As someone who has been prematurely, involuntarily retired, I haven't yet developed enthusiasm for it. However, I have some academic background in economics, have followed the "efficient markets" approach to investing that is advocated by this web site, and appreciate the additional insights and tools (FIREcalc) that it provides.
While I respect everyone's right to make the decision to retire early if they can afford it, a sobering note is that society as a whole needs to be moving in the opposite direction -- towards later retirement.
A very fundamental economic problem is that the ratio of working people to retired people is shrinking. The financial manifestation of this is that the Social Security system will require either benefit cuts or substantially increased taxes in the future. The only socially acceptable long-term solution to this dilemma (other than to make current investments that increase the productivity of future workers) is for people to work longer, thereby preventing the ratio of workers to retirees from falling to a level that excessively burdens future workers.
We retired people presumably have as much "human worth" as others, but unless we provide valuable services (like this web site), our economic worth is negative (i.e., we only consume what others are producing). The fact that we did the "producing" for the previous generation of retirees, and for the current generation of workers when they were growing up, may make this "dependency" justified, but doesn't change the fact of its existence.
I think that the ideal strategy for society and the individuals in it who are contemplating retirement, is to look for arrangements for "phasing out" of full-time work and into retirement. And the best "tool" available to most people to assure that they will be able to afford retirement, is to have the flexibility to continue working as needed to achieve a high level of confidence that their assets will last throughout their retirement.
While the historical asset returns on which FIREcalc is based are a useful guide, another sobering thought is that the shift to an aging population may reduce the future returns of financial markets, which fundamentally depend on the growth of GDP per capita.
While I respect everyone's right to make the decision to retire early if they can afford it, a sobering note is that society as a whole needs to be moving in the opposite direction -- towards later retirement.
A very fundamental economic problem is that the ratio of working people to retired people is shrinking. The financial manifestation of this is that the Social Security system will require either benefit cuts or substantially increased taxes in the future. The only socially acceptable long-term solution to this dilemma (other than to make current investments that increase the productivity of future workers) is for people to work longer, thereby preventing the ratio of workers to retirees from falling to a level that excessively burdens future workers.
We retired people presumably have as much "human worth" as others, but unless we provide valuable services (like this web site), our economic worth is negative (i.e., we only consume what others are producing). The fact that we did the "producing" for the previous generation of retirees, and for the current generation of workers when they were growing up, may make this "dependency" justified, but doesn't change the fact of its existence.
I think that the ideal strategy for society and the individuals in it who are contemplating retirement, is to look for arrangements for "phasing out" of full-time work and into retirement. And the best "tool" available to most people to assure that they will be able to afford retirement, is to have the flexibility to continue working as needed to achieve a high level of confidence that their assets will last throughout their retirement.
While the historical asset returns on which FIREcalc is based are a useful guide, another sobering thought is that the shift to an aging population may reduce the future returns of financial markets, which fundamentally depend on the growth of GDP per capita.