Now you have a bunch of people who suddenly get a benefit at the same time at least somewhat at the expense of everyone else. And, as you say, like defined benefit pensions, they're inherently designed for at least relative long-termers.
But, yeah, it's hard to take a big chunk of time off otherwise. Unless you hit it big, it's risky to say I'm not going to even job hunt for 6 months. COBRA (and the Exchanges) does cover health insurance in the US to some degree but you're still taking a financial hit if you're without a job for a year--very possibly at a point in life when your financial needs are greatest.
Retirement age refers to when you're eligible for government retirement benefits.
The proposal is to let people draw their retirement benefits early, basically.
Practically speaking, drawing 3 months of expenses at age 35 might be equivalent to something like drawing 1 year of expenses at age 65, assuming the money is invested. You'd have to do the math to see the real numbers, but that's essentially what the author is proposing.
Time value of money.
None of these problems exist in that world.
Naturally, in countries that implement compulsory pension schemes, it's also not something you can easily remove: lots of people depend on government pensions and/or have planned their lives around them, it would be an unmitigated disaster to just say "we aren't doing this any longer".
Anyway, you’re wrong with regards to removing pension schemes. Look at Australia with compulsory superannuation. The government forces people to save up enough money to put them over a threshold where they won’t be entitled to a pension. Thankfully, this is fully paid for by employers. The UK is going the same way but sadly more of a user-pays type scenario. Not difficult at all and only takes about 50 years before the majority of the population is ineligible for whatever pension still exists, but it is still there for people who fall through the cracks. No need to remove the pension at all - just price out the wealthy.
Yes, it's already like this under any system. In what other way can it possibly work?
> I guess this is along the same lines of the only wealthy people are entitled to education and healthcare.
You are making shit up. Education and healthcare have nothing to do with being forced to pay for the pensions of people who retired at 50 because they were friends with politicians. Public education is good. Public healthcare is good. Public pensions are not, as a matter of theory and practice.
> Not difficult at all and only takes about 50 years
Something that takes 50 years to remove sounds like the very definition of something that's difficult to remove.
I don't see this as a terrible deal.
Of course, you then have to work past the standard retirement age, but I see this as a given for a lot of people anyway (you might even live longer if you get frequent sabbaticals)
So yes, if you continue surviving your chances of living to your delayed retirement age increase, but I still posit you'll enjoy time off work more when you're younger.
In the US you can start drawing retirement benefits at 62 at a lower rate, or at 65 at a higher rate. So this would be similar. Eligible for benefits at 62 with no sabbaticals. Or 65 with 3 sabbaticals.
So it's not that you would be ""forced"" to work an extra year, but you won't have benefits for an extra year. Which, y'know, is still pretty bad depending on your situation.
I’ve seen more people take them in between jobs than during, which works fine within the job hopping expectations that companies have created.
I managed a month and it wasn't enough. Not a chance I could have managed much more than that though without eating into my emergency funds and becoming anxious.
Voluntarily taking unpaid time off is a massive luxury.
Social Security is relative generous by the standards of the industrialized world. For example, I will receive $3600/month from the government at the standard retirement age, in addition to any other retirement savings I may have. Similarly, the government will pay for my healthcare when I reach retirement age.
That amount is near the max, and not typical at all.[0] You must have had at least 35 high-earning years in your wage/earnings record.
Also, the government only pays for part of your healthcare (Medicare Part A = hospitalization), you still pay for all the rest (routine checkups, treatment not requiring hospitalization, preventive care, prescription drugs). You don't get any coverage at all unless you enroll and pay your share of the premiums.
Almost half of those years were the opposite of high-earning, and I don’t have 35 years yet. If it is near the max then it is because the fraction of years that are high-earning are carrying a lot of weight. I have been quite poor for a large fraction of my working life.
In general, private sector companies have switched to defined-contribution schemes like 401Ks, which are tied to an employer but can be (and generally should be) rolled over to IRAs when you leave the company.
Social Security is something else again that comes from the government but isn't usually called a pension.
When a company eliminates pensions, it applies to new hires and perhaps future contributions but does not retroactively eliminate benefits already accrued.
I’m from Australia, I quit my job last year due to burnout. Regardless of whether I choose to return to work or not, I get free public healthcare, private healthcare if I pay for it, and a guaranteed government funded pension once I reach retirement age.
The US needs to fix the problem, not the symptom.
Just take your own, you don't need anyone's permission.
Save for a few years and you'll have enough money to take a year or two off (my ratio is 2 years work for 1.5 years of freedom).
Quit your job and do what you want with your life - I drive around the world having massive adventures.
When you get back just find another job - it's not hard, and the gap in your resume is extremely easy to explain - learning languages, self-reliance, health, research, side passion projects etc. etc.
Sure, I'm not at Director level or working at FAANG like some of the guys I studied Software Engineering with, but they've been going to work every single day for the last 20 years since we graduated, I only sat at a desk for 6 of those years, otherwise I've been driving around the world hiking, surfing, snowboarding, poking lava with a stick, climbing 20,000 ft volcanoes, etc. etc. [1]
Do what you want with your life, don't let someone else dictate it to you.
One of my secrets is being willing to relocate to really random and fun locations around the world - i.e. I moved to the Yukon where it was -40 for a few months every year. Every day was an adventure, and I got paid to live/work there.
Don't settle for good enough, go find something that enables the life you want to live.
It's possible to save money on a tech salary in the US for staying a few months, or even a year, on a sabbatical. Maybe it will cost you 100K or so for a year in an average city in the US, assuming a family of 3 and no other income, a third of that being health costs. But it's possible to save 100K to do that. Hey, we're asking for the entirety of society to work to provide us a ton of services/products (even beyond healthcare) while we're resting, so that shouldn't be so surprising, right?
One thing that I read a lot on HN are arguments talking about how having to pay for health insurance makes things impossible, as if people didn't have other expenses. For most people, rent is more expensive than health insurance, so are we going to say we can't go on sabbaticals because we don't have public housing? I understand that it's not easy to deal with private health insurance, but millions of self employed people in the US do exactly that, some of them with top notch (and expensive) health insurance.
In a country with public healthcare, you don't need to save the healthcare part. But you still need to save for all other expenses - rent, childcare, bills, transportation, books etc. So maybe it would cost half as much to go on a Sabbatical in other places, but in general tech wages in "other places" aren't nearly as high as in the US. So in the end it is kind of the same.
Sure. It's going to be a lot cheaper if someone else is picking up the majority of the tab. Leaving aside some tax effects and a small administrative fee, COBRA is basically priced at your contribution plus your employer's contribution to a group insurance plan. When I've looked it's not been much different from a comparable plan on the exchanges.
For this specific plan, it asks a 35-year-old to agree to work an additional year in their 60s for 3 months' sabbatical in their 30s. That's a pretty bad deal, not only because of the imbalance between what you gain and what you sacrifice, but also because there are so many unknowns about your ability to work in your 60s. And how do you really enforce something like that?
But in general, one major problem with sabbaticals is that they are almost always tied to your employer and require you to rack up multiple years of experience to qualify for them. But the trend over the past several generations is toward greater job mobility. It is relatively rare for Gen X and Gen Y workers to have stayed with one employer for decades, as many of their parents may have done. Job hopping is often the best way to increase one's compensation, and the loyalty that used to be shown between employers/employees has largely dissipated.
Thus, many people's only realistic chance at a sabbatical is to do an unofficial one by taking some time off between jobs -- but this has its own problems. Since health insurance and many other benefits in the US are tied to employment, it can be extremely costly to not be constantly employed.