Getting to Know Economist Laurence Kotlikoff

A Boston University professor, he has a lot to say about personal finance, especially problems with Social Security.

It was the frog thing that nudged Boston University economics professor Laurence J. Kotlikoff to switch from doing good by becoming a doctor to doing good by helping people manage their personal finances.

“When I started college, I hoped to become a doctor. But a frog derailed my plans,’’ Kotlikoff writes in his new book, “Money Magic: An Economist’s Secrets to More Money, Less Risk and A Better Life,’’ being published January 4.

After spending two hours dissecting frogs in biology class, Kotlikoff writes, “By the end of the lab, I was majoring in economics.’’

Kotlikoff, 70, has spent more than four decades teaching, researching and directing fiscal analyses with the goal of making economics accessible and of practical use to the public. He’s also written 20 books, including his latest, and his columns on finance have appeared in Forbes, Fortune, the Financial Times, Bloomberg, The Hill, the New York Times, the Wall Street Journal and the Boston Globe.

“I always wanted to be able to reach out and be helpful to society in general, so I started a personal financial software company in 1993, with the idea to help people with their personal finances,’’ Kotlikoff said from his office in Boston during a recent interview with Rethinking65.

He described economists as “basically monks who are operating on our own about what people should be doing to improve their lives but then not conveying that. It’s a terrible shame because economics has an obligation to give back to society. We have a lot to share.’’

Kotlikoff spares nobody, especially Social Security, which he says is one of the most important if not THE most important financial factor in most people lives; here are some of his comments:

“Be aware that consulting the Social Security Administration’s website or its staff can lead you badly astray. The website is highly misleading. As for SSA staffers, half of what they tell you, from my experience, is either wrong, misleading or incomplete.’’

To protect themselves from being shortchanged, Kotlikoff recommends readers research the Social Security system, and he’s provided a good place to start: His 2015 New York Times’ best seller, “Get What’s Yours: The Secrets of Maxing Out Your Social Security,’’ written with Paul Solman and Phil Moeller.

Kotlikoff said he had another goal in writing his latest book: “I wanted to, every couple of pages, inject something fun, or surprising or shocking. I went back and made sure there was something like that there.’’

Chapters such as “Marry for Money — The Oldest Financial Trick in the Book’’ and “Get House Rich — Shack Up With Mom and Other Smart Housing Moves,’’ qualify as unconventional, as is Kotlikoff’s advice that the minute you get married you should be prepared for and expect to get divorced, probably in 10 years.

Or how about this lambaste of Social Security, aimed at those who plan to start collecting benefits at age 70: “Expect to receive a scam phone call. It won’t be an illegal scam call. It will be an official scam call from the Social Security Administration itself.’’

The issue? The SSA will offer a check equal to six months of past-due benefits, but Kotlikoff explains, “Going for their ‘deal’ means losing ten months of DRCs (delayed retirement benefits). Your benefit will be lower, forever, by 6.67%.’’

“I’ve been calling them (SSA) out for a long time; I’ve never been shy. Things like this have to be said, otherwise, nobody gets the point. The biggest scam is calling people before they’re 70 to dangle that big check if they start their benefits right away. You do that and you will set your benefits back for the rest of your life. That is just unbelievable.’’

Kotlikoff said his podcasts and his columns are posted on his website, Kotlikoff.net, which help him get out of the economist’s monk cell and into people’s lives.

“A lady emailed me two weeks ago that she received a bill from Social Security for $180,000 that she had received for widow’s benefits. It was inappropriate. They said they were going to take the money back.

“I called her and she said she almost had a heart attack because that money was the main source of her income. So I got on the phone and contacted somebody at Social Security at a pretty high level, and they saw that it was a mistake, a complete mistake. I think that’s my way of helping society,’’ he said.

Eleanor O’Sullivan is an award-winning journalist.

 

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