Saving for retirement is the traditional conscientious young person thing to do. It doesn’t make any sense if you believe in radical life extension or uploading or the singularity (assuming it’s within your lifetime). As medicine and technology increase, retirement age will stop even being a thing, because it won’t make sense to stop working at 65 and then live 65-650 more years.
On the other hand, investing to maximize your long-term income and wealth potential makes a LOT more sense than saving for retirement. Basically: saving for retirement is like taking the sure 450 instead of flipping the coin for 1000.
investing to maximize your long-term income and wealth potential makes a LOT more sense than saving for retirement
I get that the tax structuring in some countries makes the two seem like different things, but at least where I live(Canada), you can pretty freely relabel “retirement” money as “stuff I want to buy” money. (You pay tax on withdrawals, but given that deposits are pretax, it’s usually a wash). Savings made “for retirement” can easily be used differntly if medical technology does advance that far. If it doesn’t(which is my expectation, sadly), then I’ll still be able to retire when my body turns to shit.
Saving for retirement makes sense even if you don’t expect to retire provided that you can access the retirement funds for other purposes, and that the laws of your country are such that this is still an advantaged position. In the United States and some other countries, saving for retirement is investing to maximize your long-term income and wealth potential.
Saving for retirement makes more sense, not less, if there will be radical life extension. Do you want to work for 650 years? or work for 50 and play for 600? (Feel free to define “play” as choosing more fulfilling but less lucrative work.)
Most importantly, saving for retirement makes a heck of a lot of sense if you don’t place 100% certainty on uploading or the singularity by the relevant date when you’d otherwise retire. Or you aren’t sure the singularity will actually eliminate the need for money and capital. For instance, what if uploading is possible, but costs $2 million a person in 2013 dollars? A magical singularity genie that grants everyone a cycle of infinite wish spells would be awesome, but it is not a retirement plan.
taking the sure 450 instead of flipping the coin for 1000
Assuming logarithmic utility, that’s the right thing to do if you have less than about 2000 to start from—and that’s without even considering the possibility that the person offering you the bet may have loaded the coin.
Even if you believe in radical life extension or uploading or the singularity will be within your lifetime it still makes sense, indeed it makes more sense, to save in tax advantaged retirement accounts. Given two accounts into which you can place the same investment, one taxable and one not, by all means pick the non-taxable one. This is investing to maximize your long-term income and wealth potential.
Feel free to keep working and making money at 65. For myself I hope to be productive and active well into my 90s or beyond. But tax advantaged retirement accounts are still the best possible investment vehicle for almost everyone. The only exception I can think of would be someone with a very short time horizon due to illness or something that’s going to require a lot of cash fairly soon like a house purchase. If you’re planning to live forever, you absolutely want to use a tax advantaged retirement account for your investments even more.
Saving for retirement is the traditional conscientious young person thing to do. It doesn’t make any sense if you believe in radical life extension or uploading or the singularity (assuming it’s within your lifetime). As medicine and technology increase, retirement age will stop even being a thing, because it won’t make sense to stop working at 65 and then live 65-650 more years.
On the other hand, investing to maximize your long-term income and wealth potential makes a LOT more sense than saving for retirement. Basically: saving for retirement is like taking the sure 450 instead of flipping the coin for 1000.
It still makes sense as a hedge against being wrong about any of these, I would think.
I get that the tax structuring in some countries makes the two seem like different things, but at least where I live(Canada), you can pretty freely relabel “retirement” money as “stuff I want to buy” money. (You pay tax on withdrawals, but given that deposits are pretax, it’s usually a wash). Savings made “for retirement” can easily be used differntly if medical technology does advance that far. If it doesn’t(which is my expectation, sadly), then I’ll still be able to retire when my body turns to shit.
Saving for retirement makes sense even if you don’t expect to retire provided that you can access the retirement funds for other purposes, and that the laws of your country are such that this is still an advantaged position. In the United States and some other countries, saving for retirement is investing to maximize your long-term income and wealth potential.
Saving for retirement makes more sense, not less, if there will be radical life extension. Do you want to work for 650 years? or work for 50 and play for 600? (Feel free to define “play” as choosing more fulfilling but less lucrative work.)
Most importantly, saving for retirement makes a heck of a lot of sense if you don’t place 100% certainty on uploading or the singularity by the relevant date when you’d otherwise retire. Or you aren’t sure the singularity will actually eliminate the need for money and capital. For instance, what if uploading is possible, but costs $2 million a person in 2013 dollars? A magical singularity genie that grants everyone a cycle of infinite wish spells would be awesome, but it is not a retirement plan.
Assuming logarithmic utility, that’s the right thing to do if you have less than about 2000 to start from—and that’s without even considering the possibility that the person offering you the bet may have loaded the coin.
Even if you believe in radical life extension or uploading or the singularity will be within your lifetime it still makes sense, indeed it makes more sense, to save in tax advantaged retirement accounts. Given two accounts into which you can place the same investment, one taxable and one not, by all means pick the non-taxable one. This is investing to maximize your long-term income and wealth potential.
Feel free to keep working and making money at 65. For myself I hope to be productive and active well into my 90s or beyond. But tax advantaged retirement accounts are still the best possible investment vehicle for almost everyone. The only exception I can think of would be someone with a very short time horizon due to illness or something that’s going to require a lot of cash fairly soon like a house purchase. If you’re planning to live forever, you absolutely want to use a tax advantaged retirement account for your investments even more.