Stanford University Faculty Spotlight: An Interview With Dr. Gopi Shah Goda, Deputy Director and Senior Fellow, Stanford Institute for Economic Policy Research  

Should retirement, which in many instances is claiming Social Security and leaving the workforce, be the end goal for individuals entering the workforce?

So I think the definition of retirement does need to change or be modified as time goes on. I think that the idea that you kind of work for a set amount of time and then have a full retirement, you know, going forward, may not be the best division of work and leisure over someone’s lifetime. I think the other thing is that often times people believe that they need to claim Social Security at the same time that they leave the workforce. And that may not — that’s never actually been true, that you have to do both at the same time. And thinking about those two decisions as separate decisions instead of one joint decision, I think, could also help make people flow into retirement in different ways than they have in the past. So, yeah I think that retirement as an end-goal can make sense in terms of taking some of the leisure as kind of in one — one big chunk at the end of your life. But that there are other models that could also work in terms of gradual retirement, phased retirement, and other things like that.

Continuing on the theme of end goals and the retirement of future generations, what do you think the future of retirement will look like? Will the traditional definitions, and composition, of retired Americans change significantly? How should we prepare?

—  I think some amount of that extra lifespan has to either — has to be split between work and retirement in some way that can lead to a more sustainable path for retirement. I think again, if part of retirement is supplemented by either partial work, which it is, I think, increasingly, and it’s perhaps pushed a little farther out, I think that retirement still can exist. But I think the current, you know the current mindset of retiring at a particular age, and that age as being fixed over time, is perhaps unreasonable.

Do you believe there should be a mandatory class — in either high school or college — that educates students on the basics of financial security and the importance of savings? Your research indicates that offering knowledge of saving led to better overall planning for the future. How might this be successfully implemented?

So I do think that financial education can start very young. The best ways to do that can vary based on, you know, the age of the people involved. My work has focused on workplace education about retirement savings, and the impact that contributing during one’s work life can have on sort of your future retirement income, and sort of explaining to people the tie between current contributions and future retirement income. But I do think that starting in, say high school or college — or perhaps even earlier — can sort of lead to a change in the mindset of how people think about saving for retirement and just think about overall finances differently. So not just saving for retirement, but also debt for instance, and how that impacts someone’s overall financial picture. So until we kind of get a handle on debt, for instance, it’s hard to imagine that we can really change the way that people think about retirement savings. But I think, you know, there’s a lot of hope. I think we saw big change in the way that people think about, say energy conservation. And a lot of that grew out of efforts aimed at, you know, children really, in terms of recycling and things like that. So I think that there’s a lot of hope in terms of the way that we can potentially train younger individuals to think about saving in a more holistic way that could have impacts on saving for the future.

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