The Power of Working Longer

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
nigel_ht
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Re: Most Effective Way to Improve Your Retirement Security

Post by nigel_ht »

David Jay wrote: Mon May 10, 2021 9:30 am
CyclingDuo wrote: Thu May 06, 2021 9:10 amThe graphic on page 48 of that document shows how much would come from SS and how much would come from portfolio drawdown since the original graphic above did not have that delineation:

Image
From this graph, it is clear that the paper makes the assumption that SS benefits begin at the “retirement” date. That assumption accounts for the vast majority of the difference in income, which I suggest means that this is a very poorly designed paper (more than 2/3 of the paper’s illustrated effect is created by an a-priori assumption).

If one saves early, one can defer SS and get the “age 70” social security benefit of $70,000 while retiring at age 62. This closes the 80+% increase for an 8 year retirement delay to something less than a 25% increase.
There are many assumptions made that are questionable wrt to bogleheads.

Amounts shown are in today’s dollars, not adjusted for inflation.
• No future nominal wage increases.
• For the full-time working scenarios, they contribute 10% of their income to their retirement savings each year
until they retire.
• For the part-time working scenarios, they stop contributing to retirement savings.
• Savings earn a real rate of return of 3% per year.
• Systematic withdrawals from savings use the IRS required minimum distribution, modified for retirements
before age 70 as described in Table 1.


If you are 62 with only $350K retirement savings I'd be trying to salt away a heck of a lot more than 10% for however long my career lasts. At this age when you retire isn't always voluntary.

The issue here is that they didn't save more and can't gap the $70K/year drawdown from 62 to 70. They'd need around another $500K savings...and that would have put them pretty much in the next scenario: age 60 with $1M saved and have roughly an annual $70K spend.

That's pretty much impossible to fix at age 60 and all you can do is work longer or spend less in retirement, probably both. I guess you could have speculated in doge and cashed out but that's not exactly a good plan...
Thesaints
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Re: The Power of Working Longer

Post by Thesaints »

Dying earlier is almost as efficient as working longer, on a year for year basis.
Dennisl
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Re: The Power of Working Longer

Post by Dennisl »

bobcat2 wrote: Wed Feb 03, 2021 12:50 pm IMO most posters are missing the point of the paper.

The paper isn't saying don't save much per year and more than make up for that low saving rate by planning on working a long time.

Instead, the paper is answering the following question. As you get very near to your retirement date, is it worthwhile to work a few more months or a year longer than you intended? The answer is incontrovertibly, YES :!:

BobK
I don't think anyone disagrees with that thesis. The hope for most of us is that we'll be FI before that time so that we don't feel the need to work a few more months or years because we'll have enough prior to that time.
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Scott S
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Re: The Power of Working Longer

Post by Scott S »

Dennisl wrote: Mon May 10, 2021 2:44 pmI don't think anyone disagrees with that thesis.
And yet Bogleheads has wrung 11 pages of discussion out of it. :mrgreen:
"Old value investors never die, they just get their fix from rebalancing." -- vineviz
Dennisl
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Re: The Power of Working Longer

Post by Dennisl »

touche. haha :sharebeer
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

Dennisl wrote: Mon May 10, 2021 2:44 pm
bobcat2 wrote: Wed Feb 03, 2021 12:50 pm IMO most posters are missing the point of the paper.

The paper isn't saying don't save much per year and more than make up for that low saving rate by planning on working a long time.

Instead, the paper is answering the following question. As you get very near to your retirement date, is it worthwhile to work a few more months or a year longer than you intended? The answer is incontrovertibly, YES :!:

BobK
I don't think anyone disagrees with that thesis. The hope for most of us is that we'll be FI before that time so that we don't feel the need to work a few more months or years because we'll have enough prior to that time.
Many disagree with the thesis that the answer is “incontrovertibly yes” as evidenced in this thread because it’s based on assumptions that don’t apply to many bogleheads.

Working longer is only worthwhile if you didn’t save enough to begin with.

56% of older workers experience at least one involuntary job loss after age 50. Only 10% earn as much as they did before the job loss.

During covid workers 55+ were 17% more likely to lose their jobs than 35-54.

If you prepare to be FI by age 55 then none of those scenarios apply.
Dennisl
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Re: The Power of Working Longer

Post by Dennisl »

I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
sailaway
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Re: The Power of Working Longer

Post by sailaway »

Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
Dennisl
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Re: The Power of Working Longer

Post by Dennisl »

sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
Oh, looks like I misunderstood. That explains why this thread is so long. I guess the answer isn't so black and white. You'll find no shortage of people pushing the importance of saving here. Problem is, you can't take it with you. I saved quite a bit over the past year, but I would've been more than happy to spend a large chunk of that on creating experiences with my family and friends. Seems like some sort of middle ground would be most sensible unless there were a compelling reason numbers wise. In that case, you'd probably have to do both increased saving and length of career anyways.

I wish everyone success and luck in their work and enjoyment in retirement. Not everyone gets to have that and this community has certainly helped me to steer my ship in the direction of FI, so that I could have some choice in my life, God willing. :sharebeer
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
AlwaysLearningMore
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Re: The Power of Working Longer

Post by AlwaysLearningMore »

nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* | FIRE'd July 2023
Ricola
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Re: The Power of Working Longer

Post by Ricola »

Dottie57 wrote: Wed Feb 03, 2021 12:08 pm I retired early but don’t fit the article - no SS yet. I will wait until 70 which will help my portfolio thru much smaller withdrawls that I spend.
If I wait more year I can gain $300 month in SS. But by forging what I could have collected in that year, it will take me 10 years with the extra $300 to earn back what did not take. I am not sure if waiting makes sense.
$tar-Lord
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Re: The Power of Working Longer

Post by $tar-Lord »

Gut feel seems that most of the advantage to OMY is the gain from investments at a peak value. Of course sequence of returns could limit this benefit significantly.

Just a hypothesis, instead of working one more year, it seems that a first retirement year of extreme frugality could achieve a similar result.
Ricola
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Re: The Power of Working Longer

Post by Ricola »

Ricola wrote: Tue May 11, 2021 1:40 pm
Dottie57 wrote: Wed Feb 03, 2021 12:08 pm I retired early but don’t fit the article - no SS yet. I will wait until 70 which will help my portfolio thru much smaller withdrawls that I spend.
If I wait 1 more year I can gain $300 month in SS. But by forging what I could have collected in that year, it will take me 10 years with the extra $300 to earn back what did not take. I am not sure if waiting makes sense.
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
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willthrill81
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Re: The Power of Working Longer

Post by willthrill81 »

nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
No matter how secure one's retirement funding is, working longer will always make it more secure due to increasing saving, giving one's portfolio longer to compound, and reducing the length of time in which to make withdrawals. So after working 3-6 months, working even longer will make one's retirement funding even more secure, and so on without end. Sooner or later, one has to make the determination that one has enough to retire (or one will die first).
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59Gibson
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Re: The Power of Working Longer

Post by 59Gibson »

willthrill81 wrote: Tue May 11, 2021 4:46 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm

No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
No matter how secure one's retirement funding is, working longer will always make it more secure due to increasing saving, giving one's portfolio longer to compound, and reducing the length of time in which to make withdrawals. So after working 3-6 months, working even longer will make one's retirement funding even more secure, and so on without end. Sooner or later, one has to make the determination that one has enough to retire (or one will die first).
Right. At some point in your later stages of life 70+..? Good enough is just good enough. You make do with what you have and figure it out. If you don't have a nickel to your name, well there is SS, family, roommates etc..These tables showing folks continuing to work F/T at 70+ is pie in the sky. They're the exception not the rule, many will not have the choice of working f/t in 70s.
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Re: The Power of Working Longer

Post by Independent George »

nigel_ht wrote: Tue May 11, 2021 12:06 pm
Dennisl wrote: Mon May 10, 2021 2:44 pm
bobcat2 wrote: Wed Feb 03, 2021 12:50 pm IMO most posters are missing the point of the paper.

The paper isn't saying don't save much per year and more than make up for that low saving rate by planning on working a long time.

Instead, the paper is answering the following question. As you get very near to your retirement date, is it worthwhile to work a few more months or a year longer than you intended? The answer is incontrovertibly, YES :!:

BobK
I don't think anyone disagrees with that thesis. The hope for most of us is that we'll be FI before that time so that we don't feel the need to work a few more months or years because we'll have enough prior to that time.
Many disagree with the thesis that the answer is “incontrovertibly yes” as evidenced in this thread because it’s based on assumptions that don’t apply to many bogleheads.

Working longer is only worthwhile if you didn’t save enough to begin with.

56% of older workers experience at least one involuntary job loss after age 50. Only 10% earn as much as they did before the job loss.

During covid workers 55+ were 17% more likely to lose their jobs than 35-54.

If you prepare to be FI by age 55 then none of those scenarios apply.
This, exactly. It's obvious to the point of tautology that working longer - that is, letting your savings continue to accrue and grow instead of drawing from it, and reducing the number of years you will need to draw from it - will increase your retirement savings.

It should be equally obvious that the primary beneficiaries of this are the people who either didn't save enough, or just barely have enough, to survive entirely off their retirement accounts. This is not a judgement upon them, but a statement of fact; the people who post on this forum are weirdos who genuinely wonder how many millions they will need.

$2M saved at age 55 (typical of many BHs) and $60k of annual expenses? Working another year will undoubtedly improve the numbers, but the marginal utility is probably pretty low. It adds some extra buffer, but likely doesn't change your retirement significantly.

$85k saved at age 63 (close to the median American) and $30k of annual expenses? Working longer helps a lot.
SuperTrooper87
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Re: The Power of Working Longer

Post by SuperTrooper87 »

Independent George wrote: Tue May 11, 2021 5:49 pm
nigel_ht wrote: Tue May 11, 2021 12:06 pm
Dennisl wrote: Mon May 10, 2021 2:44 pm
bobcat2 wrote: Wed Feb 03, 2021 12:50 pm IMO most posters are missing the point of the paper.

The paper isn't saying don't save much per year and more than make up for that low saving rate by planning on working a long time.

Instead, the paper is answering the following question. As you get very near to your retirement date, is it worthwhile to work a few more months or a year longer than you intended? The answer is incontrovertibly, YES :!:

BobK
I don't think anyone disagrees with that thesis. The hope for most of us is that we'll be FI before that time so that we don't feel the need to work a few more months or years because we'll have enough prior to that time.
Many disagree with the thesis that the answer is “incontrovertibly yes” as evidenced in this thread because it’s based on assumptions that don’t apply to many bogleheads.

Working longer is only worthwhile if you didn’t save enough to begin with.

56% of older workers experience at least one involuntary job loss after age 50. Only 10% earn as much as they did before the job loss.

During covid workers 55+ were 17% more likely to lose their jobs than 35-54.

If you prepare to be FI by age 55 then none of those scenarios apply.
This, exactly. It's obvious to the point of tautology that working longer - that is, letting your savings continue to accrue and grow instead of drawing from it, and reducing the number of years you will need to draw from it - will increase your retirement savings.

It should be equally obvious that the primary beneficiaries of this are the people who either didn't save enough, or just barely have enough, to survive entirely off their retirement accounts. This is not a judgement upon them, but a statement of fact; the people who post on this forum are weirdos who genuinely wonder how many millions they will need.

$2M saved at age 55 (typical of many BHs) and $60k of annual expenses? Working another year will undoubtedly improve the numbers, but the marginal utility is probably pretty low. It adds some extra buffer, but likely doesn't change your retirement significantly.

$85k saved at age 63 (close to the median American) and $30k of annual expenses? Working longer helps a lot.
+1, bingo
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telemark
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Re: The Power of Working Longer

Post by telemark »

Dennisl wrote: Mon May 10, 2021 2:44 pm
bobcat2 wrote: Wed Feb 03, 2021 12:50 pm IMO most posters are missing the point of the paper.

The paper isn't saying don't save much per year and more than make up for that low saving rate by planning on working a long time.

Instead, the paper is answering the following question. As you get very near to your retirement date, is it worthwhile to work a few more months or a year longer than you intended? The answer is incontrovertibly, YES :!:

BobK
I don't think anyone disagrees with that thesis. The hope for most of us is that we'll be FI before that time so that we don't feel the need to work a few more months or years because we'll have enough prior to that time.
I'm someone and I disagree with that thesis. It hinges on the word worthwhile, literally "worth your while", and how you choose to value the time remaining to you.

Is it financially advantageous to keep working? Sure. That's not what he wrote.
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

Independent George wrote: Tue May 11, 2021 5:49 pm
$85k saved at age 63 (close to the median American) and $30k of annual expenses? Working longer helps a lot.
I looked for statistics for how common the provided scenario would be ($100K HHI, $320K retirement savings, age 62).

Unfortunately none of the studies seem to provide median retirement savings for a combination of age and income.

For 60+ the median is around $250K and about the same for $100K income. My assumption is that for 60+ and $100K HHI the median is much higher.

It cuts out all the folks that are old but don’t make a lot and the younger folks who do make a decent amount but are early in their savings.
Independent George
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Re: The Power of Working Longer

Post by Independent George »

nigel_ht wrote: Wed May 12, 2021 9:25 am I looked for statistics for how common the provided scenario would be ($100K HHI, $320K retirement savings, age 62).

Unfortunately none of the studies seem to provide median retirement savings for a combination of age and income.

For 60+ the median is around $250K and about the same for $100K income. My assumption is that for 60+ and $100K HHI the median is much higher.

It cuts out all the folks that are old but don’t make a lot and the younger folks who do make a decent amount but are early in their savings.
That number includes home equity; the actual liquid net worth (which is what we're interested in) is much, much lower. This calculator this calculator is a good shorthand reference based on the The Federal Reserve Survey of Consumer Finance, but I haven't been able to tie its numbers to the actual source data (they seem consistent with the Fed data, but I can't identify the exact source of their numbers). The calculator lists the net worth with/without home equity as follows:

Age 55-59: $193,548 with equity, $58,687 without
Age 60-64: $228,833 with equity, $85,324 without
Age 65-69: $271,805 with equity, $75,482 without

Table 8 of the fed data indicates nonfinancial assets accounted for 58.1% of total assets, but that is not disaggregated by age. According to table 9, the median value of the primary residence was $230k-$240k for ages 55-74 (it's grouped into age 55-64, and 65-74) for the 74-78% of households that owned their principal residence. Tables 13-17 list household debt, but I wasn't able to tie it to the home equity as percentage of net worth. Table 4 lists the median net worth for ages 55-64 as $213k, and $266k for ages 65-74.
AlwaysLearningMore
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Re: The Power of Working Longer

Post by AlwaysLearningMore »

nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm
Dennisl wrote: Tue May 11, 2021 12:21 pm I thought the thesis is if you work longer, you'll have more money than if you didn't work that time. I didn't realize that was in question. For those who involuntarily stop working, their choices may be limited. My parents were in that bucket. For those who are fortunate enough to have the choice to keep working vs retiring, clearly you'll have more money if you make more money. The question is should you leverage your time for money. The older I get, the less I'm willing to do that and the amount that is required to motivate me to do that goes up exponentially. This might change if working an extra weekend will pay for my kid's tuition or a trip to europe. That would be kind of fun, but otherwise, a hard no.
No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.
Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* | FIRE'd July 2023
scout1
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Re: The Power of Working Longer

Post by scout1 »

AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm

No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.

I agree. This is important information to know and I am glad the OP posted it. While not everyone can choose when they retire, many people can so it's valuable for them to know this.
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Re: The Power of Working Longer

Post by willthrill81 »

scout1 wrote: Fri May 14, 2021 1:01 pm
AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm

What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.

I agree. This is important information to know and I am glad the OP posted it. While not everyone can choose when they retire, many people can so it's valuable for them to know this.
The fact that working longer enables one to save more money and make one's retirement more financially secure should be common sense.
The Sensible Steward
scout1
Posts: 234
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Re: The Power of Working Longer

Post by scout1 »

willthrill81 wrote: Fri May 14, 2021 1:20 pm
scout1 wrote: Fri May 14, 2021 1:01 pm
AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm

Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.

I agree. This is important information to know and I am glad the OP posted it. While not everyone can choose when they retire, many people can so it's valuable for them to know this.
The fact that working longer enables one to save more money and make one's retirement more financially secure should be common sense.
Knowing whether working for one extra year year gives you an 10 years of retirement savings or 10 months of retirement is incredibly important to know. This study investigates that and compares it to the impact on changing savings rate and return rates. If that's not incredibly valuable, nothing is.
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Re: The Power of Working Longer

Post by HootingSloth »

It seems clear that there are (at least) three separate questions:
  1. Will working longer allow you to save more money, and hence either to spend more in retirement or to have a more secure retirement at a given level of spending?
  2. How much more money will working longer allow you to save?
  3. Is the tradeoff of spending more time working, rather than retired, worthwhile given the answer to Question 2?
The answer to Question 1 is "indisputably yes," and you do not need a paper to answer this question.

The paper provides useful information about Question 2, at least under certain assumptions (although the plausibility of these assumptions may be questionable for many Bogleheads, and so the analysis may need to be modified to be useful for them).

The answer to Question 3 is "indisputably maybe," and depends on a person's individual priorities and so clearly cannot be addressed by the kind of analysis in the paper.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
59Gibson
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Re: The Power of Working Longer

Post by 59Gibson »

scout1 wrote: Fri May 14, 2021 1:33 pm
willthrill81 wrote: Fri May 14, 2021 1:20 pm
scout1 wrote: Fri May 14, 2021 1:01 pm
AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm

Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.

I agree. This is important information to know and I am glad the OP posted it. While not everyone can choose when they retire, many people can so it's valuable for them to know this.
The fact that working longer enables one to save more money and make one's retirement more financially secure should be common sense.
Knowing whether working for one extra year year gives you an 10 years of retirement savings or 10 months of retirement is incredibly important to know. This study investigates that and compares it to the impact on changing savings rate and return rates. If that's not incredibly valuable, nothing is.
How can anyone know if working omy is adding 10 yrs of retirement or 10 months? Or do you mean someone making enough money to save 10 years exp/yr? I would think this study would be completely worthless to someone with that type of income and/or expenses that low.
smitcat
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Re: The Power of Working Longer

Post by smitcat »

59Gibson wrote: Fri May 14, 2021 1:39 pm
scout1 wrote: Fri May 14, 2021 1:33 pm
willthrill81 wrote: Fri May 14, 2021 1:20 pm
scout1 wrote: Fri May 14, 2021 1:01 pm
AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm

The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.

I agree. This is important information to know and I am glad the OP posted it. While not everyone can choose when they retire, many people can so it's valuable for them to know this.
The fact that working longer enables one to save more money and make one's retirement more financially secure should be common sense.
Knowing whether working for one extra year year gives you an 10 years of retirement savings or 10 months of retirement is incredibly important to know. This study investigates that and compares it to the impact on changing savings rate and return rates. If that's not incredibly valuable, nothing is.
How can anyone know if working omy is adding 10 yrs of retirement or 10 months? Or do you mean someone making enough money to save 10 years exp/yr? I would think this study would be completely worthless to someone with that type of income and/or expenses that low.
"How can anyone know if working omy is adding 10 yrs of retirement or 10 months? Or do you mean someone making enough money to save 10 years exp/yr? "
Perhaps a common possibility - a person or a couple who are nearing the collection of SS or pensions... or a combination of the two.... and those payments will cover a majority of expenses in retirement.
Each year they delay could mean a very large difference in mutiples of expenses.
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Do Men Who Work Longer Live Longer? Evidence from the Netherlands

Post by bobcat2 »

Do Men Who Work Longer Live Longer? Evidence from the Netherlands - by Alice Zulkarnain and Matthew S. Rutledge

Key findings

- Working longer is a powerful way to improve retirement security, and some suggest it also improves health.

- But does working longer improve health or does good health lead to working longer?

- A temporary tax policy change in the Netherlands that encouraged some older workers to stay in the labor force longer provides a natural experiment.

- The experiment confirms that working longer causes better health – specifically longer life expectancy.

- Men ages 62-65 who worked longer due to the policy change saw a two-month increase in life expectancy during their late 60s.

- This improvement could be more substantial if the impact is longer lasting.


Conclusion

As countries move to encourage later retirement, one crucial piece of information is still uncertain: whether working longer improves mortality. The simple correlation between working and mortality does suggest a relationship, but it does not imply that work is causing the better outcomes. To estimate this causal effect, the analysis takes advantage of a Dutch tax policy change. The results indicate that Dutch men ages 62-65 induced to work by the policy change do live longer: their mortality falls at a rate that implies at least two extra months of longevity, and up to two years if the effect is longer lasting.

These results require some caveats. First, the causal estimates relate to the people who responded to the tax policy by working longer, and may not apply to everyone who worked longer. Second, the tax policy takes a “carrot” approach, offering incentives to work longer, rather than the “stick” approach of some U.S. proposals that aim to discourage early retirement by reducing benefits; it is unclear whether a penalty would be more or less effective than a bonus such as the DWB. Nonetheless, these results indicate that encouraging some people to work longer may result in longer lives.

Co-authors Zulkarnain and Rutledge are research economists at the Center for Retirement Research at Boston College.

Link to policy brief - https://crr.bc.edu/wp-content/uploads/2 ... B-21-8.pdf

Link to working paper - https://crr.bc.edu/wp-content/uploads/2 ... 018-11.pdf

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
ROIGuy
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Re: Do Men Who Work Longer Live Longer? Evidence from the Netherlands

Post by ROIGuy »

bobcat2 wrote: Sat May 15, 2021 10:09 am Do Men Who Work Longer Live Longer? Evidence from the Netherlands - by Alice Zulkarnain and Matthew S. Rutledge

Key findings

- Working longer is a powerful way to improve retirement security, and some suggest it also improves health.

- But does working longer improve health or does good health lead to working longer?

- A temporary tax policy change in the Netherlands that encouraged some older workers to stay in the labor force longer provides a natural experiment.

- The experiment confirms that working longer causes better health – specifically longer life expectancy.

- Men ages 62-65 who worked longer due to the policy change saw a two-month increase in life expectancy during their late 60s.

- This improvement could be more substantial if the impact is longer lasting.


Conclusion

As countries move to encourage later retirement, one crucial piece of information is still uncertain: whether working longer improves mortality. The simple correlation between working and mortality does suggest a relationship, but it does not imply that work is causing the better outcomes. To estimate this causal effect, the analysis takes advantage of a Dutch tax policy change. The results indicate that Dutch men ages 62-65 induced to work by the policy change do live longer: their mortality falls at a rate that implies at least two extra months of longevity, and up to two years if the effect is longer lasting.

These results require some caveats. First, the causal estimates relate to the people who responded to the tax policy by working longer, and may not apply to everyone who worked longer. Second, the tax policy takes a “carrot” approach, offering incentives to work longer, rather than the “stick” approach of some U.S. proposals that aim to discourage early retirement by reducing benefits; it is unclear whether a penalty would be more or less effective than a bonus such as the DWB. Nonetheless, these results indicate that encouraging some people to work longer may result in longer lives.

Co-authors Zulkarnain and Rutledge are research economists at the Center for Retirement Research at Boston College.

Link to policy brief - https://crr.bc.edu/wp-content/uploads/2 ... B-21-8.pdf

Link to working paper - https://crr.bc.edu/wp-content/uploads/2 ... 018-11.pdf

BobK
Sorry, I didn't take time to read the paper, but I would be curious if the participants rated how they like/enjoyed their jobs that they stay on with.
I would think it would make a huge difference for a person who liked their work environment who stayed on the job longer versus a person who couldn't stand their job or work environment.
mptfan
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Re: The Power of Working Longer

Post by mptfan »

I think there is some validity to the conclusion that for some people continuing to work contributes to one's longevity, assuming the work is not too physically strenuous or demanding or dangerous. I also think retirement affects different people in different ways depending on one's personality... some people retire from work and remain active with hobbies or exercise or travel or volunteering or other things to keep them mentally and physically engaged with life, while others retire and become sedentary and do not exercise their body or their brain and they become withdrawn from activity and become less mentally active and less engaged with people and life in general. I think that life expectancy for those in the former category is not shortened by retirement, it may actually be increased, whereas life expentancy for those in the latter category is probably shortened by retirement and they would be better off continuing to work.
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Re: The Power of Working Longer

Post by nigel_ht »

AlwaysLearningMore wrote: Fri May 14, 2021 12:51 pm
nigel_ht wrote: Tue May 11, 2021 3:31 pm
AlwaysLearningMore wrote: Tue May 11, 2021 1:36 pm
nigel_ht wrote: Tue May 11, 2021 12:50 pm
sailaway wrote: Tue May 11, 2021 12:23 pm

No, the thesis was to compare working longer vs saving more over long periods of time. ie, the question was should you sacrifice lifestyle over time or time at the end of your career.
What lifestyle sacrifice?

Lets look at the scenario. $100K HHI, age 62, $320K savings.

Say college educated so started career at age 22 for 40 years of employment.

https://www.portfoliovisualizer.com/bac ... tion2_1=20

$85 a month savings ($1020/year - 5.5% savings rate)

vs

$250 a month savings ($3000/year - 16% savings rate)

https://www.portfoliovisualizer.com/bac ... tion2_1=20

that results in $1M in retirement savings.

Starting salary for 1980 with a bachelor degree was $18.5K (adjusted for inflation that's about $51K).

Is $2000 a year difference, even in 1980 ($6500 today), a major adjustment in lifestyle?

How much of a lifestyle impact was it in 1990 after your salary went up?
Some people have career hiccups, prolonged periods of unemployment, ratchet down/suspend work for child rearing or care of elderly parents. Not everyone experiences a smooth career trajectory.
For those that have "plenty" they choose to work longer. For those on less sure financial footing, working a bit longer can help shore up retirement plans. What's so hard to understand :?:
Some people also win the lottery. So what?

If you plan well and you still want to work longer you can but by no means is it a “incontrovertibly yes” answer.

Nor is it some impossible financial sacrifice to save 15% gross a year that large number of “responsible folks with dual income” can’t achieve $1M in retirement savings after 30 years.

What’s so hard to understand?
The number of lottery winners is far smaller than those who've had serious Life financial challenges. While a lottery winner should have no trouble planning a financially successful retirement, folks who've had financial setbacks (some through no fault of their own) would benefit from learning about the power of working a little longer. Unlike the lottery winners, or those whose career paths have flowed smoothly, the OP article is geared towards them.
OP’s article is not geared towards folks with “serious life financial challenges”.

And folks who save 15% of gross have a much better chance to survive “serious financial challenges” than those that don’t. The savings calculations above is for a starting salary of $18k and no raises ever except for cost of living and a constant savings rate of 16% and a terminal salary of $51K.

In comparison the median salary at age 25 with a bachelor degree today is $56,592.

Not getting a promotion or merit raise ever is a “serious financial challenge” and you can still save $1M in retirement. Are there some scenarios where you can’t? Yes. So what?

So the study essentially says “well if you didn’t bother saving much for retirement you gotta keep working”.

Not very profound.
nigel_ht
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Re: Do Men Who Work Longer Live Longer? Evidence from the Netherlands

Post by nigel_ht »

bobcat2 wrote: Sat May 15, 2021 10:09 am Do Men Who Work Longer Live Longer? Evidence from the Netherlands - by Alice Zulkarnain and Matthew S. Rutledge

Key findings

- Working longer is a powerful way to improve retirement security, and some suggest it also improves health.

- But does working longer improve health or does good health lead to working longer?

- A temporary tax policy change in the Netherlands that encouraged some older workers to stay in the labor force longer provides a natural experiment.

- The experiment confirms that working longer causes better health – specifically longer life expectancy.

- Men ages 62-65 who worked longer due to the policy change saw a two-month increase in life expectancy during their late 60s.

- This improvement could be more substantial if the impact is longer lasting.


Conclusion

As countries move to encourage later retirement, one crucial piece of information is still uncertain: whether working longer improves mortality. The simple correlation between working and mortality does suggest a relationship, but it does not imply that work is causing the better outcomes. To estimate this causal effect, the analysis takes advantage of a Dutch tax policy change. The results indicate that Dutch men ages 62-65 induced to work by the policy change do live longer: their mortality falls at a rate that implies at least two extra months of longevity, and up to two years if the effect is longer lasting.

These results require some caveats. First, the causal estimates relate to the people who responded to the tax policy by working longer, and may not apply to everyone who worked longer. Second, the tax policy takes a “carrot” approach, offering incentives to work longer, rather than the “stick” approach of some U.S. proposals that aim to discourage early retirement by reducing benefits; it is unclear whether a penalty would be more or less effective than a bonus such as the DWB. Nonetheless, these results indicate that encouraging some people to work longer may result in longer lives.

Co-authors Zulkarnain and Rutledge are research economists at the Center for Retirement Research at Boston College.

Link to policy brief - https://crr.bc.edu/wp-content/uploads/2 ... B-21-8.pdf

Link to working paper - https://crr.bc.edu/wp-content/uploads/2 ... 018-11.pdf

BobK
They use diabetes and depression to attempt to account for health.

“The paper focuses on 5-year mortality rates, but also examines less acute health measures; because of the data lack information on actual medical diagnoses, the analysis uses information on prescription drug utilization tied to two specific conditions affecting mental and physical health – depression and diabetes.



For less acute measures of health, the study will focus on one psychological and one physical health condition: 1) depression; and 2) diabetes, using prescription drug data available from 2006 through 2016. These two conditions were chosen because they could be mapped to prescription drug classes as recorded by the Anatomical Therapeutic Chemical (ATC) Classification System more directly than most other conditions.11”

Translation: we lost our keys over there but we’re looking here because the light is better.

The Netherlands is ranked 142 for incidence of diabetes.

https://www.indexmundi.com/facts/indica ... S/rankings

The US is 43.

While diabetes is a risk factor for circulatory diseases it would have been better to track drugs for those diseases instead.

https://www.statista.com/statistics/520 ... -of-death/

Well managed diabetes isn’t generally debilitating until an older age. It runs in my family so we’re aware of the consequences.

Also note:

“ The first, Bloemenet al. (2017), exploit an early retirement opportunity among civil service workers in their 50s in the Netherlands (in contrast to the DWB, which affects a broader group of workers across sectors). The study finds that early retirement decreased the affected group’s 5-year mortality rate by 2.6 percentage points – an extremely large decrease given 5-year mortality was only about 3-4 percent at those ages in the first place. The second study, Kuhn et al. (2010), finds that blue- collar workers in Austria who were given an early retirement opportunity in their early 60s experienced an increase in the probability of dying before the age of 67 of 2.4 percentage points per year of early retirement. In other words, these papers found effects in the opposite directions.2”

This study is no more definitive than those studies.

You are probably much better off to save 15% of gross over time, retire at 62 rather than 70 and join a gym rather than work longer.
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

HootingSloth wrote: Fri May 14, 2021 1:34 pm It seems clear that there are (at least) three separate questions:
  1. Will working longer allow you to save more money, and hence either to spend more in retirement or to have a more secure retirement at a given level of spending?
  2. How much more money will working longer allow you to save?
  3. Is the tradeoff of spending more time working, rather than retired, worthwhile given the answer to Question 2?
The answer to Question 1 is "indisputably yes," and you do not need a paper to answer this question.
Except is not “indisputably yes”. Once you peg your outcome at 99.999% it doesn’t get any better unless you start adding a couple 0’s to your net worth.

My wife keeps asking “what if” and my answer is the same.

For those extreme “what if” scenarios where all of our assets go *poof* the only way to reach them alive is if we are refugees in some foreign country or in an internment camp in this one. The US essentially has to turn into a failed state for these outcomes.

Working one more year for a tens or even hundreds thousand more won’t change the outcome one bit*.

Nor do you spend more except to deliberately blow more money. Other than charity I don’t see myself doing that.

Question 2 is moderately useful information except that it basically says “delay taking SS until 70 if you can” but says so in an unclear and indirect way. It also seems like a deliberate obsfucation.



* well okay, if you made enough and spent it all on getting a second citizenship somewhere useful maybe it would moderately affect the outcome of an extremely low probability event. In my opinion it would be a silly waste of time and money.
SteadyOne
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Re: The Power of Working Longer

Post by SteadyOne »

prd1982 wrote: Wed Feb 03, 2021 11:42 am The biggest issue with this paper is that it assumes the person can decide when to retire. Unfortunately, a lot of folks who are worried about having enough are either laid off, injured, or have a family member they must care for. While I'm not a fan of FIRE (I retired at 65), I am a fan of being financially able to retire early. So I worry about those folks who say they plan to work until they die.
Even better strategy is to work after one dies. This would be perfect for a ‘financial man’ copy of my physical self.

(Actually, it may work for someone getting copyrights royalties)
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court
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willthrill81
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Re: The Power of Working Longer

Post by willthrill81 »

mptfan wrote: Sat May 15, 2021 1:11 pm I think there is some validity to the conclusion that for some people continuing to work contributes to one's longevity, assuming the work is not too physically strenuous or demanding or dangerous. I also think retirement affects different people in different ways depending on one's personality... some people retire from work and remain active with hobbies or exercise or travel or volunteering or other things to keep them mentally and physically engaged with life, while others retire and become sedentary and do not exercise their body or their brain and they become withdrawn from activity and become less mentally active and less engaged with people and life in general. I think that life expectancy for those in the former category is not shortened by retirement, it may actually be increased, whereas life expentancy for those in the latter category is probably shortened by retirement and they would be better off continuing to work.
Your point is a very good one. Many studies only examine the total impact on the sample of people examined and do not examine for differential effects among various groups. It's very possible that something like 80% of those who retire early live slightly longer (e.g., 2 more years) vs. working longer due to ongoing physical activity, mental engagement, etc., but that the other 20% essentially 'check out' of life and dramatically reduce their lifespan (e.g., 10 fewer years), with the total effect among everyone in the sample being that retiring early is deleterious to one's lifespan.

In the realm of research and statistical analysis, this would be referred to as a disordinal interaction, whereby the effect of one independent variable, such as retiring early, on the dependent variable, such as lifespan, cannot be meaningfully interpreted or use in any way because the effect is wholly dependent on the effect of another independent variable, such as post-retirement activity level.
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HootingSloth
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Re: The Power of Working Longer

Post by HootingSloth »

nigel_ht wrote: Sun May 16, 2021 9:48 am
HootingSloth wrote: Fri May 14, 2021 1:34 pm It seems clear that there are (at least) three separate questions:
  1. Will working longer allow you to save more money, and hence either to spend more in retirement or to have a more secure retirement at a given level of spending?
  2. How much more money will working longer allow you to save?
  3. Is the tradeoff of spending more time working, rather than retired, worthwhile given the answer to Question 2?
The answer to Question 1 is "indisputably yes," and you do not need a paper to answer this question.
Except is not “indisputably yes”. Once you peg your outcome at 99.999% it doesn’t get any better unless you start adding a couple 0’s to your net worth.

My wife keeps asking “what if” and my answer is the same.

For those extreme “what if” scenarios where all of our assets go *poof* the only way to reach them alive is if we are refugees in some foreign country or in an internment camp in this one. The US essentially has to turn into a failed state for these outcomes.

Working one more year for a tens or even hundreds thousand more won’t change the outcome one bit*.

Nor do you spend more except to deliberately blow more money. Other than charity I don’t see myself doing that.

Question 2 is moderately useful information except that it basically says “delay taking SS until 70 if you can” but says so in an unclear and indirect way. It also seems like a deliberate obsfucation.



* well okay, if you made enough and spent it all on getting a second citizenship somewhere useful maybe it would moderately affect the outcome of an extremely low probability event. In my opinion it would be a silly waste of time and money.
When you say "it doesn't get any better," you are answering Question 3 and not Question 1. Question 1 asks whether you will have $x more, where x>0. Obviously you will. Question 3 asks whether that $x more is worth delaying retirement. In the circumstances you describe, it is not.

Note that Question 1 does not say "materially more secure" or "noticeably more secure" or "significantly more secure." $10M plus a penny is "more secure" than $10M, just not in a way that matters to anyone. Question 1 is supposed to be asking an objective question about math and nothing more. Question 3 is asking the subjective question about what matters or is significant.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
nigel_ht
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Re: The Power of Working Longer

Post by nigel_ht »

HootingSloth wrote: Sun May 16, 2021 9:10 pm
nigel_ht wrote: Sun May 16, 2021 9:48 am
HootingSloth wrote: Fri May 14, 2021 1:34 pm It seems clear that there are (at least) three separate questions:
  1. Will working longer allow you to save more money, and hence either to spend more in retirement or to have a more secure retirement at a given level of spending?
  2. How much more money will working longer allow you to save?
  3. Is the tradeoff of spending more time working, rather than retired, worthwhile given the answer to Question 2?
The answer to Question 1 is "indisputably yes," and you do not need a paper to answer this question.
Except is not “indisputably yes”. Once you peg your outcome at 99.999% it doesn’t get any better unless you start adding a couple 0’s to your net worth.

My wife keeps asking “what if” and my answer is the same.

For those extreme “what if” scenarios where all of our assets go *poof* the only way to reach them alive is if we are refugees in some foreign country or in an internment camp in this one. The US essentially has to turn into a failed state for these outcomes.

Working one more year for a tens or even hundreds thousand more won’t change the outcome one bit*.

Nor do you spend more except to deliberately blow more money. Other than charity I don’t see myself doing that.

Question 2 is moderately useful information except that it basically says “delay taking SS until 70 if you can” but says so in an unclear and indirect way. It also seems like a deliberate obsfucation.



* well okay, if you made enough and spent it all on getting a second citizenship somewhere useful maybe it would moderately affect the outcome of an extremely low probability event. In my opinion it would be a silly waste of time and money.
When you say "it doesn't get any better," you are answering Question 3 and not Question 1. Question 1 asks whether you will have $x more, where x>0.
Q1 is “to have a more secure retirement at a given level of spending”. You even state this later.
Note that Question 1 does not say "materially more secure" or "noticeably more secure" or "significantly more secure." $10M plus a penny is "more secure" than $10M, just not in a way that matters to anyone.
No, it’s not more secure. That’s the point.

A penny doesn’t change security whatsoever. It is below the threshold of effect. The “given level of spending” is so high or so low that even hundreds of dollars doesn’t impact either the impact or probability of any adverse outcome with $10M in savings.
HootingSloth
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Re: The Power of Working Longer

Post by HootingSloth »

nigel_ht wrote: Sun May 16, 2021 10:09 pm
HootingSloth wrote: Sun May 16, 2021 9:10 pm
nigel_ht wrote: Sun May 16, 2021 9:48 am
HootingSloth wrote: Fri May 14, 2021 1:34 pm It seems clear that there are (at least) three separate questions:
  1. Will working longer allow you to save more money, and hence either to spend more in retirement or to have a more secure retirement at a given level of spending?
  2. How much more money will working longer allow you to save?
  3. Is the tradeoff of spending more time working, rather than retired, worthwhile given the answer to Question 2?
The answer to Question 1 is "indisputably yes," and you do not need a paper to answer this question.
Except is not “indisputably yes”. Once you peg your outcome at 99.999% it doesn’t get any better unless you start adding a couple 0’s to your net worth.

My wife keeps asking “what if” and my answer is the same.

For those extreme “what if” scenarios where all of our assets go *poof* the only way to reach them alive is if we are refugees in some foreign country or in an internment camp in this one. The US essentially has to turn into a failed state for these outcomes.

Working one more year for a tens or even hundreds thousand more won’t change the outcome one bit*.

Nor do you spend more except to deliberately blow more money. Other than charity I don’t see myself doing that.

Question 2 is moderately useful information except that it basically says “delay taking SS until 70 if you can” but says so in an unclear and indirect way. It also seems like a deliberate obsfucation.



* well okay, if you made enough and spent it all on getting a second citizenship somewhere useful maybe it would moderately affect the outcome of an extremely low probability event. In my opinion it would be a silly waste of time and money.
When you say "it doesn't get any better," you are answering Question 3 and not Question 1. Question 1 asks whether you will have $x more, where x>0.
Q1 is “to have a more secure retirement at a given level of spending”. You even state this later.
Note that Question 1 does not say "materially more secure" or "noticeably more secure" or "significantly more secure." $10M plus a penny is "more secure" than $10M, just not in a way that matters to anyone.
No, it’s not more secure. That’s the point.

A penny doesn’t change security whatsoever. It is below the threshold of effect. The “given level of spending” is so high or so low that even hundreds of dollars doesn’t impact either the impact or probability of any adverse outcome with $10M in savings.
I think I explained what I meant by Question 1 pretty thoroughly, but if you cannot bring yourself to say that there is a difference between "more secure" and "materially more secure," then you can instead just read Question 1 as "Will working longer allow you to save more money?"
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
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