Why is it rational to invest in retirement? I don't get it.

bydiegocaleiro6y16th May 2013114 comments

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I know I said I'd be gone... but this was just a comment originally, and I noticed it may actually be relevant.

Elharo said in Munchkin Ideas:

Put as much money as you can afford into tax advantaged retirement accounts. In the U.S. that means 401K, 403b, IRA, SEP, etc.

 

I'm interested in the following:

Why should people invest in retirement? Or, instead, why should someone invest as much as most do in retirement.

Few facts that make it a boggling question for me:

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

People adjust much more to harsh economical conditions than they believe they would. They remain happy, as many studies by Seligman and others show.

People who retire are only happier as retirees if they retired by choice (I lost the paper, sorry).

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.

If you have descendants, they may support you in case you are still alive, and if you are not rich enough to keep a house, you have a good excuse to be in company of loved ones (you have nowhere else to go).

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

Given all that, I have no clue what the whole fuss about retirement plans, and being 60% of a rich old person with a crappy body is all about, specially if you are in the grave.

I mean, in the cryopreservation chamber, of course.

 

Edit: A related question not worth its own post, but maybe worth discussing, is Should inheritance "jump" a generation. Everyone inheriting from grandparents, instead of parents? Just the abstract ethical question. Regardless of implementation procedure.

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