The "Life-Cycle Model"

[ExiledInIllinois]

What say ye?

 

Young people shouldn't save for retirement.  Introduced in the 1950s, FWIW... Whaaaa! 😏 

 

"New research based on the life-cycle model says that people should strive for a consistent standard of living through their lives."

 

"...Put another way, individuals, according to the model which dates back to economists Franco Modigliani, a Nobel Prize winner, and Richard Brumberg in the early 1950s, seek to smooth what economists call their consumption, or what normal people call their spending. ..."

 

https://www.marketwatch.com/story/many-young-people-shouldnt-save-for-retirement-says-research-based-on-a-nobel-prize-winning-theory-11664562570

 

 

 

 

 

 

[EmotionallyUnstable]

Certainly interesting, especially as I watch my retirement account continue to lose money!

 

I think there is no “one size fits all” for planning for the future. It really depends on input/output, length of career and what you want in all stages of your life.

 

For my wife and I, the last 10 years of our youth, we had small incomes and yet managed to save well and keep bills extremely modest. We lived well within our means, and yet, we were perfectly happy with that because the things we did and places we enjoyed weren’t fancy or expensive. Our apartment, house, cars, trips, food, drink was never of the finest and most expensive because we were living the good life. Young, flexibility with time and money, and just figuring out what we wanted in life. 
 

Now that we are hitting the middle-age stages of life, we’ve since worked our way to higher wages, while maintaining what we used to contribute to savings. As we’ve started a family and settled into this stage in life, we chose to take on much higher expenditures (mortgage, cars, children). Our monthly flexibility is not what it used to be, even though we make way more than a decade ago. We are perfectly happy with that, because although we have to me much more conscious of our spontaneous purchases, the return from those investments in our home and our family is well worth the increase cost. 

 

By the time we retire, our house will (hopefully!) be paid off, which is a gigantic piece of our monthly bills. Between that decrease in cost, our pensions, 403B, Roth IRA and personal savings, we are hoping to maintain our quality of life. Nothing fancy, but comfortable with the flexibility to do what we please within moderation.

 

If I were to give any young, up and comer advice regarding long-term savings, I’d definitely be to make sure you have cash on hand. It doesn’t matter how much your have in accounts you can’t touch until you’re 63 if ***** hits the fan when you’re 45. 
 

Save what you can, live how you want to, enjoy today because tomorrow isn’t a given, but you want to be sure you’ll be good to go when and if you make it to retirement. 

[ICanSleepWhenI'mDead]

<< What say ye? >>

 

I say they're twits.  It's a "model."  For any model (not just this one), the following adage applies:

 

Garbage in, Garbage out

 

They have a lot of bad assumptions (i.e., a lot of "garbage in").

 

The result was garbage out.

[LeGOATski]

Don't spend more than you earn. Always pay your bills. And live it up. You'll be good to go.

[TBBills]

World won't last too much longer so spend and live it up while you can.