The Future of Retirement and Implications for FIRE

[zenyata]

So I had a thought the other day that I think links in with the MMM lifestyle philosophy to some extent and how the current conventional wisdom about the future of retirement may actually play into the hands of MMMers; and for me personally I think is slowly (and likely gaining speed) starting to morph my thoughts about retirement and sort of the big picture of life…

I’ll try to make my thoughts as coherent as possible but honestly this will probably require at least a couple clarification follow-up replies on my part…

To begin – I was reading thru some recent click-bait list of things that the government is doing that may throw up roadblocks to retirement and much of the stuff was bogus crap about really theoretical moves the government could possibly potentially maybe make but probably won’t.  So I generally just blew that stuff off and moved on but I got thinking about the bigger picture of society and this pervasive sort of low grade propaganda messaging that the answers lie in working longer, delaying social security, saving $5 million for those last few years of life medical expenses etc. etc.  It all comes across to me as “grooming” the current and future generations – to plant the seed – “you’ll very likely be working for the rest of your life so let’s dispel that notion of true “retirement” right off the bat…it ain’t going to happen…”

The thing is – personally – all of that “the adults in the room are having a serious discussion”  and “level headed advice” crap is having the opposite effect on me – it’s not making me think about working longer or delaying or forgoing anything.  It is providing an incentive to save even more aggressively and get out sooner.  Between being just young enough that it’s a very real possibility a lot of the social safety nets are severely cut or eliminated, having a serious but not game over type pre-existing health condition, seeing the writing on the wall as to how potentially screwed you are in old age if you aren’t from old / crooked money, or have health issues or otherwise can’t work when you’re 70 or 80 years old where you will then be considered expendable - I’m moving toward NOT waiting longer, NOT guaranteeing complete security, NOT looking to dragging on a few extra years in my 70s or 80s.  And coming to the realization that all of the forces at play on this planet are making it more likely that the goal to strive for isn’t an attempt at ultimate longevity only to have more goalposts moved / rugs pulled out from under me by forces largely beyond my control.  I mean I’m not so sure that living an extra 10 years scraping by at the end because the ultimate goal in America is to have everyone aged 8 to 80 working all the time for table scraps from the oligarchy is in any way a desired outcome to shoot for if it means sacrificing another 5 years (or whatever) of prime living on the front end (I’m talking living life and freedom – not a whoop it up orgy of spending).

I guess my main point is that for a subset of the population already focused in on FIRE, further messing with the institutional incentives of a more traditional retirement (which MMMers are already running contrary to) just serves to hasten pulling the trigger.  At some point (different for everyone I’m sure but an overall trend likely moving toward sooner rather than later) waiting longer for what promises to be less and less of a sure thing secure retirement becomes foolish and may fall squarely in the “unintended consequences” category for the puppet masters who seem hell bent on their utopian vision of having the carcasses of workers wheeled away from their desks etc. at age 95 (“well he had to eat and pay for rent and we no longer do silly things like pick up the slack for our freeloading elderly in the last years of their life anymore”).

[Cornel_Westside]

While you have a very doom-and-gloom tone to your post, for the most part I agree with the conclusions. In general, the corporatocracy in the US would love to give you fewer options for retirement and keep you working for longer for less. But part of MMM is looking for the opportunities that are there and making the best of them with a sense of optimism derived from a general sense of control. You are letting the long-term outlook cloud the fact that right now, in general, it is in your control. You can do many things to avoid the type of thing you refer to. The biggest one is to look at moving a different country that features a better outlook. One with universal healthcare and a better welfare system. You say you are young and aggressively saving - sounds like you have lots of time to plan for moving somewhere that may fit you better if you need/want to. The other thing you could do is move to a state that may have better systems than the US in general. Massachusetts has had a type of universal healthcare for much longer than Obamacare has been around. California is considering a single-payer system. Maybe move there and advocate for it?

You seem like this vision of the future makes you want to FIRE early and enjoy life before it is all stripped away. That's not necessarily a bad plan, but I'd hope your outlook does have plans to keep your FIREd life stable. I would also note that unless something drastically changes about the US, there's no reason to think you would lose your money. The worst case thing for me personally is rules changing about a Roth IRA conversion ladder. That said, I find that doubtful to be soon, since the IRS released guidelines for it in 2014, and practically no one takes advantage of it.

[InnTee]

Interesting topic. Following.

[Laura33]

I think there are some generational changes going on.  For most of human history, of course, you worked until you died, and not being able to do the former generally led to the latter, barring inherited wealth, charity, or family to take you in.  Then post-WWII we developed this concept of the single-earner, 9-5 job, work for the same employer until you're 65, and your company will take care of you for that first 40-45 years, and then your company/government will take care of you for the rest.  [Assuming you were a reasonably intelligent straight white Christian male, of course, but that's another story]

But I think the story since then is one of promise after promise being undermined.  First the steel mills and other manual-labor Union-type jobs went away, so the story for my generation was go to college and get an office job.  Then of course the office jobs started going away, both through geographic arbitrage and technological efficiency.  And all along pensions are being cut, SS is being trimmed (and frequently threatened with more), companies are doing mass layoffs as part of mergers that benefit only the executives and investors, etc. etc. etc. 

The problem is that much of our economy was built on trust:  the only reason a sane person would commit himself to a company for the long-term, work overtime to handle crises, and generally go above and beyond is because he knows they are committed to him.  People will not devote 40 years, when they know that in year 39 you're likely to terminate their pension; they will not go to the wall for you when they know you just consider them to be Fungible Widget #87693; when all you want is the cheapest possible labor, all your labor wants is the maximum possible wage.   

Which leads directly to the OP.  Because if you can't trust the brass ring to be there for you later, then why in the world would you sacrifice now?  It's almost like people are realizing that the rules of pre-WWII never really went away, and you're going to need to either work forever or find some alternative that allows you to opt out earlier -- but in any case, you're basically on your own.  And people respond to that differently.  Some are doing so via more current work-life balance (we have many associates, for ex., who don't even want to be a partner); some will work their asses off for a decade and save everything to go ERE; some assume they will have to work forever and so look for careers that give their lives meaning -- cool tech, for example, or teaching or charity work that helps people, because who cares if the salary is smaller if you're working your whole life anyway; and, of course, many will also assume that retirement is out the window but will then continue to work for as long as they can for as much money as they can so they can keep buying more stuff.

I don't think the actual picture is nearly this bleak, btw; there are a lot of idealistic people out there right now determined to change the world.  But I do think the future is going to look very different than what my generation was taught growing up.

[CryingInThePool]

I don’t disagree but I just think of it more as the years in my 80s are self-expendable. It’s something I consider as part of my safety margin.  If I’m wrong in my WR or SHTF I believe I’m still more likely to have enjoyed the extra time in my 40s then 80s. So there's the hustle to get out early.
 
Is it pessimistic or optimistic that I hope by the time I’m 80 we can schedule our own one way trip to Mars or a tether-less spacewalk as end of lifecycle transition? 

[wordnerd]

Seems like you're focused on the emotional response to these changes. Emotions vary by person. Some will, like you, feel more defiant. Others will feel cautious and want extra spreadsheets.

The thing about financial independence is that it puts one in a position of strength. Being rich (and able to live happily on little) does confer many benefits. Most here aren't really counting on Social Security (though I think it will continue to exist because it's easy to fix and old people vote). Changes to healthcare, though, could derail some retirements.

I do think the "gig economy" (so well covered in think-pieces) and the decline of unions/steady careers may push people toward MMM type philosophies. A phrase I heard the documentary The Minimalists (recommended here) was that young people see work as something you do around the edges of life. I do seem to know more people doing that--not retiring, but not working full-time. That might be a good recipe for a life lived in accordance in one's values too.

[aceyou]

Future should just get better.

Life expectancy...has risen and is just going up.

transportation...we will definitely have self-driving cars several decades from now.  goodbye being cooped up in an old persons home, hello options!

communications technology...last generation or two gave us internet, the next generations will give us virtual reality.  That should open up some cool options for us in our older years.

Energy...solar will be so cheap decades from now.  In 40 years when we are old renewable energy will likely be the norm.

So many areas are improving so fast.  For every reason to be pessimistic, there's 100 reasons to be pumped.