Actually the ugly truth is that this impacts retirement at any age. Whatever way you're preparing retirement, if too many people retire at the same time they'll have to share a smaller pie overall because they'll live on wealth created by those still working, and the purchasing power of their retirement funds will necessarily be re-evaluated (or devalued) to reflect this aspect of reality.

But, if that is your big sticking point, you can literally load up on the cans of pork and beans as your retirement fund.

"Savings account" is an abstraction for that, and it's important to realize how abstractions leak and fail, but for most people the abstraction is just fine.

And if everyone doesn't do that, there is a very good chance you can withdraw your money and buy some pork and beans.

Which is the point about leaky abstractions. Unless you believe there is a significant chance your scenario will play out, the distinction isn't very meaningful.

But, they won't. Not everyone is of the same age, for one. So, it's an abstraction that usually works.

Instead of accumulating pork bellies, you can accumulate pork belly futures. This is another abstraction. Not everyone can do this at once, either, but the price of pork belly futures will rise in response, telling people to stop accumulating so much of that good.

It feels like you are saying -- based on my experience talking with other people who think economics is just a sham, so perhaps I'm too sensitive to that and applying their thinking to you, unfairly -- that any savings are just a confidence game. This is what I'm arguing against.

That isn't to say that savings isn't an abstraction for something. Saving money in financial instruments isn't a "savings" game. It's a growth game. By saving, you make available capital. That capital goes towards growing the economy. Ideally, the growth in future production resulting from your capital offsets the share of production you take out in retirement. It's this element of growth that distinguishes financial savings from "savings" in the pork and beans sense.

And this is one of the good things about a capitalist free market, it reaches certain efficiencies and spreads the risk (and rewards) across the whole economy (and all its participants).

>>This is vitally important because it means it's impossible for a significant percentage of people to retire early unless the remaining workforce becomes correspondingly more productive<<

...

>>Arguably, that is already happening even without additional early retirees, simply because the increased average life expectancy (and thus the time people spend in retirement). Effectively, everyone is already doing an early retirement, compared to people 50 years ago.<<

Obviously the remaining workforce has become, and continues to become, correspondingly more productive. If you need another example of this, see 2008-2012. We lost millions of workers from employment ranks, and our GDP is currently higher than its ever been. Sure, past performance is no guaranty of future results, but I and many others believe this trend will only increase in the future. Fewer workers will be producing even more.

However, fact is that most people's incomes have stagnated or decreased. The increased productivity is not quite enough to compensate for the increasing number of retirees and/or super rich (the article linked to by hudibras implies it's actually mainly the latter).

Then again, it's also important to bear in mind that most common investments are made in stocks and bonds, not in workers. In this case you're investing in companies and/or government securities, not employees, so falling incomes do not necessarily imply decreased ROI.

To some extent you are right: obviously someone has to do actual work, and not everyone can just make money on investing. That said, it's not a one to one correspondance: if more people are investing, that means there's more capital available for companies to build off of, which means it's easier to get a profitable company off the ground, which leads to more economic growth.

To simplify: if you work 7 hours a day, but save 3 hours worth of income out of those 7 hours and invest it in a company in a developing economy, you could be purchasing 300 hours of economic activity. So by saving, you have actually worked 300 hours that day (without your capital, those 300 hours would not have been done at all), while if you did not save, there is only 7 hours of economic activity.

We stopped the high taxes on the rich, let the minimum wage fall in real terms, and made several other policy decisions which have caused the shift to the rich.

It's not retirees pulling us down (except perhaps arguably in the last week or two or life, drumming up huge medical bills), it's rent seeking.

It's not impossible. Everyone can just become poorer. That doesn't have to be a bad result when you consider just how wasteful most modern lives are.

Whether that's true or not is another issue of course.

edit: An earlier (and I think better) blog on this is http://earlyretirementextreme.com/, which is now discontinued. (The author recommended reading Mr. Money Mustache instead.)

As you say, a significant fraction of the population can't. But you get to choose whether you want to be part of the smaller fraction who retire early, or whether you want to help those who are.

All you need do is not spend your entire paycheck each month. The rest will be taken care of by the (still) significant fraction of the population who do.

Retirement != not working.

It's an interesting question what it will do to the job market. I suppose it means it becomes pretty much impossible to find a joby that is both enjoyable and pays well because the retirees who don't care for the salary will drive that down.

Ideally, yes. In reality, that's rarely the case, which is why wealth distribution has become such an issue and incomes continue to rise for top earners while falling for those in the middle and bottom tiers.

This is an important point that's often hand-waved away in discussions of retirement, future earnings, and the aging population. However, productivity IS improving and its effects over the long run dwarf all these concerns.

I think productivity improvements are difficult to "feel" because we all think about productivity in terms of our personal lives day-to-day, but not in the long term integrated over the entire economy. I certainly don't feel like I'm 16% more productive than I was 10 years ago, but that's because I'm in a different job category with more experience etc. But a hypothetical worker today doing the same job I did ten years ago probably is much more effective than I was.

Here's a good overview of productivity improvements: http://www.cepr.net/index.php/blogs/cepr-blog/the-nonsense-a...

"Readers may rightly note than most workers have not see the gains of productivity growth over the last three decades, but this just highlights the importance of intra-generational distribution. The impact of battles over distribution of income within generations will dwarf the impact of battles over distribution between generation."

The return on capital obviously does depend on the supply -- more supply should mean lower interest rates, exactly as you're describing, which is exactly what you want in order to keep the level of capital investment at a useful level, neither too high nor too low.

But when your dominant interest rates are chosen by committee and defended by central bank open market actions, all that price signalling doesn't happen. Investors of all kinds get false signals about the availability of capital throughout the economy, and you get clusters of malinvestment.