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Young people shouldn’t save for retirement

1 points by PopAlongKid 4y ago

Bostonian 4y ago
Much discussed at Bogleheads https://www.bogleheads.org/forum/viewtopic.php?t=387202 https://www.bogleheads.org/forum/viewtopic.php?t=387202.
bombcar 4y ago
There are some cases where utilizing retirement accounts do NOT provide as much of a benefit as you'd expect, for example - stocks are already "tax advantaged" in many cases, because you don't pay taxes until you sell. Index funds and ETFs are not quite as tax-advantaged as they have taxable events now and then. Bonds are almost entirely tax-disadvantaged. So saving directly may be useful. And over-saving can be a thing - renting forever because you don't want to save for the down payment on a similar house, for example. But the advantage of years of growth can't be underestimated. And when you have nearly no money is the best time to put everything additional you get into savings, it's much harder to tone down your spend once it's started. The idea of "retirement" is also a bit of a misconception - we should more be considering "financial security" - as you age you should be in a more and more secure position where you do NOT have to work as long; so instead of ceasing work at 64.5 years old, perhaps you start working less and less beginning in your late 50s. Just because you didn't save when younger isn't a reason to not start now, however. You'll always be better off compared to spending all or more than you make.
jleyank 4y ago
Don’t bet on anything that is not in your possession. Government and private pensions are great but their existence is out of your control. You need assets to live on and a roof over your head and we found it a whole lot easier to do slow and steady savings than panic at 45. Particularly is tech people might be dog food by then.
fiat_fandango 4y ago
And they wonder why my generation hates boomers... I'm young and I save / invest because I work my ass off. F to U government who just plans on giving away free money to lazy or financially irresponsible adult children AND to boomers who've inflated the price of a good education / homes. I work to pay my way, but denying the boomer generation isn't a large part of how we ended up in this mess is irational.

1 points by PopAlongKid 4y ago

Much discussed at Bogleheads https://www.bogleheads.org/forum/viewtopic.php?t=387202 https://www.bogleheads.org/forum/viewtopic.php?t=387202.

bombcar 4y ago

There are some cases where utilizing retirement accounts do NOT provide as much of a benefit as you'd expect, for example - stocks are already "tax advantaged" in many cases, because you don't pay taxes until you sell. Index funds and ETFs are not quite as tax-advantaged as they have taxable events now and then. Bonds are almost entirely tax-disadvantaged. So saving directly may be useful. And over-saving can be a thing - renting forever because you don't want to save for the down payment on a similar house, for example. But the advantage of years of growth can't be underestimated. And when you have nearly no money is the best time to put everything additional you get into savings, it's much harder to tone down your spend once it's started. The idea of "retirement" is also a bit of a misconception - we should more be considering "financial security" - as you age you should be in a more and more secure position where you do NOT have to work as long; so instead of ceasing work at 64.5 years old, perhaps you start working less and less beginning in your late 50s. Just because you didn't save when younger isn't a reason to not start now, however. You'll always be better off compared to spending all or more than you make.

jleyank 4y ago

Don’t bet on anything that is not in your possession. Government and private pensions are great but their existence is out of your control. You need assets to live on and a roof over your head and we found it a whole lot easier to do slow and steady savings than panic at 45. Particularly is tech people might be dog food by then.

fiat_fandango 4y ago

And they wonder why my generation hates boomers... I'm young and I save / invest because I work my ass off. F to U government who just plans on giving away free money to lazy or financially irresponsible adult children AND to boomers who've inflated the price of a good education / homes. I work to pay my way, but denying the boomer generation isn't a large part of how we ended up in this mess is irational.