I would prefer to save more and retire earlier. That would increase my chances to enjoy the retirement and make the person enjoying the retirement more similar to the person who saves the money. Also, the sooner I retire, the more chance I have to make money while retired -- so I could just make a plan to retire as soon as possible after I have enough money to survive; and then optionally make some more money and add them to the retirement.

As a programmer, these days I make more money than I need, but I find it hard to imagine doing this job at 60. Not because I wouldn't have valuable skills, but in my experience during job interviews most employers only care about familiarity with the few most recent frameworks -- there is not much competitive advantage I could have against someone who just learned that at university; and in addition the young competitor will probably be willing to do a lot of cheap overtime.

Unfortunately, I don't know how to do that. In my country, the rules for retirement change after almost every election. The money in the retirement funds is taken to repair some other part of economy, or is simply stolen. The state is willing to support old people with some sm... (read more)

Is there a good reason for the title to read “is it rational” rather than, say, “should I”?

I wonder if maybe the reason we retire, i.e. set aside a very relaxing experience for the end of our lives rather than spread that utility across our entire lifespan, is the same reason that the idea of heaven was so appealing for medieval peasants. Perhaps the only way we can motivate ourselves to work is by irrationally believing that one day there will come a blissful time free of suffering where we never have to lift a finger ever again and can live in utter peace. In this way, we avoid accepting the essentially Sisyphean nature of reality.

Personally, I'm worried about becoming unemployable. I'm especially worried about new technology replacing human labor. The best insurance against my labor being devalued is lots of capital.

This question is a subtype of "Why should I save any money, anyway?"

There are two basic answers. One is the utility function, as has been mentioned. The same dollar amount has different value for someone rich and for someone poor. If you expect that at some point in the future you will become more poor than you are now (because your income stream dries up), it makes sense to transfer some money from the rich now-you to the poor future-you. That transfer is known as saving.

Answer two is risk management. Future in uncertain, generally speaking you would like to be able to handle a variety of unfortunate events. Money really helps with that. If you have no savings, you have no tools to deal with what economists would call "negative shocks" and that is likely to send you down a financial death spiral. Speaking technically, the costs of not having a reserve of cash on hand to deal with emergencies can be very high.

There is a variety of other answers (e.g. future might provide much better utility for your dollar so you want to save up for that better utility), but I think that the two above are the main ones.

You are 10% to 20% likely to die before you enjoy even your first retirement year.

Careful, this is from birth and for all categories. The survival rate to age 65 for a healthy middle-class educated person in his late 20s or early 30s is likely much higher than the survival rate from birth (the first few years of life are quite dangerous, and many chronic diseases should be already diagnosed at age 30), and middle-class educated persons doing intellectual jobs (the typical audience of LW) live longer than factory workers or miners.

Most people here live in rich countries - darn, hate to be the exception! - , and their state would happily provide them with at least the maximal retirement plan legal in my country (aprox 2000 dollars/month).

The richest country, the United States, does no such thing. Poverty among the elderly is a big problem here. I have two friends in the 70+ region, who are trying to skimp by on around $1000 a month in Social Security + medicare and food stamps. One is currently homeless. Both would like to find a job, but neither is medically able to work any more. And these are people who worked for a long time. Not everyone gets as much from the U.S. government as they do. I have another elderly friend who is selling her apartment in NYC and moving to Iowa to have enough money to live on.

I also have a few more retired elderly friends who are quite well off. This is because they were successful in their careers (some very successful) and saved a lot of money along the way. I can think of one other who's still actively working at a high-paying job.

The goal is to end up like the happy, well-off retired folks and not the ones living out of their cars or on the street.

I invest about 60-80% of my income. There are a variety of reasons but here are some:

1. Spending money doesn't seem to make me much happier. Buying stuff is certainly fun, but the enjoyment of owning a new thing wears off in a few weeks. Also, some things have carrying costs, they make moving more difficult etc.

2. I'm in my 20s, and I'm worried about possible trends toward large scale structural unemployment and declining median income per worker in developed countries. If these trends do continue, owning a fair amount of capital will be vital if you want to be financially secure.

3. I also get some pride from watching the numbers roll upwards on my accounts. It reminds me of how people who have lost weight often say, "no food tastes as good as being thin feels."

People really do seem to have different utility functions/discount rates etc. YMMV, but I like the feeling of having money more than I like buying/owning stuff.

Tax advantaged retirement accounts are, you know, tax advantaged. That pretty much says all that you need to know about it. You should invest dollars into where the free money is up until the marginal dollar invested yields as much utility as the marginal dollar spent elsewhere.

In other words, as much as you can afford.

Robin Hanson thinks an optimal donation policy looks like saving up and investing as much money as you can and then making a large donation at the end of your life. So retirement accounts seem sensible from this point of view ("tax advantaged" seems like an important keyword here).

Another reason would be to save up money to pass on to your family after you die.

The mortality rate you cite doesn't control for demographics, which I think is important. Many people die early in ways that I think the LW demographic can avoid.

Most people here live in rich countries - darn, hate to be the exception! - , and their state would happily provide them with at least the maximal retirement plan legal in my country (aprox 2000 dollars/month). And surely would provide them with double the minimal (about 200/month) if they needed.

It depends on your prognosis about the future. As the average person in society gets older it's not clear whether the state has still as much money for financing retirees as it does at the moment.

Utility per annum is strongly sublinear in expended money per annum.

The point of diminishing returns goes up when you have additional maintenance expenses. Being old is expensive, and having to skimp is rougher when you're old.

SO, for example,

• if you save for retirement, you get 6 utilons per year now and 3 later, if you live that long.
• if you spend heavily now, you get 7 utilons per year now and 1 later, if you live that long.

Seems like a good trade to me.

Not to mention, that there is also some chance that technology will make your investments less valuable - be it because of nano machines, 3d printing, uploading, AI-related progress, x-risk or 'the singularity'.

Is it rational to invest in Bitcoins for retirement?

the maximal retirement plan legal in my country (aprox 2000 dollars/month).

Which dystopian state is this, that caps retirement payouts? I can understand corrupt states stealing retirement money, but having an actual policy that none may have more than that?

Saving for retirement is the traditional conscientious young person thing to do. It doesn't make any sense if you believe in radical life extension or uploading or the singularity (assuming it's within your lifetime). As medicine and technology increase, retirement age will stop even being a thing, because it won't make sense to stop working at 65 and then live 65-650 more years.

On the other hand, investing to maximize your long-term income and wealth potential makes a LOT more sense than saving for retirement. Basically: saving for retirement is like taking the sure 450 instead of flipping the coin for 1000.

You are 10% to 20% likely to die before you enjoy even your first retirement year.

I wonder if there are any death insurance companies, where you give them your retirement savings, and when you retire they pay you money continuously until you die. That way, they can pay you extra to take into account that you might not live that long.

Last, but not least: That person is not even you that much anyway.

The question is how much you care about that person. Does having a worldline connecting you matter regardless of length? Does it matter at all? Do you ca... (read more)