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Does this make sense ?

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Had an interesting discussion.


It turns our that when you ask a Cdn lottery ticket buyer what they would do if they won big, a significant number say that they would continue to work - but on a reduced time basis. The reasons cited being mental stimulation, friends, feeling of worth, etc. What do others think ?


If you work 3 days a week, you're effectively voting with your feet - & asserting that the activity (you could work for any employer, not just your current one) has a 60% (3 days in 5) societal value to you, & a 40% (2/5) monetary value. The annualized equivalent is work 7 months/yr (60%) & take 5 months (travel over winter, visit family etc.) off (essentially the 'contract' model of employment). What do others think ?


The design 'retirement' age for most pension plans is roughly 65 (Canada Pension Plan). But the reality is that it is age discriminatory & that you can't actually force retirement - you can only pay more/month if the participant retires later, & less if they retire earlier.


Here is the rub:


If a pension acts like a personal lottery would most people want to continue working either part-time, or on a 'contract' basis, for a couple of years post retirement ?


If the answer is 'yes' - you need substantially less retirement capital as you're earning what you're spending, & when you do 'retire' you'll get paid more/month because you deferred the payout. What do others think ?


The answer has some major implications;

- State social program changes (Employment Insurance, Child Care, Pensions, etc)

- Societal 'norms' change ('age culture' vs 'youth culture', long term health, child care, etc.)

- Employment practice (full-time/part-time/contract mix, attitudes, work force integration)

- Wealth Mgmt restructuring (advice vs transaction bias, product, shorter horizons)


What do people think?







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Maslov's hierarchy of needs is related to motivations to work.  Sounds like the janitor mentioned works for self-actualization.  Someone else of same age and in same role, but less savings or other-source income, might be working for shelter.


I advise (not in systematic way) next generation to focus on a pair of adjacent needs - ie food & shelter; shelter & family; family & security; security & self-actualization.  That way the transitions are easy, do not have to make a decision when to shift from goal #1 to goal #2 as it is not all-or-nothing.  But, for instance, if the concern is food & shelter, don't worry excessively about family (education), security (pension) or self-actualization (job that complies with personal priorities such as being green).


An observation of perhaps contemporary relevance, re social safety net, is that fixed-cost health care can foster entrepreneurialism.  When I had to make decision to start my own business, after 20 years working for others, having Canadian public health system made that an easier decision.  If I were to get sick, my business would fail, but would still have essential care necessary for life.  Safety net allows for sensible risk-taking.  Insurance concept.  And we need entrepreneurial thinking nowadays, to restart economy after the parasites get finished stripping out the accumulated wealth.  Ah well, I'm getting political.  Sorry for the rant.

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