Well, your value is not simply your age or the number of years in your position. It’s what you actually do that directly advances company goals- and how your own work is perceived a such. Not being easily expendible. And to some extent, your political skills.
I have a friend in her mid-60’s, who has always been able to rebound to the next position, through networking. In fact, her team now is primarily women over 60, in a technical field, well paid. But you can’t go on anecdote. Throughout our working lives, CYA should always be in our minds.
The person who lost a job at 40-50 is not involuntarily retired, but unemployed. Since most people at that age still have decent mental and physical health, they are usually capable of getting a low(er) paid unskilled or low(er)-skilled job (even several part time jobs) to (partially) replace or supplement the lost income. The problem is that most people cannot support their current lifestyle on a low(er) salary. So the best advice for young married couples is to avoid lifestyle creep and maintain two careers (or at least two paid jobs) while living on only one income (and saving the second one). Equally important, they need a good long term disability policy, at least for the higher earner, as a protection against possible health issues. Of course, trust fund babies, people who expect large inheritance, marry into money, ultra-high earners, ultra-frugal savers etc do not need to worry about these and have a choice to retire early… or never work at all in their life
Probably hard to measure, due to many confounding factors (like in any industry) and the fact that age discrimination is often effectively hidden (like in any industry), but it would be naive to believe that it just does not exist at all (like in any industry).
Note that the fact that employer-provided medical insurance is the norm in the US gives a nudge toward age discrimination against older employees, because their compensation when including medical insurance benefits effectively costs more than that of a younger person at the same cash wage or salary. Medical insurance costs also nudge gender discrimination against women, particularly in the 25-45 age range. https://www.healthcostinstitute.org/images/pdfs/Age-Curve-Study_0.pdf
So my sister in her early 20’s has been a postal worker. She has contributed to her plan as soon as allowed. After 30 years on the job she will have a better pension then all of us… Lol…
Again, teaching how to save when their young is the key I think. Every young couple with kids I see at work etc, I ask if they started a saving plan for college and I get the same response every time…"Good idea, we need to start one now…! This is after I tell them how much college is now.
If the tax rates are the same now and when you retire, traditional (back door tax) and Roth (front door tax) with the same investments are equivalent in terms of money out for a given amount of money in. Of course, if the tax rates are different, then one could be more advantageous than the other. Differences in rules by the government and the investment companies could make one better or worse than the other for other reasons in your situation.
It is true that the better one can plan and save, the more options, choices and freedom they have.
It is also true that employers generally do tend to like younger, less expensive workers, when all things are equal. Knowing and planning/preparing for this is prudent, IMHO.
Your argument via appeal to Congressional authority assumes more faith in the wisdom of our legislative branch than I have. My workplace has climate surveys and the results are at best contradictory. There are always complaints about age bias from older employees, but equally as many complaints about age discrimination from younger employees. The grass may always look greener on the other side.
Re: differences between ROTH and non-ROTH qualified plans: Yes, I get the comment about taxes, but there are also RMD rules, and rules on when distributions can be taken, to consider in making retirement plan decisions. A mix of both is probably helpful in the long run.
I have friends in tech who have struggled to get anything more than intermittent contract jobs, and I also have friends who are doing spectacularly well as they are pushing 60. While S is highly valued by his current employer, he feels no need to punch a Master’s degree in CS (his UG major was math). That concerns me because the HR software looks for those magic key words…
In my career, keeping on top of the latest software for my line of work kept me viable even though I am in and out of the workforce because of my health. Always good to have the newest tools in the toolbelt.
Have not read the entire thread but I think the biggest issue retiring early is not having access to good subsidized healthcare unless a spouse is working full-time.
Workplace climate surveys may not be completely trusted by discontented employees who may fear that complaining will make it more likely that they will be dismissed.
Regarding the ADEA, the history is given at https://www.eeoc.gov/eeoc/history/adea50th/report.cfm . Age discrimination against older people starting in their 40s was commonly openly practiced before the ADEA (granted, this was in the 1960s). Of course, any age discrimination now is more covert.
General surveys suggest that, regardless of the actual level of age discrimination, a very high percentage of people are concerned that it will affect them. Given that concern, that should be even more incentive to financially plan for the possibility of involuntary retirement or income downgrade at age 40-50, even if retirement then is not a first choice goal.
Of course, there are other risks besides age discrimination that could end a career many years before “normal retirement age”.
Yes, ability to do early retirement (voluntary or involuntary) does require having enough money to cover your spending including medical insurance and medical care costs that you may otherwise get as heavily subsidized benefits from work. Or enough money to self-pay if the ACA is repealed or private insurance companies stop selling ACA policies, particularly if you have a pre-existing condition that would have disqualified you in the pre-ACA days.
Yes, age discrimination exists. I’ve seen it behind the closed doors Outright. Also, appearance discrimination and discrimination for any number of things that are illegal. Most employers are savvy enough to keep things like that under wraps.
It’s not 100% and often difficult to know for sure but all kinds of discrimination happens
Discrimination on the basis of other than factors relating to ability to do the job is common, and some of it may be unconscious. Some such factors are openly practiced and not illegal (consider “networking” or “nepotism”). Appearance discrimination is not illegal, but can overlap with some types of illegal discrimination.
Disability, child bearing possibilities are. Age, as we discussed is Religion, national origin , race etc. but sadly it happens and often difficult to catch.
Age discrimination is real, but companies accomplish it via indirect, vaguely deniable means. For example a few years ago a large three letter tech corp cut way back on the allowed work from home policy, and then a few months later shifted a lot of workers between cities. If you’re single or without kids you can go to upstate NY or Triangle Park, NC without a great deal of hassle. But if you have kids in high school, or a nice home or any of a host of other community ties it’s much harder to take that transfer. It’s even better when the cost of employees is lower in the new city so you can bring in a bunch of replacements at a lower rate.
I’m very well aware that I should be saving (I’m 28 now) but from 20-24 I was barely making enough to eat since I was still in college and grad school. I did manage to save up enough money for a down payment on the house we live in but that was mostly because I qualified for a new homeowners program and my incoming phd funding was more than enough to cover the mortgage.
So, y’know, between paying for food, mortgage, student loans, our wedding (which ends up saving us a ton of money in the long term since he got added to my insurance through the U which is completely paid for by my phd program), etc saving is simply not possible.
Then we did manage to get on our feet and because we live in the good ole USA, even though I had fantastic insurance coverage, I got sick and that costs us thousands of dollars a year between meds, hospital visits, etc.
Honestly, most of us are going to be lucky if we retire before we die. Especially those of us who started with nothing - or even worse, nothing PLUS student debt.
Yes. That is the case with a lot of young people, and not so young. Often, there is no way one can save. Sometimes even stuck in an expensive situation because it costs too much to get out of it. Can’t squeeze water out of a stone and can’t come up with money to save or even spend when it doesn’t exist.
If you are working and get sick or hurt, no savings, no short term disability as is often the case, what next? My one kid just found out that you become homeless with a shelter referral if you do not have friends or family to take you into their places. If you cannot work, at many jobs, you simply do not get paid. If you are out on unpaid leave, as employers often give you, because they do not want you getting unemployment checks—it affects them financially , then how do you pay for health insurance, let alone rent and basic living expenses?
Many go home to parents if that is an option, no matter how undesirable on both sides.
A friend of mine came back east after she lost her job and savings after a couple of years of complications with cancer. She moved in with her estranged daughter when her friends told her that they could not carry her anymore, much as they liked her.
Even savings does not stem the tide unless it’s sufficient. It’s often sheer luck we get through the early years and reach a stage in life where we are self sufficient when misfortune hits. But a little bit of savings can still offer a few more options
This is why I’m adamant about my kids going to schools that they can graduate from with no debt. I don’t see the point of taking on a ton of debt for school to get a job in a HCOL area and then struggling for years. I mean, I get that it eventually can pay off provided all the cards fall right, but man, that would be stressful starting out like that.
They should definitely plan, but what that plan is may/will change over time. Having a sound approach to handling money (or lack of) should be a goal for all graduating students. I think that many don’t even consider finances in their decisions creating even more problems. Many students will get great jobs out of college. How they handle the money from those first jobs can pave the way to a bright future. For the students that have a slower start, success might be avoiding common financial pitfalls - anything that grows debt or increases expenses.