I follow a blog called The Dollar Vigilante that's mostly about how awesome Bitcoin is and how everyone should buy land in Chile from, coincidentally enough, the guys who run The Dollar Vigilante. Today they had a post about how terrible it is that more and more Americans think retirement is beyond their means. Over one-third of the American middle class feels they will need to work until at least age 80.
My grandfathers retired at ridiculously-young ages. My father will retire before he's incapable of working. I look at the world and my finances and don't think I'll be able to retire until I'm dead. But I'm not sure I see anything wrong with that.
"In the sweat of thy face shalt thou eat bread, till thou return unto the ground," the Lord told Adam. Not, "till 62," and not, "till work becomes bothersome." Following the Fall, the changed conditions of mortality were: 1) difficult childbirth, and 2) work until you're dead.
It used to be retirement was something for Charlie Bucket's grandparents: you only stopped going to work when you stopped going anywhere. You want to give work the old miss-in-baulk? Then take to bed like Grandpa Joe and Grandpa George.
Retirement came to the masses with the creation of Social Security. The SSA has a website which tries to downplay the massive changes in longevity that have occurred since 1935. "Oh, it's only been a five-year increase in expected remaining life for those who reach 65," the SSA says, but the number of Americans surviving from 21 to 65 has exploded. Dying in your 60s is now seen as a tragedy. So why do we retire in our 60s?
Working to 62 when you live to 65 means being retired for 5% of your life. Now that life expectancy is 79 in the United States, that would mean retirement would begin at 75.
Meanwhile, the nature of work has changed. Fewer Americans are participating in physical labor for their employment. The weakening of the body in the 60s does not demand retirement the way it used to. And zero-sum economics doesn't make early retirement an attractive option. It is not true that we "need" hordes of retirees to have jobs available for new workers. If one job is taken, that means something else is available for the new worker to do. Not employing resources is not a recipe for wealth, despite what 80 years of Keynesian economics have made most Americans believe. Able-bodied Americans not working necessarily makes us all poorer than we otherwise would be.
The real problem is the hubris of the average American, who has come to think he can half-ass it for 40 years and somehow pay for an 80-year life, AND leave an estate to his survivors, too. If you want to work half as long as the rest of the world, you need to be at least twice as productive as the rest of the world. But while developing countries teach their children science and math, we have been teaching our kids safe sex and global warming.
Retirement is a vestige of inequality. A people that is on average dumber than the rest of the world has no right to expect super-normal returns to their labor (although, perhaps because they are dumber, that's exactly what they do expect).
via oneofthebest
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