As far I'm concerned, I'm living in Europe and I'm not confident at all that I'll get any retirement before my 70. Knowing that the lifespan increased a lot but not necessary the good-shape-span, it seems to me a better strategy is to enjoy more free time now by reducing work hours than to bet on an uncertain future.
I've always thought this way, uncertainty or not. Why wait until you're old and frail to enjoy life?
I've always put the matched contribution into my retirement accounts, because it's free money, but no more than that. The rest of my savings go into places where I don't have to wait until my life is nearly over to access them.
You should do the math on how much you'll likely actually have in retirement, and see how you feel about it, before it's too late to change your strategy.
I put almost 20% of my net salary in to my pension, and my employer another 8%, and it's still unlikely that I'll be able to retire particularly early or will live a particularly comfortable life in retirement. For one thing, if I'm still renting when I retire I'll likely be barely scraping by.
Doing the math can be a shock.
Maybe some of that 28% should be put towards property?
I'm pretty sure that cases where mortgage is more expensive than renting through 30+ years are very, very rare.
My basic view is that I don't want to be rich when I'm old so that I can make "dream purchases" or live on a cruise ship for the rest of my days or whatever; I want to be living comfortably and fully for my whole life.
So for example, if you want a $30,000/yr (inflation adjusted) income in retirement you need to save yourself a $1M (inflation adjusted) pot. Over a 30 year career with a 5% (real, above inflation) investment return that takes $1,200/month.
Lots of people think saving a couple of hundred bucks per month will leave them super comfortable. The math tells the scary reality.
- 1 unit/mo for 10 years at 7%/yr => 172 units.
- 172 units @ 7%/yr for 35 years => 1,836 units
vs.
- 1 unit/mo for 35 years at 7%/yr => 1,721 units
Depends on rates though who comes out in front.
Despite all that there is still a lot of work to do. There wouldn't have to be, most of the work being done is something we could skip if we decided to let science/society stagnate at current levels. Most people have decided they want more.
Currently, my thought is that skilled trades are the least likely to be displaced, especially in maintenance, non-routine roles. There's currently a decent amount of research to automate the routine parts, though, like new construction.
Automation often does not reduce the requirement for labor, it only shifts the work and cost somewhere else.
Former plowshare-pullers become horse-steerers become tractor drivers. Each new invention does have it’s attendant complications, but they tend to be nicer than the basic, first job. Ie, I’d rather be a tractor mechanic than a plowshare puller.
I’m glossing over generations of social upheaval and re-skilling here, but that’s the pattern so far.
For instance, France have, successfully, bet on immigration. But the public discourse being what it is, since the population was getting older supposedly, we are now lacking in schools and universities because we chose to not build or/and renovate infrastructures. So now we have a real education problem for instance.
But the real problem with state pension fund in France is not that the population is getting older, the reality is that companies are simply not paying their due.
With all sort of tax credit and exemption, various French government chose to artificially lower salaries for all employees. Most of them are not even aware as this is not treated on the case by case but globally at company level.
The aim/excuse (depends on your political color) is to fight unemployment. The side effect, is that the state pension fund id depleting slowly but irremediably. On the other hand, to be fair, if you have massive unemployment, money is not entering the state pension fund either.
But the population getting older is a trick politician love to use to not have explain complicated issues and arbitrations made in depth. The lazy way out IMO.
That is exactly what has been happening several times during the last 3 decades.
Where I am(also EU), retirment is at 75 and already talks about raising it to 79, because lifespan increased, funds are in strains etc. I wonder if I will live up to that age to retire or it'll again shift several times, as the way world is changing with climate change and everything, life will probably be very different and expensive.
May be my memory is holding onto a proposal that didn't pass or something. I apologize for the misinformation.
>... enjoy more free time now by reducing work hours than to bet on an uncertain future.
Unknowingly or not, you've just echoed a chapter in Peter Thiel's book Zero to One with such perfect clarity, Mr Thiel may start to look like a savant.