I think this points out a difference in viewing everything in life as an efficiency problem focused on retirement age and overall wealth. Makes sense for a forum of engineers to see it this way I suppose.
Well in 2009, during the real estate crash and subsequent Great Recession, people were out of work for a lot longer than 6 months. Of course financial planners don't really talk about those sorts of seismic events. That historically hasn't been an issue for engineers, but there are groups that are disproportionately affected (like older engineers).
Because I'm built the way I am I've always saved in the context of how long I could live on my savings with the goal of increasing that number until it reached infinity. That first level I call 'Raman level retirement' where you could live forever[1] off your savings if you ate only Ramen, up to the the point where you can live off your savings and keep your current lifestyle (which actually takes less income than most people thing), to actually living a more lavish lifestyle without day to day employment.
[1] Of course you intercept the life expectancy line at some point, and you have to build into your model ever increasing health care costs or a one time lump sum to emigrate somewhere that has a national health plan.
I'd argue, as a 22 year old economist just entering the workforce, that the fact that people just entering their retirement hold the most wealth is quite a social problem.
For instance, the ability of the older wealth to influence politics.
I think the concept of a highly enabled, connected, and active senior class has a lot more impact than people are considering. The points made about a society that financially cannot retire are powerful because it forces us to adapt a much longer view on our career objectives (which is always healthy).
For me, this is the most important aspect of this paper:
"People say, ‘Americans are living longer, so we ought to delay the age of retirement,’ but … it’s a little bit unfair to say to low-income people that they’re going to get Social Security and Medicare for fewer years because investment bankers are living longer.”"
As the divide between the rich and poor keeps growing [1], we need to start doing something about it in all areas, and this seems like a really important finding for that.
I think it's less about ability to retire early, more about realization that being forced to sell one's life and freedom to an employer is not only miserable, but completely unnecessary for society to function (eg. with a UBI society would carry on just fine, and likely accelerate automation).
The older generation didn't grow up with technology so perhaps it's not as obvious to them.
"It's silly to think that these people are going to work until they are 75."
That's how it worked for my grandparent's generation, and likely most others before that. So not really that silly (but still sad). It'd be great to adjust the work so it's not as destructive. I don't think adjusting to earlier retirement isn't really an option based on history (retirement is a recent thing).
Yeah, modern capatism may not be great for society in general. But how does it compare with the prior models, like monarchy? Or even things like socialism? Seems like corruption and human nature ruins even the best theoretical systems.
some things that are super obvious in code to others aren't to me i feel like the same thing is happening here
so is people living longer the issue? how can people get more than they put in if everyone puts the same amount, on average start working at the same age, and retire at the same age
sorry if this is a dumb question to ask genuinely curious
It's already well established. Lifecycle investing is common practice among pension funds.
"You would need to show it wasn't one of those factors"
Firstly, I'm not the one with the burden of proof that has to check whether this fits the theory.
Secondly, you're misunderstanding my objection. What I'm objecting to are the very conceptual foundations of the theory. Old people demonstrably accept a lower EV than young people because of a difference in expected utility over the distribution of near-term outcomes. To throw the concept of expected utility in the bin is therefore a departure from reality and as such the theory automatically fails on conceptual grounds.
This isn't a push against your overall point, but I think a larger systemic view is necessary. E.g., maybe the idea of retirement after 20 years is outdated. Or maybe the system needs to be re-thought in terms of how to keep that paradigm funded, particularly in economies with declining birth rates.
How about instead of letting automation and AI put people out of work (the media is, after all, just as confident that this will happen) we just keep the pension age where it is?
Either that, or one of these narratives is bullshit. Perhaps both.
Having fewer kids also means lower taxes needed to support schooling but that side of the balance sheet is curiously taken absolutely for granted in the mad rush to kill off retirement.
Money isn’t intrinsically valuable. Forcing people to save for retirement doesn’t bother me one way or the other, but, how can I put this…
Imagine a family living alone on an island. They use gold coins for trade amongst themselves. Parents get old, kids look after them. Those kids decide not to reproduce (reasons are different between analogy and reality, effect is similar). When the kids get old themselves, no amount of coin changes the fact nobody’s doing any work, catching fish or whatever.
If we can automate all the work, great, we can all retire. If not, we need some balance between working and reproduction that varies depending on the rate of reproduction.
It's supposed to be about cost of living, increase in energy prices, etc. Not sure if the pension system is related. But pension systems have always been dubious in my mind. 401Ks + social security have seemed to be the best of both worlds.
Why is there no discussion in this article that this behaviour by companies is rational? As an aging dude I know my productivity and adapatibility is declining and I am not worth paying as much to employ as 10 years ago.
Rather than trying to hold back the tide by government fiat, why not prepare people for an income path that peaks in your 40s and slowly declines with your mind and body.
Optimizing life for retirement seems like the single most backward strategy one could have. I don't even mean that in some sort of counter-cultural way - it just seems deeply irrational.
> If we live two dozen more years that means someone will have to pay for those retirements.
You're assuming that we'd just extend life rather than slow or partially reverse ageing as the article describes. You would assume that people would work for longer if this was the case. You may even get a "better" (from an economics point of view) ratio of working life to retirement time.
Why is it painted as a problem? Why should you spend more than you need? Why is "enjoying a retirement" supposed to only be achieved by spending more money?
Do you think it would addressed under destroy wealth and neglect themselves? lol What are you even saying?
I was just trying to say that as the proportion of retired people increases they will take more resources and that will mean fewer resources for /anything/ else.
I could argue that making the opposite claim is a pretty gross overgeneralization. It's good that your family is prepared for retirement, but most people aren't.
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