Early Retirement (2006)(philip.greenspun.com)
philip.greenspun.com
Early Retirement (2006)
https://philip.greenspun.com/materialism/early-retirement/
307 comments
Both my grandfathers have repeatedly tried to retire and within 3 weeks went back to work until in the case of one his boss changed and in the case of the other, at 77 he is still working.
For many their work is very core to their identity and without it, they have little to do.
For many their work is very core to their identity and without it, they have little to do.
I think easing out of work is important. My dad 'retired' at 67 and instantly got hired back as a consultant on an hourly basis. He then spent the next 3 or so years slowly cutting down his hours until he was only working ~20-30% at which point he felt ready quit.
Similar. My old man went back to his old job as a consultant. It was supposed to be 20 hours a week and quickly turned into 40. Then he gradually reduced over time.
Probably my ideal thing would be some project-based (non-dev) consulting that wasn't too many hours and that let me disappear for a month here and there. I'm not sure I could really count on that though--especially without a lot of beating of bushes--which leads me to put in a bit more time while I easily can.
There’s a market for snowbirds who work half the year. You just have to be Visibly Very Good at something.
Newbie here. What is a consultant? What are the education or job experience reqs to be able to properly call yourself a consultant?
A consultant is basically anyone who is paid by the hour/day to works on projects and isn't employed by the company whose project they're working on.
Generally the difference between a consultant and a contractor is kind of diffuse, but basically a consultant has more autonomy and is expected to offer advice and guidance based on their experience, while a contractor is expected more to just implement a plan given to them. But as I said it's very diffuse and many people use the term contractor and consultant interchangeably.
As to what it requires, literally just that you can convince someone to pay you money for you to give them advice. Often a consultant will have a lot of experience in a specific area and will be brought on by companies that need help and expertise in that area for a specific project, but don't want to hire an expert full time.
There are also consulting companies that employ people and hire them out to other companies as consultants. At which point you just get a regular salary from your employer and the company you are hired out to pays your employer for the hours you work.
Generally the difference between a consultant and a contractor is kind of diffuse, but basically a consultant has more autonomy and is expected to offer advice and guidance based on their experience, while a contractor is expected more to just implement a plan given to them. But as I said it's very diffuse and many people use the term contractor and consultant interchangeably.
As to what it requires, literally just that you can convince someone to pay you money for you to give them advice. Often a consultant will have a lot of experience in a specific area and will be brought on by companies that need help and expertise in that area for a specific project, but don't want to hire an expert full time.
There are also consulting companies that employ people and hire them out to other companies as consultants. At which point you just get a regular salary from your employer and the company you are hired out to pays your employer for the hours you work.
[deleted]
Maybe, but I don’t know anyone who’s less happy being retired.
I've known lots of people who spiraled into various levels of depression after retirement. It's even more likely if the retirement wasn't voluntary.
I've known lots of people who spiraled into various levels of depression after retirement. It's even more likely if the retirement wasn't voluntary.
Retirement is such a loaded word because to many it means "wealthy enough to do whatever they want", whereas traditionally it meant "no longer useful to employers". In the former case we have stories of 20-somethings "retiring", the word repurposed into just a meaningless boast.
In the no longer useful to employers vein, in the working class town I grew up in there was a common observation that retirement was a harbinger of death. That when someone retired their lifestyle would quickly decline to sedentary decay, boredom medicated with alcohol (or other things). Death would quickly follow.
As an aside, tangentially there's a wonderful passage from Mark Twain in Tom Sawyer -
“Work consists of whatever a body is obliged to do. Play consists of whatever a body is not obliged to do.”
In the no longer useful to employers vein, in the working class town I grew up in there was a common observation that retirement was a harbinger of death. That when someone retired their lifestyle would quickly decline to sedentary decay, boredom medicated with alcohol (or other things). Death would quickly follow.
As an aside, tangentially there's a wonderful passage from Mark Twain in Tom Sawyer -
“Work consists of whatever a body is obliged to do. Play consists of whatever a body is not obliged to do.”
The article discusses this. In part:
> Americans cannot imagine stopping work before they've either (1) purchased everything that they could conceivably want, or (2) collapsed from physical exhaustion.
If your material needs and desires are sufficiently low, and your resources sufficiently high, you could retire. Age or usefulness to an employer could be an upper bound, I suppose.
I look at it like this: finances are like a bathtub. What you spend is the drain, your income (whether salary, interest, cap gains, etc) is the faucet, and your resources are the water in the tub. Retirement is the point where you can turn off (or turn down) the faucet and not run dry. Some people have big drainpipes and need a big tub and lots of water; others can live with a trickle.
> Americans cannot imagine stopping work before they've either (1) purchased everything that they could conceivably want, or (2) collapsed from physical exhaustion.
If your material needs and desires are sufficiently low, and your resources sufficiently high, you could retire. Age or usefulness to an employer could be an upper bound, I suppose.
I look at it like this: finances are like a bathtub. What you spend is the drain, your income (whether salary, interest, cap gains, etc) is the faucet, and your resources are the water in the tub. Retirement is the point where you can turn off (or turn down) the faucet and not run dry. Some people have big drainpipes and need a big tub and lots of water; others can live with a trickle.
I prefer the term "financially independent". Just knowing you can walk away at any time without ending up homeless or in poverty.
I retired at age 62.5, tired of working long hours and high stress as a lead programmer in a huge company. Now I write code all day I want to write. Much more fun. I miss being involved in the (non FAANG) companies business, but I don't miss the hours, stress, frustration or exec indecision at all.
There is plenty of research to suggest that people go into cognitive decline after entering retirement. Whether that translated to a change in "happiness" is perhaps a different metric, but it certainly is suggestive.
https://www.apa.org/news/press/releases/2020/03/cognitive-de...
https://www.sciencedaily.com/releases/2019/10/191029131506.h...
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6153553/
https://www.apa.org/news/press/releases/2020/03/cognitive-de...
https://www.sciencedaily.com/releases/2019/10/191029131506.h...
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6153553/
I tend to believe the statement -- I don't know about the "happiness" aspect per se but regarding doing all those things you told yourself you'd do, yeah for sure. During COVID lockdown I saw hundreds of instances of a meme something along the lines of:
"I used to think I just didn't have the time for all the things I wanted to accomplish; lockdown proved that isn't true!"
Not exactly scientific, but I can relate to that.
"I used to think I just didn't have the time for all the things I wanted to accomplish; lockdown proved that isn't true!"
Not exactly scientific, but I can relate to that.
I read some interesting advice somewhere that said: "Sit still until you're compelled to move."
I think the idea is that a lot of our wants / desires are urges that come and go, but our dreams and needs are deeper than that and we have to let those urges pass before we can find out what our true desires are.
I think the idea is that a lot of our wants / desires are urges that come and go, but our dreams and needs are deeper than that and we have to let those urges pass before we can find out what our true desires are.
And I cannot relate. This is not to say that I don't believe you, just to say that the opposite experience does exist. Some of my hobbies are pretty involved and basically require studying (signal processing etc.), and during the COVID lockdown I was able to spend much, much more time on not just those, but everything else as well.
I think I will be fine once I retire sometime.
I think I will be fine once I retire sometime.
How much money can a Silicon Valley software engineer expect to have at retirement?
This article says $7 million: https://www.wealthmeta.com/blog/being-a-doctor-vs-being-a-so...
Here's the back-of-the-envelope calculation: Annual salary: $250K (it is much higher at FAANG). Assume 25% tax (effective, not marginal), which leaves us with $187.5K, which is about $15K per month. Assume $5000 in monthly expenses, which leaves us with $10K per month investable money. (Note: since net worth includes house and 401(k) I have not deducted mortgage or 401(k) payments). So $10K includes those items.) Now use a compound interest calculator to see what $10K per month at 8% interest (assume investment in S&P 500 and allow for some market crashes) will result in, at the end of 30 years. It is about $14 million, which would include your house and your 401(k).
Here's a spreadsheet that allows you to plug in your own numbers: https://docs.google.com/spreadsheets/d/1Ryu_-mVYxSdJbW8lmf1z...
This article says $7 million: https://www.wealthmeta.com/blog/being-a-doctor-vs-being-a-so...
Here's the back-of-the-envelope calculation: Annual salary: $250K (it is much higher at FAANG). Assume 25% tax (effective, not marginal), which leaves us with $187.5K, which is about $15K per month. Assume $5000 in monthly expenses, which leaves us with $10K per month investable money. (Note: since net worth includes house and 401(k) I have not deducted mortgage or 401(k) payments). So $10K includes those items.) Now use a compound interest calculator to see what $10K per month at 8% interest (assume investment in S&P 500 and allow for some market crashes) will result in, at the end of 30 years. It is about $14 million, which would include your house and your 401(k).
Here's a spreadsheet that allows you to plug in your own numbers: https://docs.google.com/spreadsheets/d/1Ryu_-mVYxSdJbW8lmf1z...
Those numbers are pretty optimistic for expenses if you live somewhere expensive, ever plan to get into a long term relationship and/or have kids, or ever plan to make a down payment on a house.
I think your tax calculation is way low too, but haven't done the math.
I think your tax calculation is way low too, but haven't done the math.
Who needs to spend more than $5000 per month, not including mortgage?
You don't start out with a mortgage, unless have some unusual circumstances.
[deleted]
Who has a mortgage without interest payments?
I think in the US the interest is deductible.
A very small portion of people in the US benefit from the mortgage interest tax deduction ever since the standard deduction was greatly increased. You have to itemize (forego the standard deduction) in order to take advantage, and only 13% of tax filers itemize on their taxes in the US.
[deleted]
No one needs to do anything, but most families living in silicon valley are probably spending more than 5k a month. 8% is also probably too high. S&P historical returns are 7%, plus 15% tax.
If you do a little algebra and make some simple assumptions, it turns out that "years of work required for retirement" is a function of your savings ratio only, that is savings/take-home pay.
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
I like MMR, but like many people in that genre these over-simplified calculations only really work for a very narrow set of circumstances.
What happens if you want to buy a condo in a competitive market that requires a 200k downpayment? Or have a medium-sized wedding? Or have two kids in day-care?
I understand that the FIRE response would be that you don't _have_ to buy into all that stuff, but saying that it's just a little algebra and some simple assumptions is fantasy unless you want to live like a single 24 year old your whole life.
What happens if you want to buy a condo in a competitive market that requires a 200k downpayment? Or have a medium-sized wedding? Or have two kids in day-care?
I understand that the FIRE response would be that you don't _have_ to buy into all that stuff, but saying that it's just a little algebra and some simple assumptions is fantasy unless you want to live like a single 24 year old your whole life.
> unless you want to live like a single 24 year old your whole life.
Controlling expenses and living a humble life style is pretty much the opposite of living like a single 24 year old. At least for me and most of the single 24 year olds I knew back then.
It takes wisdom and maturity to realize that you don't need all that stuff. And if you can find a partner with the same outlook, you can certainly avoid spending tens of thousands on a wedding, or buying a condo in a competitive market. And there should be no need for day care if you're retired.
Controlling expenses and living a humble life style is pretty much the opposite of living like a single 24 year old. At least for me and most of the single 24 year olds I knew back then.
It takes wisdom and maturity to realize that you don't need all that stuff. And if you can find a partner with the same outlook, you can certainly avoid spending tens of thousands on a wedding, or buying a condo in a competitive market. And there should be no need for day care if you're retired.
> It takes wisdom and maturity to realize that you don't need all that stuff
This is _exactly_ what I take issue with. Look, "live below your means and be thoughtful about what spending will make you happier" is great advice. So is "plan for a future where you don't have to work".
"Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is.
I'm just the right age (37) to have grown up alongside the FIRE thing. I have a number of friends who tried it, some of them to the point of being smarmy about it. 100% of them hit late twenties and realized that the combo of "making a high income while having very low expenses" involves significant trade-offs, and is super hard to keep up. All of my friends eventually abandoned it, but I don't think that's the rule.
Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.
This is _exactly_ what I take issue with. Look, "live below your means and be thoughtful about what spending will make you happier" is great advice. So is "plan for a future where you don't have to work".
"Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is.
I'm just the right age (37) to have grown up alongside the FIRE thing. I have a number of friends who tried it, some of them to the point of being smarmy about it. 100% of them hit late twenties and realized that the combo of "making a high income while having very low expenses" involves significant trade-offs, and is super hard to keep up. All of my friends eventually abandoned it, but I don't think that's the rule.
Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.
> Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.
I haven't heard anyone claiming it's easy or that any failure to do it is due to a lack of wisdom or maturity.
I think wisdom and maturity are required, but that's not all that is required. There's also a fair amount of discipline, and alignment with the tradeoffs, plus a good helping of privilege and luck.
> "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is.
That's not even close to what I claimed required wisdom and maturity to realize.
I haven't heard anyone claiming it's easy or that any failure to do it is due to a lack of wisdom or maturity.
I think wisdom and maturity are required, but that's not all that is required. There's also a fair amount of discipline, and alignment with the tradeoffs, plus a good helping of privilege and luck.
> "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is.
That's not even close to what I claimed required wisdom and maturity to realize.
I've always been thoughtful about my spending. I got married 12 years ago and worked while my wife went to school full time. About 10 years ago, I discovered the MMM blog and started making a concerted effort achieve financial independence. I am just about there now.
For me, I didn't feel like there were many trade-offs. The key take-away is prioritizing value and figuring out what brings you joy in life. By doing this, I was able to eliminate a lot of unnecessary spending. I don't feel like I ever missed out on anything.
For me, I didn't feel like there were many trade-offs. The key take-away is prioritizing value and figuring out what brings you joy in life. By doing this, I was able to eliminate a lot of unnecessary spending. I don't feel like I ever missed out on anything.
I suspect the people who are able to keep a tight reign on their spending do so for its own sake. They get some satisfaction from it before they even start thinking about retirement.
To some people, the pain of letting the money go is greater than the perceived benefit of the product/service they get in return for the money, most of the time. You can imagine such people accumulating money all their life. For them, FIRE would be a very attractive proposition.
> What happens if you want to buy a condo in a competitive market that requires a 200k downpayment? Or have a medium-sized wedding? Or have two kids in day-care?
If you mean after you retire, you'd plan for those things within your 4% swr budget just like you would if you were making a salary.
If you mean before, then it depends on whether you're planning on getting married annually for the rest of your life, or if it is a one time expense. If it is a one time expense, I'm sure everyone here is capable of doing the math to figure out how much a large one-time expense will delay your retirement. (hint: it is one-time expense / earnings)
If it is recurring, then the math still applies.
If you mean after you retire, you'd plan for those things within your 4% swr budget just like you would if you were making a salary.
If you mean before, then it depends on whether you're planning on getting married annually for the rest of your life, or if it is a one time expense. If it is a one time expense, I'm sure everyone here is capable of doing the math to figure out how much a large one-time expense will delay your retirement. (hint: it is one-time expense / earnings)
If it is recurring, then the math still applies.
The salary numbers are very optimistic, too. A small number of tech workers at a small number of FAANG companies in a small number of locations, will be making $250K from the start or even average that much throughout their careers. I know, I know, everyone on HN makes $400K and drives a Ferarri, but that's very optimistic number for most people.
EDIT: Also: house should not be included in your net worth for the purposes of calculating retirement draw-down, unless you plan to liquidate your home equity to live on.
EDIT: Also: house should not be included in your net worth for the purposes of calculating retirement draw-down, unless you plan to liquidate your home equity to live on.
You should subtract capital gains.
Unless you know of a way to put $84k/year into a roth account.
Unless you know of a way to put $84k/year into a roth account.
If you invest in S&P 500 index fund you don't need to sell until after retirement.
I agree.
But a material chunk of the $14M belongs to the government (not available for the individual to spend).
If someone takes out a $2M loan at the age of 58, and retires at 59 (before any of it is paid back), do you think that should be money considered in a retirement calculation?
But a material chunk of the $14M belongs to the government (not available for the individual to spend).
If someone takes out a $2M loan at the age of 58, and retires at 59 (before any of it is paid back), do you think that should be money considered in a retirement calculation?
Any growth in the "government's portion" is yours until you sell. Also, if you sell after retirement the tax rate is going to be low if you don't have much non-investment income.
I agree it's yours until you sell. We are just debating semantics (does retiring with $14M mean retiring with $14M you can spend, or $14M minus taxes that you can spend).
Also, Capital gains is treated differently than ordinary income.
Your income tax bracket is irrelevant in determining your capital gains rate (at least for now).
Also, Capital gains is treated differently than ordinary income.
Your income tax bracket is irrelevant in determining your capital gains rate (at least for now).
https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...
Income tax bracket doesn't directly correspond with capital gains brackets, but total income affects the capital gains tax rate.
Income tax bracket doesn't directly correspond with capital gains brackets, but total income affects the capital gains tax rate.
Disclaimer: I am not a CPA or tax attorney.
As of 2021, a very high income married one-earner household can potentially put away $19.5k/yr pre-tax into a traditional 401(k), $38.5k/yr into a after-tax Roth 401(k) which can be optionally converted to a Roth IRA, plus $6k/yr for both the worker and the spouse into Roth IRAs, plus $7,200/yr into a family HSA (if it's available thru your employer).
That's $19.5k + 38.5k + 6k + 6k + 7.2k = 77.2k tax advantaged. $57.7k of that is not subject to income tax or capital gains upon distribution, as long as you are following the rules. Not too bad.
As of 2021, a very high income married one-earner household can potentially put away $19.5k/yr pre-tax into a traditional 401(k), $38.5k/yr into a after-tax Roth 401(k) which can be optionally converted to a Roth IRA, plus $6k/yr for both the worker and the spouse into Roth IRAs, plus $7,200/yr into a family HSA (if it's available thru your employer).
That's $19.5k + 38.5k + 6k + 6k + 7.2k = 77.2k tax advantaged. $57.7k of that is not subject to income tax or capital gains upon distribution, as long as you are following the rules. Not too bad.
If your retirement income comes entirely from long term capital gains, then the first $80K you sell per year is tax free.
80K is for married, for single filers its 40K.
He's always been an interesting chap. I wish him well.
> Most important, do not retire in the expectation that it will be easy to find rewarding non-profit volunteer work.
Thankfully, this has not been an issue with me.
I definitely don't have the massive nest egg that another commenter mentioned, but I've got enough to avoid starving, and I am happier than I ever thought I'd be.
> Most important, do not retire in the expectation that it will be easy to find rewarding non-profit volunteer work.
Thankfully, this has not been an issue with me.
I definitely don't have the massive nest egg that another commenter mentioned, but I've got enough to avoid starving, and I am happier than I ever thought I'd be.
Thank you for writing this. I was worried that I was planning to retire soon but never made a $250K salary, will not have $7M.
I have a church and spend some chunk of my active off-hours doing various activities there - maybe 10 hours a month. If I were to retire, I imagine that time would double or triple.
That's how I'd recommend viewing non-profit work in advance of retirement. Is there a non-profit you're spending effort on now? Spend more effort there. If not, it's probably a good idea to examine your values and find some organizations that advance them and start helping out.
That's how I'd recommend viewing non-profit work in advance of retirement. Is there a non-profit you're spending effort on now? Spend more effort there. If not, it's probably a good idea to examine your values and find some organizations that advance them and start helping out.
> How much work does the average college student get done? Almost none. Yet the same person, injected into a corporate bureaucracy, becomes a reasonably effective worker. Why? Most people have terrible time management skills. This limitation is of no consequence in public school. The school tells you where to sit and what to do and when, at least for six hours per day. This limitation is of no consequence at most jobs. The employer tells the workers where to sit and what to do and when, at least for eight hours per day.
No, the average worker is not doing a lot of work.
https://www.inc.com/melanie-curtin/in-an-8-hour-day-the-aver...
No, the average worker is not doing a lot of work.
https://www.inc.com/melanie-curtin/in-an-8-hour-day-the-aver...
I agree, but it depends on what you consider work.
The author in your quote is implying that in public school you get a lot of work done. I don't think this is necessarily true. Unless, we are counting sitting in school for 6 hours each day as work. If we measure work as simple attendance and adherence to a schedule, then it seems that work and school are similar (ie sit in a class lecture v sit in a meeting, with very brief amounts of work in between). But this has nothing to do with output, which most of us would consider a necessary product of work.
The author in your quote is implying that in public school you get a lot of work done. I don't think this is necessarily true. Unless, we are counting sitting in school for 6 hours each day as work. If we measure work as simple attendance and adherence to a schedule, then it seems that work and school are similar (ie sit in a class lecture v sit in a meeting, with very brief amounts of work in between). But this has nothing to do with output, which most of us would consider a necessary product of work.
I agree. I don't think either setting can be considered highly productive.
I think the point was that for a lot of people the settings are more productive than if they were left to their own devices.
That largely depends on the value system. Set someone in a remote area and tell them they have to make it on their own with nobody coming to their aide, they'll work hard. Give them a salary that doesn't change based on work effort, then why would they try harder?
I get way more done for my self than when I'm working for an employer. I'm not dragged down by meetings and bureaucracy.
I get way more done for my self than when I'm working for an employer. I'm not dragged down by meetings and bureaucracy.
[deleted]
I couldn't understand how he continues to work for harvard and still call himself retired.
By dictionary definition, you have to have left your position of employment and left work.
But there's still some meaning in "not being stuck at work" and being financially capable of choosing what you do with your time. We don't have a single word for this, but we have some phrases, like "financially independent." Once you've reached this point, you might choose to do something that people will pay you for, or you might not. Either way, you're not obligated or chained to employment any more.
Using the term "retired" for that status is not a huge stretch.
But there's still some meaning in "not being stuck at work" and being financially capable of choosing what you do with your time. We don't have a single word for this, but we have some phrases, like "financially independent." Once you've reached this point, you might choose to do something that people will pay you for, or you might not. Either way, you're not obligated or chained to employment any more.
Using the term "retired" for that status is not a huge stretch.
He teaches occasionally at Harvard, usually a short course. This is covered under the subsection "Teaching might be the answer."
It used to be a much cleaner division. You got your Rolex and you moved to Florida. (OK I exaggerate.)
But for many professional people in tech, it can mean doing some consulting/teaching/writing/whatever on the side. In fact, for me, one of my questions is what are some of the specific things it makes sense for me to do when I retire that are materially different/better than what I do today?
But for many professional people in tech, it can mean doing some consulting/teaching/writing/whatever on the side. In fact, for me, one of my questions is what are some of the specific things it makes sense for me to do when I retire that are materially different/better than what I do today?
I had a version of this realization early in my life. I wanted to be a musician. I thought that school and other things in life were a burden and that once I was devoted to music, I'd be happy and full.
I got my dream by 18 years old. When music became my work I hated it.
Made me think differently about life.
I got my dream by 18 years old. When music became my work I hated it.
Made me think differently about life.
Everything that becomes work you will hate.
I think when it is no longer your job you might begin to enjoy it again?
My career turned out to be software engineering because I liked writing software as a hobby. The job does take the software-writing energy out of me. But from time to time when I have started a little project of my own I have found it to be enjoyable again.
I think when it is no longer your job you might begin to enjoy it again?
My career turned out to be software engineering because I liked writing software as a hobby. The job does take the software-writing energy out of me. But from time to time when I have started a little project of my own I have found it to be enjoyable again.
I had a similar situation. I worked hard and went back to school and became a professional artist. I was paid decently, but ended up never drawing or painting for myself. I hated it. It took me close to a decade to start liking the process of creating visual arts again, and even then it was tentative.
I read something not all that long ago that I wished I had read when I was much younger. "Make something you like your career and keep your passions for yourself, if you are able."
Obviously, this doesn't work for everyone. Some people have that all consuming thing where the process of selling your passion doesn't kill the love for it, but it didn't mesh for me =/
I read something not all that long ago that I wished I had read when I was much younger. "Make something you like your career and keep your passions for yourself, if you are able."
Obviously, this doesn't work for everyone. Some people have that all consuming thing where the process of selling your passion doesn't kill the love for it, but it didn't mesh for me =/
I took me 10 years to buy an MPC again. And I barely touch it. The scars are real.
A couple good things though:
- I can finally listen to music without overanalyzing it. Which is to say I can now enjoy music.
- I find a lot of ways to use creativity in my job, and has given me an edge thus far (or so I think).
A couple good things though:
- I can finally listen to music without overanalyzing it. Which is to say I can now enjoy music.
- I find a lot of ways to use creativity in my job, and has given me an edge thus far (or so I think).
I do think the fast ideation strategies I learned in art school definitely help me in software development, as well as not becoming overly attached to my children and accepting criticism. There are, for sure, many wonderful lessons to be learned in creative classes that cross over. I haven't been to a "Code Camp", but I have to imagine that this form of purely technical training (on its own) would have its down sides (though, I only have a liberal arts education as well, who stumbled into a technical field because of my hobbies).
There is a big difference between have to and get to. Most people are better served with a strict work/life balance that pays the maximum they can find and get all their fulfillment from their hobbies/dreams/etc. Work becomes a punch the clock and your passions stay alive without the pressure.
As soon as something becomes work, there is a contract (expicit or implicit) that comes with rules and conditions. After a while, any activity under contraints, rules and conditions imposed by others stop being fun, unless you are very powerful / famous / popular and you can put the rules / conditions (and even in that case, sometimes it is not possible).
A tangent comment, but his website is such a fun throwback. I remember finding the Philip and Alex's Guide to Web Publishing (https://philip.greenspun.com/panda/) when it was first put up. What an amazing eye opener for me at the time to what the internet would/could be. Plus I loved his napkin-style diagrams and interspersed photos.
Every now and then I come across a link to one of his webpages. I'm glad he's kept them up for so long.
Travels with Samantha was probably one of the earliest things you really wanted to read on the Web: https://philip.greenspun.com/samantha/ That was in the days when you could have a personal homepage with "the" interesting stuff on the Web worth going to.
I was hoping to find some nuggets of wisdom in this blog post but came up empty I'm afraid.
I kept busy writing games, doing art, making things from wood before my career/family, I see no reason why I will not again when retired.
As I do have a family (and nearly an empty nest now) I have become quite comfortable not having much of a "social life". I still want friends, still need the occasional connection, but it is not nearly as central to my life as it was when I was younger.
No, I expect I will do just fine as a retiree.
(Maybe I should add, I still have managed to squeeze in projects this whole time in my off hours even while holding down a job + family. I know there are plenty of unmotivated people and so maybe I was not the target of the post.)
I kept busy writing games, doing art, making things from wood before my career/family, I see no reason why I will not again when retired.
As I do have a family (and nearly an empty nest now) I have become quite comfortable not having much of a "social life". I still want friends, still need the occasional connection, but it is not nearly as central to my life as it was when I was younger.
No, I expect I will do just fine as a retiree.
(Maybe I should add, I still have managed to squeeze in projects this whole time in my off hours even while holding down a job + family. I know there are plenty of unmotivated people and so maybe I was not the target of the post.)
This person seems to have extreme, simplistic views that they hold as the truth.
Non-profit organizations exist to provide their staff with great jobs"? He honestly believes that? How many has he worked with? I've worked with non-profits my whole life, and some are flawed, but many do tremendously valuable work. No to the beach? Depends on your preferences.
To the author: Taking personal, anecdotal experiences and drawing "objective" rules from them is the modus operandi of the fool. Maybe take your retirement time to learn to be less of a fool.
Non-profit organizations exist to provide their staff with great jobs"? He honestly believes that? How many has he worked with? I've worked with non-profits my whole life, and some are flawed, but many do tremendously valuable work. No to the beach? Depends on your preferences.
To the author: Taking personal, anecdotal experiences and drawing "objective" rules from them is the modus operandi of the fool. Maybe take your retirement time to learn to be less of a fool.
If you read more of Philip Greenspun's writings it's apparent that he likes to inject a bit of satire into them. Both self-deprecating and deprecating others. I figure that he hit it on the nose with that bit.
He's punching down, and is toxic in general. I forgot about it until I clicked the link (or maybe didn't notice it the first time I read it)
And people say studying humanities is useless...
Before you can even begin to approach questions like this, you have to get a lay of the land at least... read an article on philosophy and religion in the encyclopedia.
These aren't new questions. They've been dissected and applied to the furthest reaches of our understanding. It's all written down and at our fingertips 24/7.
They underlie the primary question in the article. Retirement is irrelevant. In a very roundabout way it seems like that is what Mr Greenspun is trying to say, but it kind of comes across as (the illustrious Gordon Lightfoot put it) a "rich man's spiritual".
> In olden times, the average person didn't expect to be happy.
How can this even be proposed? Maybe I just read way too into this. Is it a joke?
edit: I don't like leaving such negative comments. I envy Mr Greenspun. I'm not 37 yet but I'm not too far off, either. If I could retire at that age and spend the rest of my life exploring philosophy and leisure... well I could hardly think of a finer place to end up in one's life. Starting to ask the questions at all is how to start. Kudos.
Before you can even begin to approach questions like this, you have to get a lay of the land at least... read an article on philosophy and religion in the encyclopedia.
These aren't new questions. They've been dissected and applied to the furthest reaches of our understanding. It's all written down and at our fingertips 24/7.
They underlie the primary question in the article. Retirement is irrelevant. In a very roundabout way it seems like that is what Mr Greenspun is trying to say, but it kind of comes across as (the illustrious Gordon Lightfoot put it) a "rich man's spiritual".
> In olden times, the average person didn't expect to be happy.
How can this even be proposed? Maybe I just read way too into this. Is it a joke?
edit: I don't like leaving such negative comments. I envy Mr Greenspun. I'm not 37 yet but I'm not too far off, either. If I could retire at that age and spend the rest of my life exploring philosophy and leisure... well I could hardly think of a finer place to end up in one's life. Starting to ask the questions at all is how to start. Kudos.
You can read all the philosophy in the world. It doesn't automatically turn into actionable realities. Also, any philosophy is subjective, you are a human, you said something, I am a human, I beg to differ and so on and on....
Absolutely you can read it to death and still glean nothing from it. I don't know how many times I've had to reread, and I usually continue to do so. And to that end it takes more than just reading it, but if one wants to ask some profound questions about the world around oneself now that one doesn't have someone breathing down one's neck then one should probably start where others left off. It'll save a little time.
The point where you took a wrong turn was assuming that philosophy is all based on hearsay. There's been a lot of effort to ground pretty fundamental ideas to what we understand about reality, to the extent that we understand it. It's worth working to grasp some of that. It helps. If you like quantizations and mathematical/logical formality that exists as well, but mind that you'll probably want to do a lot of comparative reading.
To put this in programmer's terms: why would you re-implement libc when you haven't even looked at the existing source code or surrounding arguments? That would look like a fool's errand: not because the effort isn't worthwhile, but because you could save yourself a lot of time and use the lessons of the past to inform your next efforts rather than blindly making all of the same mistakes or rediscovering what was already known (to our best efforts). Worse, you might end up wandering around ranting about how someone should implement a core supportive library for a common systems language without ever looking to find out if there is one in the first place.
The point where you took a wrong turn was assuming that philosophy is all based on hearsay. There's been a lot of effort to ground pretty fundamental ideas to what we understand about reality, to the extent that we understand it. It's worth working to grasp some of that. It helps. If you like quantizations and mathematical/logical formality that exists as well, but mind that you'll probably want to do a lot of comparative reading.
To put this in programmer's terms: why would you re-implement libc when you haven't even looked at the existing source code or surrounding arguments? That would look like a fool's errand: not because the effort isn't worthwhile, but because you could save yourself a lot of time and use the lessons of the past to inform your next efforts rather than blindly making all of the same mistakes or rediscovering what was already known (to our best efforts). Worse, you might end up wandering around ranting about how someone should implement a core supportive library for a common systems language without ever looking to find out if there is one in the first place.
The counter argument is that "philosophers" could be dead wrong. Imagine the range of different philosophies that existed in various times and places. Popular interpretations of philosophical texts could be wrong (referring to your suggestion of reading an encyclopedia). You might not even understand the "right" question in the first place.
My personal experience is that giving the problem space a bit of thought and coming to preliminary conclusions before comparing with what mainstream thought has to say makes the whole ordeal more fun and possibly lets you learn the finer nuances and different perspectives more.
PS: the analogy with libc is quite interesting after thinking about it for a bit actually. If you just want to use a C library, you don't reimplement it. But if you want to learn about C or libc specifically, re-implementing libc from the specs is probably the best way to do it.
My personal experience is that giving the problem space a bit of thought and coming to preliminary conclusions before comparing with what mainstream thought has to say makes the whole ordeal more fun and possibly lets you learn the finer nuances and different perspectives more.
PS: the analogy with libc is quite interesting after thinking about it for a bit actually. If you just want to use a C library, you don't reimplement it. But if you want to learn about C or libc specifically, re-implementing libc from the specs is probably the best way to do it.
I think I would recommend reading about some of those philosophies you consider "dead wrong" and how they came to be.
Once you start to understand how they were formed in the first place, I think you would be less ready to deride them.
In fact, I'll bet you it entices you because you'll end up catching yourself saying "hey, I thought of that".
But what you'll find is that that one notion you may have figured out on your own is itself a nuance of a larger system of understandings. That you'll find a lot more work has been done than you realized to understand and prove each of those notions to the best of our collective knowledge.
Then you'll understand why grabbing a single notion and anchoring to it like the author is doing is so fundamentally flawed that it's not a positive exercise.
To use the "rich man's spiritual" reference again: the "rich man" of the poem is basing his salvation on the idea that he has to have enough of whatever new thing he decides is between him and heaven/salvation/happiness before he can ever attain it.
The "rich man" put that barrier there, himself. He created the frame for his experience and bound himself to it by creating it in the first place. In the poem, the central character is making the declaration that he needs more to defend his existing material accumulations, so it's not exactly a 1:1. But that kind of self-imposed framework based on nothing grounded can be self-limiting. It can make it hard to understand real fundamentals.
Once you start to understand how they were formed in the first place, I think you would be less ready to deride them.
In fact, I'll bet you it entices you because you'll end up catching yourself saying "hey, I thought of that".
But what you'll find is that that one notion you may have figured out on your own is itself a nuance of a larger system of understandings. That you'll find a lot more work has been done than you realized to understand and prove each of those notions to the best of our collective knowledge.
Then you'll understand why grabbing a single notion and anchoring to it like the author is doing is so fundamentally flawed that it's not a positive exercise.
To use the "rich man's spiritual" reference again: the "rich man" of the poem is basing his salvation on the idea that he has to have enough of whatever new thing he decides is between him and heaven/salvation/happiness before he can ever attain it.
The "rich man" put that barrier there, himself. He created the frame for his experience and bound himself to it by creating it in the first place. In the poem, the central character is making the declaration that he needs more to defend his existing material accumulations, so it's not exactly a 1:1. But that kind of self-imposed framework based on nothing grounded can be self-limiting. It can make it hard to understand real fundamentals.
I totally understand how philosophies, whether wrong or not, came to be: some random person with an interesting idea wrote it down, taught it to others, and others liked it enough to keep sharing it or further adapt/adopt it.
Through this process, things that have withstood the test of time are probably worth a look, but then with time comes a loss of context and relevance.
I mean, I wasn't even saying most/all/many philosophies are dead wrong. It's all about the signal to noise ratio after you've read more than a couple books. You'd be a fool to blindly believe in the process of how ancient wisdom is passed down mostly by a long standing popularity contest. Worse, even good ideas come with "addons" and extra baggage that needs to be thrown out, because ancient elders knew that common people wouldn't understand the core ideas and thus attached "click baity" stuff to ensure the ideas keep passed down over generations.
> In fact, I'll bet you it entices you because you'll end up catching yourself saying "hey, I thought of that".
Sure, this happens often. I consider this independent validation of my own ideas. Without this independent "verification" process, you're almost taking what you read on faith. (yes, the explanations or justifications they give are often not the real ones...)
Through this process, things that have withstood the test of time are probably worth a look, but then with time comes a loss of context and relevance.
I mean, I wasn't even saying most/all/many philosophies are dead wrong. It's all about the signal to noise ratio after you've read more than a couple books. You'd be a fool to blindly believe in the process of how ancient wisdom is passed down mostly by a long standing popularity contest. Worse, even good ideas come with "addons" and extra baggage that needs to be thrown out, because ancient elders knew that common people wouldn't understand the core ideas and thus attached "click baity" stuff to ensure the ideas keep passed down over generations.
> In fact, I'll bet you it entices you because you'll end up catching yourself saying "hey, I thought of that".
Sure, this happens often. I consider this independent validation of my own ideas. Without this independent "verification" process, you're almost taking what you read on faith. (yes, the explanations or justifications they give are often not the real ones...)
I think we are talking about two different things. If you are talking about logic, formalism and objectively verifiable things, sure, I totally agree with you. But I am talking about principles that should govern life. Unless you pivot to a Higher moral Authority, I am just taking things to their logical end and saying morality is arbitrary and no amount of philosophy will change that.
We might be.
But we also might not be. However we might be getting into dangerously personal territory there since we're approaching remarks on belief systems and people get pretty touchy about that kind of thing.
I'm curious how think that taking things to their logical end means morality is arbitrary.
My understanding puts everything onto a pretty firm plane that leads me to understand that anything I do to others I'm doing to myself. That's enough to guide my actions accordingly.
But we also might not be. However we might be getting into dangerously personal territory there since we're approaching remarks on belief systems and people get pretty touchy about that kind of thing.
I'm curious how think that taking things to their logical end means morality is arbitrary.
My understanding puts everything onto a pretty firm plane that leads me to understand that anything I do to others I'm doing to myself. That's enough to guide my actions accordingly.
> How can [the idea that in the past that the average person did not expect to be happy] even be proposed? Maybe I just read way too into this. Is it a joke?
First off, the author continued:
> Life could be a struggle for survival with hard work and adversity at every corner. Marriages were arranged by parents and if, after 20 years, the couple hated each other, there was no option to divorce.
While I guess that particular life experience is not necessarily incompatible with happiness (“I love my life as a sustenance farmer!”) it was definitely, by modern standards, very hard, and not at all what most people strive for in their retirement.
First off, the author continued:
> Life could be a struggle for survival with hard work and adversity at every corner. Marriages were arranged by parents and if, after 20 years, the couple hated each other, there was no option to divorce.
While I guess that particular life experience is not necessarily incompatible with happiness (“I love my life as a sustenance farmer!”) it was definitely, by modern standards, very hard, and not at all what most people strive for in their retirement.
The author is making a lot of assumptions about fundamental matters of philosophy and human psychology.
For instance, before we escape the first phrase in the section you quoted the author assumed that hard work and adversity run contradictory to happiness—or even actively oppose it.
I left the Gordon Lightfoot reference for a reason: the pleading of people for more material resources as the only road to their personal salvation from misery is there in psalm as a "rich man's spiritual".
"If I only had more X I could find my happiness/peace/salvation". In this article Mr Greenspun appears to begin to make a departure from that notion, but seems to keep tripping over strongly-held beliefs justifying a lust for financial rewards. That's not an easy thing to get away from.
Hell, there are tomes upon tomes about that very struggle—confusing the idea that you may as well enjoy the material to your capacity (he references Camus in that manner) with the material enjoyment being a prerequisite for your happiness.
For instance, before we escape the first phrase in the section you quoted the author assumed that hard work and adversity run contradictory to happiness—or even actively oppose it.
I left the Gordon Lightfoot reference for a reason: the pleading of people for more material resources as the only road to their personal salvation from misery is there in psalm as a "rich man's spiritual".
"If I only had more X I could find my happiness/peace/salvation". In this article Mr Greenspun appears to begin to make a departure from that notion, but seems to keep tripping over strongly-held beliefs justifying a lust for financial rewards. That's not an easy thing to get away from.
Hell, there are tomes upon tomes about that very struggle—confusing the idea that you may as well enjoy the material to your capacity (he references Camus in that manner) with the material enjoyment being a prerequisite for your happiness.
It is unavoidable for the kind of article the author is writing. He is trying to give the perspective of a person who has 'been there'. This I imagine is very interesting to read for people who want to 'be there' or going to. For them, an article that doesn't deal too deeply into philosophy may be more appealing. This is possible only if the author makes a lot of assumptions. And of course, if you don't agree with those assumptions, you'll just move on.
I didn't introduce the philosophical notions myself. The author makes plentiful use of them, but inaccurately.
That's worse than not using them.
It's like pasting
That's worse than not using them.
It's like pasting
rm -rf /
The greatest expense for me in retirement is now health insurance so it makes sense for me to instead work for insurance coverage and put my wealth towards an inheritance for my children. I used to naively believe once I paid off my mortgage, had a substantial retirement account and savings - a couple million dollars - I'd no longer work. It's also very difficult to get off of the treadmill of spending a lot of money on products and services - requires a massive life change I haven't been ready to perform.
It helps that I love to write software; I'd just continue writing software in retirement. I tried to retire once and I ended up writing software anyway, so might as well as get health insurance coverage.
It helps that I love to write software; I'd just continue writing software in retirement. I tried to retire once and I ended up writing software anyway, so might as well as get health insurance coverage.
This is the reality of the situation; until you're eligible for (edit) medicare, health is a significant expense. When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year. You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are levels, and one could live modestly in a LCOL area on that, but that's not what most people have in mind. Particularly for a "millionaire".
Medicare. To be eligible for Medicaid, you have to be quite lacking in assets.
I feel like I'd be happy enough just maintaining my current lifestyle more or less, but yes, we as software developers tend to be paid relatively well, so just matching that can be quite expensive. I also feel kind of uncomfortable with the idea of retiring without a little bit of extra safety margin in case of economic turmoil. If 2M is enough to retire, I'd probably want 2.5 just to be extra safe.
My current job pays well but is very stressful, and that had me thinking more about FIRE (Financial Independence, Retire Early), but then I realized that on anything less than 120K a year (also have a mortgage to pay), I couldn't afford the therapist I'm seeing right now, and I'd be on the hook for dental cleaning, every other expense. My current plan is to save enough that I could technically almost retire on it, and then start prioritizing low stress jobs over income. Let the nest egg grow on its own even if I don't contribute as much with a lower paying job, and still get some benefits.
My current job pays well but is very stressful, and that had me thinking more about FIRE (Financial Independence, Retire Early), but then I realized that on anything less than 120K a year (also have a mortgage to pay), I couldn't afford the therapist I'm seeing right now, and I'd be on the hook for dental cleaning, every other expense. My current plan is to save enough that I could technically almost retire on it, and then start prioritizing low stress jobs over income. Let the nest egg grow on its own even if I don't contribute as much with a lower paying job, and still get some benefits.
The low stress jobs are the key. If I have 2-3 million saved, do I really want to grind at a FAANG or equivalent? Theres low key startups and enterprise dev jobs that are much less stressful and still pay around 120-150K which keeps healthcare covered, CoL covered, and keeps your nest-egg intact.
IMO your view of stress at FAANG vs elsewhere is off. Some of the least stressed engineers I know work for the big names.
I'm sure there are stressed engineers there as well, but I'd be surprised if it's actually a higher %.
I'm sure there are stressed engineers there as well, but I'd be surprised if it's actually a higher %.
Sounds like Coast FIRE would be a good approach for you:
https://walletburst.com/coast-fire-calc
https://walletburst.com/coast-fire-calc
Will $80k a year be enough for any lifestyle? That's the question I struggle with. It's more than enough in today's dollars. But I have no idea what will happen with inflation and costs between now and retirement day. Maybe by the time I retire, $80k/yr will be poverty level. Maybe health insurance premiums alone will cost $80k/yr. Who knows! What will the value of the dollar be and to what extent will healthcare costs have grown? It makes it impossible to set a target. All those "save for retirement" online tools start with that nonsensical question: "How much income will you need in retirement?" How the F should I know? I can't predict the future.
EDIT: Yes, SOME tools will account for inflation by asking you what you think inflation might be between now and retirement day. (Who knows?) Most don't account for costs that will rise much faster than inflation, like housing and health care.
EDIT: Yes, SOME tools will account for inflation by asking you what you think inflation might be between now and retirement day. (Who knows?) Most don't account for costs that will rise much faster than inflation, like housing and health care.
The calculators usually account for inflation (and also for a percentage rate of return on the lumpsum you have saved), you would answer "How much income will you need in retirement?" with today's value of a $ (eg. if $80k a year would be enough for this year if you retired today)
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There is uncertainty in everything, but your argument about inflation seems vacuous. The $80k figure is supposed to be real dollars, not nominal. A well diversified investment portfolio will include inflation resistant assets (such as REITs, energy stocks, or commodities).
Aren't there tons of books and calculators for this?the value of the dollar is irrelevant if you live in the US. Inflation does not concern me much. Real estate and stocks have generally been good hedges.
I'm about at that salary level, and live fine in a LCOL Midwestern area. I'd love to make more money but then I'd just buy more crap. 80k is definitely a decent lifestyle. Though as you say by the time one retires, it might not be.
> "How much income will you need in retirement?" How the F should I know? I can't predict the future.
Correct. But that doesn't mean you *shouldn't* plan. That's why you rebalance your portfolio every few years, and adjust your budgets, and expectations, and make lifestyle changes. It takes a lifetime to prepare for retirement. And its kinda hard to fuck up by your own hand if you are diligent: save 10-20%/yr., cover the basic investment grid, buy and hold. With 30+ years experience and many friends in the same boat, that's a winner.
Also, retiring on $100k today would require $148k/yr in 10 years with 4% inflation, so you're right, that number will at least go up via inflation.
That's why it matters who you vote for. Medicare/Medicaid will be your primary healthcare in your 60's, but we absolutely need the ACA/single-payer, not just for early retirees, but to prevent insurance companies from forever inflating premiums and bankrupting us.
Correct. But that doesn't mean you *shouldn't* plan. That's why you rebalance your portfolio every few years, and adjust your budgets, and expectations, and make lifestyle changes. It takes a lifetime to prepare for retirement. And its kinda hard to fuck up by your own hand if you are diligent: save 10-20%/yr., cover the basic investment grid, buy and hold. With 30+ years experience and many friends in the same boat, that's a winner.
Also, retiring on $100k today would require $148k/yr in 10 years with 4% inflation, so you're right, that number will at least go up via inflation.
That's why it matters who you vote for. Medicare/Medicaid will be your primary healthcare in your 60's, but we absolutely need the ACA/single-payer, not just for early retirees, but to prevent insurance companies from forever inflating premiums and bankrupting us.
By the time you're withdrawing, your house should be paid off and you no longer need to save anything for retirement so that $80K is all spending money. Further, you're collecting social security and a good chunk of your healthcare is covered by medicare.
Even if your house is paid off, depending on the property, you may still have significant costs to budget for. I have an old house and a large property and between property tax, insurance, utilities, and maintenance (both routine and occasional large), I'm probably a good $1K/month.
If your property taxes and insurance are high it’s because your house is worth a lot of money. If your house’s value constitutes a large share of your net worth such that taxes and insurance are a burden then it indicates that too much of your equity is in your house and you should downsize.
I never said they were a "burden." I was indicating that just because you've paid off your mortgage doesn't mean living in a house is free.
I think you'll find those numbers are not especially high for a house. (As opposed to a condo which have their own fees.) My house is not especially large--but it is about 200 years old although renovated so budgeting a few hundred dollars per month for maintenance seems reasonable.
I honestly doubt that most people could get the cost associated with maintaining a house below $500/month or so.
I think you'll find those numbers are not especially high for a house. (As opposed to a condo which have their own fees.) My house is not especially large--but it is about 200 years old although renovated so budgeting a few hundred dollars per month for maintenance seems reasonable.
I honestly doubt that most people could get the cost associated with maintaining a house below $500/month or so.
> I never said they were a "burden." I was indicating that just because you've paid off your mortgage doesn't mean living in a house is free.
No one claimed it was free, and if it’s not a burden then what’s the problem? My point is that $80K without a mortgage or retirement allocation leaves significantly more money left over than $80K with those expenses. Where is the problem?
No one claimed it was free, and if it’s not a burden then what’s the problem? My point is that $80K without a mortgage or retirement allocation leaves significantly more money left over than $80K with those expenses. Where is the problem?
Of course. But my point was that your "spending money" may still need to budget $10+K/year to keep a roof over your head. (Of course, you can downsize and move someplace cheaper.)
> How much income will you need...?
I tried to get my own answer for this question in a couple of ways (retired 5 years ago, age 62 so not early).
First, I tracked my expenses, but didn't have a planned budget. I wanted to know how much I spent and where it went. I kept monthly and yearly summaries on a spreadsheet and made charts to better visualize trends and variability. I think just tracking expenses was encouragement to live modestly and contribute regularly to savings: information not coercion.
Second, I tracked potential future income/benefits. I have an employer retirement plan and an IRA plan. Before retirement, I used the retirement plan's calculators to estimate that benefit. For my IRA I used a 4% withdrawal estimate.
Third, I assumed my expense totals would be the same in retirement. I might spend less on commuting, work clothes, etc., but more on medical care, vacation travel, and so on. I estimated housing costs for either renting or having a mortgage. (Ended up selling the house when I retired, moving and renting for 3 years, then buying a new place and getting a small mortgage for that.)
Over the short term, assumptions of continuity are reasonable. As you point out, the longer term is much more of a question mark. So, fourth, I tried to make allowances for uncertainties and contingencies. How much padding or margin did I want to be comfortable? Perhaps 10% to 20% more income than one's average expenses would feel comfortable? Perhaps a contingency plan for part-time work?
All these numbers will be in current dollars, so they will be comparable. What I discovered when running my numbers (after learning about an opportunity to buy some retirement plan benefits with money I had saved in a 401-K) was that I could then afford to retire. I can't predict the future either, but felt comfortable with the uncertainties I could see.
Following one's own situation roughly once a year, one can see how different conditions and assumptions give different results. Generally, the less one spends and the more savings one has, the more flexible one can be in choosing jobs, places to live, lifestyle, and so on.
I tried to get my own answer for this question in a couple of ways (retired 5 years ago, age 62 so not early).
First, I tracked my expenses, but didn't have a planned budget. I wanted to know how much I spent and where it went. I kept monthly and yearly summaries on a spreadsheet and made charts to better visualize trends and variability. I think just tracking expenses was encouragement to live modestly and contribute regularly to savings: information not coercion.
Second, I tracked potential future income/benefits. I have an employer retirement plan and an IRA plan. Before retirement, I used the retirement plan's calculators to estimate that benefit. For my IRA I used a 4% withdrawal estimate.
Third, I assumed my expense totals would be the same in retirement. I might spend less on commuting, work clothes, etc., but more on medical care, vacation travel, and so on. I estimated housing costs for either renting or having a mortgage. (Ended up selling the house when I retired, moving and renting for 3 years, then buying a new place and getting a small mortgage for that.)
Over the short term, assumptions of continuity are reasonable. As you point out, the longer term is much more of a question mark. So, fourth, I tried to make allowances for uncertainties and contingencies. How much padding or margin did I want to be comfortable? Perhaps 10% to 20% more income than one's average expenses would feel comfortable? Perhaps a contingency plan for part-time work?
All these numbers will be in current dollars, so they will be comparable. What I discovered when running my numbers (after learning about an opportunity to buy some retirement plan benefits with money I had saved in a 401-K) was that I could then afford to retire. I can't predict the future either, but felt comfortable with the uncertainties I could see.
Following one's own situation roughly once a year, one can see how different conditions and assumptions give different results. Generally, the less one spends and the more savings one has, the more flexible one can be in choosing jobs, places to live, lifestyle, and so on.
Does the 4% withdrawal rate include dividends and the average 6/7% estimated growth rate? Napkins calculations for 2m at 6% is 120k.
As OP said if you don’t have a mortgage then you’re going to have a lot more extra money than someone with an 80-120k income and a mortgage.
As OP said if you don’t have a mortgage then you’re going to have a lot more extra money than someone with an 80-120k income and a mortgage.
> When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year.
Right, which is why people should save 10-15% starting from a young age.
> Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year.
That's quite a lot more than the median household income and by the time you're withdrawing your retirement that $80K is purely spending money--your house should be paid off and you're not setting 15% of that $80K aside for retirement any more. $80K/year is a lot of spending money to most people.
> You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are levels, and one could live modestly in a LCOL area on that, but that's not what most people have in mind. Particularly for a "millionaire".
The meme of a millionaire driving Ferrari's and eating caviar is dated due to inflation. Most people with any real-world experience with money (including my no-higher-education, blue-collar family) understand that millionaires don't live like that these days due to inflation.
Right, which is why people should save 10-15% starting from a young age.
> Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year.
That's quite a lot more than the median household income and by the time you're withdrawing your retirement that $80K is purely spending money--your house should be paid off and you're not setting 15% of that $80K aside for retirement any more. $80K/year is a lot of spending money to most people.
> You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are levels, and one could live modestly in a LCOL area on that, but that's not what most people have in mind. Particularly for a "millionaire".
The meme of a millionaire driving Ferrari's and eating caviar is dated due to inflation. Most people with any real-world experience with money (including my no-higher-education, blue-collar family) understand that millionaires don't live like that these days due to inflation.
Most Ferraris are financed, I remember reading an article that said more than half of UK Ferrari owners have a net worth of less than a million pounds.
I’m talking about the specific meme, not particulars of Ferrari ownership. That’s an interesting digression, however.
For the US, retiring, at least for most that are on the verge of retiring savings-wise, means you have a mix of regular savings (that has already been taxed) and 401k savings (that hasn't). If you figure out how to limit your 401k distributions, then it may be possible to keep your taxable income low enough that you get ACA subsidies to limit the cost of your health insurance premiums. Although maybe that's not the expensive part?
Medicare eligibility is certainly an important milestone in the US. One can retire earlier but doing so would add another significant non-optional cost.
This is why I max out my HSA and don't withdraw since it became available to me (unfortunately this was until my 30s)
Have you considered moving to a country with quality healthcare at cheaper price? Mexico comes to mind
Have you considered moving to a country with quality healthcare at cheaper price? Mexico comes to mind
In case you're not aware, you can't use HSA funds to pay for insurance.
I'm aware you can't pay premiums but you can still use it to pay services, prescriptions, deductible, co-insurance, etc.
All this does is avoid taxes on the exorbitant amount you're paying. It doesn't make the American healthcare system significantly cheaper. Also, HSA cannot be used to pay for insurance premiums.
oh I agree the issue is systemic and I'd love to see Medicare for all or similar. But I don't think the agents of change are moving fast enough to affect my retirement
It would be interesting to have Medicare age gradually lowered to ~26, but I have not seen this floated around as a possibility
It would be interesting to have Medicare age gradually lowered to ~26, but I have not seen this floated around as a possibility
> The greatest expense for me in retirement is now health insurance
Obamacare changes that. If you don't have much income you get ACA federal tax credits.
Obamacare changes that. If you don't have much income you get ACA federal tax credits.
And the covid relief bill increased the credits. If your income is low, you can get surprisingly decent insurance for not much money. "Surprisingly decent" is in the context of American health insurance.
If you withdraw from a 401k, doesn’t that become taxable income? I’m assuming if someone takes enough out per year to hit $50k+ they will reduce their federal credits to zero.
To avoid this, you want to have a multifaceted approach.
Figure out how low your expenses can be while still being quite happy with your qualify of life. Some expensive things don't provide the happiness you think they will.
Diversify the kinds of investment accounts you have. Maximize your tax-advantaged accounts like a 401k, but then contribute to a Roth IRA if available, and then plow money into a taxable brokerage account. When you approach retirement, plan to have some time period of expenses covered by cash on hand.
Then use cash, brokerage and Roth funds to cover expenses, while converting what you can from 401k or traditional IRA into Roth funds, and minimizing the income/taxation that results so you can still qualify for credits. Funds converted to Roth will be available for tax-free withdraw after 5 years, so continue to convert over time, while using the post-tax accounts to cover expenses.
Figure out how low your expenses can be while still being quite happy with your qualify of life. Some expensive things don't provide the happiness you think they will.
Diversify the kinds of investment accounts you have. Maximize your tax-advantaged accounts like a 401k, but then contribute to a Roth IRA if available, and then plow money into a taxable brokerage account. When you approach retirement, plan to have some time period of expenses covered by cash on hand.
Then use cash, brokerage and Roth funds to cover expenses, while converting what you can from 401k or traditional IRA into Roth funds, and minimizing the income/taxation that results so you can still qualify for credits. Funds converted to Roth will be available for tax-free withdraw after 5 years, so continue to convert over time, while using the post-tax accounts to cover expenses.
This and HSA is nice to have as well. Max that out. Pay out of pocket for everything and keep records of it. When you retire you can pull all that out tax free. Irs says you can can do it. And it is pretax. Any left over money will turn into IRA when your old. But if you have family and can cover the out pocket cost HSA are really nice extra amount. My plan is use my taxable and withdrawal medical expenses from the hsa tax free. So I can convert 401k funds to Roth using the ladder. Ideally the normal Roth I have had for years never gets touched for a long time. Also you can also do a Roth via backdoor.
This assumes all of your income comes from a traditional 401(k). As an early retiree that's unlikely. It's likely that a significant portion of your income will come from a taxable brokerage account. A significant portion of that income is your basis (what you paid for the investment) which is not taxable.
There's a lot you can do to "engineer" your taxable income in early retirement.
There's a lot you can do to "engineer" your taxable income in early retirement.
> If you withdraw from a 401k, doesn’t that become taxable income?
Currently, if you're married, the first $24K or so is tax free. If you're in California, there are plenty of credits/deductions, so it's likely more than $24K.
Also, you can have a 401K Roth, where all withdrawals are tax free.
Currently, if you're married, the first $24K or so is tax free. If you're in California, there are plenty of credits/deductions, so it's likely more than $24K.
Also, you can have a 401K Roth, where all withdrawals are tax free.
ACA plans in my state expose you to over $20,000 in annual risk, for a family plan. That's assuming you don't end up with a huge "out of network" bill by accident (and their networks are terrible, so that's very possible). I think the "gold" plan is a little better (though a much worse deal if you're having to pay the full premium, overall) but I'm not sure how much income-based help you get for the top-tier (and still quite bad, compared to group plans at employers around here) plan.
The tax credits are the same regardless of your plan, and for modest income the credits are substantial: even for $100k, the credits are $500/mo for a family of 4. Not that healthcare still isn't a significant expense, but the assistance is meaningful.
Not sure what you mean by "annual risk". Do you mean out-of-pocket costs?
> That's assuming you don't end up with a huge "out of network" bill by accident
New laws mostly take care of that. No more out-of-network doctors walking by your hospital bed while you're sleeping and sending you a $5000 bill. Also if you have an emergency while out of state your insurance takes care of it.
The "metal" plans all have the same network. The only difference is how much you pay vs. insurance.
> That's assuming you don't end up with a huge "out of network" bill by accident
New laws mostly take care of that. No more out-of-network doctors walking by your hospital bed while you're sleeping and sending you a $5000 bill. Also if you have an emergency while out of state your insurance takes care of it.
The "metal" plans all have the same network. The only difference is how much you pay vs. insurance.
> Not sure what you mean by "annual risk". Do you mean out-of-pocket costs?
Yeah, max out-of-pocket per year. Something like ~$24,000 family / $12,000 individual on our ACA plans. Gold and Silver ACA plans are basically identical in this state, you're just guaranteeing you pay more in premiums with Gold (so, in a bad year, the totals work out about the same, but in a good year the Gold is more expensive). We have exactly two ACA plan providers here, and their plans are nearly identical except that they have very different (both terrible) networks.
So if you get cancer you'll be paying $12,000/yr, on top of premiums (another $20,000 or so, for a family silver plan, if you're not getting assistance) until you're cured or you're dead. Two people get very sick, about $24,000 per year that they remain very sick, on top of premiums.
Yeah, max out-of-pocket per year. Something like ~$24,000 family / $12,000 individual on our ACA plans. Gold and Silver ACA plans are basically identical in this state, you're just guaranteeing you pay more in premiums with Gold (so, in a bad year, the totals work out about the same, but in a good year the Gold is more expensive). We have exactly two ACA plan providers here, and their plans are nearly identical except that they have very different (both terrible) networks.
So if you get cancer you'll be paying $12,000/yr, on top of premiums (another $20,000 or so, for a family silver plan, if you're not getting assistance) until you're cured or you're dead. Two people get very sick, about $24,000 per year that they remain very sick, on top of premiums.
https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
> For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family.
> For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family.
Yep, just checked, you're right, that's gotten a fair bit better, matching your numbers.
But that's still on top of premiums. My last year on an ACA "Silver" family plan (2019) was just shy of $20,000 in premiums w/ a $13,500 family deductible.
Health insurance premiums are a tax, not actual insurance premiums priced to one's own health risks.
The Affordable Care Act stipulates various terms which result in young and/or healthy people explicitly subsidizing old and/or unhealthy people:
1) only age, location, and smoking status are able to be taken into account for pricing. And everyone must be offered insurance (i.e. no exclusions for pre existing conditions)
2) age rating factors - premium for costliest person (64 years old) must be at most 3x those of least costly person (21 to 24 years old)
3) out of pocket maximums
The Affordable Care Act stipulates various terms which result in young and/or healthy people explicitly subsidizing old and/or unhealthy people:
1) only age, location, and smoking status are able to be taken into account for pricing. And everyone must be offered insurance (i.e. no exclusions for pre existing conditions)
2) age rating factors - premium for costliest person (64 years old) must be at most 3x those of least costly person (21 to 24 years old)
3) out of pocket maximums
Unless you go to great efforts to shelter, the couple of million in assets will provide an income that exceeds anything considered "not much income". His stated desire to spend the income is going to greatly complicate sheltering efforts.
I wonder if this fact makes it easier to attain some form of early retirement in countries with more extensive public health care. I guess it would have to be weighed against the (assuming here without numbers) higher earning potential/lower taxes in the U.S.
Do people in countries with universal healthcare not have this problem?
What are the types of products and services that are so significant? Surely we aren’t talking about things like Netflix and utilities?
What are the types of products and services that are so significant? Surely we aren’t talking about things like Netflix and utilities?
It's a lesser problem, but there are also less opportunities to accumulate wealth rapidly.
Lots of folks I know get FatFIRE (>=$5MM assets, $200k/year in income at 4% SWR) in the US and then retire to Portugal [1] (which has universal healthcare, and gets you access to the EU).
[1] https://en.wikipedia.org/wiki/Portugal_Golden_Visa
Lots of folks I know get FatFIRE (>=$5MM assets, $200k/year in income at 4% SWR) in the US and then retire to Portugal [1] (which has universal healthcare, and gets you access to the EU).
[1] https://en.wikipedia.org/wiki/Portugal_Golden_Visa
Are these people you know Americans? I admire the spirit of such a move, but losing immediate contact with friends/family would make it challenging (for me).
Yes. Most end up either in Lisbon or Porto.
That's a crazy good deal. As long as the 500k doesn't get completely wiped out someone with a family likely comes out ahead on health-care costs alone (though I understand the tax implications of US citizens abroad are complicated).
There is an investment version where the cost is only 250000 EUR, but there's more due diligence and paperwork required. You're essentially buying citizenship for the opportunity cost of those funds not making returns in more aggressive investment vehicles for several years.
I'm a Brit, been living in the US for a decade or so now. I came here for the money and the weather, but the weather is going to shit these days...
The long term plan was always to make sufficient money to retire early, then go home. Complicating this easy straightforward idea was that I got married (!) and now have a kid who I don't want to uproot. So now I wait for college-days, and then sod off back to the UK :)
The cost of my (paid off) house in the Bay Area will fund a small mansion by the sea in the UK. Long walks on the beach with the dog seem appropriate, and will even be good for my old age :)
The long term plan was always to make sufficient money to retire early, then go home. Complicating this easy straightforward idea was that I got married (!) and now have a kid who I don't want to uproot. So now I wait for college-days, and then sod off back to the UK :)
The cost of my (paid off) house in the Bay Area will fund a small mansion by the sea in the UK. Long walks on the beach with the dog seem appropriate, and will even be good for my old age :)
Living far away from your children and grandchildren is really sad, especially once you get old and need help and company.
But... I won't be ?
I'm a Brit. I have lots of family in the UK. My wife doesn't have any siblings, her mother lives in Costa Rica, and her father lives in Southern CA but hasn't visited in the 10 years we've been married (we've been there).
Perhaps it wasn't clear, but I was expecting the kid (man, at that point, I guess) to come with - there's plenty of excellent universities in the UK, and he'll even be legally able to have a beer or two...
I'm a Brit. I have lots of family in the UK. My wife doesn't have any siblings, her mother lives in Costa Rica, and her father lives in Southern CA but hasn't visited in the 10 years we've been married (we've been there).
Perhaps it wasn't clear, but I was expecting the kid (man, at that point, I guess) to come with - there's plenty of excellent universities in the UK, and he'll even be legally able to have a beer or two...
Some might say you're giving your son a gift having citizenship in both the US and the UK. Options are freedom.
Must be raging that that doesn't include EU citizenship now
What can I say ? Idiots.
Not that I had any say, I've been out of the country too long to vote now.
Not that I had any say, I've been out of the country too long to vote now.
Plenty of that happens in the US too though. I grew up in the Rust Belt but have lived my entire post-college life (more than 2.5 decades) on the west coast.
By the time you need to get on a plane to visit, 2000 miles vs 5000 miles isn't a tremendous difference. (Assuming normal times with open borders).
By the time you need to get on a plane to visit, 2000 miles vs 5000 miles isn't a tremendous difference. (Assuming normal times with open borders).
Every time your elderly father gets sick are you going take the plane? Take him to the doctor? Wash him, prepare dinner.
Not everyone can afford retirement facility.
From what I have calculated, the savings from universal care vs insurance are negated by higher taxes
While I have not made SV salaries, I’ve done ok. Overall, the total-deduction I see in Ontario is comparable to the US. Higher, I imagine, than Texas but lower than California - us social security is way more costly than Canadian cpp (yielding more benefits too). And I moved here over 10 years ago and thus have paid my taxes…. It’s permitted us retiring before hitting Medicare age.
Depends on what is covered under universal health care.
In Canada, doctors and hospitals are covered. But if you need a lot of drugs, you might need to keep working. You also need to budget for dental and vision, as those are also tied to employment agreements.
In Canada, doctors and hospitals are covered. But if you need a lot of drugs, you might need to keep working. You also need to budget for dental and vision, as those are also tied to employment agreements.
In Ontario, there is a provincial drug plan for 65+. I think Quebec has something similar. Ontario tried to extend it to all but the government change a few years back killed that.
I'm curious about Canada. My plan is to make a lot of money in the states and retire early, then apply for Canadian citizenship and move to Canada to cover health expenses. Even if the citizenship process takes 2-4 years, would this be worth it?
Canada’s immigration process is based on a points system. If you are not working, don’t speak French or are over a certain age, then I wouldn’t rate your chances too highly. The reason is the “move to Canada to cover health expenses” part. If you have never paid into the system via taxes by working and living here, then why would we want you?
The older you get and not working make it a lot harder, as many people have your plan.
So if you want to do that, come to Canada before you retire and having a job here will help you get in.
So if you want to do that, come to Canada before you retire and having a job here will help you get in.
That won't be easy unless you marry a Canadian citizen. That's what my cousin did and now he's a citizen after all these years.
Immigration to Canada is notoriously difficult without family ties: https://www.canada.ca/en/immigration-refugees-citizenship/se...
Nope. Proper healthcare costs are truly an afterthought in most if not all parts of Europe, same as public transport tickets or cafeteria budgeting. Of course this doesn't cover non-medical stuff but under normal situation one doesn't need much of that apart from good suncream (which is required anytime anyway).
I firmly believe that the problems of cashflow during retirement, outside medical costs discussed here which are very US-specific, are much more about lifestyle choices. If one desperately needs that luxury they bathed in in last 30 years and it became the base standard life, then there is tough time ahead with possibly sad outlook. We all know more humble life leads to more happy life long term at this point, so to each their own.
Why I believe this - the most awesome memories from my life is doing stuff that costs very little - long backpacking trips around the world where plane tickets there & back are maybe 50% of the cost of 1-month long adventure. Doing many awesome sports one can do in the mountains (hiking, climbing, via ferratas, ski touring, paragliding, etc.). All these need initial gear investment and then just gas costs + rare equipment replacement costs.
These activities also highly increase chances that one reaches retirement actually in good shape, and can relatively kick ass till 75-80. I expect to be highly active during 60-70 retirement, based on genetics in my family. And a bit of luck obviously, one needs that for everything.
While doing these activities, I've met tons of people who are properly age-retired. During work week (maybe outside of July&August tourist seasons), you will find that most hikers in the Alps are retirees for example.
I firmly believe that the problems of cashflow during retirement, outside medical costs discussed here which are very US-specific, are much more about lifestyle choices. If one desperately needs that luxury they bathed in in last 30 years and it became the base standard life, then there is tough time ahead with possibly sad outlook. We all know more humble life leads to more happy life long term at this point, so to each their own.
Why I believe this - the most awesome memories from my life is doing stuff that costs very little - long backpacking trips around the world where plane tickets there & back are maybe 50% of the cost of 1-month long adventure. Doing many awesome sports one can do in the mountains (hiking, climbing, via ferratas, ski touring, paragliding, etc.). All these need initial gear investment and then just gas costs + rare equipment replacement costs.
These activities also highly increase chances that one reaches retirement actually in good shape, and can relatively kick ass till 75-80. I expect to be highly active during 60-70 retirement, based on genetics in my family. And a bit of luck obviously, one needs that for everything.
While doing these activities, I've met tons of people who are properly age-retired. During work week (maybe outside of July&August tourist seasons), you will find that most hikers in the Alps are retirees for example.
To avoid repeating myself, I'll link a reply to a sibling comment:
https://news.ycombinator.com/item?id=28062162
The gist is that lowering your other expenses and qualifying for ACA could dramatically lower your health insurance expenses as well.
https://news.ycombinator.com/item?id=28062162
The gist is that lowering your other expenses and qualifying for ACA could dramatically lower your health insurance expenses as well.
My plan is:
- Move to America, become rich
- Move back to Canada, retire
- Win
:P
- Move to America, become rich
- Move back to Canada, retire
- Win
:P
Just an FYI that if you avoid permanent US residency via green card or US citizenship you can potentially take advantage of a step-up of the cost basis of ALL your taxable assets when you move back to Canada, thus erasing any tax on the capital gains -- both short and long term. (In Canada, there is no distinction of short or long term gains).
Assuming that you have little-to-no Canadian assets now, dispose of everything at no-to-low cost when you leave, move to the US for a decade or so and rack up a lot of RSUs/exercised options, maybe surviving an IPO or two, while enjoying a strong USD, you can move back comically wealthy compared to your peers.
You may or may not have to toy with your employer's immigration lawyers as they scramble to get you a green card while you avoid filing any paperwork.
(This is not financial advice, contact a licensed professional, tell your friends, etc.)
Assuming that you have little-to-no Canadian assets now, dispose of everything at no-to-low cost when you leave, move to the US for a decade or so and rack up a lot of RSUs/exercised options, maybe surviving an IPO or two, while enjoying a strong USD, you can move back comically wealthy compared to your peers.
You may or may not have to toy with your employer's immigration lawyers as they scramble to get you a green card while you avoid filing any paperwork.
(This is not financial advice, contact a licensed professional, tell your friends, etc.)
[deleted]
If you’re Canadian, can’t you work on a TN visa? Thought this was renewable multiple times and had no credit for immigration…
(This post is not legal advice, consult an immigration lawyer, etc.)
Yes and no. TN is technically only for specific professions drafted in like the 80s or something. It's incredibly stupid. For example, many Canadians use "Computer Systems Analyst" for their TN which explicitly forbids programming, as a programmer is not considered a professional job in the eyes of NAFTA. It's bananas. If you don't have a decent secondary education with a recognized degree, you're likely out of luck.
And while yes, you can effectively ride TN status forever, it has a lot of downsides. For one, it's not portable, so you have to restart the process if you switch employers. In theory you can't even seek employment while on a TN. Two, the customs agent letting you into the US can decide at their leisure whether or not you qualify. It's rare but I know of a few instances of people getting rejected for no real reason. If they think you are abusing it, they will reject you, etc. If you lose your job for whatever reason, you have to leave ASAP. There is not much peace-of-mind with TN status.
Compare to an H-1B, which confers a ton of benefits, like a straightforward path to a green card (also possible with a TN but a lot of lawyers are less comfortable), easy to switch employers, your employer must pay for everything, if you're fired your employer has to pay for your travel, there is a lengthy grace period where you can be unemployed to either find work or wrap up your affairs, you can stay in the country while waiting for approval, etc. It's a million times better than TN.
Attorneys probably also dislike TN status because they really are not necessary. The applicant, not the company, must pay the application fee. In theory you don't need lawyers at all, but it is pretty useful for them to prepare the documents and cover letter for you. Get your ducks in a row, etc.
Most Canadians I meet in the US who are on TN status or H-1B visas are, at least initially, on the path to a green card. Most half-decent employers who are willing to sponsor want to put you on that path anyways, since it ensures your position is not going to evaporate because you were denied at the border or something. Most people on non-immigrant or immigrant-status visas want a green card anyways, so it is sort of the default path.
Lastly, most folks do not know about the downsides of a green card, such as the frustratingly complex tax burden if you are abroad, that it expires if you leave for ~5 years, etc.
Yes and no. TN is technically only for specific professions drafted in like the 80s or something. It's incredibly stupid. For example, many Canadians use "Computer Systems Analyst" for their TN which explicitly forbids programming, as a programmer is not considered a professional job in the eyes of NAFTA. It's bananas. If you don't have a decent secondary education with a recognized degree, you're likely out of luck.
And while yes, you can effectively ride TN status forever, it has a lot of downsides. For one, it's not portable, so you have to restart the process if you switch employers. In theory you can't even seek employment while on a TN. Two, the customs agent letting you into the US can decide at their leisure whether or not you qualify. It's rare but I know of a few instances of people getting rejected for no real reason. If they think you are abusing it, they will reject you, etc. If you lose your job for whatever reason, you have to leave ASAP. There is not much peace-of-mind with TN status.
Compare to an H-1B, which confers a ton of benefits, like a straightforward path to a green card (also possible with a TN but a lot of lawyers are less comfortable), easy to switch employers, your employer must pay for everything, if you're fired your employer has to pay for your travel, there is a lengthy grace period where you can be unemployed to either find work or wrap up your affairs, you can stay in the country while waiting for approval, etc. It's a million times better than TN.
Attorneys probably also dislike TN status because they really are not necessary. The applicant, not the company, must pay the application fee. In theory you don't need lawyers at all, but it is pretty useful for them to prepare the documents and cover letter for you. Get your ducks in a row, etc.
Most Canadians I meet in the US who are on TN status or H-1B visas are, at least initially, on the path to a green card. Most half-decent employers who are willing to sponsor want to put you on that path anyways, since it ensures your position is not going to evaporate because you were denied at the border or something. Most people on non-immigrant or immigrant-status visas want a green card anyways, so it is sort of the default path.
Lastly, most folks do not know about the downsides of a green card, such as the frustratingly complex tax burden if you are abroad, that it expires if you leave for ~5 years, etc.
Or you can do what I'm doing and make the big bucks working remotely out of a small town in Ontario for a SV company ;)
Once you get to staff+ you effectively remove any real pay difference based on your locality.
Once you get to staff+ you effectively remove any real pay difference based on your locality.
I can neither confirm nor deny that I am doing the same.
> It's also very difficult to get off of the treadmill of spending a lot of money on products and services - requires a massive life change I haven't been ready to perform.
You should just factor this into your living costs. As long as you aim for the right fraction of your earnings to go into savings rather than an absolute amount, you'll be fine.
You should just factor this into your living costs. As long as you aim for the right fraction of your earnings to go into savings rather than an absolute amount, you'll be fine.
As a mid-30s software developer who is trying to save as much as possible, with the hopes of retiring before I'm old and deprecate, this really sucks to read.
$2 million in investments AND a payed off mortgage and still, it doesn't pencil out to retire? Seems like over the past decade+ the 'value' of even $1 million has become more and more diluted. To support even just a middle class, to upper middle class lifestyle, can get very expensive.
$2 million in investments AND a payed off mortgage and still, it doesn't pencil out to retire? Seems like over the past decade+ the 'value' of even $1 million has become more and more diluted. To support even just a middle class, to upper middle class lifestyle, can get very expensive.
Inflation is very real, and it’s most apparent in home values right now. Even if you pay off your mortgage, your property taxes keep going up as values increase.
If your property taxes are indexed to assessed value (which mine are), it also means your property value is going up. So double taxes would mean double value of home. It just means that at some point you may need to sell your home and downsize, pocketing a nice profit on the way out.
Unless prices fall in the future, in which case you’ve paid a lot in taxes every year and never get any benefit from the temporarily high valuation.
Very true
I agree with you in general, although I think the home prices probably overstate the case given the huge value transfer from commercial to residential real estate for work-from-home purposes. Not that I think we'll go back to anything like the pre-pandemic distribution, but it'll be interesting to see where it nets out when the dust settles in 4-5 years.
More than likely OP suffers from lifestyle inflation. You should definitely be able to retire with that much money.
The "Safe withdraw rate" is something like 4%.
1 million saved = 40k per year, adjusting with inflation. 2 million saved = 80k per year, adjusting for inflation.
If you can live a life you want for 80k a year, then sure - 2 million can do it.
And yes, there will always be a "what if the economy collapses etc. etc", but retiring doesn't mean you can never ever for any reason hold a job again or make money.
1 million saved = 40k per year, adjusting with inflation. 2 million saved = 80k per year, adjusting for inflation.
If you can live a life you want for 80k a year, then sure - 2 million can do it.
And yes, there will always be a "what if the economy collapses etc. etc", but retiring doesn't mean you can never ever for any reason hold a job again or make money.
Fortunately house wealth can help via equity release / a lifetime mortgage. Of you don't want to pass it on to your kids that is.
Don't forget that safe withdrawal rate assumes a 30 year retirement. If you are looking at a 40+ year retirement, the safe withdrawal rate is probably more like 3-3.5%.
According to MMM
https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-nee...
> Luckily, the math in this case is pretty interesting: there is very little difference between a 30-year period, and an infinite year period, when determining how long your money will last.
You should be fine at 4% forever. If you can spend a little less some years, or go make a few dollars somewhere hey, boosts your odds even more.
https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-nee...
> Luckily, the math in this case is pretty interesting: there is very little difference between a 30-year period, and an infinite year period, when determining how long your money will last.
You should be fine at 4% forever. If you can spend a little less some years, or go make a few dollars somewhere hey, boosts your odds even more.
There's a lot of shorthand advice out there, but at the end of the day, if someone wants to get a better sense of what they need to retire, there's no way around it - they have to start tracking their own expenses by categories.
I personally do it every month. I know where every dollar has gone every month, and I also track a 12-month moving average. So I have a sense now of what our yearly expenses are. I compare that with the ever-changing recommendations of what a "Safe Withdrawal Rate" is, and then I try to squint into the future to mix in the effects of: taxes from retirement income; social security (even at the 80% level if no one fixes it); increased retirement expenses from having fun; decreased retirement expenses from not working and getting old; increased retirement expenses from health.
But ultimately, it just comes down to the trio of savings, interest rate, and expenses.
I personally do it every month. I know where every dollar has gone every month, and I also track a 12-month moving average. So I have a sense now of what our yearly expenses are. I compare that with the ever-changing recommendations of what a "Safe Withdrawal Rate" is, and then I try to squint into the future to mix in the effects of: taxes from retirement income; social security (even at the 80% level if no one fixes it); increased retirement expenses from having fun; decreased retirement expenses from not working and getting old; increased retirement expenses from health.
But ultimately, it just comes down to the trio of savings, interest rate, and expenses.
Sounds like you're where I'll be in a few years. I figured the "treadmill of spending" would be the hardest part. At the end of every year I look at my expenses and say to myself, "Well, I wouldn't have gone out to eat twice a week and taken four vacations and bought that new mountain bike if I was retired." Every year there's about $10-20k of spending that I naively try to convince myself "I wouldn't do if I was retired" but hearing you say it makes me realize I'm full of BS.
Thanks for the reassurance. :)
I've been writing software for 40 years, for fun and profit, I'm about 100% sure I'll never stop, so like you I'd like to monetize it as long as possible.
Thanks for the reassurance. :)
I've been writing software for 40 years, for fun and profit, I'm about 100% sure I'll never stop, so like you I'd like to monetize it as long as possible.
Once you have kids the calculation changes, at least for me.
I could retire comfortably in a few years, but my earning power is at it's peak. Every extra year I work provides significant extra resources for my family, to help the girls afford their first houses and get a good start in life when they graduate. I'll probably work another 5 years beyond what I'd probably do if it was purely about self-interest for myself and my wife.
I'm lucky that I enjoy my work, so it's not a massive sacrifice, but I do enjoy my leisure activities more. I'm really looking forward to being able to go somewhere interesting in the world with the missus and just stay there for 6 months. Also I'm a Brit here in the UK so health care is just not really an issue.
I could retire comfortably in a few years, but my earning power is at it's peak. Every extra year I work provides significant extra resources for my family, to help the girls afford their first houses and get a good start in life when they graduate. I'll probably work another 5 years beyond what I'd probably do if it was purely about self-interest for myself and my wife.
I'm lucky that I enjoy my work, so it's not a massive sacrifice, but I do enjoy my leisure activities more. I'm really looking forward to being able to go somewhere interesting in the world with the missus and just stay there for 6 months. Also I'm a Brit here in the UK so health care is just not really an issue.
Why can't your kids work for their own house? It builds character. My mom told me I had to get a scholarship if I wanted my college paid, so I got one. Nobody is going to hand me a house either so I sought (and received) exceptional return in Bitcoin
So you got lucky on a crypto-gamble and you think your situation applies to everyone?
Help could mean a lot of things... it could mean $20K towards their down payment all the way up to buying the damn thing, the poster didn't really clarify.
This whole "builds character" thing is a bunch of bullshit that people spout off to poo-poo those that have a leg up in life.
Help could mean a lot of things... it could mean $20K towards their down payment all the way up to buying the damn thing, the poster didn't really clarify.
This whole "builds character" thing is a bunch of bullshit that people spout off to poo-poo those that have a leg up in life.
Fair question, they can. Both are working towards well paid careers. Still, housing costs in the UK are extremely high these days. I got help from my parents with the deposit for my first house and I want to be able to do the same thing for my kids.
They’re both hard working, they do well at school and have part time jobs over the summer. I’m not worried about them on that score.
They’re both hard working, they do well at school and have part time jobs over the summer. I’m not worried about them on that score.
> ...to help the girls afford their first houses and get a good start in life when they graduate...
I thought having a possibility to graduate is 'the good start' in life.
I thought having a possibility to graduate is 'the good start' in life.
Not for a few decades now. Since a 4 year degree is the baseline for young people entering the workforce, a degree is not a guarantee of prosperity.
>Also I'm a Brit here in the UK so health care is just not really an issue.
The Tories really don't like the NHS so I'm assuming they will continue to squeeze it. I wouldn't be surprised if we end up paying for things like joint replacements.
The Tories really don't like the NHS so I'm assuming they will continue to squeeze it. I wouldn't be surprised if we end up paying for things like joint replacements.
I know of people who have enrolled in community college to be able to purchase health insurance at student rates, which are relatively low.
Have you tried to get a < 40 hrs/wk full-time job, to get the benefits but do less hours? If so, how has that been?
Why is health insurance is a concern for early retirement? The platinum option of obamacare costs about $35K a year? Is it because the 10% copay can still mount to a huge expenditure because the healthcare in the US costs too much?
$35k a year is a lot if you don't have any income - at a 4% withdrawal rate that requires an additional $875k in savings to cover, and at most incomes it takes many years to save up that much (plus obviously all the years you work to save 1.5M for your $60k/year or whatever in living expenses).
There is also the fact of a 10% or however much copay, which will be a lot over time if you get a chronic illness (which would also reduce your ability to go back to work).
Additionally, most people expect healthcare costs to rise with age, so will want a buffer on top of what healthcare currently costs to cover future bigger expenses.
There is also the fact of a 10% or however much copay, which will be a lot over time if you get a chronic illness (which would also reduce your ability to go back to work).
Additionally, most people expect healthcare costs to rise with age, so will want a buffer on top of what healthcare currently costs to cover future bigger expenses.
Peter Drucker wrote a really good essay called The Second half of your life. I can’t find it online outside of buying the Essential Drucker, but this article covers some of the points: https://www.asme.org/topics-resources/content/peter-druckers...
If you've ever talked to anyone that has done FIRE or just retired a few years early, it's always health insurance. The current US system of healthcare via your employer is a huge blocker to any kind of alternative lifestyle. Have to wait until 65 (or like 68 by the time most of us can retire)
The current system is not healthcare via employer. Anyone can go to healthcare.gov and get the same insurance plans.
The main benefit of employer purchased health insurance is that you buy with pre tax dollars.
The main benefit of employer purchased health insurance is that you buy with pre tax dollars.
Sorry, affordable healthcare. Sure, public plans exist, but most state exchanges are 2k a month. It's not the same, because the insurance pools are different. Check the coverage plans: https://www.wahbexchange.org/new-customers/coverage-basics/p...
Except for a few situations, it's mostly bottom tier insurance pools.
Meanwhile, my insurance PPO ranged from $0.0 month (high deductible) to max ~$50.
Except for a few situations, it's mostly bottom tier insurance pools.
Meanwhile, my insurance PPO ranged from $0.0 month (high deductible) to max ~$50.
They are not that different in my experience. The same metal level plan on healthcare.gov are pretty similar to what employers will be offered by the insurance companies. There might be some savings for those working at white collar firms with younger employees like tech and finance and law, but that will not apply to most people in the US.
Your portion of the insurance premium was $0 to $50 per pay period via your employer, but the cost of your insurance was still much higher, probably the same as healthcare.gov. Check code DD in box 12 of your W2 to see how much your employer paid, and you can compare the actual price of your health insurance.
Edit: NJ puts out a nice document that anyone can estimate their premium for based on metal level and age. Note that $2k per month would be for family coverage of 2 old people, but for young people it would be a third. Also note that prices for young people are extra high due to subsidizing old people due to stipulations in ACA limiting premiums for old people to be 3x those of young people. See “age rating factors” box at bottom of pdf.
https://www.nj.gov/dobi/division_insurance/ihcseh/ihcrates20...
Your portion of the insurance premium was $0 to $50 per pay period via your employer, but the cost of your insurance was still much higher, probably the same as healthcare.gov. Check code DD in box 12 of your W2 to see how much your employer paid, and you can compare the actual price of your health insurance.
Edit: NJ puts out a nice document that anyone can estimate their premium for based on metal level and age. Note that $2k per month would be for family coverage of 2 old people, but for young people it would be a third. Also note that prices for young people are extra high due to subsidizing old people due to stipulations in ACA limiting premiums for old people to be 3x those of young people. See “age rating factors” box at bottom of pdf.
https://www.nj.gov/dobi/division_insurance/ihcseh/ihcrates20...
They are significantly different if you see the plans and the network you're in. Just look at the costs for the plans I linked above.
It's really not the same, or even close. Let's take one of the more popular plans on the exchange for Washington state.
https://www.insurance.wa.gov/rates/bridgespan-health-company...
https://www.insurance.wa.gov/sites/default/files/2020-09/bri...
It's really not the same, or even close. Let's take one of the more popular plans on the exchange for Washington state.
https://www.insurance.wa.gov/rates/bridgespan-health-company...
https://www.insurance.wa.gov/sites/default/files/2020-09/bri...
Those premiums look the same as those for employer sponsored health insurance:
https://www.statista.com/statistics/632151/premiums-for-empl...
https://www.commonwealthfund.org/sites/default/files/2020-11...
https://files.kff.org/attachment/Summary-of-Findings-Employe...
https://www.statista.com/statistics/632151/premiums-for-empl...
https://www.commonwealthfund.org/sites/default/files/2020-11...
https://files.kff.org/attachment/Summary-of-Findings-Employe...
Those premiums are significantly above what corporate employees pay. My premiums at my current and last job were way below those figures.
Keep in mind "private employers" is a huge bucket and would encompass a wide range of companies, including smaller companies with likely small budgets.
It is not reflective of many of the benefits many SWEs would get.
Keep in mind "private employers" is a huge bucket and would encompass a wide range of companies, including smaller companies with likely small budgets.
It is not reflective of many of the benefits many SWEs would get.
Again, I am talking about the total cost of insurance, not just the portion of the cost of insurance that an employer asks an employee to pay.
Just because an employer is paying for $18k out of $20k of your annual health insurance premiums (again, check code DD box 12 of your W2), does not mean that health insurance costs (meaningfully) less for an employer. It is simply a portion of your total compensation, which both employer and employee prefer to go via the employer due to the ability to purchase it with pre tax money, hence an immediate savings of 30% on the insurance premium portion of one’s expenses.
To go back to the root of this conversation, my purpose was to clarify that “healthcare via employer” is simply an artifact of the tax code and results in savings of tax rate * annual health insurance premiums.
Just because an employer is paying for $18k out of $20k of your annual health insurance premiums (again, check code DD box 12 of your W2), does not mean that health insurance costs (meaningfully) less for an employer. It is simply a portion of your total compensation, which both employer and employee prefer to go via the employer due to the ability to purchase it with pre tax money, hence an immediate savings of 30% on the insurance premium portion of one’s expenses.
To go back to the root of this conversation, my purpose was to clarify that “healthcare via employer” is simply an artifact of the tax code and results in savings of tax rate * annual health insurance premiums.
The employer's cost for my health insurance is largely irrelevant to me, the employee. There is zero reason that if my employer's cost was zero, that those dollars would be passed along to me unless the employment market forced them to.
Your specific total compensation is not affected by the employer paid portion of health insurance, but all compensation across all employees across all businesses is surely affected (the money for the health insurance has to come from somewhere).
But back to my original point, is that the quality and cost of health insurance on healthcare.gov is comparable to what employers offer (many times it is the same product sold by same insurer). And it is at the same cost, just the tax treatment differs when an employer pays for a portion of it.
But back to my original point, is that the quality and cost of health insurance on healthcare.gov is comparable to what employers offer (many times it is the same product sold by same insurer). And it is at the same cost, just the tax treatment differs when an employer pays for a portion of it.
I just think that's wrong. Private insurers pools are still less expensive, even if the employer was not going to pay some percentage of your premium. If you look at the plans that most large employers have (Microsoft, Amazon etc) their total premium cost is still far less. I understand what you're saying, it's just not correct for the vast majority of large company workers.
Your total private insurer cost is all of the US, which includes many small businesses which are on inferior plans. But for an swe, your total premium cost is far less (regardless of how much your employer chips in) due to the fact that your private insurer pool is filled with relatively wealthy, educated workers. Private mom/pop pool != private Microsoft/Amazon pool.
What you're saying is just...wrong...for most talented eng workers.
Your total private insurer cost is all of the US, which includes many small businesses which are on inferior plans. But for an swe, your total premium cost is far less (regardless of how much your employer chips in) due to the fact that your private insurer pool is filled with relatively wealthy, educated workers. Private mom/pop pool != private Microsoft/Amazon pool.
What you're saying is just...wrong...for most talented eng workers.
> If you look at the plans that most large employers have (Microsoft, Amazon etc) their total premium cost is still far less.
Is this data available somewhere? I cannot find anything specifically related to big tech companies, although I did acknowledge about there might be some slight advantage due to population. But many of these tech companies are huge with tens and hundreds of thousands of employees. I highly doubt Amazon, with 1.2M employees, most of them not highly paid software engineers that sit in chairs all day, has a risk pool that is materially less costly than any random healthcare.gov plan.
The only other way is if some people here employed by FAANG pipe in with what their W-2 says the employer paid portion of their health insurance costs were.
Is this data available somewhere? I cannot find anything specifically related to big tech companies, although I did acknowledge about there might be some slight advantage due to population. But many of these tech companies are huge with tens and hundreds of thousands of employees. I highly doubt Amazon, with 1.2M employees, most of them not highly paid software engineers that sit in chairs all day, has a risk pool that is materially less costly than any random healthcare.gov plan.
The only other way is if some people here employed by FAANG pipe in with what their W-2 says the employer paid portion of their health insurance costs were.
> The main benefit of employer purchased health insurance is that you buy with pre tax dollars.
The main benefit is that my employer pays most of the premiums. As an example, I have a high deductible plan. The deductible is only about $3750/year. I pay 0 in premiums. The equivalent health plan from healthcare.gov is easily over $10K in premiums.
The main benefit is that my employer pays most of the premiums. As an example, I have a high deductible plan. The deductible is only about $3750/year. I pay 0 in premiums. The equivalent health plan from healthcare.gov is easily over $10K in premiums.
I understood the context of the discussion to be a comparison of obtaining healthcare with and without an employer, in which case an employer paying for it reduces to compensating you for working, which is obvious and not notable when discussing whether or not one can retire.
You can get the same healthcare, the only distinction is do you have enough money saved up to buy it from your savings or do you need to continue working to afford it, just like everything else in retirement.
You can get the same healthcare, the only distinction is do you have enough money saved up to buy it from your savings or do you need to continue working to afford it, just like everything else in retirement.
With the current options for health insurance plans, this depends largely on your other expenses.
To explain, your "income" in early retirement is a combination of money you're converting from an IRA to a Roth IRA, capital gains (as you sell investments to cover expenses) and dividends on your taxable brokerage account. If your expenses are in the $40-50k range annually, you might only be paying on conversion income, and relatively low taxes on long-term capital gains. Overall, you can qualify for health insurance subsidies at this level of taxation, and get a pretty good plan without a lot of out of pocket expenses.
Here's one example of an article going into the details:
https://rpgplanner.com/aca-tax-credits/
To explain, your "income" in early retirement is a combination of money you're converting from an IRA to a Roth IRA, capital gains (as you sell investments to cover expenses) and dividends on your taxable brokerage account. If your expenses are in the $40-50k range annually, you might only be paying on conversion income, and relatively low taxes on long-term capital gains. Overall, you can qualify for health insurance subsidies at this level of taxation, and get a pretty good plan without a lot of out of pocket expenses.
Here's one example of an article going into the details:
https://rpgplanner.com/aca-tax-credits/
This is not a problem any more - with the ACA, you can get excellent health insurance plans nowadays.
I just entered my data and for my family of 7 insurance costs are $1792 per month via healthcare.gov
I'm not sure what it covers.
I'm not sure what it covers.
I was reading about this the other day, but wouldnt using the Advanced Premium Tax Credit help lower dramatically your healthcare costs?
I retired early recently - I am in my mid 50s. It's not anywhere as hard as people seem to think. With a disciplined approach to investing, I think that it's very much possible to reach financial independence with a typical tech salary in the US. I achieved FI without an extraordinarily high salary, stock grants or participating in an IPO.
There is a treasure trove of information in the Bogleheads wiki: https://www.bogleheads.org/wiki/Getting_started
There is a treasure trove of information in the Bogleheads wiki: https://www.bogleheads.org/wiki/Getting_started
My problem is, I'm kind of anti-capitalist, to make it short. Labor and capital and not just production factors, but they constitute a power relationship (and often a quite asymmetric one).
I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work".
People get all upset about the stance, but all I am saying is that everyone wants to profit off someone else' work and I do not think that's the best way forward. Especially not in an era, where labor overall will decrease in value (we will continue to automate more and more) - which just means poverty for anyone w/o capital (it's that simple).
Edit: Also, I'm not speaking as a "loser" of this system - but on track to the first million - it's just that I can imagine another world and so many people take the "capitalist framework" as a given - which it just not is. There are ways to think about society in a more nuanced way, without losing all the competitive niceties of capitalism.
I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work".
People get all upset about the stance, but all I am saying is that everyone wants to profit off someone else' work and I do not think that's the best way forward. Especially not in an era, where labor overall will decrease in value (we will continue to automate more and more) - which just means poverty for anyone w/o capital (it's that simple).
Edit: Also, I'm not speaking as a "loser" of this system - but on track to the first million - it's just that I can imagine another world and so many people take the "capitalist framework" as a given - which it just not is. There are ways to think about society in a more nuanced way, without losing all the competitive niceties of capitalism.
So if you don't invest, do you just save money in a savings account? Over a 50 year career S&P Index Fund vs stuff in a savings account is the different between... having 20k a year to pull from savings, vs having 100k a year to pull from investments. It's a pretty stark portfolio difference.
Ironically if you put the money in a savings account, someone much richer than you is going to be investing it on your behalf and taking the lion's share of the interest that you're leaving on the table.
Right. Can't really escape the game.
[deleted]
> Money does not "work".
This seems an overly literal diversion from the point of that phrase.
This seems an overly literal diversion from the point of that phrase.
As a fellow anti-capitalist I struggle with how to live in a clearly capitalist world. I'm currently on track to retire at an average age or earlier and cynically view it as buying freedom from the system. In reality it reminds me of the old company store at coal mines. Paying workers in currency which can only be spent at their own store.
Breaking out of the capitalist cycle seems quite difficult to do while still maintaining a decent quality of life.
Breaking out of the capitalist cycle seems quite difficult to do while still maintaining a decent quality of life.
> Breaking out of the capitalist cycle seems quite difficult to do while still maintaining a decent quality of life.
I would suggest that's because its capitalism that provides that quality of life.
I would suggest that's because its capitalism that provides that quality of life.
Indeed, it seems like the parent thinks that if it weren't for capitalism no one would need to work for their food, shelter, healthcare, etc. When in reality "in order to have basic necessities one must labor" is a natural law and capitalism seeks to minimize the amount of labor required to achieve that decent quality of life. Further, the parent describes himself as participating in capitalism precisely because it is the easiest way to achieve his "decent quality of life".
This seems like the fundamental misunderstanding that anti-capitalists make--everyone wants to minimize the labor required to achieve a decent quality of life, but anti-capitalists uniquely (seem to) believe that capitalism is the reason we have to labor in the first place.
This seems like the fundamental misunderstanding that anti-capitalists make--everyone wants to minimize the labor required to achieve a decent quality of life, but anti-capitalists uniquely (seem to) believe that capitalism is the reason we have to labor in the first place.
I am not interested in descending into an idealogical argument here, but most (serious) anti-capitalist criticisms will acknowledge that capitalism has brought the hitherto highest quality of life, just that it is self-constrained by the necessity to produce for profit.
Socialism is then understood as the overcoming of this constraint, but as always if you ask n socialists/communists you get m answers, where m > n.
It is messy and tiresome to discuss, especially when everyone insists that their personal understandings of what terms mean are the only real ones. More so when you've heard every position a dozen times already...
Socialism is then understood as the overcoming of this constraint, but as always if you ask n socialists/communists you get m answers, where m > n.
It is messy and tiresome to discuss, especially when everyone insists that their personal understandings of what terms mean are the only real ones. More so when you've heard every position a dozen times already...
> it is self-constrained by the necessity to produce for profit
That's a constraint imposed by nature, not by capitalism. Capitalism tries to optimize the amount of profit per unit labor so as to elevate society out of poverty.
That's a constraint imposed by nature, not by capitalism. Capitalism tries to optimize the amount of profit per unit labor so as to elevate society out of poverty.
I don't understand anti-capitalism. I get that it sucks to work to provide oneself with "a decent quality of life", but the whole point of capitalism is to minimize the amount of work one needs in order to secure that "decent quality of life". I.e., capitalism is the most efficient system we've found to secure a decent quality of life for as many people as possible.
The laws of nature require that food, shelter, and healthcare require the labor of some people and apart from slavery those people need to be compensated for the fruits of their labor. In order for each of us to share in the fruits of their labor, we have to have something with which to compensate them, which is ultimately our own labor.
It feels like anti-capitalists believe there is some forest of money trees that the capitalists are sadistically preventing anyone from accessing.
The laws of nature require that food, shelter, and healthcare require the labor of some people and apart from slavery those people need to be compensated for the fruits of their labor. In order for each of us to share in the fruits of their labor, we have to have something with which to compensate them, which is ultimately our own labor.
It feels like anti-capitalists believe there is some forest of money trees that the capitalists are sadistically preventing anyone from accessing.
I see capitalism as a good system in the sense that it does not require any belief in anything - that's certainly a plus.
What is bad is that I capital can just work and earn money, those not lucky need to be creative and actually use and sell their abilities.
Also bad: while there is competition, there is just a huge amount of excess and waste work because everybody is determined to out-compete the others.
In the end, a capitalist company aims for perpetual growth and monopoly, because that's where you can set your price and maximize your profit.
What is bad is that I capital can just work and earn money, those not lucky need to be creative and actually use and sell their abilities.
Also bad: while there is competition, there is just a huge amount of excess and waste work because everybody is determined to out-compete the others.
In the end, a capitalist company aims for perpetual growth and monopoly, because that's where you can set your price and maximize your profit.
> What is bad is that I capital can just work and earn money, those not lucky need to be creative and actually use and sell their abilities.
Yeah, inequality is a bummer, but it's a small price to pay to lift billions out of abject poverty. Further, we can do more to calibrate our capitalist systems to be more efficient which is to say we can reduce the amount of inequality and lift more people further out of poverty. That said, capitalism has allowed many of us have been able to lift ourselves out of the labor class and to begin to earn passive income even if it hasn't allowed all of society to do so in perfect lock-step. It's a centuries-long process (7+ billion people distributed through a lot of different cultures and political systems with varying degrees of corruption especially among the non-capitalist systems), but we can get there.
> Also bad: while there is competition, there is just a huge amount of excess and waste work because everybody is determined to out-compete the others
Far less than any other system known to man.
> In the end, a capitalist company aims for perpetual growth and monopoly, because that's where you can set your price and maximize your profit.
Our system largely marshals this corporate greed to the benefit of all of society. Many of us believe it can be marshaled more efficiently (i.e., less inequality and less poverty, probably by steeper taxes on the rich), but we're talking about calibrating the existing system--not changing to a fundamentally different one. Indeed, we haven't found an alternative to capitalism that isn't utterly catastrophic, so complaining about capitalism seems horribly destructive (by all means, complain about the degree to which our system could be made more efficient, but complaining that capitalism is responsible for the constraints imposed by nature is ultimately counterproductive).
Yeah, inequality is a bummer, but it's a small price to pay to lift billions out of abject poverty. Further, we can do more to calibrate our capitalist systems to be more efficient which is to say we can reduce the amount of inequality and lift more people further out of poverty. That said, capitalism has allowed many of us have been able to lift ourselves out of the labor class and to begin to earn passive income even if it hasn't allowed all of society to do so in perfect lock-step. It's a centuries-long process (7+ billion people distributed through a lot of different cultures and political systems with varying degrees of corruption especially among the non-capitalist systems), but we can get there.
> Also bad: while there is competition, there is just a huge amount of excess and waste work because everybody is determined to out-compete the others
Far less than any other system known to man.
> In the end, a capitalist company aims for perpetual growth and monopoly, because that's where you can set your price and maximize your profit.
Our system largely marshals this corporate greed to the benefit of all of society. Many of us believe it can be marshaled more efficiently (i.e., less inequality and less poverty, probably by steeper taxes on the rich), but we're talking about calibrating the existing system--not changing to a fundamentally different one. Indeed, we haven't found an alternative to capitalism that isn't utterly catastrophic, so complaining about capitalism seems horribly destructive (by all means, complain about the degree to which our system could be made more efficient, but complaining that capitalism is responsible for the constraints imposed by nature is ultimately counterproductive).
You have an explicit choice to either not invest or invest. If you spend all your money instead of investing it, you're still making somebody work for you- they're immediately being made (although I'd disagree with this portrayal that it's involuntary, you may not) to serve you a plate of lunch or manufacture a new car for you.
Your attitude seems to be financially masochistic to me and possibly a way to justify your own actions.
Your attitude seems to be financially masochistic to me and possibly a way to justify your own actions.
Given that if you don't invest, someone else will (and get marginally higher returns on average), consider investing and donating all of the returns to a labor organization?
I'm not an expert on ethics, but it seems that the captured excess productivity is liberated from the worker regardless of whether you invest or not and if you donate 100% of your profits to labor organizations, you are merely redistributing the money back.
I'm not an expert on ethics, but it seems that the captured excess productivity is liberated from the worker regardless of whether you invest or not and if you donate 100% of your profits to labor organizations, you are merely redistributing the money back.
Your investment pays someone's wage, and in exchange for your investment you get interest. This doesn't seem exploitative at all, and moreover I don't know of any economic system that has the ability to minimize poverty and maximize human rights than capitalism.
Unless your opposition to capitalism is based on idealistic notions of morality, you have to accept that it is the predominant mode of production that society involuntarily finds itself in. Marx was financed by Engels, a factory owner and capitalist, and if he had refused to do so on principle, he would have probably never gotten around to write any of his theory (regardless of what one things of it).
Money disassociates social relations under capitalism. You fear wanting to pay people to work for you, but they too just work for the money. There is nothing ethical or unethical about that, it is just how the structure of capitalism influences the production and reproduction of society.
You might want to study theory or history, engage in labour actions, teach, help the needy, etc. but the system doesn't privilege anyone unconditionally. To have the opportunities to do what you find important, you need the resources: education, money and also time.
So it is up to you, to live by the standards of an ideal society or to exploit the current circumstances as best you can.
Money disassociates social relations under capitalism. You fear wanting to pay people to work for you, but they too just work for the money. There is nothing ethical or unethical about that, it is just how the structure of capitalism influences the production and reproduction of society.
You might want to study theory or history, engage in labour actions, teach, help the needy, etc. but the system doesn't privilege anyone unconditionally. To have the opportunities to do what you find important, you need the resources: education, money and also time.
So it is up to you, to live by the standards of an ideal society or to exploit the current circumstances as best you can.
Capitalism by it's nature is exploitative. You work for me and I pay you less than your labor is worth so I make a profit. It's a system built on greed and profit and is most certainly unethical.
The system privileges the top unconditionally. Think what you want, but let's not pretend that capitalism is an ethical system where the laborer isn't exploited.
The system privileges the top unconditionally. Think what you want, but let's not pretend that capitalism is an ethical system where the laborer isn't exploited.
Exploitation is not an ethical question, it is necessary for societies that a discrepancy exists between the value of labour invested and the value of the return. Otherwise you'd have a society where only those who work would be rewarded, and the ill, the elderly and children would get nothing.
Capitalism doesn't require greed, in the abstract it is just a condition whereby some must sell their labour and others have to buy it. In practice, there are of course a number of issues when production revolved about value accumulation, and it breaks down when the reproduction of society on a material level becomes unprofitable.
Capitalism is the rule by Capital, the impersonal forces that emerge from the structures based on the wage-labour relation. Capitalists, insofar they still exist, are (well-treated) servants, but they have no autonomy and are not rulers. Some stand to gain more than others, naturally, but the need to moralize capitalism is the consequence of weak theory, not something inherent to the system.
Capitalism doesn't require greed, in the abstract it is just a condition whereby some must sell their labour and others have to buy it. In practice, there are of course a number of issues when production revolved about value accumulation, and it breaks down when the reproduction of society on a material level becomes unprofitable.
Capitalism is the rule by Capital, the impersonal forces that emerge from the structures based on the wage-labour relation. Capitalists, insofar they still exist, are (well-treated) servants, but they have no autonomy and are not rulers. Some stand to gain more than others, naturally, but the need to moralize capitalism is the consequence of weak theory, not something inherent to the system.
Yes, true - many societies are using this configuration for hundreds of years.
My issue is not based on morality, but on the fact that we as humans are capable of reflecting on our existence. And that each of our lives is determined by a large amount of luck.
I could be born smart, ill, rich, poor and so on. Does some accidental property give me more rights and opportunities than others? My western net worth would allow me to retire right now in many parts of the world - but did I earn this privilege? Of course not, it was pure accident.
My issue is that people take a huge amount of lucky accidents as a justification of all kinds of power grabs and entitlements. And capitalism just has the potential to magnify this effect - e.g. by letting the "smart" and "lucky" control the "less smart" and "less lucky" and call it all "natural" and without alternative.
My issue is not based on morality, but on the fact that we as humans are capable of reflecting on our existence. And that each of our lives is determined by a large amount of luck.
I could be born smart, ill, rich, poor and so on. Does some accidental property give me more rights and opportunities than others? My western net worth would allow me to retire right now in many parts of the world - but did I earn this privilege? Of course not, it was pure accident.
My issue is that people take a huge amount of lucky accidents as a justification of all kinds of power grabs and entitlements. And capitalism just has the potential to magnify this effect - e.g. by letting the "smart" and "lucky" control the "less smart" and "less lucky" and call it all "natural" and without alternative.
Virtually no one likes inequality, but we really really don't want mass poverty, starvation, disease, etc that accompany alternative systems. Capitalism is how we minimize for poverty by tolerating some acceptable degree of inequality (it's a tricky but necessary calibration endeavor).
Imagine a community of elderly people who are physically incapable of cutting their lawn on a weekly basis.
A neighbor sees their predicament and thinks if he could only buy a lawn tractor he could help them out. But he doesn’t have the money.
So he borrows the money at 5% interest, buys the tractor and offers to cut their lawns at a low rate. He uses the money he makes from his customers to pay the payments on the tractor and even reinvests some of that to buy a truck with a plow so he can plow their driveways when it snows.
He’s happy, his customers are happy, the bank that loaned him the money is happy. It seems like putting “money to work” in this way seems like a good thing to me but maybe I’m missing something.
A neighbor sees their predicament and thinks if he could only buy a lawn tractor he could help them out. But he doesn’t have the money.
So he borrows the money at 5% interest, buys the tractor and offers to cut their lawns at a low rate. He uses the money he makes from his customers to pay the payments on the tractor and even reinvests some of that to buy a truck with a plow so he can plow their driveways when it snows.
He’s happy, his customers are happy, the bank that loaned him the money is happy. It seems like putting “money to work” in this way seems like a good thing to me but maybe I’m missing something.
Clear away the clutter. Are you able to sell things for more money than you bought them for and still honor your personal values? If you can, then do so.
Forget the slogans, descriptions and tortured analysis. Can you as a human sell things to another human for more than you paid for them in a situation where you are both happy with the price?
If so, do so. If not, I suggest you take a look at what is motivating your feelings.
Forget the slogans, descriptions and tortured analysis. Can you as a human sell things to another human for more than you paid for them in a situation where you are both happy with the price?
If so, do so. If not, I suggest you take a look at what is motivating your feelings.
> Can you as a human sell things to another human for more than you paid for them in a situation where you are both happy with the price?
I would be really interested to understand how someone can exchange a good for someone else's labor (which is what you're describing above) but they can't invest--which is merely paying someone's wage in exchange for a share of the profits. In both cases the participants in the exchange find the agreement to be mutually enriching, so it's not like either is particularly inherently exploitative.
I would be really interested to understand how someone can exchange a good for someone else's labor (which is what you're describing above) but they can't invest--which is merely paying someone's wage in exchange for a share of the profits. In both cases the participants in the exchange find the agreement to be mutually enriching, so it's not like either is particularly inherently exploitative.
Yes, that's fine - I'm doing that.
My goal is simple: try not to make things worse.
My goal is simple: try not to make things worse.
"anti-capitalist" - how does one become an "anti-capitalist" when it's abundantly clear that, even though it's not a perfect system, it's the best system there is? It's the system that facilitates competition, social progress, scientific advancements etc etc
I'm thinking "anti-capitalist" attitude is usually a result of the poor decisions in early adulthood (decisions regarding education, reproduction, career, social circles). When these choices don't pay off, failure to recognize that and self-correct early enough builds resentment. Since the system doesn't reward poor decisions (works as designed) it's very common to shift the blame from yourself (your incapability to adjust, adapt, improvise, and overcome) onto the system and characterize it as "exploitative"
I'm thinking "anti-capitalist" attitude is usually a result of the poor decisions in early adulthood (decisions regarding education, reproduction, career, social circles). When these choices don't pay off, failure to recognize that and self-correct early enough builds resentment. Since the system doesn't reward poor decisions (works as designed) it's very common to shift the blame from yourself (your incapability to adjust, adapt, improvise, and overcome) onto the system and characterize it as "exploitative"
Let me ask you, why aren't more workers "happy capitalists" and praise this way of living? Why aren't the warehouse workers more happy? Or the people soon displaced by computers and algorithms? Why aren't they look forward to a life of less chore and more free time?
Why do so many people protest against climate change? Why is it ok for corporations to externalize costs? Why is all the considered good?
I'm all for competition and fierce fights, but let just not forget that we live in a "society" and not in a box, everyone for themselves.
Why do so many people protest against climate change? Why is it ok for corporations to externalize costs? Why is all the considered good?
I'm all for competition and fierce fights, but let just not forget that we live in a "society" and not in a box, everyone for themselves.
> Let me ask you, why aren't more workers "happy capitalists" and praise this way of living?
Many are. The others don't understand economics, i.e., they don't understand that capitalism minimizes the amount of work required to meet their needs/desires, not least of all because of the sheer amount of misinformation.
Many are. The others don't understand economics, i.e., they don't understand that capitalism minimizes the amount of work required to meet their needs/desires, not least of all because of the sheer amount of misinformation.
If you mean “subscribe to the ideology of the Austrian school” when you say “understand economics”, the above makes some sense.
I was quite clear about what I meant:
> they don't understand that capitalism minimizes the amount of work required to meet their needs/desires
Anyone who thinks this is merely "ideology"--that there are non-capitalist systems that afford better quality of life for less labor--is invited to support their position with evidence.
> they don't understand that capitalism minimizes the amount of work required to meet their needs/desires
Anyone who thinks this is merely "ideology"--that there are non-capitalist systems that afford better quality of life for less labor--is invited to support their position with evidence.
> Anyone who thinks this is merely “ideology”--that there are non-capitalist systems that afford better quality of life for less labor–is invited to support their position with evidence.
The evidence is the replacement of the system originally named “capitalism” by its critics, under pressure from its critics, throughout the developed world by the modern mixed economy in the decades of the mid-20th Century, with the modern mixed economy, which afforded the working masses a better quality of life for less labor directly by restraining the property relationships defining capitalism.
The question isn’t whether you can do better in terms of quality of life for workers with less labor than capitalism, the question is whether there is a limit to how far you can move away from capitalism while continuing to improve on that.
The evidence is the replacement of the system originally named “capitalism” by its critics, under pressure from its critics, throughout the developed world by the modern mixed economy in the decades of the mid-20th Century, with the modern mixed economy, which afforded the working masses a better quality of life for less labor directly by restraining the property relationships defining capitalism.
The question isn’t whether you can do better in terms of quality of life for workers with less labor than capitalism, the question is whether there is a limit to how far you can move away from capitalism while continuing to improve on that.
> The evidence is the replacement of the system originally named “capitalism” by its critics, under pressure from its critics, throughout the developed world by the modern mixed economy in the decades of the mid-20th Century, with the modern mixed economy, which afforded the working masses a better quality of life for less labor directly by restraining the property relationships defining capitalism.
I’m profoundly disinterested in semantic arguments or moving goalposts.
> The question isn’t whether you can do better in terms of quality of life for workers with less labor than capitalism, the question is whether there is a limit to how far you can move away from capitalism while continuing to improve on that.
Fair enough, but even then the answer by all appearances is “not very”. In other words, no system has done better than those of modern first world countries.
I’m profoundly disinterested in semantic arguments or moving goalposts.
> The question isn’t whether you can do better in terms of quality of life for workers with less labor than capitalism, the question is whether there is a limit to how far you can move away from capitalism while continuing to improve on that.
Fair enough, but even then the answer by all appearances is “not very”. In other words, no system has done better than those of modern first world countries.
> why aren't more workers "happy capitalists"
Only idiots are always happy. If we see flaws, no matter how small, we try to proceed to the next level by fixing those, there is a brief moment of perceived happiness, but it passes rather quickly, and so cycle continues. What you described is Work-In-Progress. Capitalism is the system that allows that, it allows itself to self-correct.
> Or the people soon displaced by computers and algorithms
Everything that can be automated - should be automated. Humans is a creative reserve that is limited, physical labor needs to become obsolete. Also you don't see any horse carriage operators complaining about being displaced by automotive industry, do you?
> let just not forget that we live in a "society" and not in a box, everyone for themselves
That's right, everyone is not against you, they are just for themselves.
Only idiots are always happy. If we see flaws, no matter how small, we try to proceed to the next level by fixing those, there is a brief moment of perceived happiness, but it passes rather quickly, and so cycle continues. What you described is Work-In-Progress. Capitalism is the system that allows that, it allows itself to self-correct.
> Or the people soon displaced by computers and algorithms
Everything that can be automated - should be automated. Humans is a creative reserve that is limited, physical labor needs to become obsolete. Also you don't see any horse carriage operators complaining about being displaced by automotive industry, do you?
> let just not forget that we live in a "society" and not in a box, everyone for themselves
That's right, everyone is not against you, they are just for themselves.
> why aren’t more workers “happy capitalists”
Uh, because capitalists are literally a different class within capitalist society than workers; from top to bottom:
capitalists (haut bourgeoisie)
middle class (petit bourgeoisie)
workers (proleteriat)
underclass (lumpenproletariat)
You might as well ask, of feudal society, why more serfs aren’t “happy aristocrats”.
Capitalism is the best system possible…for people who are both (1) part of the capitalist class, (2) concerned primarily with their own relative position within society.
Uh, because capitalists are literally a different class within capitalist society than workers; from top to bottom:
capitalists (haut bourgeoisie)
middle class (petit bourgeoisie)
workers (proleteriat)
underclass (lumpenproletariat)
You might as well ask, of feudal society, why more serfs aren’t “happy aristocrats”.
Capitalism is the best system possible…for people who are both (1) part of the capitalist class, (2) concerned primarily with their own relative position within society.
> “anti-capitalist” - how does one become an “anti-capitalist” when it’s abundantly clear that, even though it’s not a perfect system, it’s the best system there is?
Uh, its not “abundantly clear” that its the best system there is, which is why it was mostly thrown out in the mid-20th Century in favor of the modern mixed economy, which mitigate its harms with elements of socialism that are hostile to the basic property relationships underlying capitalism, and the major subsequent debates in the developed world have been largely about fine tuning the balance of capitalist and socialist elements of the modern mixed economy; there is a strongly pro-actual-capitalism faction in modern developed world (e.g., adherents to Austrian school ideological economics), and they are naturally popular among the disproportionately powerful, but they aren’t the consensus, any more than the faction that thinks that the problem with the mixed economy status quo is retaining capitalist elements (the anti-capitalist faction) is.
Uh, its not “abundantly clear” that its the best system there is, which is why it was mostly thrown out in the mid-20th Century in favor of the modern mixed economy, which mitigate its harms with elements of socialism that are hostile to the basic property relationships underlying capitalism, and the major subsequent debates in the developed world have been largely about fine tuning the balance of capitalist and socialist elements of the modern mixed economy; there is a strongly pro-actual-capitalism faction in modern developed world (e.g., adherents to Austrian school ideological economics), and they are naturally popular among the disproportionately powerful, but they aren’t the consensus, any more than the faction that thinks that the problem with the mixed economy status quo is retaining capitalist elements (the anti-capitalist faction) is.
Early Retirement communities are kind of a spectrum.
Bogleheads, inspired by Jack Bogle, founder of Vanguard, leans towards topics of investing, having lots of money, and being able to afford the things you want. If you visit the forums, expect to be encouraged to amass a very large fortune to be able to handle anything.
MrMoneyMustache.com has an environmental slant, and tends to attract relatively high earners like software developers, with the message that you don't need to spend every last dollar to find happiness, and some careful allocation of your money can greatly decrease your working career and open up other possibilities for you (while lessening your impact on the planet.) There's a focus on being flexible and resilient, and many people expect to get their annual expenses in the $30k-100k range, trusting the 4% safe withdrawal rate, and thus having an investable net worth of $750k-$2.5m.
EarlyRetirementExtreme.com is geared towards someone who wants to be very self-reliant and capable, massively decreasing your expenses by decreasing consumption and paying for services you could handle yourself. Here the expectation might be that you could live on as little as $10-25k annually.
Bogleheads, inspired by Jack Bogle, founder of Vanguard, leans towards topics of investing, having lots of money, and being able to afford the things you want. If you visit the forums, expect to be encouraged to amass a very large fortune to be able to handle anything.
MrMoneyMustache.com has an environmental slant, and tends to attract relatively high earners like software developers, with the message that you don't need to spend every last dollar to find happiness, and some careful allocation of your money can greatly decrease your working career and open up other possibilities for you (while lessening your impact on the planet.) There's a focus on being flexible and resilient, and many people expect to get their annual expenses in the $30k-100k range, trusting the 4% safe withdrawal rate, and thus having an investable net worth of $750k-$2.5m.
EarlyRetirementExtreme.com is geared towards someone who wants to be very self-reliant and capable, massively decreasing your expenses by decreasing consumption and paying for services you could handle yourself. Here the expectation might be that you could live on as little as $10-25k annually.
These “stratified” communities are also viewable on Reddit. One end is called /r/fatfire and the other is /r/leanfire. To match the three communities you talked about in terms of anticipated spending… fatfire is similar to bogleheads while leanfire is similar to earlyretirementextreme. Fire being financial independence retirement early.
There is a discussion going on in the ERE forums at the moment that accuses the leanfire types of being somewhat profligate.
People love to divide themselves into tribes.
People love to divide themselves into tribes.
What if a stagflation of 15 years starts now?
Will you have to work again?
Will you have to work again?
It's a valid question.
The honest answer could simply be "yes." Depending on your circumstances. The more nuanced answer is...
Look at things like The Trinity Study / Monte Carlo simulation, https://www.cfiresim.com/, https://engaging-data.com/visualizing-4-rule/, https://firecalc.com/intro.php, https://retirementplans.vanguard.com/VGApp/pe/pubeducation/c... and so on.
To start, we assume that 1) we cannot predict the future but 2) the best predictor of the future is the past.
Then we make some assumptions that we think we could apply to the future, like how much we'll spend each year, how we'll allocate our assets / investments, and how long we need our money to last. From there, we take historical data and apply our unique assumptions to the historical data simulating each time period available, and we take a close look at the results.
To get 100% success, you'd need something like no inflation, or invested assets greatly exceeding our expenses. For example, if you spend $100,000 / year, and you have $4 million invested, even if inflation matched your investment return, you could still live off this money for 40 years.
But you probably don't need a true 100% success rate. More likely, you need just a bit of flexibility, and a backup plan. Most failures happen due to something like stagflation or negative returns very early into your retirement. Your best option at that point is to return to work and reduce expenses until you've passed some of the worst, and then return to retirement with a much higher predicted success rate. If you retire without flexibility and a backup plan, blindly spending 4% of your assets each year regardless of the market and inflation, staglation could ruin your chances of success. But why would anyone choose to do that?
The honest answer could simply be "yes." Depending on your circumstances. The more nuanced answer is...
Look at things like The Trinity Study / Monte Carlo simulation, https://www.cfiresim.com/, https://engaging-data.com/visualizing-4-rule/, https://firecalc.com/intro.php, https://retirementplans.vanguard.com/VGApp/pe/pubeducation/c... and so on.
To start, we assume that 1) we cannot predict the future but 2) the best predictor of the future is the past.
Then we make some assumptions that we think we could apply to the future, like how much we'll spend each year, how we'll allocate our assets / investments, and how long we need our money to last. From there, we take historical data and apply our unique assumptions to the historical data simulating each time period available, and we take a close look at the results.
To get 100% success, you'd need something like no inflation, or invested assets greatly exceeding our expenses. For example, if you spend $100,000 / year, and you have $4 million invested, even if inflation matched your investment return, you could still live off this money for 40 years.
But you probably don't need a true 100% success rate. More likely, you need just a bit of flexibility, and a backup plan. Most failures happen due to something like stagflation or negative returns very early into your retirement. Your best option at that point is to return to work and reduce expenses until you've passed some of the worst, and then return to retirement with a much higher predicted success rate. If you retire without flexibility and a backup plan, blindly spending 4% of your assets each year regardless of the market and inflation, staglation could ruin your chances of success. But why would anyone choose to do that?
Lots of people are able to say, “it’s very much possible to reach financial independence” when the DOW has more than tripled in the last ten years. The Boglehead philosophy is perfect for these conditions (and many others).
If the stock market reverts to the mean over the next ten years, it won’t seem quite as possible though.
If the stock market reverts to the mean over the next ten years, it won’t seem quite as possible though.
What's the alternative?
Stock market returns may be muted and uncertain but cash pays nothing for sure.
The property market in the UK is at record highs in terms of price:income ratios, but it can still make sense to buy rather than rent due to record low interest rates (Gross rental yields being 4-6% and interest rates 1.5-4%), and the certainty it gives you (Investing your 20-25% deposit won't do you much good if house prices and rents outstrip the stock market in the 20-30 years before you retire)
Stock market returns may be muted and uncertain but cash pays nothing for sure.
The property market in the UK is at record highs in terms of price:income ratios, but it can still make sense to buy rather than rent due to record low interest rates (Gross rental yields being 4-6% and interest rates 1.5-4%), and the certainty it gives you (Investing your 20-25% deposit won't do you much good if house prices and rents outstrip the stock market in the 20-30 years before you retire)
> With a disciplined approach to investing, I think that it's very much possible to reach financial independence with a typical tech salary in the US
Bear in mind that you have been the beneficiary of an exceptional bull market
Bear in mind that you have been the beneficiary of an exceptional bull market
I should mention that I started regular automated index fund investing in the mid 1990s. I have been through two _big_ market corrections: 2001 and 2008-9. Despite being nervous, I never once stopped my automatic investments.
I understand, but consider how different your situation might be if those corrections had occurred at the end of your career rather than the beginning.
My dad told me after he retired it was his biggest mistake in life.
He'd started a business with a friend in the 1970's that became quite successful in the Detroit Metro area. He retired and like a good Italian, bought a house in Florida and played golf everyday. After a few months he hated his new life, and wished he'd never sold his business. He realized after he retired that his work was something he enjoyed doing, that his clients - most of whom he knew for 20+ years - were people he loved to see and visit. All that changed after he retired and sold the business to my older brother and a another business partner. There was no going back, and that was that.
He'd started a business with a friend in the 1970's that became quite successful in the Detroit Metro area. He retired and like a good Italian, bought a house in Florida and played golf everyday. After a few months he hated his new life, and wished he'd never sold his business. He realized after he retired that his work was something he enjoyed doing, that his clients - most of whom he knew for 20+ years - were people he loved to see and visit. All that changed after he retired and sold the business to my older brother and a another business partner. There was no going back, and that was that.
> bought a house in Florida and played golf everyday
It sounds like this was one of the big mistakes. Hindsight being 20/20 and all, it's hard to see it all now, but it sounds like he could've attempted to transition some of his best business relationships into personal ones, with lunches and/or some other kinds of personal meet-ups. Of course, enjoying the work, it does sound like he sold too soon!
This is still a personal anecdote though. As per the article, we aren't very good at predicting or evaluating what makes us happy. We think retiring and doing "other things" is what we want, but is it? It might be working, running a business, or golfing. You have to figure that out for yourself, and ideally in a way that doesn't require irreversible decisions.
It sounds like this was one of the big mistakes. Hindsight being 20/20 and all, it's hard to see it all now, but it sounds like he could've attempted to transition some of his best business relationships into personal ones, with lunches and/or some other kinds of personal meet-ups. Of course, enjoying the work, it does sound like he sold too soon!
This is still a personal anecdote though. As per the article, we aren't very good at predicting or evaluating what makes us happy. We think retiring and doing "other things" is what we want, but is it? It might be working, running a business, or golfing. You have to figure that out for yourself, and ideally in a way that doesn't require irreversible decisions.
Why isn't healthcare insurance more like car insurance? Almost everyone can afford to pay car insurance and are not worried about going broke and filing for bankruptcy if they have an accident or get a speeding ticket.
A friend got covid, almost died and then got a large five figure medical bill. They had insurance via the employer, but the hospital ER/ICU they were transported to was out of network. How is a very sick person in the back of an ambulance suppose to handle this in America?
A friend got covid, almost died and then got a large five figure medical bill. They had insurance via the employer, but the hospital ER/ICU they were transported to was out of network. How is a very sick person in the back of an ambulance suppose to handle this in America?
Because (most) cars are not worth much?
> Almost everyone can afford to pay car insurance and are not worried about going broke and filing for bankruptcy if they have an accident or get a speeding ticket.
Wealthy people actually buy an umbrella policy or something else to protect their wealth. Crashing into a 2 million dollar car or causing the deaths of a few people is going to put 1+ million in damages back on you. If your net worth is 50k, maybe doesn't matter. If it is 5 million, it could be life changing.
Wealthy people actually buy an umbrella policy or something else to protect their wealth. Crashing into a 2 million dollar car or causing the deaths of a few people is going to put 1+ million in damages back on you. If your net worth is 50k, maybe doesn't matter. If it is 5 million, it could be life changing.
Car insurance has capped payouts, and any policy which is considered by the insurer to be too much of a risk would be denied.
Unlike a car, health costs are both unbound, and good health has infinite utility (you'd always be willing to pay as much as you can for good health,) and unlike car ownership, is also a basic human right.
Unlike a car, health costs are both unbound, and good health has infinite utility (you'd always be willing to pay as much as you can for good health,) and unlike car ownership, is also a basic human right.
I’m terrified of retirement. I’ve got about 30 years to go, and I’m only just now seriously thinking about saving for retirement. My two greatest fears are that I will retire and have to take a part-time job to make ends meet, or worse, there’s a health crisis that completely wiped us out financially. Our plan is to slowly develop a small real estate portfolio of rental properties to bring in secondary streams of income, as well as some investing, 401(k), and hard assets. But it’s absolutely terrifying.
Aside from 401(k), what are some of the ways that you were saving for retirement? Investments? Stocks? Assets and real estate?
Aside from 401(k), what are some of the ways that you were saving for retirement? Investments? Stocks? Assets and real estate?
> there’s a health crisis that completely wiped us out financially
Do you have at least catastrophic health insurance? This is a fear you can solve for not that much money.
Do you have at least catastrophic health insurance? This is a fear you can solve for not that much money.
IRA’s get you a little more tax shelter on top of the 401(k).
If a man is physically fit to work in some capacity, and has learned to live on little income, that man has little to fear. By all means learn to save and invest, but it's not as important as staying healthy, and learning what things you spend money on that are unnecessary to your life, health and happiness.
I completely share the medical fear. The cost of american health care is absolutely terrifying. I'm only in my 30s, but got a taste of a bleak future when I had to get a whole suite of tests done to weed out what my doc thought may have been a major illness (turned out to be nothing, thankfully!). Those multiple x-rays, an MRI, and visits with specialists basically deleted a chunk of my HSA savings (even with my "good" insurance).
fwiw, retirement wise (baring a health event deleting everything), I just do the "invest everything" strategy outlined in books like I Will Teach you to be Rich and Get Rich Slowly. I only keep 7mo of "emergency" cash liquid. All tax protected accounts get maxed out, and everything else goes into an index fund.
fwiw, retirement wise (baring a health event deleting everything), I just do the "invest everything" strategy outlined in books like I Will Teach you to be Rich and Get Rich Slowly. I only keep 7mo of "emergency" cash liquid. All tax protected accounts get maxed out, and everything else goes into an index fund.
Perhaps I'm a bit naive in my mid-20's, but I actually don't think that I'd hate working 15-20 hours a week (at a low-stress company) for the rest of my life. Or at least until I was physically unable.
I've recently been wondering if I should instead be trying to view life as a "sustainable marathon" rather than trying to cash out quickly (FIRE).
I've recently been wondering if I should instead be trying to view life as a "sustainable marathon" rather than trying to cash out quickly (FIRE).
How easy is it to find these positions though
There's nothing particularly wrong with this mindset, but let's be explicit about your options:
1. Spend any extra money you make, knowing that you'll work 20 hours / week at least until social security arrives. If you start to hate work or having trouble finding work, you likely have very little to fall back on. Social security might not support your lifestyle, so expect a very pared back retirement late in life.
2. Spend a lot less than you make, but still spend amply to cover qualify of life and the things you enjoy and value. Invest the extra and have a cushion that covers unexpected job loss, periods of burnout, and the option to go long periods without any work at all if you have other interest you want to pursue. Be prepared for retirement now or when you're much older, but always having everything you need to cover the lifestyle you've designed.
3. Be miserable now, spending way less than you make, hating your job and hoping once you have a huge nest egg, you can make yourself happy!
Some people think early retirement is #3 but it's really #2. And many people do #1 until they start to realize they don't love being tied to a job at 40 as much as they enjoyed it at 20. (And that spending lots of money doesn't always make up for the obligation to work as well as they hoped.)
1. Spend any extra money you make, knowing that you'll work 20 hours / week at least until social security arrives. If you start to hate work or having trouble finding work, you likely have very little to fall back on. Social security might not support your lifestyle, so expect a very pared back retirement late in life.
2. Spend a lot less than you make, but still spend amply to cover qualify of life and the things you enjoy and value. Invest the extra and have a cushion that covers unexpected job loss, periods of burnout, and the option to go long periods without any work at all if you have other interest you want to pursue. Be prepared for retirement now or when you're much older, but always having everything you need to cover the lifestyle you've designed.
3. Be miserable now, spending way less than you make, hating your job and hoping once you have a huge nest egg, you can make yourself happy!
Some people think early retirement is #3 but it's really #2. And many people do #1 until they start to realize they don't love being tied to a job at 40 as much as they enjoyed it at 20. (And that spending lots of money doesn't always make up for the obligation to work as well as they hoped.)
why does spending way less than you make imply hating your job and being miserable? i dont think the idea of spending money as a primary mechanism for life happiness holds up. if you're a happy person internally it doesn't really matter if you use cheap hand towels at home or silk ones- it doesn't matter if you're eating filet mignon or chicken legs.
> hoping once you have a huge nest egg, you can make yourself happy!
this is a super uncharitable way of putting the ideas of fi. i would suggest the idea is more like "learn to view money as apart from happiness and recognize that the things that make you happy are more on the intrinsic side of things- self growth, real relationships with people near you, serving others and dont waste the time you have on earth by giving it to some corporation or other entitiy unless you want to"
> hoping once you have a huge nest egg, you can make yourself happy!
this is a super uncharitable way of putting the ideas of fi. i would suggest the idea is more like "learn to view money as apart from happiness and recognize that the things that make you happy are more on the intrinsic side of things- self growth, real relationships with people near you, serving others and dont waste the time you have on earth by giving it to some corporation or other entitiy unless you want to"
> why does spending way less than you make imply hating your job and being miserable?
It doesn't! But some people believe that's their option. That you spend so little that you're miserable. And the job might only be something you endure to make money to someday retire.
We agree. I just may not have communicated that I was being somewhat "extreme" to make the point that "early retirement" doesn't have to be that way. If you re-read my #2 you can kind of see that I'm getting to the same point as you.
It doesn't! But some people believe that's their option. That you spend so little that you're miserable. And the job might only be something you endure to make money to someday retire.
We agree. I just may not have communicated that I was being somewhat "extreme" to make the point that "early retirement" doesn't have to be that way. If you re-read my #2 you can kind of see that I'm getting to the same point as you.
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A 15-20 hours a week job sounds quite pleasant. I wouldn't mind working 3-4 hours a day. I would mind 8-10 hours though.
15-20 hrs/week though still at least implies that you're available 15-20 hours in a given week. For me, part-time would have to be fewer hours on average but also the ability to head off somewhere for a few weeks.
> I've recently been wondering if I should instead be trying to view life as a "sustainable marathon" rather than trying to cash out quickly (FIRE).
Honestly, that isn't incompatible with FIRE. Being financially independent allows you to take the few months off needed to find that 20 hours a week / low stress job.
In the community, retirement is viewed more as a 'freedom from compelled labor' than 'do nothing for the rest of your life'.
Honestly, that isn't incompatible with FIRE. Being financially independent allows you to take the few months off needed to find that 20 hours a week / low stress job.
In the community, retirement is viewed more as a 'freedom from compelled labor' than 'do nothing for the rest of your life'.
No company I've every worked at would consider a part time role like this, especially for older, semi-retired person.
Famous for Greenspun's tenth rule of programming:
"Any sufficiently complicated C or Fortran program contains an ad hoc, informally-specified, bug-ridden, slow implementation of half of Common Lisp."
https://en.wikipedia.org/wiki/Greenspun's_tenth_rule
>The rule expresses the opinion that the argued flexibility and extensibility designed into the programming language Lisp includes all functionality that is theoretically needed to write any complex computer program, and that the features required to develop and manage such complexity in other programming languages are equivalent to some subset of the methods used in Lisp.
>Other programming languages, while claiming to be simpler, require programmers to reinvent in a haphazard way a significant amount of needed functionality that is present in Lisp as a standard, time-proven base.
"Any sufficiently complicated C or Fortran program contains an ad hoc, informally-specified, bug-ridden, slow implementation of half of Common Lisp."
https://en.wikipedia.org/wiki/Greenspun's_tenth_rule
>The rule expresses the opinion that the argued flexibility and extensibility designed into the programming language Lisp includes all functionality that is theoretically needed to write any complex computer program, and that the features required to develop and manage such complexity in other programming languages are equivalent to some subset of the methods used in Lisp.
>Other programming languages, while claiming to be simpler, require programmers to reinvent in a haphazard way a significant amount of needed functionality that is present in Lisp as a standard, time-proven base.
> Retirement forces you to stop thinking that it is your job that holds you back. For most people the depressing truth is that they aren't that organized, disciplined, or motivated.
This resonates. I took a 1-year sabbatical after 12 years in the tech industry. I kept a big text file with all the things I wanted to do once I had the time. When I finally did, I realized I only wanted to do one thing from that list (of 30+ items). The rest sounded good on paper, but I never had the motivation to do them. This was a harsh realization, but now when I think "I wish I had time to...", I know it's an illusion. We tend to make time for what we really want. Overall, it was useful to realize.
This resonates. I took a 1-year sabbatical after 12 years in the tech industry. I kept a big text file with all the things I wanted to do once I had the time. When I finally did, I realized I only wanted to do one thing from that list (of 30+ items). The rest sounded good on paper, but I never had the motivation to do them. This was a harsh realization, but now when I think "I wish I had time to...", I know it's an illusion. We tend to make time for what we really want. Overall, it was useful to realize.
Don't blame yourself, one year is barely enough to decompress after a decade of work. Who knows how productively happy you could be after getting all the tiredness out of your system?
Retired at 55 from software development. I think it helps when your career (slash passion blah blah) is something that you don't need other people to do. I still write programs and help nonprofits with Salesforce work. Software development, writing, music, all can be done solo, and more importantly for your own fulfillment. Doctors etc. could have a problem.
AFAIK, Philip is not really retired. He does a lot of expert witness work these days https://philip.greenspun.com/software/expert-witness
"No retirement plan survives first contact with the divorce lawyer" This applies to Greenspun as much as anybody else.
Most of these early retirement failure essays are from people with poor social skills. The number 1 thing that will make you happy in retirement is friends to talk to.
"In olden times, the average person didn't expect to be happy" - I don't think that statement is supported by any evidence or logic. People are happy sometimes even when they're food-scarce. Only the dead are truly never happy.
Similarly, the concept of 'pursuit of happiness' then referenced was a sort of adaptation of the 'right to property'.
Perhaps this article would be stronger with a deeper research into history of people a few hundred years ago, or philosophy of work/life at that time.
Similarly, the concept of 'pursuit of happiness' then referenced was a sort of adaptation of the 'right to property'.
Perhaps this article would be stronger with a deeper research into history of people a few hundred years ago, or philosophy of work/life at that time.
That sentence was followed by 'Life could be a struggle for survival with hard work and adversity at every corner. Marriages were arranged by parents and if, after 20 years, the couple hated each other, there was no option to divorce.'. So, if you don't struggle for survival, and don't have to work hard, and are not hit by adversity, and not forcely married to a person you don't like, then you may be happy. That seems a reasonable assumption considering the objective of the essay.
I went down to three days a week four years ago and it's one of the best decisions I've ever made.
At first, I planned on working on an existing business but I decided not to do that and started making YouTube videos because I wanted something else to do on my days off. That was fun at first but got monotonous fast. I volunteered for a political campaign for a year, and now now I am working on another business that I am really excited about. For me, I definitely have to have something productive to do or I get bored.
I own a home with no debt and am pretty frugal so I could probably "retire" now, but will probably keep working until my new business starts making money. Once that happens, I'll probably shift over to working entirely for myself. I don't think I'll stop "working", whether it's something that makes money or not. The beauty is that since I've been pushing towards financial independence, I'll always have plenty of "extra" cash that I can use for whatever I want. If I do decide to retire, I'll probably keep my development skills active so I'll always be able to find work if need be.
At first, I planned on working on an existing business but I decided not to do that and started making YouTube videos because I wanted something else to do on my days off. That was fun at first but got monotonous fast. I volunteered for a political campaign for a year, and now now I am working on another business that I am really excited about. For me, I definitely have to have something productive to do or I get bored.
I own a home with no debt and am pretty frugal so I could probably "retire" now, but will probably keep working until my new business starts making money. Once that happens, I'll probably shift over to working entirely for myself. I don't think I'll stop "working", whether it's something that makes money or not. The beauty is that since I've been pushing towards financial independence, I'll always have plenty of "extra" cash that I can use for whatever I want. If I do decide to retire, I'll probably keep my development skills active so I'll always be able to find work if need be.
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Wow; this is a really good article. I love how the author (I think rightfully) highlights that people use their jobs as an excuse for staving off goals they've created.
My retirement plan involves stuffing as much money into creditor-protected assets and then declaring bankruptcy if I get a huge medical bill. I see no alternative in today's world of "surprise" out-of-network charges.
The types of assets are protected in Texas: 1. 401k + IRA (plus Roth versions) 2. Home 3. Two vehicles 4. Permanent insurance (i.e. whole life / indexed universal life - not optimal unless you want to leave money to heirs)
Other states aren't quite as generous with the creditor protection, so check your state's laws.
The types of assets are protected in Texas: 1. 401k + IRA (plus Roth versions) 2. Home 3. Two vehicles 4. Permanent insurance (i.e. whole life / indexed universal life - not optimal unless you want to leave money to heirs)
Other states aren't quite as generous with the creditor protection, so check your state's laws.
Maybe, but I don’t know anyone who’s less happy being retired. They might not be living their retirement fantasy, but the pressure and stress of having to work is gone.