What if everyone ER'd?

[audreyh1]

I got a fantastic education at the UT College of Engineering for very little money. Looking at tuition plus book costs now, it's amazing how cheap it was back in the late 70s. I had no trouble paying for college by working part time and doing the engineering coop program for three semesters plus a very small scholarship. I lived at home part of the time. No loans, no massive money layout from my parents (though they did help with the first semester). But tuition was just a few hundred dollars!

Audrey

 

[ERD50]

You can only take this so far as a thought exercise.

What if *everyone* was a Fire-Fighter? Who would build the houses that they protect? Who would produce the food for their dinners, etc, etc, etc.

It works better for ethical questions, where everyone can share equally.

-ERD50

 

[FUEGO]

You can only take this so far as a thought exercise.

What if *everyone* was a Fire-Fighter? Who would build the houses that they protect? Who would produce the food for their dinners, etc, etc, etc.

But given the constraints suggested by the OP, it could potentially happen. Everyone starts working by age 25 on average and works 30 years on average in order to support themselves for 30 more years on average.

We probably aren't far from that reality today. Plenty of people retire by the time they are 55 or are forced to stop working due to death, disability, obsolescence, elder care or child care requirements, etc.

I wonder what the average career length is across all people (men and women, rich and poor).

Obviously if folks work an average of 30 years before ER, then there will always be SOME people doing work to support the ones that are not working. Every year will produce an eager new crop of 25 year olds seeking gainful employment.

 

[OAG]

HS drop out (9th grade), 21 years of work and, 30 years of "retirement" so far; hope to be "retired" for 46 years - if I make my "life expectancy". I need a "slacker" certificate (do they have them?).

 

[RonBoyd]

Ron, I think that depends on what you study and where you go. I was accepted to some pretty prestigious private schools but I wound up going to a cheap state university which I was able to pay for in full by living at home and w*rking part time (mostly full-time during the summer and winter breaks) at a drug store.

So I got out of college with a job as a programmer -- and no student loan debt. Even when I was 18 I was being cheap and avoiding unnecessary debt...

Yeah, you don't fit the description that L & B had in mind. Again, the YMMV rule applies but...

 

[Independent]

I am more and more impressed with Kotlikoff and Burns' ability to cover all the bases. In their book (Spend Til' the End"), Chaper 10 -- Does College Really Pay --

I think I'll look for a copy. IMO it makes a lot of sense for Ziggy or Audrey to go to public schools and get degrees in IT or engineering. But the "conventional wisdom" that says everyone should go to college just doesn't compute for me.

 

[RonBoyd]

I think I'll look for a copy. IMO it makes a lot of sense for Ziggy or Audrey to go to public schools and get degrees in IT or engineering. But the "conventional wisdom" that says everyone should go to college just doesn't compute for me.

http://isbn.nu/9781416548904

Another example is the opening of Chapter 9:

"Who makes more, a doctor or a plumber?

...

"Ok, who has the higher living standard?"

 

[Dennis]

Well taking age 18 to 67 now?= 49 yrs
and that may not be enough for most to be able to afford to retire on either..
seeing as I saw on another report that some 68% os seniorws go broke by age 80, be it from Health care needs to Nursing home cost for one of the spouses to Death by the primary spouse's income source...

If one needs say an additional $10k income from savings? They need over $300,000 to do it to last, IF they have to leave it behind for their spouse to live on.. Otherwise only need $175,000 of course making about 5%apy and that about 6% B4 taking out taxes.. And less than 1/3rd of Seniors have this going for them...

I can see why Pres. Obama and some other Dems want to Double the SS & Medicare payroll taxes, take away their Chance to Gamble their $ away and give us Double SS and Medicare Beneifts back in return... Other Countries do it and works well for them! This Bear market/Crash is a Good Op to put something like this thru...

Not saying I would go for it, nor Professionals would, but for most of the others, might be the best way for them?

 

[landonew]

http://isbn.nu/9781416548904

Another example is the opening of Chapter 9:

"Who makes more, a doctor or a plumber?

...

"Ok, who has the higher living standard?"

I have heard that argument and I think it is BS. They assume that the plumber NEVER hits a salary cealing and that the Doctor has no deductions. In fact, the plumber

How many plumbers are still working at age 60? How many Doctors? Seems to me as if all the plumbers that come to my house are in their 20s, 30s, or possibly 40s. That would suggest the manual labor associated with cleaning feces from pipes isn't conducive to longevity.

 

[RonBoyd]

I have heard that argument and I think it is BS. They assume that the plumber NEVER hits a salary cealing and that the Doctor has no deductions. In fact, the plumber

How many plumbers are still working at age 60? How many Doctors? Seems to me as if all the plumbers that come to my house are in their 20s, 30s, or possibly 40s. That would suggest the manual labor associated with cleaning feces from pipes isn't conducive to longevity.

My guess? They later become owners of a pumbling business... which still makes them Plumbers. I would further guess that the owner of a going Plumbing Business makes more than the average doctor. Let's first rule out those like my Cardialogist whose salary has to be in the $500,000 a year category (from help wanted ads). On second thought, there has to be exceptional business owning Plumbers, also.

 

[harley]

On second thought, there has to be exceptional business owning Plumbers, also.

Yep, I bet those Ghost Hunter guys (Ghost Hunters | SCIFI.COM) pull down some serious bucks, between their Rotorooter business and the TV show.

 

[Nords]

I think the cause-effect question goes in the other direction. "What changes in economic, political, and social conditions would be required before people would be comfortable retiring half way through their adult lives?"
My answer is: A huge change in the relative value we put on stuff-you-can-buy vs. free time. This would be a society where hardly anybody wants a 2,000 sq ft house, a 4,000 pound car, or a Caribbean cruise. We'd all prefer the simple lifestyle - grow your own vegetables, cook your own meals.

I live a beach-bum lifestyle, but if I couldn't afford those choices then I'd get a job. And while I'm happy to pluck fruit from our orchard before (some of) it goes to waste, I'm not growing my own veggies anytime soon...

If you want to jump in a time machine to see what I mean, go back 100 years to 1909. The concept of ER was completely alien to the great unwashed masses of the middle and lower classes.

IIRC, in 1900 the median American lifespan was 47. And that's probably the middleclass white Anglo-Saxon Protestant version of an American that they're referring to.

 

[aaronc879]

If you worked 30 years from 25 then retired 30 years you would only be 85 when you ran out of money. It is a nice goal but really only would work for people who didn't have anything else going on and who planned to die young.

That's me. I have nothing else going on and plan(expect) to die before 85.

Except that someone starting a full-time j*b at 18 won't be in college and thus is far less likely to be able to have the income to put away for early retirement. Though I guess those who go into the military right after high school and put in their 20+ would be an exception.

You don't need a high income to FIRE. My base pay is $43,000 and won't go up much. I still fully expect to retire no later than age 49 after 29 years of full-time blue-collar work. No pension. You don't need a college degree you just need to LWBYM.

 

[kyounge1956]

You can only take this so far as a thought exercise.

What if *everyone* was a Fire-Fighter? Who would build the houses that they protect? Who would produce the food for their dinners, etc, etc, etc.

It works better for ethical questions, where everyone can share equally.

-ERD50

I think one reason the book suggests that question is to get people to think about the ethical aspect of any goal. I haven't really thought about whether ER is ethical.

I told a friend of mine I'm planning to retire in a few years and she said something like "It's not logical to expect to be able to live that many years without working." She thinks pension funds have over-promised and someone else (herself among them) will end up paying the bill. I don't think that's true of the City Employees' pension fund specifically. According to them they meet all the funding requirements (but do the funding requirements take today's longer life expectancy into account?). I get a statement of how much money has actually gone from my paycheck into the pension fund and I have no idea how they can possibly pay me the amount they say they are going to out of the amount I have put in. OTOH, the amount deducted from my paycheck for retirement is a hair over 8% of my salary, and my employer puts in the same, so you could say 16% of my salary has been going into a retirement account for the last 24 years, plus the smaller amounts I've put into my tax deferred account and Roth IRA. Is it unreasonable to expect to live for three or four decades on that much money?

 

[ziggy29]

IIRC, in 1900 the median American lifespan was 47. And that's probably the middleclass white Anglo-Saxon Protestant version of an American that they're referring to.

I've seen the life expectancy in 1900 was about 47, but much of that was skewed much higher infant mortality rates. For those who made it into adulthood, I believe the life expectancy was over 60 even back then.

 

[FUEGO]

I've seen the life expectancy in 1900 was about 47, but much of that was skewed much higher infant mortality rates. For those who made it into adulthood, I believe the life expectancy was over 60 even back then.

This link suggests you are correct. For the average white male just coming of age (20 year olds), the life expectancy in 1900 was 62. In 2004 it was 77. So at least some portion of those coming of age around 1900 could still have had sufficient time to earn a living, and save some funds before expecting to die, assuming the average salaries available at the time provided a sufficient surplus after living expenses that allowed one to save a significant portion.

 

[ls99]

What if everyone ER'd?

That would be a bad thing. RE, my last refuge from competition.

 

[unclemick]

Watched the Space Shuttle launch on cable last night - felt a twinge but it soon passed.

Will be checking the rental places this week for tillers to aerate the lawn and till spots for the flowers and veggies this year.

That's fun - not work. When it's not fun anymore, I'll stop:

Or at least beg her to stop coming up with planting ideas.



heh heh heh -

 

[haha]

I am more and more impressed with Kotlikoff and Burns' ability to cover all the bases.

I believe there is a huge flaw in this idea, that someone who doesn't go to college because Burns says it doesn't pay will become a highly paid plumber or pipe fitter or crane operator.

The truth is, he will likely become a marginal IT guy, or a salesman who may of may not have the talent for that, or a department store clerk. Some entrepreuneurs will hit it, but that is a talent and personality type too, jut like oil field workers or crane operators or high iron workers.

People go to college mainly because they want white collar lifestyles. They prefer working in air conditioned offices to sewers, or the frozen tundra, or flooded basements or construction sites. They want to eat luch with clean hands in an air conditioned lunchroom or restaurant insted of a hundred feet up in the air on a girder.

Most blue collar work is downright hard. Hard on your knees, hard on your skin, often dangerous. I knew that fishing in Alaska paid a lot and left a lot of down time in winter, a good setup for sure. But it is hard and dangerous, so only certain types are willing to do it. Two of my friends drowned on crabbers in their 20s.

So most of us go to State U, and avoid that rough stuff.

Ha

 

[jIMOh]

ER would then matriculate younger- the bar would be set lower. Because some people just need to be better than others. Unless you are a democrat.

If everyone retired at 55, the ER would become 45

 

[RonBoyd]

I believe there is a huge flaw in this idea, that someone who doesn't go to college because Burns says it doesn't pay will become a highly paid plumber or pipe fitter or crane operator.

As well as all those PHDs now working behind the counter at McDonalds.

(Yes, I am exaggerating... but not by much.)

Anyway, I am not the one to defend Burn's position on this issue (or any other). I merely meant that I am impressed that they even thought [-]it through[/-] about it.

(You do make a good point, however.)