It’s crucial for the argument that it’s priced in. You own a risky asset, your job. The market values that risk at $0, because you can diversify it away. Investing in assets that profit when you lose your job is how you do that.
The way wealth accumulates forces you to be overexposed to the market near retirement and underexposed now. That’s more $0-valued risk. It’s a practical problem you can fix with leverage.
[Edit: reworded for clarity]
It’s crucial for the argument that it’s priced in. You own a risky asset, your job. The market values that risk at $0, because you can diversify it away. Investing in assets that profit when you lose your job is how you do that.
The way wealth accumulates forces you to be overexposed to the market near retirement and underexposed now. That’s more $0-valued risk. It’s a practical problem you can fix with leverage.