Has becoming collapse aware changed your retirement planning?
Posted by atascon@reddit | collapse | View on Reddit | 58 comments
In most western economies there is a pretty standard approach to retirement planning. This tends to revolve around maximising your income early on at the expense of other things, maxing out your pension, buying a house, and long term/'safe' investing. Look at any of the FIRE subs as an example and you will find pretty rigid flowcharts demonstrating this.
Behind that are some major assumptions about these instruments being available in the future and that the tradeoffs people are generally encouraged to accept are worthwhile for returns in the distant future. What if pensions and the assets they hold become worthless?
For those of us in our 30s, 40s, and even 50s, there are some serious questions about how fruitful this traditional approach will be going forward and whether we should be prioritising different things.
This leads to a few possible approaches:
- Play the game as you would anyway because collapse is a slow process and you can't predict the future
- Increase your risk appetite to try and reap financial rewards sooner and enjoy life more. This could mean more risky equity investments or simply a more hedonistic approach to spending money. It could mean doubling down on a well-paying job for a short period to build up savings
- Become more frugal and shore up other types of 'capital' - relationships, skills, fitness etc. Pursue alternative careers that pay the bills but are more meaningful
Personally I'm doing a combination of all three. I've made a career switch which significantly lowered my earning potential but I now work in a much more meaningful job. I've significantly upped my risk appetite in terms of investing.
Curious how others are approaching this question. Also fully appreciate that many people are in financial survival mode and not all these options are feasible.
RobertPaulsen1992@reddit
When I was 21 years old my employee back in Germany asked me if I want to take part in some government retirement fund nonsense. When I declined, the HR dude said "but it's great, you pay in now, and the government gives you double that when you retire!" I responded that by the time I'll reach retirement age humanity will have a whole different set of problems to busy themselves with other than money. That was 13 years ago.
Half a year later I quit my job, moved to the tropics and became a subsistence farmer. I've never looked back once.
Logridos@reddit
I don't know if you've been paying attention at all, but the tropics aren't going to continue supporting human life for much longer. I foresee a lot of looking back from you in the next few years.
Own_Appointment_8410@reddit
Imagine billions of people fleeing tropical countries and trying to enter Europe, the US, and other countries.
Hodgepodge_Exp@reddit
My collapse plan is multi faceted due several financially set backs in my 20s and early 30s. I'm finally in a decent paying job where I can save some money for a Roth 401k, pay down student loans and have some money spending money left over for general savings goals (some of them are converting dollars into a tanblie asset) and paying for some hobbies here and there. If I had a kid right now, I would be screwed financially. I'm using my hobbies as a means to develop some survival skills such as sewing and camping skills as one of them is a LARP. I'm also developing skills for one or two side incomes. My long term goal is either to join a bunch of friends co-living together or to move to a country to set up a small semi dependent homestead for under $100k and retire there. Getting debt free and working around my bad hip are current goals besides "savings".
what-no-earth@reddit
I just don't give a fuck and spend my money on experiences and seeing the world. I doubt we will have any form of retirement or even advantage from classic investments once it goes down.
shewholaughslasts@reddit
Yeah whose to say if paper money (much less investments) will have any value? Could be all shady af digital currency or social credits the way this bs is going.
lobsterdog666@reddit
same as it ever was: dying in the fresh water wars of the 20xx's
RedditAppSucksRIF@reddit
m19010101@reddit
Zero plans for retirement. Almost 50. Cashed out my measly 401k years ago. Unable to save anything since I can barely afford to survive. Small chance of a family inheritance.
PithyCyborg@reddit
Rofl...
Retirement planning?
That's cute.
(I feel so broke whenever I post on Reddit, lol. God, I suck.)
My plan is to literally survive.
Retirement is a fairy-tale in my world.
Cordially,
Mike D
Comrade_Compadre@reddit
MIKE D WITH THE MASTA PLAN
I SAID OH MY MY AND THANK YOU MAM
PithyCyborg@reddit
One lonely beastie I be.
All by myself without nobody.
-Paul Revere
shewholaughslasts@reddit
I love your B boy stance Mike D.
DrRatio-PhD@reddit
*Two whole ass other fellas repeating the "Nobody" part*
sp0rkify@reddit
I feel this so hard - I'm on my province's disability benefits.. my daughter and I barely scrape by every month.. and that only happens with maxed out credit cards.. (it doesn't help that the job market is shite and my ex hasn't been able to find consistent full time employment in like, 2 years.. so, he's $8,000 behind in child support..)
I luckily qualified for Canada's federal disability tax credit, so I get an extra $200/month (which was supposed to be a payment to pull us out of poverty.. 😅) and I now qualify for the Registered Disability Saving Plan.. so, I throw whatever I can in there just to qualify for the government grants..
My "retirement" plan (basically for when the disability payments stop and I'm forced to survive solely on the Guaranteed Income Supplement and Old Age Security payments) is inheritances from my grandparents and parents.. as depressing as that thought is..
Distinguishedflyer@reddit
i'm in just survive mode too, friend. I feel broke as hell also.
Private_Mandella@reddit
The concept that undergirds a lot of modern passive investment strategies is something called asset allocation. Essentially you invest in different types of assets (stocks, bonds, REITs, etc.) to capture some rate of return at a lower volatility. You can still apply this for the coming collapse, but it requires you to make some definitive decisions about what you think the future will look like. You can’t predict the future, so this is fraught with difficulty.
You first have to have some idea of what the collapse will look like. No one knows, but you can try and make some informed decisions. What regions of the country will fare better? What industries will fare batter? What acute stresses will happen? The literature is pretty consistent on these but you need to do your own reading.
After you have answers for these, you can tilt your portfolio to anticipate these outcomes. Im going to outline my thinking, which is more holistic because a collapse is bigger than just the economy.
Your Time Investment
No matter what happens you will need some craft or trade you are an expert in, a community, a home, and some basic skills. Spend some of your time nurturing these.
You also need to read up on things. Find quality books about climate change, investing, your craft, etc, and make sure you actually know what you are talking about.
Your Money Investment
I don’t see a way around having a basic Boglehead approach to investing. Some of what you invest in will have to be the total stock market, the total bond market, and the total international stock market. However, you’ll want to tilt your asset allocation based on predicted future outcomes, and tilt some into more unorthodox investment vehicles accordingly. Investing in commodities makes sense to me. Maybe a regional REIT could work. Maybe a fund focused on renewable energy could work.
This is difficult to do and you’ll have to make some hard decisions here that don’t get you an optimal return, but a return that’s protected against a wide variety of futures. Look into what did well during the Great Depression and Stagflation when starting your planning.
Time Scales
When I think through my plan I also have a time horizon I’m thinking about. What will I need in the short, medium, and long term? Short term you need liquid assets and income. Medium term you need to build up your skills and make consistent progress on your investing strategy. Long term you need to ride out whatever is coming.
abelabelabel@reddit
Euthanasia is my plan.
Electrical-Regret-13@reddit
Yes, invested heavily in gold and silver....
astilba120@reddit
I began preparing for it a long time ago, creating a sustainable homestead far from the maddening crowd. Saved as much as I could, stacking silver since 2009, not thinking it will become the only currency, but to cash in as needed. Never thought it would possibly go over 45 ever again, so, pleasantly surprised. I live very simply, not a consumer of things I do not need. I live as green as I can. I am recently retired and will turn 76 next week. Way back in 1977,,when I still lived in NYC, I saw the future in the mindless crowds and traffic, headed North, bought a parcel and a small cabin, found employment, rather low wage, in human services, lived cheap, ate clean, stopped drinking alcohol, walked instead of driving, when I could, grow most of my own food, buy the rest at the co op, re use, use it up, wear it out, do with or do without. The back to the land movement was big in the 70's, many of us have already passed, but some of us are still going strong, our adult children, those of us with big enough accomadations and land, they live with us, helping maintain the homestead. I guess once a hippy, always a hippy. I raised my son with the same values, so he should be fine if the cities go to hell, which they will. regarding financial feasibility, the most important thing is to get off the wheel of consumerism. There is no reason to buy anything new, except maybe software. In the USA, small countries could easily live on what people throw away. The nuclear family and the middle class standard of living is completely unsustainable. There are still people with that mindset, looking for one another. Granted, since trump, many of them have turned crazy political, but they are not all like that. Ask yourself, if the shit hit the fan, what is absolutely neccessary for you to survive, and live and spend like that. Do not use a credit card except for an emergency, but keep up your credit by using it, say, for a subscription to a news source or a streaming service. Pay it on time every time. Keep your health up , buy second hand, do you really need 10 pairs of shoes? Do you really need that new appliance? Do you really need to remodel your kitchen? Get a parcel of land, put a modular home on it, build up as needed, dig a well, Leave a small impact on the natural world, it will reward you. Learn first aid, healing herbs, read,
FrownsRUs@reddit
Bought a small old house recently, despite that it took all my savings and paying my mortgage means I'm pretty much house poor. I just didn't want to be in situation where a landlord could evict me on a whim if things fall apart suddenly.
old-legs-623@reddit
We retired at 59 in 2009 to collapse proof to the best of our impecunious ability. Now 77, missed the storm by a bit but had many years doing our favorite things, growing stuff, putting food by, splitting wood and what not.
itsatoe@reddit
We're working on a similar strategy, with the added nuance of building a community to do it with us.
Investing into building a community that I can share with the less fortunate gives me more hands to make (much) lighter work, as well as a built-in social group.
RobertPaulsen1992@reddit
Great to hear you have no regrets. I've been on this journey myself for over a decade now, and I couldn't imagine ever going back. All the best to you!
Practical_Hippo6289@reddit
This is kind of what I want to do. Even if the worst doesn't hit during my lifetime I would have enjoyed and taken pride in doing something like this.
lowrads@reddit
Just be useful, and you probably won't be among the first to starve. Food has always been a difficult thing to hoard.
Effective-Ebb-2805@reddit
Nope. It's still death. Nothing's changed.
waffledestroyer@reddit
I am already almost retired in my late 30s due to a mental diagnosis. I doubt I will live to see my 70s, one way or the other.
scootunit@reddit
I think there's plenty of people out here who are undiagnosed and just schlepping along. I hope things go okay for you.
waffledestroyer@reddit
Thanks.
cosmic_censor@reddit
I am super behind financially with Retirement planning (In my forties and only roughly 2-3 years of current income saved for retirement). My belief is that because of collapse pressures, financial independence is even more important because social services for the elderly may not survive through the boomer retirement years.
At the same time, uncertainty makes it hard to know what kind of assets you hold. I believe that best case scenario is that once the boomers have finally sodded-off most asset classes will come down from their over-inflated valuations. The next twenty years will see stagnating asset markets with price gains mostly just matching cost of living while at the same time being punctuated with financial crises that cause significant devaluations.
The best approach as I see it, is to play the game but at the same time learn how to live modestly and focus on health. One of the biggest financial costs for the elderly is medical so the better you can age, the better off you will be. And for those that neglect health thinking believe that dying sooner is preferable, they are not taking into account the decade or so of frailty and disease that awaits them before their death. Better to be as healthy as possible until you OD on a barbiturate if you don't want to live out your natural lifespan.
RandomBoomer@reddit
Absolutely try to stay healthy, but be aware that it's not a matter completely under your control. My wife's Parkinson's wasn't the result of a lifestyle choice (unless you count childhood exposure to toxic chemicals as a choice). Same for my Hodgkin's Lymphoma that started a cascade of health issues since 1984.
Lostregard@reddit
I stopped payments to my 401k
thequiet-B4-thestorm@reddit
Yep. I no longer have a plan..
Bobcatluv@reddit
Yeah, the ol’ Smith & Wesson retirement plan
acatinasweater@reddit
It’s looking like I’ll either retire to become a regional warlord or retire in a federal prison. Of course I’m preparing for both scenarios.
sgm716@reddit
I've switched my financial savings to 100% precious metals. Besides my 401k and its match, but thats only 6%.
jsc1429@reddit
What retirement? You guys have a retirement?
ideknem0ar@reddit
I have a relatively stable job at a ye olde institution of higher ed. (AI will probably come for the job close to or after I retire, given how slow & conservative that place operates.) I plan to stay 4 more years til 55 and early retire. I don't chuck a ton of money into my SRA and it's doing well enough now and, since I'm debt free, I use some discretionary income to do some preps and save the rest. After 55, I'm going to roll with it and not be determined to live to a ripe old age at all costs and medical interventions. If I can get some chill years of gardening and semi-leisure in a diminished standard of living and getting by on my frugal habits, it'll be better than the cubicle grind that hasn't done many favors to this old body and brain over the past 25+ years.
I'm pretty much an outlier in my dept. Most everyone else my age or older seem to want to stick around until 68 or higher because they can't conceive of any other way to spend their days, I guess. I know some are hypernormalizing the heck out of what's going on, so I don't even talk to them about the direction things are headed, beyond an occasional comment to stock up on beans and rice. But even that falls on deaf ears, so I stay in my little cubicle doing my bullshit concierge service job for the librarians and counting the days I have left. (1530-something... Started counting at 3300 days lol)
James_Fortis@reddit
I retired with my partner at 39 last year. We don't have enough money to live the way we do through 70, but instead we're taking the time to live now and build skills. We bought a lot of arable land and are building a house with the money we do have, and plan to spend our free time living and building skills that we'll likely need in 20-30 years (gardening, harvesting wood for heat and building, sourcing our own water, repairing our own stuff, etc.)
Due_Charge6901@reddit
We did a similar thing, we have been fixing a century home all by ourselves to learn all the necessary skills to be self sufficient (old homes are work but much easier to fix than new homes where everything is made of plastic or breaks down fast…). We’ve gotten chickens and have moved to a more connected community where we align with neighbor’s more and have spent considerable time building roots within the community.
We now spend our time learning (my husband is going back to school to learn medical skills) , experiencing life, being present with ourselves and our child/animals. The best part of this approach is I no longer stress or worry about the future collapse because my daily life is no longer rooted in fear, it’s rooted in love. Love for the structure of support we have built around ourselves. It will be the cocoon that may or may not get us through the storm, or it may not, but I no longer feel lost, helpless and like I’m waiting for it to happen. Life is for living (aka loving), no matter what comes next, try to focus on that as much as you can!
Minizaka@reddit
“Retirement”
WeaveLikeGreatGranny@reddit
I have reduced my earnings by working fewer hours per week doing a couple casual jobs that I'm able to say "no" to at anytime and use the other time to grow food, build things, repair things, scavenge waste resources from our wasteful society and generally try to live a lifestyle that doesn't need much money to sustain. Oddly enough, I haven't spent down much of my savings while doing this. But I did cash out my retirement accounts to get them in savings to avoid the stock market. I'm 35 and the "retirement accounts" put together are only enough for an emergency purchase of a kind of nice used car lol
victor4700@reddit
“Planning” in that the timeline for me to drop dead while working has been pulled forward
FaberOG@reddit
For many I think the best best bet is building up strong community networks so we can maintain crucial services as the systems that previously maintained them fail. I personally joined my local DSA branch, great place to start organizing with other socially aware people.
WileyCoyote7@reddit
My wife and I accelerated our savings by doubling (more like tripling) down our efforts at work for a decade in order to “climb the ladder” faster to make the money necessary. We then sold everything. Our house, our cars, furniture, hell even most of our clothes. We wanted to spend what was left of our lives slow-traveling the world and enjoying ourselves while we could and the world allowed.
That was three years ago.
foxyfree@reddit
How is it going, if you don’t mind sharing a little more about this?
Omateido@reddit
Ya. I stopped planning for it.
sundancer2788@reddit
I retired 2 years ago at 61, spouse had retired previously at 49, we're the same age.
Blasphemiee@reddit
Life continues on for us poors
SeattleOligarch@reddit
I'm doing mostly 2+3. It took me 15 years, but I finally figured out my investing niche a few years ago and scraped just enough together to "FIRE" myself after I got laid off and could add my severance and 401k into the mix.
Even before I got laid off I was renovating our house, baking bread, maintaining our cars, and gardening (first year I've gotten a really good strawberry harvest). I'm just leaning more into that so I've added self-hosting and open source software to start limiting our subscription services and gain more privacy control.
My parents were career corporate until they retired a couple years ago. They don't understand that the rules have changed or why I'm doing what I'm doing, but thats their loss. They view it as "going backwards" since my grandparents were tradesman who sent all their kids to college to get white collar jobs. They expected this generation to be C-suiters... Only got 1/25 or so, lol.
mlo9109@reddit
Yes, it's why I haven't done as much as I probably should. Like, why bother if I'll be dead or unable to retire anyway because everything is so damn expensive?
The_Rad_In_Comrade@reddit
Those with capital will continue to fare better in almost any circumstance, unless your collapse scenario specifically includes an economic transition away from capitalism. All modern governments are captured by capitalist interests and will devote their dying breaths to protecting the capitalists and capitalism itself. Electrical grids, grocery stores, basic public safety and law and order will be allowed to fail long before the stock market or the general concept of a market economy based on money.
Henrious@reddit
Aware or not im screwed tbh. 40 years old no savings. Thankful to get by without drowning
rematar@reddit
What kind of investments are you looking at?
Historically, commodities follow gold after a delay, and when tech speculation fades. The Hormuz situation will also likely drive many commodities up.
CorvidCorbeau@reddit
Yeah, being early 20s it changed them from having retirement plans to not having any.
Though of the 3 you listed, what I'm doing is closest to option 1. I'm building up some capital now, living normally as I would if I was unaware (since I'm not a big spender anyway) which I can turn into useful things in the near future and looking into learning skills that could benefit me later in life, if/when we are forced into a much more reduced and simple lifestyle.
I tried hedonism at some point, it's not really working for me. All it makes me feel is I'm just ruining whatever time I have left.
Oh and my academic interest diverted from cars to energy systems and ecology, so I guess that's what I'm pursuing next. Not that it matters for retirement, but still.
horsewithnonamehu@reddit
Yes it did - now I don't have any.
Additional-Sky-7436@reddit
Live like you will die tomorrow, save like you'll live forever.