Early retirement is bad ...

[explanade]

According to this opinion writer,, a Harvard-trained economist.

Still, almost two-thirds of people — between ages 57 and 66 — choose to retire early out their own volition, despite having saved next to nothing. And most of them are able-bodied, without disabilities that would prevent them from staying on the job.

The baby boomer's retirement debacle

Take the baby boomer generation, the 76 million-strong population of those born between 1946 and 1964, who are retiring droves. Almost half of them have little if any savings.

Indeed, their median wealth is just $144,000 — less than three years of median household spending. If they had significant private, state or local pensions on which to rely, things would look better. They don't.

Less than 1 in 3 have a pension apart from Social Security. As for those with pensions, many had state- and local-government jobs that weren't covered by Social Security.

https://www.cnbc.com/2022/02/01/why...akes-youll-regret-says-harvard-economist.html

Obviously he's talking most about people who haven't planned to be FI before FIRE-ing.

He does cite some reasons people are driven to ER, such as running out of physical or psychological steam.

Also cites some interesting stats:

Social Security's average benefit — $18,000 per year — could be far higher, but 94% of retirees take Social Security retirement benefits well before its benefit peaks, at age 70.

In fact, roughly 85% should be waiting until 70 to collect. The age-70 retirement benefit is 76% higher, adjusted for inflation, than, for example, the age-62 benefit.

Would be interesting to see the average and median age that people here take SS.


He is doing what he preaches, says he's 71 and plans to "die in the saddle."

 

[Gumby]

A saying I learned while following the progress of one of our members along the Appalachian Trail is "Hike your own hike." Meaning that the experience is yours alone to create and what other people do or don't do should not control you. So, you go at your pace, stop where you think you should, and see the things you want to see.

As with hiking, so with life. Each of us needs to make our own way through the world as we see fit. If for you that means retiring early, great. If for you it means dying in harness, also great. I have made my choice, but I don't begrudge you yours.

 

[jldavid47]

Well, since he's Harvard-trained he's obviously out of touch with the real world. ��

The dumbest part about this is that he is drawing conclusions from population averages and not even averages of those who chose to RE.

1) I don't have median wealth and neither do you and neither do any of the people who retire early.
2) I don't get Social Security's average benefit and neither do you. Anyone who is retiring before age 62 gets no benefit (yet).
3) The "almost half" of baby boomers who have no savings are likely the ones who are NOT retiring early.
4) As an economist he makes the faulty assumption that maximizing income/wealth is the only goal in life.

There's more to life (and retirement) than accumulating and spending massive amounts of money. He can die in the saddle. He's an academic. Most of the rest of us who have actually done work would prefer to enjoy the last years we have on this mortal coil. Why should I keep working even though I easily could?

Money ain't everything.

 

[jldavid47]

As with hiking, so with life. Each of us needs to make our own way through the world as we see fit. If for you that means retiring early, great. If for you it means dying in harness, also great. I have made my choice, but I don't begrudge you yours.

+1

 

[FindingForward]

"My current plan is to die in the saddle. My work is just too rewarding — financially, intellectually and psychologically — to give it up."

Every time I read another article like this, I always think about the legions of folks who can't weigh in...because they "died in the saddle" too early & never enjoyed a single day of retirement freedom at all. They may have a different take on this advice. Serious confirmation bias here.

Their spouses/loved ones may have a different point of view as well, as they would likely trade a much lower standard of living in a heartbeat for more time with the person they love, (vs a more secure nest egg to spend alone.)

I also notice it's typically the academic types with tenure & cushy jobs that often pat themselves on the back for continuing to work and advise others to do the same, as if their daily grind is anywhere close to the stress & exhaustion many corporate, healthcare & blue collar workers face.

 

[Sunset]

I personally think due to various new factors there are more folks these past 2 years that have retired early that are not financially prepared well enough. It won't show up for quite a few years until they run into financial trouble as they do have some savings.

It may simply mean a non-fancy retirement, skipping travel saves a lot.

The author includes people who retire at age 65+ , I don't consider that early !

 

[GalaxyBoy]

I saw this piece on my news feed the other day. I didn’t get very far into it until I figured it was basically saying that cold weather is bad because people who go out in freezing weather in the nude freeze to death. Meh.

 

[Delawaredave5]

I'd guess the top quartile in wealth of BB is retiring sooner (58-63) than top quartile of previous generation (65-70). But I'd think this group is just as "wealth prepared" as previous generation.

What matters is "who can afford BB assets as they sell ?"

I watched them build elementary schools to accommodate BB, then middle schools, then high schools. Then suburbs. Now assisted living.

As the "bulge" went through - there were excess school/societal assets that closed when no longer needed.

The oldest baby boomers are hitting life expectancy, 76 years. Will there be a bubble in stocks, 2nd homes, primary homes, classic cars, etc as this group gets rid of assets ?

 

[Freedom56]

Her quote:

"As for me, I just turned 71. Fortunately, I have tenure and can keep doing research, writing books and columns and teaching. My current plan is to die in the saddle. My work is just too rewarding — financially, intellectually and psychologically — to give it up."

My quote:

"I retired early because I could. My money and investments work for me and my leisure time to do what ever I want when I want is more rewarding intellectually and psychologically than only an early retiree can understand."

She appears to be a financial misfit and the bar must be pretty low at Harvard to hire her as an economist.

 

[bbbamI]

Early retirement is bad.....

 

[Car-Guy]

Written by someone who likes to work, apparently... Everyone is entitled to an opinion.

 

[Dtail]

Well, since he's Harvard-trained he's obviously out of touch with the real world. ��

The dumbest part about this is that he is drawing conclusions from population averages and not even averages of those who chose to RE.

1) I don't have median wealth and neither do you and neither do any of the people who retire early.
2) I don't get Social Security's average benefit and neither do you. Anyone who is retiring before age 62 gets no benefit (yet).
3) The "almost half" of baby boomers who have no savings are likely the ones who are NOT retiring early.
4) As an economist he makes the faulty assumption that maximizing income/wealth is the only goal in life.

There's more to life (and retirement) than accumulating and spending massive amounts of money. He can die in the saddle. He's an academic. Most of the rest of us who have actually done work would prefer to enjoy the last years we have on this mortal coil. Why should I keep working even though I easily could?

Money ain't everything.

Good post. This is the guy IIRC who published a book on when to take SS, plus had his own retirement calculator.
The contributor is my reference, not the author.

 

[NW-Bound]

Right in the title of the article is the word "money".

And the author keeps mentioning lack of money as the reason many people will regret taking early retirement.

... We are, as a group, lousy savers, making early retirement unaffordable. Financially speaking, it’s generally far safer and far smarter to retire later...

But, but, but if I sometimes missed my work, it was not for monetary reasons. I have more money than ever, and only miss the technical work that I enjoyed.

If it were not for Covid, I would be so busy either doing traveling or planning for it, I would not have time for much else. Heh heh heh...

 

[explanade]

I personally think due to various new factors there are more folks these past 2 years that have retired early that are not financially prepared well enough. It won't show up for quite a few years until they run into financial trouble as they do have some savings.

It may simply mean a non-fancy retirement, skipping travel saves a lot.

The author includes people who retire at age 65+ , I don't consider that early !

There is the Great Resignation, which includes mostly people who were mistreated, as frontline workers during the pandemic.

But there are also anecdotes about people in highly-compensated professions who revolt at their employers trying to make them come back to work, when they think it's been fine WFH the past two years.

These include a lot of tech industry workers who may have some hefty equity portfolios, which grew a lot during the pandemic.


So there may be a number of people who were able to RE but kept working and the pandemic made them realize that continuing to work isn't as important to them and that they have the means not to work if they don't want to.

Lot of these people may not be specifically choosing not to work ever again but more taking time off and thinking they can go back to the grind later or take on short-term jobs if they want.


The "take this job and shove it" mindset may have become more common after the pandemic.

 

[daylatedollarshort]

I got a lot of "thou doth protest too much" vibes from the article.

He is out of touch with real seniors having physically demanding, unrewarding and high stress jobs. He is also out of touch with how much it costs to live in LCOL areas. The average SS benefit for 2022 is almost $20K a year. For a couple or two roommates, that is $40K, with no kids to raise, no income taxes, maybe a paid off home or low rent, camping vacations and qualifying for Medicare, that is a normal middle class life in many parts of the country. You'd think someone who is an economist would know that. We have many members here in LCOL areas who live well on that amount per year, often by choice.

 

[foxfirev5]

"My current plan is to die in the saddle. My work is just too rewarding — financially, intellectually and psychologically — to give it up."

Every time I read another article like this, I always think about the legions of folks who can't weigh in...because they "died in the saddle" too early & never enjoyed a single day of retirement freedom at all. They may have a different take on this advice. Serious confirmation bias here.

Their spouses/loved ones may have a different point of view as well, as they would likely trade a much lower standard of living in a heartbeat for more time with the person they love, (vs a more secure nest egg to spend alone.)

I also notice it's typically the academic types with tenure & cushy jobs that often pat themselves on the back for continuing to work and advise others to do the same, as if their daily grind is anywhere close to the stress & exhaustion many corporate, healthcare & blue collar workers face.

According to my Old Man there were a couple of tests if you actually are working for a living. Do wash your hands before or after you go to the bathroom? And do you shower after work or before? He died a few weeks before his 70th birthday.

 

[Delawaredave5]

According to my Old Man there were a couple of tests if you actually are working for a living. Do wash your hands before or after you go to the bathroom? And do you shower after work or before? He died a few weeks before his 70th birthday.

This is awesome !

Nowadays, we need to add: "Do you change out of your pajamas to work ?"......

 

[ownyourfuture]

Early retirement is bad.....

A+

 

[Midpack]

So the author is saying folks who don't plan well shouldn't retire. And she notes a lot of baby boomers have not planned well. Nothing there that comes as a surprise. Early retirement will be a disaster for many who haven't planned well, that's all the author is saying? This is a community of people who have planned well, looking down our noses at those who haven't serves what purpose?

We're all different before we retire, why would we all be the same after? Some have planned well, some haven't and everything in between. Some are busy in retirement, some don't know what to do with themselves and EIB. Some are in good health, some aren't and EIB. Some of us live a long time, some don't and EIB. Some are SIRE, some FIRE and EIB. There is no right or wrong.

 

[finnski1]

"My current plan is to die in the saddle. My work is just too rewarding — financially, intellectually and psychologically — to give it up."

Every time I read another article like this, I always think about the legions of folks who can't weigh in...because they "died in the saddle" too early & never enjoyed a single day of retirement freedom at all. They may have a different take on this advice. Serious confirmation bias here.

Their spouses/loved ones may have a different point of view as well, as they would likely trade a much lower standard of living in a heartbeat for more time with the person they love, (vs a more secure nest egg to spend alone.)

I also notice it's typically the academic types with tenure & cushy jobs that often pat themselves on the back for continuing to work and advise others to do the same, as if their daily grind is anywhere close to the stress & exhaustion many corporate, healthcare & blue collar workers face.

+1 great post

 

[street]

A saying I learned while following the progress of one of our members along the Appalachian Trail is "Hike your own hike." Meaning that the experience is yours alone to create and what other people do or don't do should not control you. So, you go at your pace, stop where you think you should, and see the things you want to see.

As with hiking, so with life. Each of us needs to make our own way through the world as we see fit. If for you that means retiring early, great. If for you it means dying in harness, also great. I have made my choice, but I don't begrudge you yours.

Nicely said.

 

[GravitySucks]

He is doing what he preaches, says he's 71 and plans to "die in the saddle."

I am also hoping to die in the saddle, but I don't think we are using this term in the same way.

 

[F.I.R.E User]

Retiring financially doesn’t mean to stop working.

 

[statsman]

I also notice it's typically the academic types with tenure & cushy jobs that often pat themselves on the back for continuing to work and advise others to do the same, as if their daily grind is anywhere close to the stress & exhaustion many corporate, healthcare & blue collar workers face.

Nailed it.

 

[aja8888]

"my work is rewarding...." I've heard that line before and sometimes it really means I have no life beyond work. That will work until it doesn't. Sooner or later, out the door you go (tenure or not)!