Will Early Retirements Crash the Economy
Money For the Rest of Us
J. David Stein
4.5 • 1.4K Ratings
🗓️ 26 February 2020
⏱️ 27 minutes
🧾️ Download transcript
Summary
Almost half of Millennials want to retire early. Will that hurt economic growth? There were similar concerns in the 1920s that early retirement would wreck the economy. In fact, there was significant pushback against retiring at all due to fears retirements would destroy the economy. Yet, the Great Depression still came. In this episode, we consider what ended the Roaring Twenties, caused the Great Depression, and how early retirements impact the economy.
Topics covered include:
- What is the paradox of thrift and how does it apply to early retirement.
- Why the 1920s were called the Roaring Twenties.
- Why the work culture in the 1920s was for workers to not retire, but "die in the harness."
- What caused the Great Depression.
- How economies and job markets adapt over time.
- How waves of early retirements could change the economy.
Thanks to LinkedIn Learning and Vistaprint for sponsoring the episode. Use promo code David to get free shipping from Vistaprint.
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Transcript
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| 0:00.0 | Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to |
| 0:07.7 | invest it and how to live without worrying about it. I'm your host David Stein today |
| 0:12.4 | is episode 288. It's titled, |
| 0:15.0 | Will Early Retirement Crash Economy? |
| 0:20.0 | I recently saw a poll that was sponsored by T-R-O-P price. It showed 43% of millennial workers |
| 0:30.0 | expect to |
| 0:33.4 | 65. That compares to 35% of those from Generation X, |
| 0:40.2 | which is ages 40 to 55. |
| 0:44.3 | This survey was referenced in an article by Gina Smollek of the New York Times. |
| 0:50.8 | The article was titled, How millennials could make the Fed's job harder. |
| 0:57.0 | The subtitle, |
| 0:58.0 | They love the idea of retiring early. |
| 1:00.0 | That could diminish the Federal Reserve's firepower. |
| 1:04.0 | The article referenced how millennials, in order to leave the workforce early, would need to build up massive retirement funds. |
| 1:12.0 | And buy less things. |
| 1:14.0 | And that lack of demand could hit consumption, |
| 1:18.0 | which would slow economic growth, |
| 1:20.0 | leading to ever lower interest rates. |
| 1:24.0 | The author mentioned the paradox of thrift, |
| 1:27.4 | which is, if everyone tries to save in mass that could lead to lower economic growth, lower inflation, and trip up the economy. |
| 1:40.7 | She writes, when consumers save a big portion of their income, they are not spending as much |
| 1:45.6 | on dinners out, movie nights and cars. |
... |
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