The Enemy of the Good

Surprise! This is not a blog about the heinous policies of the current administration, and its hell-for-leather campaign to ruin our financial lives (or simply kill us off). This is about the full expression of the axiom.

Don’t let perfection be the enemy of the good.

Meet Alicia Munnell. Ms. Munnell formerly led the Boston College Center for Retirement Research. Before that, she served at the Federal Reserve for 20 years. So, when I tell you that she knows a thing or two about planning for financial security, you should believe me.

And yet. Last year she retired at the age of 82. She loved her profession, so she just kept on doing it. She gave an interview to the Wall Street Journal and talked about what she did wrong in her retirement planning, as well as a few things she did right.

Did she raid her retirement savings for a lavish wedding for her child? Yes, she did. Did she take advantage of the opportunity to pay less in taxes by executing Roth conversions? No, she did not. I could go on.

The point is, you can go blithely through your financial life, failing at every turn to optimize your financial position and at the end of the day, turn out just fine. More than fine.

Just don’t do anything stupid.

I remember something that a former boss said about speaking to people who are experiencing a financial jam or a tricky decision. I am paraphrasing heavily here, but the gist was that he could tell pretty quickly in the conversation whether the story ultimately was going to end well or not. Because it is not usually about what led to your distress; what counts is what you do next. Some people — I would like to believe most — can simply be counted upon to use basic good judgment. They can be relied upon to not make a bad money situation worse by grasping for a long-shot straw.

So often someone will say to me that they did not discuss finances in their family, and they are, in their words, not financially literate. Yet their balance sheet is a thing of beauty. Because fundamentally they know right from wrong. They intuitively understand that there are no free lunches, that risk and reward move in unison. They don’t chase rainbows.

Back to Ms. Munnell. She is happily retired by all accounts. Follow her example and give yourself a break. You do not have to maximize each and every financial decision. You do not have to go down every alley on Reddit looking for the savings account that pays .01% more than the one that you have. Occasionally, you can let a tax benefit slide right by you, undisturbed. And if you make a blunder today, you can make a better choice tomorrow.

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