can get in a no-load fund from a firm like Fidelity or Vanguard or T. Rowe Price. I think it’s the most valuable new product since the index fund.
CHATZKY: You’ve been in personal finance now for 35 years. How do you stay interested?
QUINN: This is the most fabulous field in the world. The market changes. The economy changes. That keeps me interested. And I am so concerned with consumer and investor protection … I see some new product with a high fee being sold improperly and I head for the keyboard and I write something.