Financial Independence Daily FI discussion thread - Wednesday, January 05, 2022 |
- Daily FI discussion thread - Wednesday, January 05, 2022
- Weekly Self-Promotion Thread - January 05, 2022
- Discussion: New FRED article demonstrates that many workers retired "earlier than they otherwise would have" - but that might not mean early retirement is on the rise
- Daily FI discussion thread - Thursday, December 30, 2021
| Daily FI discussion thread - Wednesday, January 05, 2022 Posted: 05 Jan 2022 02:02 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments] |
| Weekly Self-Promotion Thread - January 05, 2022 Posted: 05 Jan 2022 02:00 AM PST Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments] |
| Posted: 30 Dec 2021 07:24 AM PST Two days ago, the St. Louis Federal Reserve Bank's "On the Economy" blog published this post, titled "Excess" Retirements during the COVID-19 Pandemic. It links back to Miguel Faria e Castro's essay The COVID Retirement Boom, which frankly isn't much longer or more informative. It, at least, acknowledges right up front that it is a back-of-the-envelope estimate. I figured it might be an interesting read for this community, given that these are almost all, by definition, early retirements. Unfortunately, my disappointment with the FRED blog continues. This isn't to say that it's not a useful essay, and it's probably directionally correct, but I found the math behind it to be disappointing and the depth of analysis in the article to be lacking. From the chart:
I'm not in academia, but this seems a bit intellectually lazy. Surely there's data on the number of boomers by age and a model could be built with projected retirement rates by cohort. The analysis seems to hinge on the divergence between model and reality that starts here, but it seems like the modeled behavior is pretty divergent from the prior several years of data, based on what, a few months of convexity? The overall point remains valid, but it seems the quantification may be a bit off. The key quote:
This SOUNDS like "early retirement on the rise", right? This intersects interestingly with a great New Yorker article I posted about back in August, talking about the drivers of the Great Resignation. The FRED article confirms that the Great Resignation is, in fact occurring (many previously posited it as a reshuffle rather than a resignation, because reporting at the time focused heavily on actual resignation numbers rather than net employment). As we can see, Labor Force Participation Rate has somewhat stabilized about 2 percentage points below its pre-pandemic levels. This confirms that folks have indeed left the labor force. To counter the discussion of a gender gap, we can look at November 2021 vs November 2019 by gender:
I'll bring in a third source, however, in a Pew article from November titled "Amid the pandemic, a rising share of older U.S. adults are now retired". A few interesting data points from the first chart:
There are some fun crosstabs on the last chart, most notably that this is somewhat concentrated in higher-educated, American-born, metropolitan folks, but I think that's largely noise compared to the question at hand. The first chart is where the meat is, and it leads to a conclusion that I think runs somewhat counter to the narrative. The Great Resignation appears to be driven in part by less LATE retirement (65-74), rather than more early retirement. I haven't pulled in the relative sizes of the cohorts to show what % of that 2% LFPR decrease is accounted for by this age cohort, so I'd happily welcome someone else jumping in on that one, but it seems to me that the story of the pandemic enabling early retirement may be overblown, and instead gave a big kick to those that were already past what we would consider to be traditional retirement years. [link] [comments] |
| Daily FI discussion thread - Thursday, December 30, 2021 Posted: 30 Dec 2021 02:02 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments] |
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