Talking about early retirement tends to be a fairly self-serving affair – we’re talking about your money and your aspirations, after all. But there’s a huge part of all of this that’s anything but self-serving. And today we’re going to talk all about the social good that can and does come along with leaving the workforce.
But first: two quick admin notes.
1. The first Tahoe meetup will be Saturday, April 28, at 1 pm at Alibi Ale Works in Truckee. And if you’re local or frequent the area, please join the Facebook group to get info on future meetups.
2. I’ll be sending out an e-newsletter next week (the first in a while!), and I’ve cleaned up the list to remove folks who didn’t open multiple prior newsletters. That means that if the newsletter went to spam for you and you therefore didn’t see it, you’ve probably been deleted. So feel free to resubscribe (or subscribe for the first time!), and then be sure to check your email for the automated verification note you’ll receive to confirm you want in.
Now back to our topic!
When I started sharing some of my posts on MarketWatch last year, which is well outside of our happy, cozy, supportive blog community bubble, I started seeing a different though not-unexpected critique:
That by not working, we are drains on society.
I wasn’t surprised that strangers on the internet would accuse us of being lazy for not wanting to work until 65, but their level of anger and vitriol went far beyond what I anticipated. We’re all that’s wrong with the world today, y’all. In case you didn’t already know.
So let’s actually dig into that argument instead of just dismissing it out of hand. Are we drains on society as early retirees, or are we contributing more to the greater good this way?
Part 1: Are We Drains on Society? (Spoiler: No.)
The “you’re a drain on society” crowd has a few key problems with what we’re doing, many of which are not factually correct, but I’m including them to be complete:
- We’re probably going to run out of money and end up on welfare, at public expense.
- We’re using community services without paying taxes.
- We’re getting subsidized health care despite having a high net worth which is obviously an abuse of the system.
- We’re selfish and lazy if we aren’t contributing to the labor force. (I won’t even get into the raging ableist bias in this one.) And also not wanting to have jobs makes us morally rotten.
Let’s go through them one by one:
We’ll end up on welfare – We along with nearly every early retiree I know care deeply about self-sufficiency. We are also resourceful, we’ve built in 5000 contingencies (only a slight exaggeration) and if we don’t get hit by bad sequences of return, then we very well may have oversaved. Plus we have most of our assets sitting untouched until we reach age 59 ½, so that we don’t accidentally spend too much in our early retirement years and screw over traditional retiree Mark and Tanja. While not true of all early or traditional retirees, we’re not even counting on Social Security!
We’re using services without paying taxes – Oh how I chortle at this one. Let’s see… we pay property taxes to the tune of $5000 a year to fund schools and local services, we pay California’s sky-high gas taxes to pay for our roads (reminder: electric vehicle owners are using the roads for free, subsidized by poorer folks), we’re still paying into Social Security and Medicare on our passive and side hustle income as well as federal and state income tax, and there’s sales tax on everything we buy. We’re also no longer claiming a mortgage interest deduction since we paid off our house, and we’ll probably never itemize again. Sure, some retirees like Jeremy focus on getting out of paying any tax whatsoever, but he and his family also live abroad and aren’t demanding much from U.S. services. Most early retirees we know are still paying taxes multiple ways.
Our health care is subsidized and that’s not cool – To me, this is the most legitimate complaint folks raise, and I understand that there is something inherently icky about high net worth people getting a tax credit to pay for their health insurance. But we subsidize all kinds of things rich people spend money on, and drawing the line here is completely arbitrary. First, though, let’s smack down any accusation that we’re in some way abusing the system to do so. We’re following the law to the very letter, and estimated a higher income than we expect to have to get a smaller subsidy (which could actually mean getting money back at tax time next year, though that’s not our goal). Folks who have a problem with this need to take it up with their lawmakers, because the law says that health care premiums are based on income, not on assets, and there’s nothing shady or manipulative about honestly reporting our expected income. But to the larger point, most of those things we subsidize for wealthy people that have little to no demonstrable social value. Wealthy investors get a huge tax break on the capital gains tax rate, which is much lower than the rates for equivalent earned income. The fact that high earners have a cap above which they no longer contribute to Social Security makes Social Security one of the most regressive taxes possible. We let all kinds of rich people write off mortgage interest on their second homes. We let billionaires write off interest on their yachts! To say that those are fine but getting more people covered by health insurance – which reduces costs for all of us, because uninsured people don’t usually pay their bills, and that puts taxpayers on the hook – is bonkers. (And, it goes without saying that we’d prefer a truly more affordable health care system so that our subsidy wasn’t necessary. We haven’t actually reformed health care, only health insurance, and all the political threat-making is only creating market chaos and driving costs up for everyone, including taxpayers.)
We’re selfish and lazy if we don’t work – I bet we can all name some people who are selfish and lazy and do work. One thing has nothing to do with the other. ;-) But I believe strongly that we can do a lot better job of being unselfish by not working, and that’s what part 2 of today’s post is all about.
Part 2: Can Retiring Early Be a Social Good? (Spoiler: Yes.)
I’m not trying to talk everyone in the world into retiring early. Some people feel fulfilled by their work or love it for other reasons, and for plenty of people, it’s just not realistic and no amount of frugaling will make it so. But especially for those who care about leaving the world in better shape than they found it, early retirement offers a long list of ways to do good.
Some of those are:
Quitting your job is essentially job creation – We all talk about wanting to leave our jobs, but I wish we’d talk more about freeing up space for someone else. I’d argue that Mark and I continuing to work two six-figure jobs with good benefits when we no longer needed more money would be the epitome of selfishness. When you have enough, you move along and give someone else a turn – and a chance to earn that paycheck. I think of quitting our jobs as the equivalent of creating two high-wage, high-skill jobs. We’re job creators, even in retirement! And so is everyone who makes space for someone else earlier than the traditional schedule says you’re supposed to. Creating jobs is clearly good for society and the workforce.
The ability to volunteer more time and with more substance – When we were both working, we volunteered some, but not as much as we wanted to. We each sat on boards of local nonprofits, but we didn’t have a ton of time to be more involved, and then we’d plug in on one-off projects for other organizations during our limited free time. Now, though, we can do so much more and truly contribute at the level we’re capable of contributing. We’re each now president of the board of the nonprofits we work with (avalanche center for Mark, and a conservation group for me), and we can take on bigger, more in-depth projects for other organizations we care about. And that’s just us! We know early retirees who are doing all kinds of cool projects across philanthropy, and who are using their career knowledge for the benefit of charitable causes. Super rad.
The freedom to be a better caregiver – Our society massively undervalues caregiving, and people who need to cut back on work or quit work altogether to care for kids or aging loved ones are massively punished for it. But when you don’t need to earn money, you can take care of kids, elderly relatives or anyone in your life who needs some special attention without penalty.
The calmness to be a kinder, more considerate person – When we were working, I was often not the best version of myself. Though I tried hard to be kind to airline and hotel employees, taxi drivers and every person I encountered whose job it was to do something that served me in some way, I know I often didn’t live up to that aspiration. It’s embarrassing how many people I must have been rude to because I “had” to be on a work call while trying to do something else. Or how many people I snapped at because air travel delays or client drama pushed me over the edge. It’s not hyperbole to say I’m a lot nicer now, and (almost) all the time, not just some of the time. If more of us were free of work stress and able to be kinder and more compassionate, society would absolutely be a better place.
Not adding to rush hour traffic – It’s the former Angeleno in me speaking, perhaps, but this is something! ;-)
What’s Your Take?
Your turn to chime in! Do you think early retirees are drains on the system in any way, or providing more social good? Does it depend on the person, or is the social good of freeing up your job for someone else enough all by itself to count? What would you add to this list of ways in which quitting your job contributes to the greater good? Let’s discuss in the comments!