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

Have you looked into opening an investment account in the US as a non-resident (so your government won't be able to easily appropriate your money)? I'm not familiar with it myself, but a cursory Google search seems to indicate that it's possible and not too difficult. Or if the US doesn't work for some reason, some other country...

I concur with your sediment. I posted this on the munckin thread, but it bears repeating MMM Simple Math of Early Retirement. Going purely on your investments and saving(i.e. no government programs) you should be able to retire in 51 years if you save 10% of your income annually. However, if you save 20% of your income, it drops to 37 years.

MMM and Early Retirement Extreme advocate investing 50-75% of your income, if not more. This will let you retire between 7 and 17 years, leaving plenty of time to enjoy your retirement.

I fully agree with the last paragraph. When it comes to valuing my time, the less free time I have, the more valuable it is, and the less reluctant I am to spend it (the value of an hour of my time isn't constant).

If I'm busy at a given time, it might not take much for me to go out of my way to help a friend; but if I'm really busy and they ask, there had better be some kind of incentive.

...upon reflection, that would be why people get paid time and a half for overtime.

What career paths are open to programmers? Do a lot of programmers go into management (head of a programming team), or specialize in something harder to learn? You seem to be saying that a programmer with 20 years of experience wouldn't have that much of an edge over someone with only 2 or 3 years experience.

As an engineer, two of the popular paths are going into project management or similar, or gaining a high amount of technical proficiency in certain domains. Either way, these types of positions really do require the extra experience.

Only that it seems like a cached thought that many never thought of but are following. If the 'I' is not indexed to me, than obviously no. So if you designator is flacid, no. If the designator is rigid (Kripke 1972) then yes, the question is about claims such as elharo's, which are hipothetically giving rational investment advice, and the disagreement is over how rational are them.

Which even though brilliant, is kind of ironic in a way, given, that all the evidence about money spending indicates to spend on the few things spread over time, and never, ever, ever, ever! on the big things more discrete in time.

Besides the classic "If money doesn't make you happy, then you probably aren't spending it right" (Gilbert et al 200x)

Seems like there is a new antidote for the christian manthra, but I don't have time to read it. http://csi.gsb.stanford.edu/if-money-doesnt-make-you-happy-consider-time

Invested in whatever the machines can't do. Or what they will multiply instead of devaluate.

Like hairdressing, chef cooking, extreme sport tour guide, land in scandinavia (if Hansons guess about the emulations hub is right), energy sources. Which is what one should invest in, if afraid of the emulation economy.

Depending on your current career path, up to a certain age it's entirely possible to switch careers entirely, even to something that makes concrete use of skills acquired from another career (so it's not a complete restart). Built-up capital or some other means of remaining self-sustainable for a period of time could allow you to return to school in something completely different.

I'm not speaking from experience though; I can guess that this type of situation would be difficult. But when saving, balancing the return on investment with the accessibility of the funds seems wise.

Agreed, but the options listed, sadly, don't help you there. If you use a tax advantaged savings vehicle, it's much harder to actually use the money before retirement. At best you can borrow from it (which i ended up doing as a buffer when switching careers) or take the withdraw penalty, which eliminates a large portion of the savings.

So I'd agree with keeping savings as a hedge against unemoyability, but against usIng the 401k etc methods the OP listed if that is your goal.

(e.g. future might provide much better utility for your dollar so you want to save up for that better utility)

This is one of my main reasons for saving a lot and I'm surprised nobody else has mentioned it. If technological progress continues, it seems likely there will be all kinds of cool toys and useful procedures (e.g., cognitive enhancement or life extension) that one could buy in the future, not to mention investment and charitable opportunities, and I'd hate to be left out because I had already spent my money on a bigger house or flashier cars and clothes.

According to Wolfram Alpha if you're a 30yo male in the US then your probability of reaching 65 is somewhere around 80%.

The other demographic details surely make some difference, but I wouldn't assume they're all favourable; for instance, being largely sedentary brings all kinds of problems.

[EDIT: I wrote 20% where I meant 80%. Thanks to wedrifid for catching my mistake!]

The United States is actually only the 8th richest country by per capita income (PPP adjusted).

en.wikipedia.org/wiki/List_of_countries_byGDP(PPP)_per_capita

(No active link because of the damn parentheses)

The extreme poverty line is around $1.25 a day, and the poverty line at around $2.50. They are well above both. By global standards, they're not poor; merely relatively poor to other Americans (which is to say, not poor at all)

And $1,000 a month in social security plus food stamps valued at $200 plus Medicare valued at $680, you get pretty close ($1,880) to $2,000 a month from the US Federal government.

How much at what interest rate, etc?

I also spend very little money, and am not doing anything intelligent with the ~1k/month that I save, so I'm interested.

Spending money doesn't seem to make me much happier.

“If money doesn't make you happy, then you probably aren't spending it right.”

How much do you make, if you don't mind me asking? I'm saving about the same percentage, but I'm living with my parents for the next few months, and that percentage is going to plummet as soon as I actually have living expenses.

I don't think the marginal dollar invested in a retirement account yields anywhere near the utility of the marginal dollar spent elsewhere, even with the tax advantages. Freezing your money for decades is a huge deal. If you're 55, sure, go ahead; if you're in your twenties, putting money into a retirement account is almost as bad as setting it on fire.

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).

From a tax perspective, my understanding is that you can deduct up to 50% of your income from your taxes if you give it to charity. Are retirement account tax incentives that good? If not, you might want to put your money in a donor-advised fund instead of a retirement account. (See this comment for more relatively clueless speculation from me.)

Or simply insuring against being a burden (a cost) to your family in case your health declines.

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.

In the UK it is clear: it doesn't. State pension ages are slowly going up, and the state pension isn't much anyway. It's no more than a safety net for people who haven't made their own arrangements. My occupational pension will be very much larger.

I didn't put it in the original, but it feels the reverse to me. Younger people have more taste buds, more tactile pleasure, more reason to signal to others, more uncertainty, more mobility. All of those seem to increase the amount of utilons one gets in a youth age as opposed to an old one.

So for example. Say I give, out of the blue, no strings attached, 500 Euros to a 70 year old man, and 500 to a 22 year old man.

Who do you think will make the most out of the money given?

The guy may go to a paintball, a theme park, begin a startup, buy a star wars clothing article, buy some narcotics and give a party, travel to the beach, pay 6 months of a course he always wanted to do. The older man has fewer good uses for it, and probably would just save it to keep it safe. He may give a party, but he can't stand in the party for long, or drink as much, probably he wouldn't begin a startup, or fulfill a childhood dream. He could, it is true, buy painkillers if he has chronic pain. A better TV-set, maybe.

But it still seems to me that the marginal utility of money is higher by a large factor when one is younger.

And this is in addition to all the other reasons I mentioned. Even if this is false, the other reasons stand on solid ground.

The odds of that are low - new technology increases the overall wealth of society, after all. Yeah, I might lose some if I invest in the wrong fields, but if I invest in index funds, the mint made by a company with a really good new idea will outstrip the losses from the buggy-whip companies.

The generalized question is is it rational to invest in things with small chances of large payoffs. The answer is a qualified yes, given a few conditions.

1. You must have some expertise in the area you are investing in.
2. You must be young and thus have high risk tolerance.
3. You should not devote too large a fraction of your portfolio to this, despite above.

The pool of people who would devote a significant portion of a windfall to SENS or MIRI should be more risk tolerant in their investments than average.

According to this TechCrunch article, 87% of surveyed economists are bearish on Bitcoin. So we can speculate about cost of adoption, velocity of money, deflation, and volatility all we want, but it seems that the people with PhDs who really know this stuff aren't optimistic.

Still probably a good idea to invest in Bitcoins some, just keep a diverse portfolio.

Edit: these economists don't seem that bearish, and they also seem to think they are pretty clueless.

I'm not sure that bitcoins will stay this valuable for several more decades.

Maybe, invest some but not all of your savings in bitcoins.

Standard financial theory says that in the absence of specialized information about what assets are better than others, you want to invest in every single investable asset proportionally to their total value. The Bitcoin market is worth about $2 billion at current prices, compared to some $25 trillion for stocks, meaning that in principle you should put $1 into Bitcoin for every $12,500 you have in stocks. (In practice, transaction costs make this completely infeasible, as should be obvious, but that's the mathematical argument)

Which dystopian state is this, that caps retirement payouts?

I suspect that the OP is talking about what would in the US terms be called "defined benefit" plans -- as opposed to "defined contribution" plans (like 401(k), etc.)

This is Brazil. I've checked now, and indeed: A aposentadoria pode variar de R$ 678,00 (salário mínimo) até R$ 4.159,00 (valor máximo corrigido anualmente). 10 Brazil reais = 4.93754 U.S. dollars

Is this not like this elsewhere?
Is anyone open to negotiating a formal marriage by the way? message me. I generally fear that maybe states will pay for longevity stuff, and my citizenship will put me out of play. Also, I want to live in Berkeley or Oxford.

It doesn't make any sense if you believe in radical life extension or uploading or the singularity

It still makes sense as a hedge against being wrong about any of these, I would think.

investing to maximize your long-term income and wealth potential makes a LOT more sense than saving for retirement

I get that the tax structuring in some countries makes the two seem like different things, but at least where I live(Canada), you can pretty freely relabel "retirement" money as "stuff I want to buy" money. (You pay tax on withdrawals, but given that deposits are pretax, it's usually a wash). Savings made "for retirement" can easily be used differntly if medical technology does advance that far. If it doesn't(which is my expectation, sadly), then I'll still be able to retire when my body turns to shit.

Saving for retirement makes sense even if you don't expect to retire provided that you can access the retirement funds for other purposes, and that the laws of your country are such that this is still an advantaged position. In the United States and some other countries, saving for retirement is investing to maximize your long-term income and wealth potential.

Saving for retirement makes more sense, not less, if there will be radical life extension. Do you want to work for 650 years? or work for 50 and play for 600? (Feel free to define "play" as choosing more fulfilling but less lucrative work.)

Most importantly, saving for retirement makes a heck of a lot of sense if you don't place 100% certainty on uploading or the singularity by the relevant date when you'd otherwise retire. Or you aren't sure the singularity will actually eliminate the need for money and capital. For instance, what if uploading is possible, but costs $2 million a person in 2013 dollars? A magical singularity genie that grants everyone a cycle of infinite wish spells would be awesome, but it is not a retirement plan.

taking the sure 450 instead of flipping the coin for 1000

Assuming logarithmic utility, that's the right thing to do if you have less than about 2000 to start from -- and that's without even considering the possibility that the person offering you the bet may have loaded the coin.

Even if you believe in radical life extension or uploading or the singularity will be within your lifetime it still makes sense, indeed it makes more sense, to save in tax advantaged retirement accounts. Given two accounts into which you can place the same investment, one taxable and one not, by all means pick the non-taxable one. This is investing to maximize your long-term income and wealth potential.

Feel free to keep working and making money at 65. For myself I hope to be productive and active well into my 90s or beyond. But tax advantaged retirement accounts are still the best possible investment vehicle for almost everyone. The only exception I can think of would be someone with a very short time horizon due to illness or something that's going to require a lot of cash fairly soon like a house purchase. If you're planning to live forever, you absolutely want to use a tax advantaged retirement account for your investments even more.

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.

Yes; they are called annuities (well, some types of annuities work this way).

The "death Insurance" you propose is called an annuity. It's a very standard and common product. However in practice it is almost always a bad investment. You get higher returns at less risk in an index fund with a large bond component. There may be very special cases where it makes sense for very wealthy individuals, with particular tax or estate issues, but for most of us an annuity is a ripoff.

Longevity insurance is available from several insurance companies.