Yup. It’s just stupid not to AT LEAST contribute the matched or otherwise-incented amount. This is free money. As for longer-term amounts and planning, the key question is “what is the alternative use?”
Not saving so you can donate more—I think it’s confused, but I can’t really judge what’s important to you.
Not saving so you can get full consumption value in the present (vacations, fine dining, better living, etc.). Still can’t judge. I suspect you’ll regret it, but I really don’t have a good model of “best” for intertemporal transfers.
Saving, but avoiding protected “retirement” plans so you can invest in traditional taxed assets. This is very hard to justify, for the reasons you give. I’d classify as mostly dumb.
Saving/investing in non-traditional things (angel funding, crypto schemes, etc.) that you can’t do in a retirement account. I’d recommend “do both”—diversify across possible futures and timelines. I will say, when you’re young and have no dependents is the time to take more risks. In a static world, it’s also the time to start traditional investments (including long-term protected accounts).
Thus, I’d separate the aspects of this advice. “the chance that you’ll want money at retirement is large enough to be worth planning for.” will depend on specific estimates, and the foregone uses for money that “planning for” entails. “The money is less restricted than it sounds” is very important, and true.
Note that it is entirely possible to invest in almost all “non-traditional” things within a retirement account; “checkbook IRA” is a common term for a structure that enables this (though the fees can be significant and most people should definitely stick with index funds). Somewhat infamously, Peter Thiel did much of his early angel investing inside his Roth IRA, winding up with billions of dollars in tax-free gains.
Saving, but avoiding protected “retirement” plans so you can invest in traditional taxed assets. This is very hard to justify, for the reasons you give. I’d classify as mostly dumb.
This is the only one I’m trying to argue against in the post, fwiw.
Not saving so you can donate more—I think it’s confused, but I can’t really judge what’s important to you.
Why do you think it’s confused? If some others can benefit >100x more from the money compared to 60-year-old Lorenzo, and their interests are just as important, wouldn’t it be rational to reallocate money from him to them?
Not really interested in convincing anyone, and probably shouldn’t have mentioned it. I respect and honor your choices, and the fact that your time preferences and value of optionality compared to your estimate of urgent donation value don’t make sense to me is kind of irrelevant.
IMO, even if I do intend to donate some amount over some timeframe (and I do, and I do donate a fair bit concurrently), you’re PROBABLY better off investing and growing a fair bit of your assets, and donating it later (when it’s larger, and you’ll have more information about how to donate well). This doesn’t fully generalize, and there may well be causes where sooner is way better and it’s knowable with pretty good certainty now.
Yup. It’s just stupid not to AT LEAST contribute the matched or otherwise-incented amount. This is free money. As for longer-term amounts and planning, the key question is “what is the alternative use?”
Not saving so you can donate more—I think it’s confused, but I can’t really judge what’s important to you.
Not saving so you can get full consumption value in the present (vacations, fine dining, better living, etc.). Still can’t judge. I suspect you’ll regret it, but I really don’t have a good model of “best” for intertemporal transfers.
Saving, but avoiding protected “retirement” plans so you can invest in traditional taxed assets. This is very hard to justify, for the reasons you give. I’d classify as mostly dumb.
Saving/investing in non-traditional things (angel funding, crypto schemes, etc.) that you can’t do in a retirement account. I’d recommend “do both”—diversify across possible futures and timelines. I will say, when you’re young and have no dependents is the time to take more risks. In a static world, it’s also the time to start traditional investments (including long-term protected accounts).
Thus, I’d separate the aspects of this advice. “the chance that you’ll want money at retirement is large enough to be worth planning for.” will depend on specific estimates, and the foregone uses for money that “planning for” entails. “The money is less restricted than it sounds” is very important, and true.
Note that it is entirely possible to invest in almost all “non-traditional” things within a retirement account; “checkbook IRA” is a common term for a structure that enables this (though the fees can be significant and most people should definitely stick with index funds). Somewhat infamously, Peter Thiel did much of his early angel investing inside his Roth IRA, winding up with billions of dollars in tax-free gains.
This is the only one I’m trying to argue against in the post, fwiw.
Why do you think it’s confused? If some others can benefit >100x more from the money compared to 60-year-old Lorenzo, and their interests are just as important, wouldn’t it be rational to reallocate money from him to them?
Not really interested in convincing anyone, and probably shouldn’t have mentioned it. I respect and honor your choices, and the fact that your time preferences and value of optionality compared to your estimate of urgent donation value don’t make sense to me is kind of irrelevant.
IMO, even if I do intend to donate some amount over some timeframe (and I do, and I do donate a fair bit concurrently), you’re PROBABLY better off investing and growing a fair bit of your assets, and donating it later (when it’s larger, and you’ll have more information about how to donate well). This doesn’t fully generalize, and there may well be causes where sooner is way better and it’s knowable with pretty good certainty now.