Retirement savings simulator
how-f-cked-are-you-98ab6cdc8944.herokuapp.com
how-f-cked-are-you-98ab6cdc8944.herokuapp.com
Alternative sites:
It helped me retire early (along with fire calc)
With the recent bout of inflation/concerns about government's ability to maintain debt-to-GDP ratio + interest payments, I'd be worried that you're pretty much forced to constantly be worried about having to return to the workforce in some capacity (part time) eventually.
Working 20-30 hours a week in whatever industry it takes to make an extra $40k-$50k/yr to get by doesn't sound so bad.
There's something too daunting about the concept of "stop working, instead of seeing your net worth go up, you see it go backwards as you start to pull it/spend it during your otherwise prime earning years" I just can't convince myself is realistic for me (and maybe others) to actually pull off. Talk about online is one thing, but actually do/pull off?
But... it's just a cruel side effect of needing to afford to live, right? Plain and simple?
This is a feature of capitalism, not a bug. Capitalists benefit by having a large pool of laborers desperate to sell their labor.
Sounds like you have never heard of the 4% rule[0]. Further, there are reasons to withdraw funds above ordinary living expenses, such as for gifts and donations.
>you have no idea how long you'll live,
Of course you do, within a range of probability. And there is insurance available to minimize the risk of uncertainty.
[0]https://www.fool.com/retirement/strategies/withdrawal/4-perc...
Does it really matter from a tax perspective?
Most likely, no.
If you are in a tax-deferred account (IRA/401k) then all the money distributed is going to be taxed at ordinary income tax rates.
If you are in a regular brokerage investment account, then both your long term capital gains and qualified dividends are taxed at the same favorable rate.
I don't see the point in re-investing dividends if you are going to take out cash in the same amount within less than a year.
The difference is cash flow. Obviously if your only income source is dividends, at some point you'll have to sell some of the underlying asset for the cash.
4% is just a rule of thumb to give you an idea of what your savings should be relative to annual spending.
The simplest method: look at your portfolio's worth on January 1, and take out the appropriate amount. Let the remainder ride.
So roughly:
* Year 1: take out 4%
* Year 2: Year 1 amount + inflation from Year 1
* Year 3: Year 2 amount + inflation from Year 2
* […]
* Year N: Year (N-1) amount + inflation from Year (N-1)
Is there? I haven't heard of this but admittedly had not thought of researching into it.
It would be a game changer to be able to buy an insurance policy that guarantees a monthly payment indexed to inflation starting at age, say, 85 until death.
Every quarter you drawdown your networth decreases to cover your expenses. Then you hope it maintains/stays the same by the stock market predictably reliably recovering from your 1%/quarter (4% drawdown/year) sale/gets offset by dividends, etc.
To me it seems it might be noise but there is for sure a period where your net worth decreases as you spend your "nest egg". Especially more so if the market doesn't just go straight up over time on average.
Completely wrong:
* https://en.wikipedia.org/wiki/Trinity_study
* https://en.wikipedia.org/wiki/William_Bengen
Principal liquidation is just fine and has lots of theoretical/historical analysis to support it, with (tens of) millions of people doing it as we speak.
(1) Planned, time-limited expenses that decrease net worth. For example, a child's college education. If you've budgeted for it, this is fine.
(2) General market wobbles. My net worth increases or decreases by tens of thousands in a day, just because of what the market did. (No, I don't have all of my assets in the market, but enough.) If the long term trend is downward and/or not keeping up with inflation, that would be a worry, but a dip here and there is also fine.
Is net-worth decrease a problem outside of these scenarios? Even that depends. It's probably still "no" if there are more income sources (e.g. social security, inheritance from parents) that haven't kicked in yet and will make Number Go Up again when they do. Less obviously, if you're going to run out of money at 150, that's not likely to be a problem. If it's at 75, that very likely is a problem.
It really is possible to save too much, though few do. Telling people to plan for an infinite retirement, which is basically what you're doing, is also bad advice. There's no virtue in scrimping and saving more than you really need to.
To not worry about that, I'd want at least $5mm in the bank, but I would still work just to keep myself sane.
"it's never enough"
90% invested, 10% cash?
what are the investments going to look like? 100% index funds? What if the market doesn't return 7-10%? What's your plan, draw down 4% a year, 1% a quarter?
S&P500 index fund has a 1.5% dividend, so you only need to draw 4 - 1.5 = 2.5% (0.625% a quarter), unless you'd let the dividends reinvest and then sell them off.
You can get treasuries/bonds yielding 4-5% for short term now, not sure about a 15-30 year outlook.
Annunities and other weird things (high dividend yield ETFs) are an option but anything other than trying to find 4%+ is not without risks.
Plus your expenses are $30k now. In 2020, what were they? $25k? They won't be $30k forever (as you know).
I just can't imagine being in a position where I need to sell off 1% of my portfolio quarterly to live no matter the conditions of the market. The stock market can perform like crap for years at a time. Your net worth in stocks can drawdown up to 40-50% in 'worst case scenarios'
I guess I question what these part-time, low stress jobs that pay median US annual wages are. They're presumably not driving for Uber or working in retail over the holidays.
If someone already has some sort of consulting/freelancing business, you can probably dial things back a bit. But it doesn't seem straightforward in general.
I do agree in general that deciding to step away from a full-time professional job --especially later career--is something you can't necessarily undo.
There are tons and tons of really cool technical problems and projects out there that aren't financially lucrative but have huge positive benefits for people.
Having an experienced person volunteering to work on something would make a world of difference to many of these projects that have tangibly positive effects on people but struggle with funding.
Plus I’ve landed in well paying gigs that I enjoy and don’t want to stop building big things for big bucks yet. I’ll do my smaller dreams next, I think I’m ready to slow down and focus on something smaller next.
Meaning, there's a decent chance to make it, but I wouldn't trust it. We're talking about crossing 30-35 years, in an exponentially changing world that is exceptionally volatile.
There will be multiple financial crashes. A swift change in government. A currency change. Hyper inflation. Almost anything is on the table in that time span.
For in-depth planning, I like ficalc.app, and cfiresim.com is good, too.
This is obviously a personal anecdote and ultra variable-dependent but my entire elementary school -> middle school -> high school friendbase hang out exclusively in Discord playing video games/watching sporting events digitally instead of in person. I wonder how widespread this is.
No Medicare, so you still need to buy insurance and pay for out of pocket maximums, and you are less and less employable for jobs that offer decent subsidized health insurance. Also, unless you qualify for significant ACA subsidies, premiums are going to be more than $1k per month per person.
And at the same time, most people will be getting their Type 2 Diabetes/Hypertension/Thyroid/etc diagnosis so their chronic medicines start.
If a married couple can both cross the age 65 line before hitting a big healthcare event, then they will probably be OK, but that is far from a guarantee.
When you are retired, there will be about 2 people supporting you.
If you're under 40 (maybe even 50), wrapping social security income into your retirement calculations is a fool's errand. I'm in my 30's and basically treating it as play money. If it's there I might use it to help buy a car or something in my 80s, but I'm assuming I'll get approximately $0 for everything I've paid in supporting today's retirees.
Don't buy it. Don't spread it.
This is trivial. But “some level of benefits” could theoretically mean using all of the nations’s productivity to support the elderly.
The pertinent question is what level of wealth transfer will the working populations tolerate, especially if the current workers believe they will be getting less when it is their turn to receive.
Actually, number of workers per retired person matters A LOT regardless how you look at it.
If you disregard imports, the total amount of goods and services produced per capita goes down. No amount of cash can buy more stuff than is for sale in a market. As more and more money chase less and less stuff, inflation has to go up to compensate.
And these two workers can demand more or less what they wish, while old people get poorer and poorer.
And there is a limit to how far down society will let the pensions of the poorest retired people go, so some way will be found to bring enough cash for them to have at least a little.
Meanwhile, the working people can more or less demand what they want in saleries, if the shortage of workers is great enough. And if the government tries to take a lot from them through taxes, they can always go on strike, move abroad or something similar.
Those with savings but no productivity, who are rich without working, they are fair game in such a society.
The word "boomer" is already a slur used against a generation seen as pulling the ladder up after themselves. And as the number of retired people per worked continues to go up, such thinking will just gain traction.
See “American Families Plan” section:
No one working, everyone consuming, so we get either high inflation or high debt. If high inflation, old people need a strong welfare state or they die, so we get high debt. Young people need to pay for the debt of their elders, so high taxes. Productivity plummets because taxes are high and tax revenue decreases. Life gets worse for everyone.
One escape is that we have to drastically increase the retirement age. Getting rid of a welfare state wouldn't help, because they would still be consuming without being productive. Another solution is that we kill all old people. Another possibility is that innovation allows us to make investments that drastically increase productivity, but that's not guaranteed either.
As the problem gets worse, I think we will see this play out in formerly wealthy European countries and Asia, as their aging populations are further ahead than the US. Great opportunity for the US and third world countries to seize economic power from these places though.
You misspelled psychopathic.
Drastically increasing the retirement age only makes sense to us keyboard jockeys who rarely even see physical labor up close. Data shows that people in physical jobs start to break down physically in their mid 40s. It's silly to think that these people are going to work until they are 75.
> Another solution is that we kill all old people
I mean, let's be frank. We're talking about killing poor old people. Have you looked at Congress lately?
We need to ask, is our economic system here to serve the human species, or was the human species put on on this planet to serve our (current) economic system? Since modern capitalism has only existed since the Dutch East India Company, I think the answer is obvious.
I do wonder how this squares with the fact that the average age in the skilled trades is 55, and 57 in farming. I know those jobs are more physically demanding, but I always doubt the extent to which blue collar jobs 'ruin your body'. In my experience, the wise old farts in the trades are in much better health than their compatriots in sedentary roles in the office. There's just more opportunities for young bucks to hurt themselves in the trades if they aren't careful and follow proper safety procedures.
That's how it worked for my grandparent's generation, and likely most others before that. So not really that silly (but still sad). It'd be great to adjust the work so it's not as destructive. I don't think adjusting to earlier retirement isn't really an option based on history (retirement is a recent thing).
Yeah, modern capatism may not be great for society in general. But how does it compare with the prior models, like monarchy? Or even things like socialism? Seems like corruption and human nature ruins even the best theoretical systems.
But what about the other 3 grandparents?
Sorry, after you did it twice I couldn't help myself.
Now, I'm no different than most people. I am extremely apathetic about our situation as well. However, it's still soul sucking to realize I'm contributing to the path we're on while feeling like there is nothing I can do.
Feels bad :/
Many Baby Boomers went through something similar in the 1970s when the last of the radical political movements with teeth died down. They retreated into themselves and started viewing the crumbling world around them (e.g., late 1970s NYC) as "beautiful".
Much of the requirement for individual people to remain productive is largely unnecessary. Clothes, fruit, vegetables, medicine, etc.
Its not even theoretical. We just put the value of one's private property(not personal) and Capital over the value of general well being.
They won't have a choice. The smaller the proportion of workers, the fewer resources we have to spread around. We can tax people up to 100% of all the wealth not needed for them to survive, but if communist experiments in the 20th century are any indication, that will only decrease economic prosperity.
> I mean, let's be frank. We're talking about killing poor old people. Have you looked at Congress lately?
No, realistically we're not killing anyone because old people are the most powerful voting block. Their power will only increase as the population ages. More likely we're going to force young people to carry out debt.
> We need to ask, is our economic system here to serve the human species, or was the human species put on on this planet to serve our (current) economic system? Since modern capitalism has only existed since the Dutch East India Company, I think the answer is obvious.
This would be a problem in any economic system. But I want to put it back to you: should young people work to serve the economic system of old people? Should we force young people into servitude by spending money on their behalf? This wasn't a big problem when there weren't many old people, but with an aging population we're demanding a lot more from them.
We're not crushing young people with social security taxes. We're crushing them with wages that can't pay their bills, with or without social security taxes deducted.
There are limits to how much you can redistribute. People will simply stop producing taxable income.
> We're not crushing young people with social security taxes. We're crushing them with wages that can't pay their bills, with or without social security taxes deducted.
Never said we were. But if the population continues to age like we see in places like Japan, we will very quickly find ourselves with huge social security bills.
But only once. After that, nobody will lend to them, at least not at reasonable interest rates.
But if done intentionally, with a warning to the citizens that from here on, taxes will have to pay for expenses, it is quite doable for a country like the US to get out of almost any debt trap, at the expense of bond holders.
Keep in mind, there are very few signs that the US is going to balance the budget anytime soon.
At some point, the debt will be so high that lenders lose confidence, especially for 30-year or even 20-year maturity bonds, and at that point, there is very little time left to turn the ship.
Much of the supply of labor shortage that has led to inflation is in the food services, construction, landscaping industries; Of which, the US uses h2b migrant visa to seasonally fulfill some of; but that has led us to competition amongst the states, with a high fee, low local reinvestment rate.
It works only for rich diverse countries (US, Canada). For countries like South Korea or Japan, it would be painful for those societies to bring in a huge number migrants they need.
How would this even be possible, in an economy that is roughly 80% services? All there is to "consume" is the output of someone else's labor. If nobody is working, there is nothing to consume.
I'm currently in a phase where the boomers in our family are moving into permanent elderly care, as well as a few that have passed on already. What is striking is their rich support system. Most have several siblings, partners of those siblings, their own children, partners of those children, grandchildren. So there's a relatively large amount of people able to contribute to the care, even if just by doing the occasional visit. If each does a little, that's still plenty for a humane type of care. A lot of this care is done by the women in the family whom in the post-boomer generation still often had the traditional role.
The social care will be dramatically different in the future. Most people have few siblings if any. Few children if any, whom may be less capable to help out as they're busy staying afloat. And most women aren't housewives anymore either.
In other words: you are mostly on your own compared to the current retirees.
Importantly, we should not use this to bash the elderly. Rather we should strive for a world where working two incomes until you're 70 is curtailed. We're over-asking people.
There's doom and gloom around the end of human labor and the advent of AI/Automation/AGI (call it what you will). But, people's taste ossifies in early-adulthood. Our generation, once old, is going to crave experiences from a pre-AI world, and the only ones with the ability to deliver on it will be fellow millennials.
In my experience, a lot of the FIRE folks are driven by paranoia and a *lack of fulfillment in their present life.*
____________________
I've been fortunate enough to have hit my limits of hedonism. A 5 star hotel relaxes me just as well as a shack. An honest meal is fulfilling irrespective of the Michelin stars to its name. My people welcome me whether I bring chocolate or not; and our conversations are just as warm over lemonade as it may be over fancy whisky.
The hedonistic treadmill is infinite. It's cliche, but all good wisdom sounds like cliche. If you stop looking, you'll find yourself knee deep like low-tide on a beach.
A pursuit, your people, health, a roof and a warm meal. FIRE gives you time, money and access to those 5 things that matter. But, in the absence of them, no amount of $$ FIRE $$ is going to make you happy.
The first world has solved most of its issues. However, we tie happiness to owning more material belongings than our peers. In that case, FIRE will not be promised release It will merely be a moving goal post on the horizon, that keeps you going through an unfulfilling present.
My 'funny' observation is that the misery line stays at zero as long as you have money... that doesn't really match my knowledge of the ageing process. I think misery goes up at a gradual rate from age... 25?
1. You can forgive the taxes in which case everyone else in the tax jurisdiction just pays this person's taxes indirectly.
2. You can lien the property and pass the bill on to the estate, in which case you're either having the heirs pay the taxes (and late fees, and interest) with extra steps, or if no heirs the buyer pays less for the property and the end result is basically #1.
Say retired couple owns a $500k home and can't pay $5k/yr property tax. They will live for 10 more years.
With no lien, they are forced to sell and buy a cheaper $450k house, using the equity to pay property taxes. When they die, heirs get $450k.
With the lien, in 10 years the estate sells the house and the heirs receive $450k after paying the back taxes.
Obviously this is simplifying a lot, but I don't think the rest of society is being shortchanged by the lien mechanism. Except in the case where the unpaid taxes exceeds the value of the house.
My property tax is considered “extremely high” at $4500 a year.
Rent for $4500 a year is like a closet, even in a cheap place.
Property taxes aren’t a flat rate.
Property taxes county + city are about $4300 per year. They have increased recently, and so has the rent.
If they owner put down a 10% down payment, I estimate their total monthly payment for mortgage + taxes + insurance is about $2000, and will likely remain in that ballpark.
That means rent is currently paying the entire mortage/tax/ins plus $6k per year. At the end of their mortgage that monthly cost drops to about $700, and they will own an asset likely worth $500k+.
Making a monthly profit and ending up with a paid off, appreciated house at the end is profiting doubly.
I'm from the Netherlands, where property tax is based on the municipality. A 400K home where I live amounts to 423€ in yearly property tax. Rate increases over time are capped. And there's many ways to protest against the market value the taxation is based on.
I suppose the basis for this relatively low taxation is that a huge amount of home owners here have a relatively valuable home (even the simplest of homes is expensive) whilst having a fairly moderate to low income.
If property tax would be 10x as your example suggests, I'd suspect 75% would go bankrupt.
The unrealized part is the gain in property value, and your equity in it by paying down the mortgage.
But if you consider never selling the house, paying $2k/mo in rent vs $2k/mo in (mortgage + insurance + property tax) is going to start out break-even, improve as the rent climbs to $3k for the equivalent place to live, and then be a larger benefit after 30 years when that housing payment drops to just tax and insurance.
In terms of inflation? Owning the house has already made that a lot less painful.
Last year I spent 4000$(CAD) on maintenance, this year I'm at just under 1000$. It's about 60 years old and it really doesn't take much to keep it in decent condition, but I'm also happy to and skilled enough to do a lot of work myself.
If I owned a giant American style McMansion I could see it costing that much, but it's a very modest house.
When it comes to maintenance costs it's hard to estimate when talking online because every location, house, and person is very different.
So, yeah, even owning my house outright, it probably costs a good $1,000/month to pay regular bills and keep it in a reasonably stable state.
When I replaced the exterior doors and half of the windows that was about an 8000$ year and that is the worst it's ever been. The guy who installed those was a family friend though, so it was a bit cheaper and I helped.
This year I had to replace the water pump, but I did that on my own and it was about a 400$ job. I had to fix one of the soffits, but that was a pretty simple job too.
The only thing I dread is the roof, but that's still years and years off since it was new when I bought the place.
Generally if I put away 4000-5000$ a year for future maintenance I'm happy, that'll leave me with a giant fund if needed.
What has made owning a house vastly worth it over the past couple of decades is severe under-construction of new housing which has led to prices spiraling upward and creating a gold mine for homeowners. Will that continue? Probably yes. But consider the risk that it doesn't.
I strongly disagree. You compare all costs. Interest, principal, maintenance, insurance, taxes... If I knew how to calculate them I'd add things like risk that you need to move (realtor fees, potentially making payments on a house you are not living in...)
If you sell the house before you die, then you can pull out the difference, which can be applied to nursing home costs. Otherwise the gain of a house is in the lower rent you pay after you pay it off.
> I strongly disagree. You compare all costs.
Both can work, but if you include the principal as a cost you need to account for the asset value that is increasing your net worth. Of if you don't want to bother with that, counting just the interest as an expense is a resonable simplification.
But if you count all rent and all mortgage as a pure expense, then it's not apples to apples.
It's not an investment asset if you require it to live.
That said, renting is just as expensive as owning right now too. You're paying a mortgage and taxes and repairs and insurance either way, and with renting, you're also paying for a bit of landlord profit.
There's a lot of nuance in disagreement with this. Renting often makes sense for young workers who have not yet settled down. Also in many parts of the US one can rent a simple 1bd apartment where one could not buy such a house. I rented and invested in stocks up to about 5y ago and I've come out much further ahead than if I purchased a house.
As a simple example, my fully-laden (mortgage + insurance + tax) cost on a 2600 sqft 4br/3.5ba house on a 1/2 acre lot in a nice suburb in San Antonio purchased in 2012 was around $1400/mo compared to this being the typical rent for a 1br apartment pre-2020 in San Antonio anywhere that wasn't in the ghetto. That was largely thanks to having a 2.4% interest mortgage and being able to buy in 2012 in the dip for property values. The same property that was purchased for $162k in 2012 sold for $340k in 2022, and the mortgage rate for the new buyer was around 6.5%, doubling both price and interest rate greatly changes the equation, but let's not act as if that hasn't been a relatively recent (pandemic-tied) shift.
The above is the rule of thumb though. You have to run numbers for your life situation as they constantly change. Note that some of the numbers are for your life situation which itself can change. Renting is often better just if you buy and have to move there is a bunch of negatives.
Owning a home, I'm investing the difference I save by not having to rent. Difficult to see how a renter can come ahead unless the time horizon is just a couple years.
Rents only ever (mostly) go up. Mortgages only go down (refinances). Those lines can cross in just a few years into ownership. By now, renting the same house I own is about 4x more expensive.
One thing you really don't want when going into retirement is a constantly and unpredictably increasing housing cost when you'll be on a fixed income.
Why do we do this to young people? It's horrible. The only reason I'm not homeless now is that my spouse managed to be in very small fraction of the workforce that still offered a pension. 401ks go in the blink of an eye if you're disabled and out of the workforce too soon.
They trigger me in a negative way.
When are you planning to retire? "I don't know, that's why I'm here!"
When are you planning to die? "For real??"
At what rate will your investments grow forever? "Let me check my crystal ball."
What will your retirement expenses be? [......]
These calculators always just do the simple part (the math). The part that all of us could type into Excel in 10 minutes. Not much value there.
Also, we can't cut oil use cold turkey, as literally our whole civilization runs on it, including food production.
There's truly nothing new under the sun for human beings, we just keep play-acting out patterns etched by millions of years of evolution.
Like flying to the moon, and launching artificial satellites in greater numbers than naked-eye distinguishable stars, and some more to places so remote that even the sun is naught but a bright star; like flying above the clouds, around the world, and faster than sound; like refining metals from sand, poisoning it, etching on literally occult symbols (the word means hidden and they are smaller than light itself) and feeding them artificial lightning in order to trick it into doing our thinking for us; like transmuting metals and gasses to create weapons that can level cities and moderate-sized hills; like altering the global balance of fauna to be overwhelmingly us, our pets, and our livestock, with only a small fraction of the total now being wild animals; like wiping out entire diseases, learning to see colours beyond those our eyes can perceive (and also with sound) in order to look within living bodies; like having the power of Morpheus to keep someone asleep throughout as their heart is removed and replaced without killing them; like the power to read and write the language of life to bend it to our will, giving us spider-silk yeast?
I was clearly referring to psycho-social patterns, not arbitrary lists of technology.
Second: given how much we've changed our environment, our food, the substances we take for mental health, any take regarding our "nature" must account for the impact of this environment
Third: ditto nurture, as we now insist on educating ourselves to adulthood, and — in opposition to our earliest comprehensible written records — many of us are now in societies that reject things like slavery and husbands having arbitrary power over their wives (and increasingly, though to a lesser degree, religion); we have, essentially, domesticated ourselves.
(Yours would be a better insult had I not fallen off the top of the cognitive scoring mechanism when it was tested — which only means "at least +2σ" because it is poorly defined as a concept, but yours was still a woefully inept attempt at a put-down).
I rather hoped that #2 and #3 would have given a hint as to why #1 — but "communication is not a single-player game" isn't just something I'm telling you so you can be better.
Some of the areas with the highest predicted temperature increases are relatively dry places, such as Siberia and several deserts.
[1] >Since 2005, wet-bulb temperature values above 95 degrees Fahrenheit have occurred for short periods of time on nine separate occasions in a few subtropical places like Pakistan and the Persian Gulf. They also appear to be becoming more frequent. In addition, incidences of slightly lower wet-bulb temperature values in the 90 to 95-degree Fahrenheit (32 to 35-degree Celsius) range have more than tripled over the 40 years studied by Raymond’s team.
https://climate.nasa.gov/explore/ask-nasa-climate/3151/too-h...
https://www.thelancet.com/journals/lanplh/article/PIIS2542-5...
Furthermore, while every death to heatstroke is a tragedy, the numbers listed in the article you provided are quite low, in the order of 100 per year (and falling).
The Lancet article found that in the Americas there are about 37 excess deaths per 100,000 people per year, or about 1000 times per per capita than the 2011-2020 average in the NASA article.
I'm not denying that global warming may make some small-to-moderate part of the world uninhabitable (at least without access to electricity or running water). Indeed, half of Vietnam may be flooded.
Still, wet-bulb temperatures of 35 degrees is extremely hot and quite rare. I doubt we will see death tools in the millions per year in our lifetime, which is what it would need to be to match what cold weather or indoor air polution is already causing.
Those were deaths in the US, not globally or in the Americas. The US has just about the highest percentage of households with ACs of any country in the world and so is, broadly speaking, less susceptible to deaths from severe heatwaves even should they occur. Globally, the figure is more like five million [1] between heat and cold.
[1] https://www.theguardian.com/world/2021/jul/08/extreme-temper...
What the headline doesn't show, is that from those 5 million, over 80% is cold related.
Also, if you travel a bit in third world countries, you may be surprised by how many have access to air conditioning, either in their own house or (in an emergency) some relative or neighbour nearby.
There shouldn't be any mass migrations either...
That doesn't answer the parent's question, which is that those events have been happening in the past few decades with seemingly no material effects.
All that threat modelling, ecosystem analysis, and understanding the consequences of current biochemical developments are just a bunch of alarmism, stressing us out for no reason...
No need to understand what their data, methodology and conclusions are at all.
Again, this is something that's going to be a humanitarian disaster for the developing world, but a non-issue for the developed world because:
1. they can afford agricultural subsidies/crop insurance to protect farmers
2. they can afford consumer subsidies (eg. reliefs that european governments gave to consumers after the ukarine invasion)
3. there's tremendous slack in the food system. In the US only 27% of crops are used for feeding humans, the rest are used for livestock and biofuel [1]
4. Food represents a small fraction of Americans (and likely other developed countries)'s overall budget around 11%, and only a small fraction of that is actually spent on the crop itself[2].
In the worst case we have to switch to eating meats every week rather than every day and spend a bit more of our budget on food, but that's not exactly "fucked".
[1] https://www.vox.com/2014/8/21/6053187/cropland-map-food-fuel...
[2] https://www.ers.usda.gov/data-products/ag-and-food-statistic...
Insurance relies on a relatively small chance of a bad event occurring. If there are widespread failures, insurance companies may refuse to insure anything altogether. Systemic risks are not typically solved by insurance companies (see 2008 housing crisis, current Florida housing market insurance debacle)
> 2. they can afford consumer subsidies
For how long? If the answer is "forever, until we reverse all CO2 emitted", that might change the math for subsidies considerably.
> 3. there's tremendous slack in the food system. In the US only 27% of crops are used for feeding humans, the rest are used for livestock and biofuel
Livestock food is not slack.
> 4. Food represents a small fraction of Americans (and likely other developed countries)'s overall budget around 11%
Sometimes a small change in margin makes a big difference in decision making. If you go from 5% profitability to -5% (10% swing), you suddenly turn on the behavior on its head. How many households would be insolvent if their food % went from 11 to 15? What about 11 to 22?
For long enough so that farming can adapt (eg. technology improvements and/or moving agriculture to all the previously inarable land up north), or in the worst case for people to readjust their expectations for not eating meat for every meal of the day.
>Livestock food is not slack.
Why not? Corn is corn right? It might not be the sweet corn that you're used to, but it's still edible as food. Think corn tortillas or corn flakes[1]
>Sometimes a small change in margin makes a big difference in decision making. If you go from 5% profitability to -5% (10% swing), you suddenly turn on the behavior on its head.
No, because producers can raise prices to pass on costs to consumers.
>How many households would be insolvent if their food % went from 11 to 15? What about 11 to 22?
1. I mean, there's definitely going to be an non-zero amount of people that goes hungry due to any price rise, but that's why my original comment said "most developed country residents", not "everyone". Apparently in 2007-2008 there was a food price crisis, but given how it's not remotely in the american consciousness it's fair to say the impact on global food prices for the average american is negligible.
2. If you look at the same source you see that in the 1960s americans spent 17% of their income on food. Clearly it's doable in the past.
3. While it's true that most americans live paycheck to paycheck, I suspect the phenomena is mostly driven by equilibrium rather than lack of material wealth (ie. they're living paycheck to paycheck because of lifestyle inflation). If you look at the data broken down by income level[3], there's a surprisingly high amount of people making $100k+ but still living paycheck to paycheck. This leads me to believe that while they a good chunk of people living paycheck to paycheck can find the money eventually. They just have to make lifestyle sacrifices elsewhere. In the worst case they can revert to eating rice and beans, which isn't great but also isn't exactly "fucked".
[1] https://en.wikipedia.org/wiki/Field_corn#Uses
[2] https://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_p...
[3] https://www.pymnts.com/wp-content/uploads/2022/08/PYMNTS-New... (page 9)
We have four options:
- get rich
- stay working forever
- kill ourselves
- move to the woods
- keep healthy
- increase ownership of capital
- achieve age escape velocity
That's a much nicer, larger house than almost all of our grandparents grew up in (plus has some great bonuses such as running water). Definitely larger than you need when you're retired, but maybe you want plenty of room for grandkids to visit.
You now need $272k cash. Not undoable but as previously mentioned:
- get rich
bankruptcy stays on your credit file for just 7 years. And nobody is going to care about a missed bill or two in 2-3 years. As long as you don't take any payday loans, that is.
I doubt it. There may have been a time when most people on HN were startup founders, but it doesn't seem to be the case today.
> mean you'll have likely missed a bill or two, and your credit is ruined, and you'll never get a loan.
I don't have any failed startups, but I have missed plenty of bills, including going more than a year without paying a mortgage before short selling the house.
Credit isn't perfect now, but was able to swing a home loan on reasonable terms only a couple years after; missing a few bills isn’t a “you can never get a loan for life” situation.
Doesn't your house get repossessed if you do this, and you end up with nothing? I accept I may be wrong here, but I've been told the above a thousand times.
Foreclosure is a long and expensive process and can result in very bad deals for the lender. Particularly during and in a fairly long shadow after the Great Recession, lenders were very reluctant to pull the trigger on that if they believed they could get a better resolution, and for most of the time I wasn't paying I was in the process of trying to get the bank to approve the short sale (had a potential buyer lined up.) Also, had located and, during the time in question, moved into a rental with an independent landlord and no management company who was more-than-typically flexible in assessing credit, so wasn't dependent on having the house. (Because of the same changed market conditions that left the first home loan underwater, the rental of a larger home in a better neighborhood was also less than the mortgage on the underwater one.)
Yes, though, foreclosure was a risk, but in a no-recourse state with an underwater loan being left “with nothing” is better from a narrow financial perspective (potentially worse for other reasons without alternate housing arranged, given how credit can effect that) than having the house and mortgage,
Does that count as retiring? Presumably you'd still need money for stuff like electricity and manufactured goods that you can't make/forge yourself. Not to mention all the forging/hunting/crafting you'd have to do to sustain yourself.
(Edit: Humans going to the Moon or Mars don't count. People could do that but the distances are significant enough that those are going to be mostly separate economies. They will not impact Earth's economy very much.)
Population growth is the fundamental driver of GDP growth. Growth can still happen in other ways via innovation and efficiency improvements but without population growth it's going to be in the low single digits.
Without significant growth, retirement just can't work. Savings can't compound enough. Taxing the rich won't provide enough and taxing the middle class will kill the economy and make the problem worse.
Lastly retirement is really an institution that was born in an age when people did not live as long (on average) and work was much more physically punishing.
I could certainly see a kind of semi-retirement where a person dips out of high-pressure work in favor of lower pressure intellectual work that can be completed on a looser time frame. A lifetime of experience could probably be leveraged to provide valuable insight or work on high-value niche problems in specific domains, and that can be fairly lucrative and is often very amenable to remote part-time employment.
But regardless of things like that, this is a recipe for pretty significant social conflict. Young people already resent "boomers" for burdening them with cost via not just taxes but squatting on all the real estate and rigging the system to increase its value to fund their retirement. This will get worse, not better.
a) people were passing away shortly after retiring. E.g. the early pensions after the industrial revolution.
b) people in retirement would take on essentially unpaid social work. Carrying for elders and kids and so on. E.g. what was going on in late USSR and soon after it's collapse.
Those options may survive even with no population growth. But nowadays people expect to live long AND social work to be done by paid employees. And that is not sustainable with or without population growth.
But pensions on the other hand usually involve some sort of government system which often ends up trapped by demographic swings. The key for a pension system is this: don't allow it to depend on demographics. Make sure each generation provides for it's own pensions.
I used food above, but lots of other things likewise need current work. You cannot retire and sit on a log watching birds, you need to get lots of things from society.
Just storing value as cash just means that you have a greater claim to the productivity of a given society than other people, it doesn't necessarily "grow the pie".
A lot of people do that in some form but it's generally hard to convert into something that pays. (It's easy to contribute to open source projects for example. It's a lot harder to get paid a modest sum for doing so at your own pace and at your own pleasure.) The same things applies in general for casual consulting, writing, etc. in semi-retirement. You can certainly do it for the stimulation but it's hard to get someone to pay you and, in any case, that probably requires a certain amount of maybe-less-fun business activities.
ADDED: Most of the cases I've run into of decent part-time/freelance work are indeed through people I know but it's been mostly in the beer money category--I admittedly like better beer.
They're not the ones you need to be talking with. They only serve to gatekeep, don't really understand what the company needs, and can't champion you from the inside.
The engineering manager from two jobs ago on an adjacent team who's since gone off to start their own startup with some other ex-coworkers who need help in area X that you've spent years working in, but not enough for it to be a full time position yet? Reach out to them.
The rich shouldn't be taxed just for providing for other people, but also as a sort of dampening effect to make sure that getting rich doesn't become the non-rich people's only objective in life (like it seems to, for many in the US).
Taxing the rich at high rates and ensuring that lifestyles are slightly more equitable will enable everyone (both rich and non-rich) to be able to enjoy the kind of "semi-retirement where a person dips out of high-pressure work in favor of lower pressure intellectual work" that you mention.
In fact, taxes on the rich could be set up explicitly to fund something like basic income programs for older people.
It doesn't work this way. Ambitious people either just move to a county that's more open to business, bringing jobs and economic growth there instead, or they go into politics and get rich just by leeching off the economically productive populace, like corrupt officials in Russia and China.
Europe is a good example of this: it's got the highest tax rates globally, and some of the lowest GDP growth rates (and number of new businesses) in the world. People in France, Germany and the UK are seeing their standards of living get worse year by year, not better
https://projects.propublica.org/americas-highest-incomes-and...
You(a nation-state government entity) has the power to drag someone back home to pay their taxes. If Apple went 100% based out of Ireland, you could tariff the hell out of Apple products until their sales drop to zero.
You can put sanctions on places that run offshore bank accounts where people hide their money.
You can nationalize industries that are falling apart due to the requirement to increase profit, ie rail infrastructure.
The issue is why would the elected officials who benefit from this, do something to counter it. They're fine with an inequitable world governed by the Koch Brothers' school for business fairy tales.
The economy is a sham, the government could pay people to run the farms and clothing factories and stockpile the excess rather than burn it to create scarcity. There are other ways to live beyond this narrow system of faux economic sciences.
Musk is the obvious example. Tesla provides ~120k well paying jobs. Its the first electric car company that makes having an electric car cool thus putting tens of thousands of people in non polluting vehicles. SpaceX has fundamentally changed space travel plus employs 12k people directly. Should we have just capped his income after he sold paypal? Think of all that would have been lost.
Also who are we to decide what people should aspire to?
It has nothing to do with comfort, dude lives in a 200 SqFt fabricated house or sleeps at work.
Now, some might make the argument that without the possibility of becoming a multi billionaire some might not be motivated to start or run a business. That, I think would be a small enough loss to be worthwhile
I've always seen this as a very weak argument. With future automation we will have to figure out some form of collective ownership and dispersal of profits.
Why do anything, shut the company down and leave, its not your responsibility any more
Not to mention all the ancillary jobs that are going to be lost. Boat builders, private aircraft manufacturers, etc.
Those who build billion dollar companies do so for more than money.
Our money isn't a durable store of value since the gold standard was abandoned, you used to be able to make up for it by investing but the line can't go up forever.
Few that save for retirement keep their savings in cash. Most would save in some sort of instrument that would expose them to the stock market, money market, real estate etc. You might not always beat inflation but you also aren't seeing your savings eaten at the rate of inflation.
> the line can't go up forever
Central banks normally have an inflation goal of 2% meaning they literally want everything to slowly go up, forever. The problems usually occur when it's faster and slower than that...
The historical returns are a aberration from a high growth world, populations are falling. They won't look like that in the coming decades.
> Central banks normally have an inflation goal of 2%
2% CPI. CPI is a political measure first and a scientific measure second, from hedonic quality adjustment, owner imputed rent and the simple fact that most households don't have teams of economists planning their budget in order to maximally limit inflation means its far from a accurate barometer for the experiences of real people in the economy.
The single income households of yore had a higher percentage of discretionary income than two income households today. CPI was unable to capture this change and finds those households are wealthier somehow.
Apart from some countries with curious and massive drops in fertility coupled with low or no immigratoin, are there any signs that global population is falling rapidly? If anything it seems it's entering a pretty stagnant phase (for example in the US). Of course stagnation might still mean an aging population, which is a problem in some cases especially when it comes to pension systems, but it doesn't magically make the economy stop growing. GDP growth isn't merely population growth.
Not only that, there is evidence birth rates fell when regions were conquered or captured by the Romans and Greeks. Birth rates fell during the end of golden ages in China, I believe birth rates fell during the renaissance.
I believe there is some limiting factor in humans. We paradoxically make more children during bad times and stop producing them when times are good. We wouldn't be alone, crickets have genes that respond to cricket population levels, changing behavior, I think we have something similar.
Also lots of environmental stuff is messing with fertility, plastics, etc.
And if you put your money in something like global index funds, it would take something like large scale war for it to not give a positive real yield. Even just a 2-3 real interest becomes quite significant if left ot accrue over 50 years.
You can actually see it here, the age keeps going up. (Canada) https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=141000...
>I could certainly see a kind of semi-retirement where a person dips out of high-pressure work in favor of lower pressure intellectual work that can be completed on a looser time frame. A lifetime of experience could probably be leveraged to provide valuable insight or work on high-value niche problems in specific domains, and that can be fairly lucrative and is often very amenable to remote part-time employment.
This is how most old folks lived for all but the last 100 years. I'd totally be down to work 1-2d / wk if the labor market allowed it, but most jobs are 40h / wk or more with very little in the way of part time flexibility. We're going to have to change to allow this sort of work again in the future.
I'm putting my own retirement in jeopardy because of her failure to be responsible. I'm not even 40. My uncle pays his mothers nursing home, but he's 65 and she's well into her 80s. Another thing that shouldn't have to be paid for by someone else.
There's some lawsuit going on in PA where a guy who works a pretty normal income job, I think maybe he was a restaurant owner or manager. Anyway, IIRC his entire family except mother lives in Italy or somewhere overseas. He's the only one in the USA. He's being sued by her nursing home for $93k in back rent. IIRC he's lost every appeal. He had not a single thing to do with her nursing home contracts. He definitely made under 100k, I think 40-60k. I don't see it in this article and I'm too tired to dig around.
https://hh-law.com/blogs/supplemental-hh-law-blogs/pa-filial...
Last I read, the superior court of PA denied hearing his case and so the lower court ruling holding him responsible held.
As if anyone needed yet another reason to get out of Pennsylvania (I lived there for the first ~30 years of my life).
/s, obviously.
I'm already married, and I don't have an advanced degree (nor I have the need for one). My only options of getting a green card are (ranked from the least to most ridiculous)
- winning in the green card lottery
- finding someone to sponsor me an EB3, which would be very difficult, as I would refuse to accept an H1-B, unless they also immediately file for an EB3 (because on H1-B my wife wouldn't get a work authorization, but with EB3 she also gets an EB3 as dependent spouse)
- coughing up $900k for EB5
- divorcing and marrying a US citizen (or LPR)
- doing something that would get me persecuted in my home country but what was perfectly legal in the US, and applying for asylum in the US
none of these options are feasible. I do play the green card lottery every year though.
If you want extra motivation, keep in mind that raising a child (you!) is very expensive. If you paid everything back, it might be around the ballpark of paying some rent for your mother (or, way more...).
Be at peace.. my god.. lol. I don't have children, and won't have children. I don't expect anyone to pay for my old age.
Just out of curiosity - were you the only child in the family?
> You are actually mistaken completely. There s no your or theirs. It's all the same system, the cycle of life so to say and it's all connected.
If you'd like to provide for my irresponsible, conservative, self absorbed parent, let me know, I can provide logistics info. I have had my fill for this lifetime. Compassion and self preservation must exist in tension.
If the first, then this is the right thing to do as we have to find a balance (and we know where the balance is exactly), if the last then fy seriously, because it only makes the matter worse and doesn't give any help - a positive exponential process always trumps the negative one - you have to make all of them negative or close to 0 to actually succeed, of course negative process is also a dead end in the long run.
Do you understand this?
With regards to the macro or economics, I could care less of ponzi schemes that rely on an ever growing population. There are 8 billion people on this Earth, and we'll top out between 9-10 at the end of the century. If that number drops in half, or even more, that is not the end of humanity, simply pain on a suboptimal economic system that will need to adapt to the wishes of citizens participating within in.
[1] https://www.law.cornell.edu/wex/guardian_ad_litem
[2] https://news.ycombinator.com/item?id=37300184 (citations)
Let me try to explain it to you. If there are two societies, one with negative birth rate and one with positive then while it may appear that they cancel each other out, it is only temporarily until one with the negative birth rates is extinct.
If you target only the society with the negative birth rate then you only help them closer to their extinction while at the same time making the life of the people harder and harder because they have to upheld the society with less and less people (it's not about money, it's about work).
Of course the life of the society with the positive (usually excessively positive) birth rates gets also worse and worse because they have to share usually constant amount or resource among constantly growing amount of people.
Both models are not sustainable model in the long run and the only solution is a balance for both societies.
On top of this I personally consider it as an act of genocide if this kind of scheme targets small nations with unique culture and language that already have unsustainable birth rates. Are you participating in genocide?
Are you a cartoon oligarch or something?
We're in overshoot pretending that infinite growth is possible on a planet with finite resources and you're over here celebrating the meat grinder.
Of course you can point out various crises and low points, but generally every factor has worked in their favor. They've had strong employment, cheap education, population growth, strong unions, rising wages, common pensions, strong dollar/low inflation, low real estate prices that later peak around retirement age, great stock market returns peaking around retirement age, advent of the 401k, cheap debt in peak earning years, and the list goes on.
Unless they had incredibly bad luck or a major disability it'd be hard to be in a bad spot for retirement without being completely financially irresponsible. I have much less compassion and willingness to help in that situation.
something like 40+ percent of the Boomer generation is going to retire to poverty. There are many reasons ranging from jobs that don't pay enough or didn't offer a retirement plan. Divorce especially grey divorces are a common reason for no retirement money as is medical bankruptcy. job loss in your 50s and age discrimination contributes to lack of recovery.
All the benefits that you pointed out of growing up in the Boomer era were concentrated in a very small part of the population. Pensions were not as common as you might think and a many of them were underfunded and collapsed in the late 1980s.
401(k)s were never intended to be a retirement plan. They were created to supplement pensions and personal savings. In my darker moments I think they were also created as a rent seeking vehicle for the financial industry.
Great stock market return benefits mostly the financial elite. My father bought stock for his kids and returns were pretty crappy. Every ESOP program I participated in found me buying high and selling low (bad financial advice).
Debit is never been cheap. When I bought my first house in 1980, it was 14 1/2% interest on a three year arm. we refinanced down to something like 9% a few years later. Over 15 years, it only appreciated by something like 2x-ish what we paid for it. when we bought our second house, interest was in the 6% range.
yes, I had a lot of opportunity but between exploitive/bad financial advice, medical bankruptcy, and divorce all those advantages came to nothing. The lesson to take from this is you are just as vulnerable to the same forces. You sound like you have better financial literacy but doesn't matter if it's one bad event or series of smaller bad events, all of your retirement planning goes in the dumpster with no hope of recovery.
what am I doing about my (lack of) retirement? Saving as much I can, choosing a better partner this time around, and like half of my generation, working till I die, and hoping I die quickly when the time comes.
In the US, it objectively has been for the last few decades (especially 15 years), hence the enormous asset price inflation. If you were not invested, you were losing ground, and if you were not leveraged, then those ahead of you were pulling away.
Growing up, I knew a single mother who worked in a woman-dominated and rather underpaid field despite being (eventually) university educated and working her way up to management.
She could afford to rent, but not to buy, mostly because the down payment was perpetually out of reach despite living relatively frugally.
Then as her career started to make some traction (her late 40s), where she lived and worked the property market went stratospheric over a relatively small number of years and she was entirely priced out.
She died before retirement, so I don't know what that would have looked like.
Except for the crises and low points, of course. My first mortgage was 11% interest, inflation was roaring but there was still a recession (see "stagflation"[0]). Don't forget the 20% drop in stock market value in 1987. And the oil embargo[1]. And the Bush (1st) and Clinton tax increases.
I do share the sentiment.
Last year we bought them a house so the working spouse didn't need to stay employed into their mid 70s. They pay "rent" equivalent to about 25% of the payments we make each month for the mortgage + taxes. I also found out last year that since they pay below-market rates I need to count the rent they do pay as income for taxes but don't benefit from any of the usual landlord tax deductions (e.g. depreciation).
My own meager experience, as an immigrant to Canada, is that these things can be highly culturally dependant. Where & When I'm from, I feel parents sacrificed more for their kids upbringing (kids were not supposed to "get a job" in high school or university, typically stayed with their parents until marriage, were supported financially frequently beyond that point as well). Having output a lot more energy to upbringing, cultural norm at that time was largely that children will then take care of parents on the other end; frequently parents will live out their years with one of the children (while helping as babysitters etc - it's still not a one-direction relationship:)
My experience in North America is that kids will become independent earlier, have jobs and some income as early as 16, frequently will move out as young as ~18 (University), obtain loans or work jobs to provide financing for university, and are unlikely to return home afterwards (*Historically! The housing crisis may bring the two approaches closer together!). As such, there's lower energy invested by parents into upbringing and somewhat lowered expectation / frequency of supporting parents later.
My third anecdata observation is that some issues occur when cultures change - i.e. if parents invested a lot of energy into kids somewhere else, then they all move to North America where culturally we're less well setup to support our parents; this may occur in a "one-time" generational glitch with parents possibly left hanging.
----
That's my overall perception; as to your specific case, devil is always in the details - outsiders like us don't know, and don't need to know the background - how much your parents supported you, what happened that jeopardized their retirement, and what your overall relationship is :-/. I am planning and expecting to support my dad in at least some of his retirement (my mom passed away young), but again, I was lucky with my parents, and cultural expectations and specific family relationships differ. We all have our own story and history.
I invest everything I can into my kids, but I have zero expectations of them sacrificing their goals to help me. What people may have expected is kids will live nearby and help out, which is a perfectly reasonable thing to expect from nearby family, but things start getting dicey when kids have better economic opportunities in other places or simply want to live somewhere different or unaffordable for the parents.
Also, I know lots of immigrant cultures that have an expectation of daughters in law being expected to be full time chefs/nurses/maids, so one generation of women that had to be a chef/nurse/maid will get shafted, while they will not receive the same from their daughter in law.