MR. TOM GJELTENThanks for joining us. I'm Tom Gjelten of NPR. I'm sitting in for Diane Rehm. Many people looking ahead to their retirement years could only hope their savings and other income sources last for the rest of their lives. Personal finance commentator Jane Bryant Quinn says some relatively simple planning can significantly improve your chances of being financially comfortable later in life. Her now book is called, "How To Make Your Money Last." Jane Bryant Quinn, thanks for being here.

MS. JANE BRYANT QUINNHello, Tom. It's a pleasure.

GJELTENIt's a pleasure to meet you. I've no doubt this is one of those hours on "The Diane Rehm Show" where a lot of you will want to reach us with your own questions. We'll take as many calls as we can. Our number is 1-800-433-8850. Our email address is drshow@wamu.org. If social media is your thing, you can reach of on Facebook or Twitter. First off, Jane, there have been a lot of stories in the press lately about how our retirement system is broken. How concerned should we be? How concerned are you that Americans are not thinking adequately about their own retirement?

QUINNI think it's a sort of half-half and that is our -- the question is our system, which is just what you've put your finger on. If people have a job in a company that offers them a 401 (k) or a 403 (b) so the money is automatically taken out of their paycheck and they have savings. They don't even notice it. They have put it in mutual funds and there it is. This group of people is approaching retirement in much better shape than you would think because all of that money has been put aside without their having to really work at it.

QUINNThe other half, though -- and these are people who they work in the gig economy. They work part time. They work for companies that don't have these 401 (k) plans and they have to do it all themselves. And that is extremely difficult. So...

GJELTENIt takes a lot of discipline, doesn't it?

QUINNIt takes a lot of discipline. It takes a lot of knowledge and I think it's a completely unfair system because you have one group of people for whom it's simple to save because somebody does it for them and they approach retirement in much better shape and then you have another group that has to figure out, well, where do I get an IRA, how do I do this? Oh, I'm living paycheck to paycheck. I don't think I can take money out. I'm a freelancer and money comes -- so this is a very difficult problem.

QUINNI think we need some kind of -- and some states are approaching this and the president has put something out, a MYRA, My IRA that may be addressing this, but some kind of a savings plan that is an automatic savings plan that reaches everybody, not just the lucky half.

GJELTENNow, do you think that these, you know, to the extent that companies do offer automatic savings plans, 401 (k) type plans or 403 (b) s, do you think that the deductions are adequate? Do you think that people are -- if they -- assuming that they max out, which a lot of them don't, is that enough? I mean, is that enough or do you need to, you know, do people need to sort of take it on themselves to save above and beyond what their employers take out of their paycheck?

QUINNI think it might be very valuable to say above and beyond. But, again, this depends on how much money you make. Let's face it.

GJELTENRight, of course.

QUINNThat's a high income question, not a middle income question. For the middle income, I see people not maxing out, not putting as much in as they should and they -- or they can. And you say, well, I'm living paycheck to paycheck so I can't afford anymore. But there's only one magic thing in personal finance and that is if you don't see it in your checking account, you don't spend it. And somehow you adjust your style of life to what you see in your checking account.

QUINNSo everyone who's putting in just 5 or 6 percent, say, into a company plan, go to 7, go to 8, go to 10. Raise it bit by bit. What will happen to your standard of living, nothing. You won't notice any change, except that you will be saving more money. So it's -- and younger people, you know, many plans put you in automatically and they'll start you at 5 percent, say. And so for younger people, say that's fine. I've got a plan. Their 5 percent is going in and they forget about it, when, in fact, they should be working to increase it year by year.

QUINNAnd so that's -- when you're coming to the company plan, yeah, you've got good plans, but you have to take maximum advantage of it. And then, if you save more in addition, as higher income people do, that's valuable, too.

GJELTENOkay. So the first thing is to make sure that you take as much advantage as you can of whatever is offered to you, but say your company does have a -- say you do have a 401 (k). How much flexibility -- and I'm sure it varies from plan to plan. Do you still have another decision to make about how those 401 (k) funds are invested? I mean, how much -- 'cause you spend a lot of time in your book talking about the different investment options that people have. How much control do people have over their own 401 (k) s and do they make mistakes, even in managing their own retirement accounts?

QUINNI think that fewer mistakes are made now than used to be the case. You have a list of mutual funds, usually, in a 401 (k) or retirement plan.

GJELTENAnd you're a big mutual fund supporter, aren't you?

QUINNOh, I'm a -- I don't buy individual stocks, Tom. I'm not smart enough.

GJELTENWith all your expertise, you don't.

QUINNI do not. I am a mutual fund investor. I think that there is plenty of research that shows that what matters in terms of your total return is your asset allocation, which means what percentage you put in stocks versus what -- stock funds versus what percentage you put in bond funds and that accounts for something like 97 or 98 percent of your returns. And if you try to pick individual stocks, some of them will be great. Some of them will be -- lag the market. Some will go to zero and you -- and again...

GJELTENYou're speaking from experience, aren't you, Janet?

QUINNI tried it. Yeah, I tried it in the old days and I tried managed mutual funds. None of them match the market. So if you want to do as well as the market overall, which has shown it can create long term gains for you, there's a kind of fund called an index fund and it matches the stock market, minus expenses. There are low cost index funds and those are, I think, the best possible investments for individuals because if you try to pick stocks, you'll pick a handful.

QUINNYou don't -- won't know what's good. You won't know what could happen. You have no idea. Maybe it's fun, but it will not do as well as the market as a whole. I am not in this game for entertainment. I am in this game for making money long term for my future. And an index mutual fund takes care of that for you. In fact, I don't know if you saw Warren -- the legendary Warren Buffet in his 2013 letter to shareholders. He said that he had left instructions for the trustee of his wife's trust.

QUINNAnd the instructions were to put 90 percent into S&P index mutual fund and 10 percent in treasuries and he felt that that would give superior returns that any individual could do themselves or any high fee manager could do for them. So sometimes people say, oh, I'm a Buffet person. I'm very careful about how I analyze my stocks. No. If you're a Buffet person, you should be in mutual funds 'cause he doesn't think you can analyze stock well enough.

GJELTENOkay. So that's one approach. A fund that is indexed to a certain -- to NASDAQ or S&P or whatever...

QUINNActually, the best one used to be Standard & Poor's 500 stock under. That was the first index fund. Jack Bogle at Vanguard came out with that. It was a remarkable change for individuals at that point. But now, it's called a total market fund and it includes the larger stocks which you get in the S&P and it also includes smaller stocks. So that has basically replaced the old S&P index fund as the main one you would want to be into. And going back for a moment to the 401 (k) question, most 401 (k) s have index funds available in them.

QUINNThey also have something called a target date fund.

GJELTENRight.

QUINNWhich, I think, is a terrific thing for individuals. A target date fund says to you basically, what year do you think you'll retire, from which they infer your age and then they do this asset allocation for you. They say, based on your age, I think you should have this percentage in stocks and this percentage in bonds and...

GJELTENBecause you can take more risk as a younger person.

QUINN...something in -- exactly, you have more risk. And so as you get older, they gradually decrease the amount that you have in stock funds and increase the amount you have in bond funds and it's a total package. They do complete money management for you. And for people who are -- I mean, let's face it. We all do different things, you know. You're a radio broadcaster. You're a lawyer. You're an electrician. How are you supposed to know what kind of an investment to get? And these 401 (k) target date funds are largely done in index funds that are inside these target funds. And I think that they're absolutely the best...

GJELTENIt's a relatively new product, isn't it?

QUINNIt is a relatively new product. There have been very few -- I mean, I've been working at this a long time, as you know, Tom, and there are very few -- a handful of really good things that have been developed over my lifetime in this for individuals. And one was the money market fund where -- which, at the time, was paying much better than banks were paying. The second one is the index fund, which Jack Bogle and Vanguard pioneered, and then I would say the third one is the target date fund.

QUINNNow, I guess I've run of them. Forget handful. It's only three.

GJELTENThree big ones. Jane Bryant Quinn is a commentator in personal finance and her new book is "How To Make Your Money Last: The Indispensible Retirement Guide." We have a lot of listeners who want to ask you some financial advice questions, which we will get to after we take this short break. I'm Tom Gjelten.

GJELTENAnd welcome back. I'm Tom Gjelten. I'm sitting in for Diane Rehm this week and we're talking about the need to do better planning for our retirement -- better financial planning for our retirement -- with Jane Bryant Quinn, one of America's most esteemed commentators on personal finance. And she has a new book out, "How to Make Your Money Last: The Indispensable Retirement Guide." She's also, of course, well known for her previous books, including "Making the Most of Your Money Now," "Smart and Simple Financial Strategies," and "Everyone's Money Book."

GJELTENWe got a note here, Jane, from somebody who says that she is -- or she or he, it doesn't say -- was so proud of my 26 year old maxing her 401 (k) contribution last year. But last year it was down 13 percent. I'm afraid she's going to drop out. And that's something. When you see those, you know, when you look at your statement and it says down 13 percent, why am I doing this?

QUINNShe's 26 years old. She is going to live at least another 50 years. Over the next 50 years, that is going to do very well. And do you know, this issue is not just somebody new to the market, as obviously her daughter is, and she should just leave the money there. But people who are in their 50s and 60s, and they're planning ahead or they're starting retirement already, and they start saying, well, I ought to take money out of the stock market because -- well, they did the first part of this year. Stocks all of a sudden, two months, they didn't do so well. Oh my goodness. Should I drop out of my stocks? You know, when you are 60, 65, you are still a long-term investor.

GJELTENHmm.

QUINNOur longevity is extraordinary. It's mid-80s is average, once you've reached 65. And then you -- people who have had good health insurance and who have good educations -- they, on average, live much longer. So you need to be -- the 90-plus population has tripled in the past three decades and it's expected to triple again. I mean, you, at 65, you've got 25, 30 years ahead.

GJELTENHmm. Right.

QUINNSo, and during that period, U.S. business is going to grow and profits will grow. Global business will grow and profits will grow. And so you need to be attached to that if you want -- the thing is, am I going to run out of my money before I do? I mean, will my money last for life? That's the question that people have. And one way to be sure that it will is when you are planning for retirement and early in retirement, is to make sure that you have a substantial amount of money in like, my favorite, of course, would be index mutual funds, devoted to equities because they will grow.

QUINNAnd anytime you get a bobble in the market, well, you lived through this over and over and over again. The market goes down. The market comes back. The market goes up. And even at later ages...

GJELTENWe're all...

QUINN...you say, I'm a long-term investor. And this young woman that...

GJELTENWe're all long-term investors is what you're saying.

QUINNYeah. Exactly. And this young woman, at 26, I mean, fine, keep putting the money in. Keep putting the money in.

GJELTENI want to bring Katherine into our conversation now. She's calling from Charlottesville, Va. Hello, Katherine, you're on "The Diane Rehm Show."

KATHERINEHi. Happy to be here.

GJELTENGood. Do you have a question for Jane Bryant Quinn? I'll bet you do.

KATHERINEI actually have a -- I have a compliment.

GJELTENOkay. Sorry.

KATHERINEI read Jane Bryant Quinn's book, "Make Most of Money Now," when I was 19.

QUINNOh, thank you.

KATHERINEYeah. And coming from a very money-unstable household, my parents taught me nothing good about how to spend and save your money. And I'm just first out of school. I just turned 23. And in the last four years, I've maxed my Roth IRA four times. And with my new career, I will -- I'm on track to save about 70 percent of my income.

QUINNOh, my.

KATHERINEAnd I'm going to max out my 401 (k), my Roth IRA and my HSA, all of which are in index mutual funds with Vanguard. So I can thank you every day for changing the course of my life and giving me a very comfortable retirement prospective.

GJELTENWell, that's nice to get a call like that.

QUINNOh, oh, what a nice thing to say. Thank you so much for calling in. You know, writers, we sit in our little cubbyholes and we write. And you send something out in the world and we don't see or talk to a lot of the people who read them. And so I am very moved by that. Thank you for calling in.

GJELTENJane, I want to bring this listener to your attention because I think what he has to say is especially important right now. He says, I'm a 60 year old who has scrimped his whole life. Interest rates were 15 percent when I started. I now have a nest egg for retirement. But I feel I've been ripped off by the system and the stock market. We lost a lot in 2008. It still hasn't come back. I feel everyone is getting robbed by Wall Street. We don't get rich. Others do. I have become so cynical.

GJELTENAnd we now have a presidential candidate, Bernie Sanders, who, you know, talks about Wall Street all the time. I'm sure that this is a common sentiment, that, you know, you're talking a lot about investing in stocks. Stocks is Wall Street. You know, can people trust Wall Street?

QUINNI don't trust most of Wall Street as far as I can see you, and we're right across the table from each other. And this is, again, one of the reasons that I recommend things like index mutual funds. Because I think, because they're -- like Vanguard or Fidelity -- they're very low cost, they're very simple. And I think that when you are trying to buy stocks, when you are trying to buy some of these terrible annuities they push you into buying, which are high cost and so dreadful -- there are all kinds of other things that they try to do for you, oh, I can save you, I can pick the right stock for you and they can't -- and then something like this happens, you lose money in 2008 and you're still behind.

QUINNBut, you know, if you had been in an index fund and you had left your money in the market, you would not be behind now. You would be up from where you left off in 2008...

GJELTENMm-hmm.

QUINNYou'd be up, I think, it's like almost 50 percent.

GJELTENMm-hmm.

QUINNSo you -- of course, you had to live through those bad years and those are scary. But when you are involved in products that are sold on commission by people in Wall Street, I think that you are very often at risk. And I don't blame them, I mean, the salespeople there. That's how they make their living. That's how they send their kids to college. They sell you products with high commissions. That's their job. Your job is to avoid those things when you have the opportunity to.

GJELTENSo here's an important question.

QUINNSo I feel bad -- I feel very bad for -- I think many people are in this position. But -- and part of it is because of the stuff Wall Street sells.

GJELTENSo you need -- people need investment advice. Now, you're talking about, you know, brokers who push products on you that are too expensive, take high commissions. How does one go about choosing an advisor? You know, do you go for, you know, the lowest cost advisor that you can find? Do you go for someone who takes a commission? Do you go for someone who charges a flat fee? Do you try to do it yourself, just, you know, even if it's a matter of buying mutual fund products? How do you approach that?

QUINNWell, you know, first, there are a lot of do-it-yourselfers out there. Well, look at this young woman who just called in...

GJELTENRight.

QUINN...and said how valuable my book has been to her. She's been doing it herself.

GJELTENRight.

QUINNAnd she's been doing it herself because she is using very simple things like index funds. I'm going to have an index fund for stocks, I'm going to have an index fund for bonds, and I'm going to keep putting the money in. And that's all I have to do.

GJELTENAnd there are cheap ways you can do that, aren't you? Even one of these...

QUINNYeah. Low cost. Vanguard is one of the lowest cost. Fidelity is very low cost. T. Rowe Price is a little higher cost but they've got very good funds nevertheless. And they are, you know, no-load, there's no commission. So can you do it yourself? I think, yes, most people can. But the thing is, you have to understand that you need to keep it simple. And there's a lot of complicated stuff out there and it sounds sophisticated and you think maybe I should use that instead. I think it is sophisticated to be simple.

QUINNNow, if you want an advisor -- and that means beyond, where do I put my savings -- but you want a financial planner who will help you with things like taxes and budgeting and other things in your -- insurance, other things in your financial life, I like advisors who do not sell products.

GJELTENMm-hmm.

QUINNAgain, no commissions.

GJELTENSo they have no personal interest in anything.

QUINNThey're called fee-only financial planners. There's an organization called the National Association of Personal Financial Advisors, NAPFA.org. And if you put in your zip code, you will get a list of people in your area. And you can go and talk to them about -- and they take no commissions. They charge only fees for managing money or fees for doing a project for you or doing a financial plan for you. And I think that you get the most unbiased information from those kinds of advisors. I think they're looking out for you.

GJELTENJohn has a question about the aggregate difference in performance between managed funds and indexed funds. And he's suggesting that the difference is largely in the fees that are charged. Is that right?

QUINNYes.

GJELTENMm-hmm.

QUINNWell, the fees -- let's just go back for a moment. A managed fund, a fund managed, it is run by...

GJELTENThat's where your advisor decides how to move stuff around.

QUINNSomebody -- he or she is picking stocks or picking bonds and trying to get a mutual fund that will do better than the market, or will do better than your basic index fund. And the -- yes, part of the difference -- and decades and decades and decades of studies have shown that, over time, the index funds do better than the managed mutual funds. A managed fund will do better maybe for five years or for seven years, but then it will fall back and another fund will do better. And, over time, you're better off in an indexed fund than in managed mutual funds.

QUINNBut part of the difference is fees because the managed funds charge more. The other part of the difference is that managed funds are not necessarily well diversified.

GJELTENMm-hmm.

QUINNFor example, they may think, well now is the time to own financial stocks. So they'll get heavily into financial stocks and then, boom, you'll have 2000, 2008 and down they go. Or they'll say, now is the time to be in energy stocks. So -- and look at what happened, maybe now is the time, but last year wasn't the time. So they may not be as well diversified and that's why they're -- when the kinds of stocks they own go up, they go up. When the kinds of stocks they own go down, they go down. And they're not -- they don't own, as Warren Buffett would said -- the whole cross section of business in the United States.

GJELTENJane Bryant Quinn is a commentator on personal finance. I'm Tom Gjelten. This is "The Diane Rehm Show." And let's go now to Sarah, who's on the line from Florida. Now, Jane, you've been talking mostly about investment. You've mostly been giving investment advice. I think Sarah wants to know about spending advice. Is that right, Sarah?

SARAHYeah. So I am on -- all on-board with investment. I actually max out my Roth every year and do an -- a target fund for my projected retirement rate. But my deal is, is like the daily funding. I was raised in a household where dad had the final financial say. And his idea of frugality was always by, as cheap as you can whenever you can. But I'm kind of more of the inclination that you're just going to end up re-buying those things over and over again. So I was kind of wondering what your viewpoint was on that and how to balance that in your daily life so that you can max out your savings for retirement?

QUINNI think that -- my view is, I think exactly what you're doing, which is you max out your retirement first. So that if you are putting the maximum into your savings plan, then whatever you have left, people will have different views on what they should do with their money when -- whatever you have left. And maybe you want to buy something inexpensive because you want to replace it often. You want -- choose to replace it often. Maybe you don't want to replace things often so you buy something more expensive. But then -- as long as you have done the basics. You've got your health insurance. You have -- you're maxing out your savings. Then what is left is your decision about what kind of a lifestyle you want to live.

GJELTENBut there certainly are big-purchase decisions, whether it's cars or homes or so forth, that where you need to really think in terms of what's the best way to spend that money? You know, and so you don't have to turn around and replace something right away again.

QUINNOh, right. I mean, you're going to get a car, if you -- but, you know, to here, again, is the exact thing...

GJELTENYeah.

QUINN...how many people like to buy new cars? And they want another car.

GJELTENRight. Sure.

QUINNAnd they want another car. So the idea of trying to tell people how they should spend their money...

GJELTENYou don't do that, do you?

QUINN...I think is useless.

GJELTENYeah.

QUINNBut what is useful is to say, max out your retirement spending. Then see what your other goal is. If you want a house and you need to save for a down payment, do that. And beyond that, what else is left with your money, that's up to you to spend. I don't try to tell people how to spend. I want them to save and invest and have health insurance and buy a house and stay out of debt. And after that, you know, do what you want with your money.

GJELTENMatt, who is writing from Round Lake, N.Y., says there is a form of automatic savings plan for all. It's called Social Security. Maybe we should start there. Are you satisfied, Jane, with the way the Social Security system is set up now? Would you, you know, if you had sort of policy responsibilities, if you were going to make -- take a political position here, you know, what do you think needs to happen to Social Security?

QUINNFirst, I think Social Security is a wonderful program. And so many people think of it as a program that helps older people, which of course it does. But think if there were no Social Security, all of the younger people are going to have to take in their parents.

GJELTENYeah.

QUINNThey're going to have to support them. I think that younger people, middle-aged people, don't fully appreciate the extent to which Social Security saves them from having to support their parents, which used to be in the old days. And their parents, of course, are greatly relieved to be independent. I, first, I think Social Security is not going to go bankrupt. I don't think there is -- I don't care what politician says it's going to run out of money and it's going to go bankrupt or whatever, it will never happen because it has such complete support in our society when you look at it. They're not going to let it go out of business. Whatever the tax is going to be, whatever adjustments are going to be made for higher-income people, Social Security will be there.

QUINNThe second thing is that at -- you can start it at 62. If you do it at 62, you get a 25 percent discount from what the full amount would be if you waited until 66. So the longer you can wait to take Social Security, the better off you are. And if you wait until 70, the difference between taking a check at 62 and taking it at 70 is huge. You get a 76 percent higher benefit, plus inflation, plus, if you die and you have a dependent spouse, you have left a higher income for the dependent spouse. Now, there are -- if you're -- if you lost your job and you ran through your savings and you're 62 and you need Social Security, I mean, sign up for it. That's what it's there for right now.

QUINNBut I see people starting at 62 because they're afraid -- they don't want to be a Social Security looser. Because if I wait till -- if I put it off and then I die and I will not -- I won't have had anything out of it.

GJELTENRight.

QUINNBut, excuse me, you will be dead and I think -- and you won't be feeling anything. I think that you should bet on a longer life rather than a shorter life.

GJELTENJane Bryant Quinn, her advise and her book on Social Security is one word, wait. She is a commentator on personal finance. We're going to take a short break right now. When we come back, we've got a whole board full of calls here and we're going to go to your questions. Stay tuned. This is "The Diane Rehm Show."

GJELTENHello again, I'm Tom Gjelten, I'm sitting in today for Diane Rehm, and we are talking about retirement issues, particularly with respect to managing your money. My special guest is Jane Bryant Quinn, a very well-known commentator on personal finance, and she's here because she has a new book out, "How to Make Your Money Last: The Indispensable Retirement Guide."

GJELTENWe've got a whole bunch of phone calls to take, we've got a stack of emails to go through. First, Jane, Michael writes, I'm 63, I have $600,000 in my 401 (k), and as a couple we're going to be getting $4,000 per month in Social Security, but I feel I don't have enough. Am I wrong?

QUINNI think that obviously it depends on how you live, and this is, I think, the most important question when you are this age, and by the way, congratulations for having such a large 401 (k). I think you've done very well in your savings plan. The -- and you will.

GJELTENHe will -- they'll be fine. They will be fine. They're not going to be in poverty.

QUINNAnd you will be putting off Social Security, right. The -- when you are doing your retirement planning, and you're rounding up the amount of money you have, people tend to say how much money do I need for my retirement. That is backwards. What you need to say is how much income will I have, and then you fit your expenses to the income that you can foresee as you are doing your financial planning.

QUINNSo your income is Social Security. Maybe you do or don't have a pension. And then you have these savings, and there are recipes for figuring out how much you can afford to take out of your savings every year and have the money last for 30 years, and it's -- you sort of have to go into what is the best thing for you to do, and it is in the book, but you take out four percent, or you take out four and a half percent, or you take out five and a half percent, depending on your flexibility, and you add that, you say okay, that will be part of my income.

QUINNSo now you have whatever you're taking from savings every year, whatever you're taking, Social Security, pension if you have it, and that is your income going now and into the future. And if you are over-spending that, well, there is an answer. Either you don't retire yet, or you what I call right-size your life, you take a little -- almost everybody in retirement takes little nips and tucks and changes their life a little bit. And if your neighbors are telling you they're not doing that, that's not true because almost everybody does.

GJELTENI've heard a rule of thumb that you should plan on having 80 percent of your pre-retirement income during retirement, but that seems like almost too broad a generalization.

QUINNIt's too broad a generalization. It is -- anybody who has budgeted in younger life can also sit down as they're doing their retirement planning and hear the differences that you are doing a projection, and the projection includes how much you can afford to take out of those savings and investments you have. In this case, he has $600,000. How much can he afford to take every year and still have his money last for 30 years? There are ways of figuring that out, and that's a very key part of doing this planning.

QUINNBut do you know if -- you've got to right-size the life first. You're not going to make it by getting a better interest rate or a better mutual fund or a better something. You need to get your style and standard of living to fit into the retirement income you have projected. And once you've got that done, then, then you can do other things with your -- then you can get on with all the more things than thinking about your money all the time. You can think about your grandchildren instead.

GJELTENLet's go now to Michelle, who's on the line from Houston, Texas. Michelle, do you have a question for Jane Bryant Quinn?

MICHELLEI do. I'm wondering, I'm 36 years old, and I'm wondering if it would be more important for me to be saving towards retirement or towards a home, ownership.

QUINNYou can't do both, is that your problem?

MICHELLERight, right.

QUINNDo you have a 401 (k) plan or 403 (b) or that kind of plan at work?

MICHELLEYes.

QUINNOkay, what you do is you save in that plan, and you don't have to save the max right now, but you save part of that plan. Do not -- do not step away from doing your retirement savings because there's lots of tax advantages to it. And then you might not max out, you might do part of it, and then you would have a saving for your home, your future, on the side.

QUINNAnd I might suggest that for saving for a down payment, you might use a thing called a Roth IRA. It's an individual retirement, you put money in, and it grows, tax-free, if you never use it, it's tax-free all your life, but what's important is that you can take your own contribution out of that any time, and you can take part of it out to help buy a house. So that gives you the -- some tax deferral on your savings while at the same time you are building up the money you're going to use for a down payment.

GJELTENHere's an interesting question, Jane. This comes to us via Twitter. What about self-directed IRA invested in a good rental property? I own a great rental, but my Morgan Stanley 401 (k) is down after 10 years. And before you give her your answer, I want to read something from your book. Ask yourself honestly, do you have the guts to demand the rent on time, to demand rent at all if someone gives you a sob story? Can you throw out a single parent who has lost his or her job, even if the child is small and sick? If you can't answer all these questions with a hardboiled yes, don't even try to be a landlord. In this game, nice guys get their clocks cleaned. Now I have to ask you...

QUINNThat was tough, right, but I think -- I still think it's right.

GJELTENThat scares off a lot of people that might be thinking about, you know, maybe I should be a landlord.

QUINNWell, the thing about buying a rental property, and many people do, of course, is that that is very different from financial investing, from stocks, bonds, cash, from mutual funds. You are starting a small business, a rental property, you need to know about the financing, you need to know about your laws, you need to know about eviction laws, you need to be able to evict a tenant, as Tom so clearly just said. Even if the tenant has a...

GJELTENYou're the one that wrote it.

QUINNEven if the tenant has a puppy, right, you need to be able to do that, and so you need to be able to collect the rent, and you have to be available when things go wrong and when renters change, times change. You might have to up-wire it for a different kind of technical devices over time. So -- but it's a small business. It's a very -- and the rules, a friend of mine told me once that you make your money on the house when you first buy it because if you buy it at the right price, and that means finding properties that for some reason might be selling below market.

QUINNWhen you buy homes for rental, you don't upgrade them to something you want to live in because you're going to be spending too much money, and you won't make it back. You upgrade it to whatever the market needs, and you stop there. I mean, there are lots of things you need to learn in order to be manager of a rental property, and many people do it, and they do it successfully, but man, you've got to read -- you really have to understand all these aspects of buying, selling, financing, renting properties. You can't just sort of do it, that's a nice house, I know how to change a light bulb, I can make money renting properties.

GJELTENAnd of course there is a product, a real estate investment trust, where you can sort of invest in somebody else being a landlord and take a share of the profits.

QUINNThat's true, but there you're basically buying a stock, so that's how that works out.

GJELTENA couple of questions here, and I think these are important ones. One, Steven wrote that the first words, and this is going back to the beginning of our interview, Jane, where you said that if you increase you're automatic savings, you won't even miss the money, he questions that. He said, you know, this is clearly another lecture from Wall Street, well you're not Wall Street but, to squeeze every dollar out of Mr. and Mrs. Average. He said, don't tell me I won't notice any change, less money in the form of cash going into my back account. It's the first thing I check after every pay period.

GJELTENBefore I answer that, there's another person here, who writes that many of us are worried about retirement but have years to prepare -- and have years to prepare but are having difficulty. Saving is a challenge. I have no house equity. I'm paying $700 a month in student loans and will be for the next dozen years. My field is over-saturated. I'm stuck temping as intellectual migrant labor.

GJELTENI mean, there are a lot of people for whom, you know, saving at all, I mean, they're living from paycheck to paycheck, aren't they?

QUINNThat's true.

GJELTENYou can't underestimate that.

QUINNYou can't, and the second question, or I don't see how he or she is going to be able to save. This is a very difficult position to be in. I'm not so sure with the first one. They seem to think that saving is somehow a Wall Street, something Wall Street is trying to do for you. But if you -- the automatic savings plan does work. I know years ago, when I was in my early 20s, and I had a kid, and I was by myself, and I was not making much money because they didn't pay women much money then for sure, and I said I can't possible save, and a colleague made me.

QUINNSo I have actually had the experience of saying it is impossible, I'm not paying my bills now, somebody forced me, basically, into a company savings plan, and I started with five percent, and do you know, I didn't notice it. It just, I truly didn't notice it. So I do know that it can work, but obviously in this case I wasn't loaded up with student loans, as so many young people are. But, you know, eventually I don't know how you're going to get to it, but eventually you are going to retire. Your paycheck will stop.

QUINNAnd at that point, whatever you have you've got make last for 30 years, and if you have Social Security, I mean, it's there, and you're going to live on Social Security, then you right-size your life so that you can live on Social Security. But it does happen that there is a time in your life when what you've got is what you've got, and you have to live on it. And so at some point you need to think ahead and say am I going -- how am I going to live on what I've got.

GJELTENJane Bryant Quinn, her latest book is "How to Make Your Money Last: The Indispensable Retirement Guide." I'm Tom Gjelten. This is the Diane Rehm Show. And, you know, you mentioned a couple times pensions, Jane, and Don writes from Michigan, I don't believe I've heard the word pension in your discussion. Well, he wrote before we mentioned it, but his question is an interesting one. Are they so rare now that they're almost irrelevant? Is that a function of the decline of unions in the U.S., or is it because corporate employers want to reduce their legacy costs?

GJELTENHe's right. I mean, pensions, or you're talking about defined contribution or defined distribution, defined benefit pensions, they really aren't as common as they used to be, are they?

QUINNNo, they are not. The classic, old-fashioned pension, where you have something, and it's -- your employer provides a check for life, that is vanishing. Younger people don't have them at all. They were stopped because -- he's exactly right, it was a money-saving idea for corporations because they started out with the 401 (k) s, and they match them, and then when they get in trouble they don't have to match. And all of the retirement risk is now on you, the employee, it's not on them.

QUINNYou've got to -- you have to invest it, and it's all up to you. So I think it's very sad that pensions have declined. So I think a lot of people found them extremely valuable. And I want to say for people who are getting pensions, you have a choice of taking a larger pension for your life, or if you're married taking a smaller pension, which will also cover your spouse for life. And I see a lot of couples at retirement deciding that we're just going to take the larger pension on the breadwinner, say it's the husband in this case, because they're worried about money.

QUINNThey're retiring, they don't -- they want -- they want the larger check. And then three or four years later, when they've right-sized their life, and they see they're okay, then suddenly they say, if the husband dies, the wife is stuck. So unless you are absolutely positive that your spouse is going to have enough money to live on for life and count a long life, I think that you should have a pension cover your spouse not just yourself. And by the way, coming -- speaking of a long life, we have -- our longevity, they say, is much longer than we're going to think.

QUINNIn my family, next month we are celebrating my mother's 101st birthday, and three years ago she married a lovely young man of 87. So you never know how long life is going to be, and that's why I say plan on living a longer life and figuring out whatever you have or however you're going to live, make your money last for a longer life, not a shorter one.

GJELTENWe're going to go now to Donna, who is on the line from Washington, D.C. I think Donna's going to have to be our last caller. But Donna, I believe you have a question of -- on a topic we haven't covered before.

DONNAYes, I have a question about, is it prudent for me to enroll in Medicare Part B even though I have a health insurance plan that was provided by my employer? I'm newly retired, and I pay quite a bit for that. But Medicare Part B is another $1,300 a year. What do you think?

GJELTENMaybe you can expand sort of -- buying health insurance is a big part of financial planning, isn't it?

QUINNI say it's a huge part of financial planning, and at 65 everyone is on Medicare A, you've already paid for that with your taxes, and that covers hospitalization. Medicare B is for doctors, basically, doctors, let's say. And so -- but let me ask you this. You are on a retiree health plan, by the way, of which there are very few left, as well as very few pensions left. So do they pay your doctors' bills on your...

DONNAThey pay a lot of it. I'm still paying about $3,500, $4,000 for my wife and I.

QUINNI would say that if you're on a health insurance plan that is -- a retiree plan that is paying your doctors' bills, I don't think you have to sign up for Part B. I would wait, and then because you -- you don't -- if you're double-covered, you might get a little more out of it because you first send it to your health insurance plan, and then you send it to Medicare, but I don't think that's worth it for the amount of money you have. So I would wait on Part B and just use your company health insurance plan. And congratulations. Most people don't have one.

GJELTENOne important question, Jane, that we haven't gotten to, and it's I think a very important one for people approaching retirement, and that is the issue of long-term care insurance. Very confusing advice on whether, you know, we should sign up for it or not. What's your view on that?

QUINNI have it myself, and before I -- I was a widow and then remarried, and before I remarried, I made sure that my new husband had it, too. So I believe in it. But it is very expensive, and so obviously you have to be -- have to make enough money so that you can pay for it. I think that if -- a married couple should consider it if they can afford to pay for it because you worry one spouse is in a nursing home, and then what about the spouse at home.

QUINNOne of the problems has been that certain insurance companies have been raising prices by 30 and 40 percent a year on these policies. When you buy a policy, look at how the company treated its previous policyholders, and if they did not raise prices on previous policyholders, that's a better company.

GJELTENJane Bryant Quinn is the author of "How to Make Your Money Last: The Indispensable Retirement Guide." One of the things that we have talked a lot about this morning is how many big decisions people have to make on their own as they approach retirement, and Jane Bryant Quinn's book has a lot of easy-to-understand advice. So I would highly recommend it. Jane, great to meet you, great to -- thanks for coming in.

QUINNThank you, Tom, I've had a lovely time, and thank you, everybody, for calling and writing in.

GJELTENMy words exactly. I'm Tom Gjelten. This is "The Diane Rehm Show."