Jeffrey Brown: Saving for Retirement 'Only Half the Puzzle'

Our guest on the podcast today is Dr. Jeffrey Brown, the Josef and Margot Lakonishok Professor and the Dean of the University of Illinois Gies College of Business. A key focus of Dean Brown's research is how to create sustainable retirement income, including the role of annuities, Social Security, 401(k)s, pensions and long-term care planning. He's a research affiliate at the National Bureau of Economic Research, a faculty affiliate of the Institute on Government and Policy Affairs, and a fellow at the TIAA Institute. He also serves as a trustee for TIAA. In addition, he served on the Social Security Advisory Board under President George W. Bush and was also a senior economist at the White House Council of Economic Advisers. He has published extensively on the topic of retirement security and public and private insurance markets, and he has received numerous awards for his research as well. He holds a Ph.D. in economics from MIT, and a master's in public policy from Harvard. Background Jeffrey Brown bio Jeffrey Brown C.V.  Jeffrey Brown publications and working papers    Defined Contribution (DC) Plans Defined contribution plan definition  Defined benefit plan definition  “A Brief History of the 401(k), Which Changed How Americans Retire,” by Kathleen Elkins, CNBC.com, Jan. 4, 2017. “The Disappearing Defined Benefit Pension and Its Potential Impact on the Retirement Incomes of Baby Boomers,” by Barbara A. Butrica, Howard M. Iams, Karen E. Smith, and Eric J. Toder, Social Security Bulletin, Vol. 69, No. 3, 2009. “What Killed Pensions,” by Mary Beth Franklin, Kiplinger, Oct. 6, 2011. “Public Pensions Are Still Marching to Their Death,” by Jeffrey Dorfman, Forbes.com, Sept. 11, 2014. “House Passes SECURE Act to Ease 401(k) Compliance, Promote Savings,” by Stephen Miller, SHRM.org, May 23, 2019. “How the SECURE Act Would Impact Your 401(k),” by Simon Moore, Forbes.com, June 25, 2019. “Annuities in 401(k)s Won’t Solve the Retirement Crisis. Here’s Why,” by Mary Romano, Barron’s, June 28, 2019. “What Does It Mean to Annuitize?” by Justin Pritchard, Thebalance.com, Jan. 21, 2019. “Crash Course Needed: Four Out of Five Americans Fail When Quizzed on How to Make Their Nest Eggs Last,” by The American College for Financial Planning, Dec. 3, 2014. “401(k) Nudges and Course Corrections,” by Kimberly Blanton, Squared Away blog, Oct. 24, 2017. “Thank Richard Thaler for Your Retirement Savings,” by Ben Steverman, Bloomberg, Oct. 10, 2017. “Plan Quality Varies Significantly by Industry,” by John Manganaro, PlanAdviser, March 20, 2017. “Corporate Profits and 401(k) Plan Performance Go Hand in Hand: T. Rowe Price,” by Michael S. Fischer, ThinkAdvisor, Sept. 17, 2018. “The Conundrum of State-Run Retirement Plans,” by Terry Dunne, InvestmentNews, May 8, 2017. “Reasons to Be Wary of State-Run Retirement Plans,” by Jeffrey Brown, Forbes.com, Feb. 10, 2014. Multiple Employer Plan (MEP) definition “How Hard Should We Push the Poor to Save for Retirement?” by Andrew G. Biggs, The Journal of Retirement, Spring 2019. Thrift Savings Plan    Annuities “Use Annuities to Protect Yourself from Yourself,” by Jeffrey Brown, Forbes.com, May 22, 2014. “Income Annuities Provide Retirees Longevity Protection,” by Wade Pfau, Investment News, Sept. 28, 2019. “Why Don’t People Insure Late-Life Consumption? A Framing Explanation of the Under-Annuitization Puzzle,” by Jeffrey R. Brown, Jeffrey R. Kling, Sendhil Mullainathan, and Marian V. Wrobel, National Bureau of Economic Research, January 2008. Variable annuity definition Equity-indexed annuity definition Deferred payment annuity definition “The Main Types of Annuities Made Easy,” by Clair Boyte-White, Investopedia, July 27, 2019. “Annuities and Inflation Risk,” by Robert Bloink and William H. Byrnes, ThinkAdvisor, Sept. 3, 2011. “Lifetime Income for Women: A Financial Economist’s Perspective,” by David F. Babbel, Wharton Financial Institutions Center Policy Brief, Aug. 12, 2008. “Jeff Brown Tackles Tough Annuity Questions,” by Michael Finke, ThinkAdvisor, Sept. 29, 2014. “Annuities and Individual Welfare,” by Thomas Davidoff, Jeffrey Brown, and Peter Diamond, The Center for Retirement Research at Boston College, May 2003. “Behavioral Impediments to Valuing Annuities: Complexity and Choice Bracketing,” by Jeffrey R. Brown, Arie Kapteyn, Erzo F.P. Luttmer, Olivia S. Mitchell, and Anya Samek. National Bureau of Economic Research, Oct. 11, 2019. Intertemporal choice definition    Long-Term Care “Does Medicare Cover Long-Term Care?” Medicare.com "Insuring Long-Term Care in the U.S.," by Jeffrey Brown and Amy Finkelstein, National Bureau of Economic Research, September 2011. “The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market,” by Jeffrey R. Brown and Amy Finkelstein, National Bureau of Economic Research, October 2004. “Can Increasing The Long-Term Care Insurance Elimination Period Make Coverage Appealing Again?” by Michael Kitces, Nerd’s Eye View, Jan. 7, 2015. Long-Term Care Financing Project “Hybrid Long-Term Care Policies,” by Wade Pfau, Forbes.com, Jan. 21, 2016. “Is the LTC Cost Guarantee of Today's Hybrid Life/LTC or Annuity/LTC Insurance Policies Just a Mirage?” by Michael Kitces, Nerd’s Eye View, Oct. 16, 2013. “Life-LTC Hybrid Sales Level Off: LIMRA,” by Allison Bell, ThinkAdvisor, July 22, 2019.    Social Security Social Security Trustees’ Summary Report, 2019. “How Would You Fix Social Security?” The Center for Retirement Research at Boston College. “How the Latest Report on Social Security’s Solvency Changes Your Retirement Plan,” by Bob Carlson, Forbes.com, May 24, 2019.