Ask HN: How do you realistically prepare for retirement while working in tech?
For those who’ve thought seriously about it: what actually mattered most, savings rate, investing strategy, lifestyle choices, or something else?
22 comments
Your savings rate is a lifestyle choice.
eg, let's simplify and assume spherical cows, no inflation and no ROI. If you save 50% of your income, 1 year of work is 1 year of retirement. If you save 25% of your income, 3 years of work is 1 year of retirement.
So you should probably read bogleheads, live below your means, and max out your 401k/403b/roth ira/etc with low-cost index funds. or just yolo it on stonks and hope for diamond hands.
eg, let's simplify and assume spherical cows, no inflation and no ROI. If you save 50% of your income, 1 year of work is 1 year of retirement. If you save 25% of your income, 3 years of work is 1 year of retirement.
So you should probably read bogleheads, live below your means, and max out your 401k/403b/roth ira/etc with low-cost index funds. or just yolo it on stonks and hope for diamond hands.
This is the correct base from which all plans for "retirement" should start from.
1) Eliminate/Simplify/Lower all your "wants". You will be surprised as to how much you can save.
2) Focus only on your "needs" for existence i.e. what you actually need to live when you are 70.
3) Modify your lifestyle immediately; specifically Diet and Health in the light of the above two goals viz. proper work/life balance, proper diet, proper sleep, proper exercise. Health _is_ Wealth when it comes to old age since much of your retirement money will go to healthcare when you are older. Control/Plan-for/Manage this now.
4) Get your entire family to understand and buy-into the above.
Everything else is gravy.
1) Eliminate/Simplify/Lower all your "wants". You will be surprised as to how much you can save.
2) Focus only on your "needs" for existence i.e. what you actually need to live when you are 70.
3) Modify your lifestyle immediately; specifically Diet and Health in the light of the above two goals viz. proper work/life balance, proper diet, proper sleep, proper exercise. Health _is_ Wealth when it comes to old age since much of your retirement money will go to healthcare when you are older. Control/Plan-for/Manage this now.
4) Get your entire family to understand and buy-into the above.
Everything else is gravy.
I don’t suggest people put off everything until they are old. Enjoy life today. Take the vacation, enjoy the concert, etc. It’s about balance. Of course you should save/invest.
I am not saying buy the expensive house, cars etc.
I am not saying buy the expensive house, cars etc.
Not what i meant.
The idea is to make sure that you can guarantee (barring unforeseens) the absolute minimum that you need to live before anything else. Once this is done everything else becomes a choice and you can indulge (or not) as you please.
Life is all about Risk Management and given the uncertain world we live in, you need to ensure that you are not totally dependent on the future performance of the Economic System. "Enjoy Life Today/YOLO" etc. should not become an excuse to not think realistically and plan for your own/family's future with definite guarantees.
Nassim Taleb's ideas about Mediocristan vs. Extremistan, Power Laws/Pareto Distribution, Barbell investment strategy, Black Swan events etc. are all relevant here.
Savings/Investments etc. ideas from Financial Independence, Retire Early (FIRE) movement are also very relevant here - https://en.wikipedia.org/wiki/FIRE_movement
The Objective is to avoid total ruin when things go wrong, but have the resiliency to bear the loss and bounce back or be anti-fragile enough to get better.
The idea is to make sure that you can guarantee (barring unforeseens) the absolute minimum that you need to live before anything else. Once this is done everything else becomes a choice and you can indulge (or not) as you please.
Life is all about Risk Management and given the uncertain world we live in, you need to ensure that you are not totally dependent on the future performance of the Economic System. "Enjoy Life Today/YOLO" etc. should not become an excuse to not think realistically and plan for your own/family's future with definite guarantees.
Nassim Taleb's ideas about Mediocristan vs. Extremistan, Power Laws/Pareto Distribution, Barbell investment strategy, Black Swan events etc. are all relevant here.
Savings/Investments etc. ideas from Financial Independence, Retire Early (FIRE) movement are also very relevant here - https://en.wikipedia.org/wiki/FIRE_movement
The Objective is to avoid total ruin when things go wrong, but have the resiliency to bear the loss and bounce back or be anti-fragile enough to get better.
If the economic system today collapses, no realistic amount money will save you.
I don't mean "collapse" but a gradual/abrupt slide downward towards another equilibrium than that expected from earlier projections.
A good current example is what is happening to the economies of many countries due to Trump's tariffs.
A good current example is what is happening to the economies of many countries due to Trump's tariffs.
I re read your initial reply more carefully and we are doing just that.
Because of a combination of poor life choices between 2000-2008 and purposeful decisions between 2012-2020 early retirement or even retirement before my wife and I are eligible for Medicare is mostly out of the question unless we move out of the US - we are seriously exploring this possibility and we will be in one of those countries for six weeks starting in late February.
That being said, knowing those are my constraints. I have made some purposeful decisions.
First I pivoted to cloud consulting working full time for consulting departments /companies where there are plenty of remote opportunities, experience and age is an asset and not a liability, and the pay is better than enterprise dev. They also can’t outsource customer facing consultants who have to fly to customer’s sites.
Second, I “retired my wife” in 2020 so she could pursue her hobbies and we could travel extensively while we are healthy and it can be funded by income.
That has the knock on effect that we don’t need as much money for retirement because we would have already gotten our expensive travel out of the way by then.
Third, we aggressively reduced expenses when my youngest step son graduated in 2020 - we sold our big house in the burbs and bought a condo 1/3 the size in central Florida close to Disney. Florida is a state tax free state.
Now between making decent money and low expenses, we can live comfortably day to day, do the digital nomad thing off an on (and rent our home out as vacation rental while we are gone).
Because of a combination of poor life choices between 2000-2008 and purposeful decisions between 2012-2020 early retirement or even retirement before my wife and I are eligible for Medicare is mostly out of the question unless we move out of the US - we are seriously exploring this possibility and we will be in one of those countries for six weeks starting in late February.
That being said, knowing those are my constraints. I have made some purposeful decisions.
First I pivoted to cloud consulting working full time for consulting departments /companies where there are plenty of remote opportunities, experience and age is an asset and not a liability, and the pay is better than enterprise dev. They also can’t outsource customer facing consultants who have to fly to customer’s sites.
Second, I “retired my wife” in 2020 so she could pursue her hobbies and we could travel extensively while we are healthy and it can be funded by income.
That has the knock on effect that we don’t need as much money for retirement because we would have already gotten our expensive travel out of the way by then.
Third, we aggressively reduced expenses when my youngest step son graduated in 2020 - we sold our big house in the burbs and bought a condo 1/3 the size in central Florida close to Disney. Florida is a state tax free state.
Now between making decent money and low expenses, we can live comfortably day to day, do the digital nomad thing off an on (and rent our home out as vacation rental while we are gone).
Nice! I am not sure whether i should comment on your decisions ;-)
For myself, because of my upbringing and my own studies, i follow these axioms;
1) Be extremely risk averse when it comes to money-in-hand. I would rather live within my capital than risk it on investment which may make me lose a sizable portion of it.
2) Never trust any financial/investment advice from anybody unless i have thought through it and assessed the risks. Nobody has my welfare at heart as me myself.
3) Curtail my desires i.e "wants" and whatever i buy, make full use of it over a number of years. That means using cars/laptops/phones/gadgets/clothes etc. until they die on me. Never buy something just because and/or follow fashion.
4) When you splurge on some specific "want", you must balance it with saving on other fronts. This rule is inviolable; nothing will build financial discipline like being forced to give up something for something else.
5) Never buy stuff on loan/EMI etc. but always do it with cash-on-hand. If you can't pay for it completely, you can't afford it. The only possible exception is buying a house but even here you should try to payoff everything as soon as possible.
6) Always payoff your credit card etc. in full every month. There should never be any outstanding debts.
7) The future is uncertain. Hence always imagine the worst-case scenario and then plan for it. As i said, the goal is to avoid total ruin.
8) Always rely only on yourself; do not assume/depend on help from siblings/relatives/friends etc. when things go wrong. This builds mental fortitude and responsibility so that you can face come what may in the future.
For myself, because of my upbringing and my own studies, i follow these axioms;
1) Be extremely risk averse when it comes to money-in-hand. I would rather live within my capital than risk it on investment which may make me lose a sizable portion of it.
2) Never trust any financial/investment advice from anybody unless i have thought through it and assessed the risks. Nobody has my welfare at heart as me myself.
3) Curtail my desires i.e "wants" and whatever i buy, make full use of it over a number of years. That means using cars/laptops/phones/gadgets/clothes etc. until they die on me. Never buy something just because and/or follow fashion.
4) When you splurge on some specific "want", you must balance it with saving on other fronts. This rule is inviolable; nothing will build financial discipline like being forced to give up something for something else.
5) Never buy stuff on loan/EMI etc. but always do it with cash-on-hand. If you can't pay for it completely, you can't afford it. The only possible exception is buying a house but even here you should try to payoff everything as soon as possible.
6) Always payoff your credit card etc. in full every month. There should never be any outstanding debts.
7) The future is uncertain. Hence always imagine the worst-case scenario and then plan for it. As i said, the goal is to avoid total ruin.
8) Always rely only on yourself; do not assume/depend on help from siblings/relatives/friends etc. when things go wrong. This builds mental fortitude and responsibility so that you can face come what may in the future.
Oh my decisions were objectively bad - marrying the wrong person the first time around, letting my career stagnate for almost a decade until 2008 and becoming an “expert beginner” and investing in real estate before the crash.
I preach not doing the first two all of the time in real life and on the appropriate threads on HN.
My purposeful life decisions from 2012-2020 was getting married (still married) and gladly taking on the responsibility of my two stepsons (both grown and fully launched now). That tied me to Atlanta for 8 years. I landed a job in BigTech one month after my youngest graduated. My wife said she was willing to move anywhere the money took us after my youngest graduated. It just never came to my having to move.
While no one would ever call us “frugal”, with the money we spend every on travel and experiences, we do keep our fixed expenses low and I max out my 401K + catch up contributions (over 50) + Roth + HSA. All of my projections are that we will be fine at retirement age and worse case we can nice to small town south GA where I’m from and where my family still lives
I preach not doing the first two all of the time in real life and on the appropriate threads on HN.
My purposeful life decisions from 2012-2020 was getting married (still married) and gladly taking on the responsibility of my two stepsons (both grown and fully launched now). That tied me to Atlanta for 8 years. I landed a job in BigTech one month after my youngest graduated. My wife said she was willing to move anywhere the money took us after my youngest graduated. It just never came to my having to move.
While no one would ever call us “frugal”, with the money we spend every on travel and experiences, we do keep our fixed expenses low and I max out my 401K + catch up contributions (over 50) + Roth + HSA. All of my projections are that we will be fine at retirement age and worse case we can nice to small town south GA where I’m from and where my family still lives
I just remembered; every American should watch the documentary Waging a Living - https://en.wikipedia.org/wiki/Waging_a_Living - Available on Youtube and other sites.
People from other countries may also find it useful, though the lessons would need to be adapted to their own environments.
Our Economic System and Social Conditions are so skewed that many (all?) of the rules that enabled our grandparents/parents to raise and sustain a family without too much risk (i.e. guaranteed income from guaranteed job provided you met the requirements and didn't do anything absolutely self-destructive) no longer apply. Hence of a necessity our adaptation to these circumstances must change accordingly with a greater emphasis on safety-first.
People from other countries may also find it useful, though the lessons would need to be adapted to their own environments.
Our Economic System and Social Conditions are so skewed that many (all?) of the rules that enabled our grandparents/parents to raise and sustain a family without too much risk (i.e. guaranteed income from guaranteed job provided you met the requirements and didn't do anything absolutely self-destructive) no longer apply. Hence of a necessity our adaptation to these circumstances must change accordingly with a greater emphasis on safety-first.
Two ways come to mind re: retirement. Luck/skill into a big payout via startups or tailor a series of jobs to get you a paid-off residence someplace you'd like to live. Carrying a mortgage into retirement is just too much of a financial restriction for most folks.
You need retirement savings that will cover expenses over any government pension you might get. I assume you're in the US, so there's little chance of a company pension... Basically, save as much as you can while living a reasonable lifestyle. And the killer question is whether or not you have kids - which, usually, suggests a partner having similar decisions. DINKS have more financial flexibility but less populated lives.
In a way, you should "burn the candle at both ends" while younger. Deferring everything until later puts you at risk to not having the physical or mental means to do what you'd like. Or, not having the people you'd like to do them with. I guess you could say "don't waste time". You only get so much and it grows valuable as you age.
And store up memories when you're young. You'll spend them when you're old.
You need retirement savings that will cover expenses over any government pension you might get. I assume you're in the US, so there's little chance of a company pension... Basically, save as much as you can while living a reasonable lifestyle. And the killer question is whether or not you have kids - which, usually, suggests a partner having similar decisions. DINKS have more financial flexibility but less populated lives.
In a way, you should "burn the candle at both ends" while younger. Deferring everything until later puts you at risk to not having the physical or mental means to do what you'd like. Or, not having the people you'd like to do them with. I guess you could say "don't waste time". You only get so much and it grows valuable as you age.
And store up memories when you're young. You'll spend them when you're old.
How are you going to store up memories if you're spending the whole time working to satisfy the demands of your financial overlords?
There is a such thing as vacations
Spend less than you make.
It wouldn’t hurt to say that three times.
Don’t get caught up trying to keep up with the joneses. Nobody who matters gives a shit what kind of car you drive.
If your company matches your 401k contribution, max that out. It’s free money. You’re leaving it on the table if you don’t take it.
Even if there’s no match, max your contribution. If you’re putting in 18k/yr into index funds you’ll look up one day and have a million bucks.
Save up a down payment and buy a house. Property ownership is the path to generational wealth.
Don’t get caught up trying to keep up with the joneses. Nobody who matters gives a shit what kind of car you drive.
If your company matches your 401k contribution, max that out. It’s free money. You’re leaving it on the table if you don’t take it.
Even if there’s no match, max your contribution. If you’re putting in 18k/yr into index funds you’ll look up one day and have a million bucks.
Save up a down payment and buy a house. Property ownership is the path to generational wealth.
How fast you fire is a function of your savings and burn rate. The more you save and the lower your burn rate, the faster you fire.
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...
The best thing to do is to be prepare to switch your career at some point. The tech industry is notoriously ageist so don't expect to retire working in the same type of job you have now.
I am 51. I got my first job in BigTech at 46. When I got Amazoned in 2023, within the first two weeks I had three offers.
I was out looking again in 2024, I responded to a recruiter and had a job offer within two weeks.
I am still an IC and half my job as a staff consultant is pushing out code onto AWS, the other half is leading projects, supporting sales, talking to customers.
I was out looking again in 2024, I responded to a recruiter and had a job offer within two weeks.
I am still an IC and half my job as a staff consultant is pushing out code onto AWS, the other half is leading projects, supporting sales, talking to customers.
You are the exception not the rule. Go to any tech shop and you the will see that the majority are in their 20's and 30's and mid 40's. Sure there are a few that are older but they are the minority by far.
There's a survivor bias, you see the older techs that are employed and people think "oh, there's no problem." But people don't take into account all the other techs that could not continue their career because they could not get a job as they got older.
There's a survivor bias, you see the older techs that are employed and people think "oh, there's no problem." But people don't take into account all the other techs that could not continue their career because they could not get a job as they got older.
There's also a large number of folks moving to management as they age. Yes, the tech industry tends to skew young for engineering, but management doesn't. There's also a relatively decent chunk of people retiring in their early 50s (I plan to). There's also a decent number of them leaving to create their own companies, or to join friends at their early stage startups.
I don't think it makes sense to say they're the exception. I'm also mid-40s and have no issues finding employment. Most of my friends are mid 40s/50s and also have no issues. The vast majority of them have switched into management, though. Myself and the other older engineers I know are staff+, though, which helps a lot. I can't imagine being this age as a senior engineer trying to fight an army of equally qualified people in their 20s (who are also having issues finding employment right now).
I don't think it makes sense to say they're the exception. I'm also mid-40s and have no issues finding employment. Most of my friends are mid 40s/50s and also have no issues. The vast majority of them have switched into management, though. Myself and the other older engineers I know are staff+, though, which helps a lot. I can't imagine being this age as a senior engineer trying to fight an army of equally qualified people in their 20s (who are also having issues finding employment right now).
The HN bubble is real. Most developers are boring old enterprise developers who toil away at writing LOB apps spending their entire career in corp dev if they don’t move onto management.
They live in second tier cities and retire at the same time everyone else retires.
If you are 40 years old and still competing with 20 something’s based on your ability to reverse a b tree on the whiteboard, you have made some poor life choices.
They live in second tier cities and retire at the same time everyone else retires.
If you are 40 years old and still competing with 20 something’s based on your ability to reverse a b tree on the whiteboard, you have made some poor life choices.
Most of the 3 million developers are not working at “tech shops”, they are working at banks, the government - ie “the enterprise”.
I see these folks all of the time at client companies.
On the other hand, if you are 50 years old and haven’t kept up with tech - yeah you’re going to struggle
I see these folks all of the time at client companies.
On the other hand, if you are 50 years old and haven’t kept up with tech - yeah you’re going to struggle
I do not plan on living until retirement given the current state of things and my age. Most of my age cohort seem to be similar -- we will never be able to afford a home, we will never have a pension.
Only way out is jackpot -- lottery, startup sale, AI slop millionaire.
Only way out is jackpot -- lottery, startup sale, AI slop millionaire.