My Problem With Retirement Saving
The double whammy of traditional retirement
Pop quiz poll. Who do you think wrote this?
Retirement policy is often predicated on the belief that more saving is always better, at least at the margin. This belief is used to justify the increasingly widespread practice of automatically enrolling workers in employer-sponsored defined contribution plans. However, the conclusion that individuals do not save optimally for retirement requires a benchmark for optimal behavior. A reasonable benchmark that is often used in the academic literature is the life-cycle model, in which rational individuals allocate resources over their lifetimes with the aim of avoiding sharp changes in their standard of living. We argue that, under realistic assumptions, the life-cycle model implies that most young people should not save for retirement.
Today, we explore that paragraph broadly and within the context of being semi-retired, however you define it.
Though, hopefully … most likely … definitely …
But first, two things—
It’s October. Pumpkin spice latte time, baby. Actually, I’ve never had one. But it’s also almost the end of the year. At the end of the year, I’m raising the price of a newsletter subscription from $5 to $7.50 a month, $50 to $60 a year and $100 to $150 for founding members. This will not impact existing subscribers. So, if you want to subscribe as a new reader or upgrade to a founding membership (which I instantly convert into a lifetime subscription), it makes sense to do so now.
We’re officially less than four months away from our February-long journey to Spain (Barcelona, Girona) and France (Montpelier, Lyon, Paris, Bordeaux, Toulouse). Like we did in February of this year, I’ll stack up lots of content from the trip throughout the month and tie it to what we do in March. Personal finance. Retirement. Semi-retirement. Travel. All the good stuff. Soon, I’ll be ready to announce the specific plans for February and March—for paid subscribers only.
As for what we did on this last trip. Tying February to March.
Here are my favorite examples from the 50 or so posts between the two months.
February—to—March
February—to—March
I’m cooking up something similar for February/March, 2024.
And, hopefully soon, I can make another announcement. As I mentioned a few weeks ago, I started a new freelance gig, writing money articles for a major media organization. I still can’t say who. But they’re big. And I’m excited to share the news with you and discuss how the job fits into my work schedule and near-term plans.
I’m writing about topics such as financial advisors and 401(k) plans. I don’t use a financial advisor or have a 401(k)—I mean I don’t even save for retirement— but I know a lot about these and related subjects and enjoy writing about them. It’s a nice, regular change of pace. Keeps me engaged. Keeps things exciting. I might even bring some of that content into the newsletter from time to time.
Anyhow, this more traditional money writing got me thinking—again—about that excerpt on not saving for retirement. So today, we’ll discuss what it means to me in the life I live now and want to live for the duration and how you might be able to apply it to your semi-retired (or whatever!) life.
That excerpt and the article it comes from echoes a guiding principle of this newsletter—
To live evenly across the lifespan.