Laurence Kotlikoff, an economist and writer I admire, recently published an article on CNBC titled A Harvard-trained economist says ‘early retirement is one of the worst money mistakes’—here’s why you’ll ‘regret’ it. While the title is intended to be provocative (aka click bait), the article is well-written and sensible--as Dr. Kotlikoff can be counted on … Continue reading Is Early Retirement a Mistake?
Two of the most important calculations in retirement planning are (1) how much you need to save up in order to be ready to retire and (2) how much you can afford to draw from your savings each year in retirement. There are many different calculators available online, and each has its own assumptions. There … Continue reading A simple approach to retirement income planning
The issue of retirement savings in the United States needs more sensible discussion and fewer sensationalist headlines such as The Retirement Crisis is Much Worse Than You Think and Fears of a Retirement Crisis are Overblown - and These Numbers Prove It. Unfortunately, discussions of this topic are rife with simplistic and misleading statistical arguments. … Continue reading Misleading statistics on the retirement crisis
In discussions of all sorts of public policy, it is common to see references to the average American or the average household. It seems to me that the entire idea of the average American household may be fairly meaningless. About 33% of Americans have a college education. The average incomes of people with college degrees … Continue reading Is it useful to discuss the ‘average American’?
In the United States, many people are re-evaluating the traditional model of working and saving through life. The traditional model is that you get an education and then work full-time until you exit the workforce entirely and live on a pension, Social Security, and/or savings. In recent years, the Financial Independence / Retire Early (FIRE) … Continue reading Rethinking earnings and consumption through life
Elizabeth Warren and Bernie Sanders have proposed massive college debt forgiveness programs. I am not in favor of these proposals, largely because of the general unfairness of having taxpayers subsidize people who have attended expensive private colleges or made other costly personal education choices. This is unfair to families that scrimped and saved or made … Continue reading ‘IRAs for all’ vs. college debt forgiveness
The ways that people envision and plan their lives start with concepts about the "natural" stages of life. These concepts change over time, though. As people live longer, new ideas are emerging about how to characterize mid-life in developed economies. More people are thinking in terms of a new stage of life, the second middle … Continue reading Redefining middle age
Today's workers face challenges that previous generations did not. First, a diminishing fraction of company earnings goes to workers. Second, real job security is largely a thing of the past. Third, employers provide less generous benefits than they used. Workers bear an increasing share of the costs of healthcare and traditional pensions have been replaced … Continue reading An optimist’s view of the future of work
The ways that people earn money, spend, borrow, and invest are all changing quickly. We are experiencing the greatest changes in personal finance since the start of the industrial revolution. To thrive in the new economy, people need to know far more and be disciplined and proactive in managing their finances. In this post, I … Continue reading The evolution of personal finance
The Financial Independence / Retire Early (FIRE) movement is much in the news these days. You can hardly go to a financial website without seeing a headline about someone who "retired" in their 30's. There is, not surprisingly, plenty of debate about what distinguishes retirement from being a professional blogger who writes about FIRE. Much … Continue reading Thoughts on the Financial Independence / Retire Early (FIRE) movement