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The Life-Cycle Hypothesis, Consumption Smoothing And Saving For Retirement : Planet Money Even if you don't own stocks, there are a lot of reasons to care about investing. We meet some of the folks left out of the stock market who deploy sophisticated economic thinking, even creating their own alternate financial systems. Our professors help us understand how consumption smoothing and life-cycle hypothesis apply to personal finance. And we meet the creator of the 401(k). | Watch this Tik Tok to learn more and subscribe to our weekly newsletter here.

Planet Money

Planet Money Summer School 3: Smooth Spending & The 401(k)

By 

Cardiff Garcia

, 

Stacey Vanek Smith

, 

, 

Alex Blumberg

Planet Money Summer School 3: Smooth Spending & The 401(k)

Listen · 32:05
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  • Transcript
An economics professor balances between students with money.
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Suharu Ogawa for NPR
An economics professor balances between students with money.
Suharu Ogawa for NPR

Find all episodes of Planet Money Summer School here.

Today on the show, we talk about investing strategies for planning across a lifetime... and the obstacles to that.

Investing is about turning money now into more money in the future. But it's not just about growth, it's about making sure you have the money you need when you need it.

We meet some of the folks left out of the stock market who deploy sophisticated economic thinking, even creating their own alternate financial systems with lessons for all of us. Our professors help us understand how to think about debt and spending differently depending on our age and phase of life. We will try to apply the life-cycle hypothesis to personal finance.

We'll also hear from the creator of the 401(k) about why it started and when it makes sense to use as a tool for retirement investing.

Vocab Words:

  • Consumption smoothing
  • Life-cycle hypothesis
  • 401(k)

Music: "Lost Situation," "Groovy Rollin," "Indie Dance," "Uncertain Times," "Efficientissimo," and "Sun Sweat Skin."

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