Long term economic impact of mass early retirement ?

Thrugelmir

Deleted_User said:

green_man said:

It is an interesting question.

I retired at 47 (now 54) I was a higher rate tax payer and if I was still working I would have continued to be so. Since retiring I have been a non (income based)tax payer.  

So is the gov drawing in less tax due to my retirement? I don’t think so.  Basically someone else is doing my job, someone will have moved up into my role, this allows the usual job progression you get in a large company and ultimately enables them to take on more graduate level starters, without these opportunities it’s this age group than can struggle to establish their careers and become a burden on the state.

So overall I don’t think retiring early does  reduce tax take.  The only time it would be a big issue is if we have near 100% employment.

People are employed by businesses for a reason and its not so they get paid lots.  Employment is not a zero sum game. If trained and experienced people in their prime leave employment, it cuts the overall output.  And yes, it does reduce tax intake. 

Technology has removed the need for many tiers of management and supervisory levels over the past 30 years. 

barnstar2077

Mickey666 said:

green_man said:

It is an interesting question.

I retired at 47 (now 54) I was a higher rate tax payer and if I was still working I would have continued to be so. Since retiring I have been a non (income based)tax payer.  

So is the gov drawing in less tax due to my retirement? I don’t think so.  Basically someone else is doing my job, someone will have moved up into my role, this allows the usual job progression you get in a large company and ultimately enables them to take on more graduate level starters, without these opportunities it’s this age group than can struggle to establish their careers and become a burden on the state.

So overall I don’t think retiring early does  reduce tax take.  The only time it would be a big issue is if we have near 100% employment.

Agreed.  Well done on 47 btw, I only managed 49   But you're absolutely right about the job still existing (unless you were genuinely made redundant) and it was the same for me, so that job is providing the taxman with tax and NI.  In fact, the taxman is presumably even better off because as well as my old job still contributing to the taxman's coffers, so am I because I'm still economically active and spend my pension money as well as other savings and investments, all of which contributes to the economy.

So I can't really see how early retirement can be detrimental to the economy unless there is a labour shortage.

And no, I don't have any other part-time employment, nor have I ever wanted any.  I'm now far too busy pursuing all my other interests.  Indeed, I sometimes wonder how I ever found time to go to work at all! (the answer, of course, is by neglecting some of my other interests).

Retiring sub 50 is quite an achievement indeed!  Some people I have met react quite badly to others good fortune, but personally I am always impressed and inspired by other peoples accomplishments.

Nebulous2

I'm in an organisation, which is partially government funded. We have a middle-aged workforce. Recruitment is tough, we are carrying a number of vacancies that we cant fill.  Public sector pay restraint has had an impact, but we've had a decent pay rise this year and a regrading of some posts to try and improve recruitment. It has made very little difference to recruitment so far, though it is relatively early days. 

It has had some unintended consequences however.  The increased salary, with many people having preserved final salary benefits appears to be tipping the balance for some people to decide to go earlier than they might have done. The empty posts have meant the role is harder than it used to be, which is contributing to some people pulling the trigger.  The measure they took to try to help seems to be causing some significant problems. 

[Deleted User]

Thrugelmir said:

Deleted_User said:

green_man said:

It is an interesting question.

I retired at 47 (now 54) I was a higher rate tax payer and if I was still working I would have continued to be so. Since retiring I have been a non (income based)tax payer.  

So is the gov drawing in less tax due to my retirement? I don’t think so.  Basically someone else is doing my job, someone will have moved up into my role, this allows the usual job progression you get in a large company and ultimately enables them to take on more graduate level starters, without these opportunities it’s this age group than can struggle to establish their careers and become a burden on the state.

So overall I don’t think retiring early does  reduce tax take.  The only time it would be a big issue is if we have near 100% employment.

People are employed by businesses for a reason and its not so they get paid lots.  Employment is not a zero sum game. If trained and experienced people in their prime leave employment, it cuts the overall output.  And yes, it does reduce tax intake. 

Technology has removed the need for many tiers of management and supervisory levels over the past 30 years. 

The rumour that technology has reduced the need in workers has been popular since the Luddites.  I have not seen any actual evidence yet. The nature of employment changes, yes.  

Anonymous101

barnstar2077 said:

Mickey666 said:

green_man said:

It is an interesting question.

I retired at 47 (now 54) I was a higher rate tax payer and if I was still working I would have continued to be so. Since retiring I have been a non (income based)tax payer.  

So is the gov drawing in less tax due to my retirement? I don’t think so.  Basically someone else is doing my job, someone will have moved up into my role, this allows the usual job progression you get in a large company and ultimately enables them to take on more graduate level starters, without these opportunities it’s this age group than can struggle to establish their careers and become a burden on the state.

So overall I don’t think retiring early does  reduce tax take.  The only time it would be a big issue is if we have near 100% employment.

Agreed.  Well done on 47 btw, I only managed 49   But you're absolutely right about the job still existing (unless you were genuinely made redundant) and it was the same for me, so that job is providing the taxman with tax and NI.  In fact, the taxman is presumably even better off because as well as my old job still contributing to the taxman's coffers, so am I because I'm still economically active and spend my pension money as well as other savings and investments, all of which contributes to the economy.

So I can't really see how early retirement can be detrimental to the economy unless there is a labour shortage.

And no, I don't have any other part-time employment, nor have I ever wanted any.  I'm now far too busy pursuing all my other interests.  Indeed, I sometimes wonder how I ever found time to go to work at all! (the answer, of course, is by neglecting some of my other interests).

Retiring sub 50 is quite an achievement indeed!  Some people I have met react quite badly to others good fortune, but personally I am always impressed and inspired by other peoples accomplishments.

I agree - it’s very impressive to hear of people retiring in their 40’s. It often requires years of planning and living below your means. I’m sure there’s an element of good fortune to some people’s stories but most I think are more hard earned.

I’m always interested in people’s reactions when people discuss this topic too, as you say many people seem to react really negatively to this. As if they are of the opinion that you have to spend everything you earn and it is somehow insulting to them if you don’t. Or looking from a work perspective they find it insulting that you don’t live to work.

ElephantBoy57

iamnotasoldier said:

Now I know it's not ONS level data set & research, but it seemed most people were aiming to be retired early & got me wondering about if there could be ticking demographic time bomb, with substantial implications for the economy, tax revenues etc esp after the pandemic & record levels of borrowing/spending.

Surely with COVID killing 40,000 more than in a normal year, there will be fewer old people, compared to normal?

hugheskevi

Surely with COVID killing 40,000 more than in a normal year, there will be fewer old people, compared to normal?

The common actuarial assumption is that COVID simply brings forward deaths by a short period. There have been a little over 70,000 deaths higher than would be expected in 2020, compared to a bit over 600,000 deaths per year in UK.

So statistically speaking, COVID hasn't caused an especially big increase in death rate, and that increase is expected to be very temporary, leading to a below average number of deaths in the short term (the effect of bringing forward deaths by a few months ending as vaccine takes effect) before the death rate returns to trend. Within a year or two it is expected the number alive will be what it would have been had COVID not occured.

barnstar2077

Anonymous101 said:

barnstar2077 said:

Mickey666 said:

green_man said:

It is an interesting question.

I retired at 47 (now 54) I was a higher rate tax payer and if I was still working I would have continued to be so. Since retiring I have been a non (income based)tax payer.  

So is the gov drawing in less tax due to my retirement? I don’t think so.  Basically someone else is doing my job, someone will have moved up into my role, this allows the usual job progression you get in a large company and ultimately enables them to take on more graduate level starters, without these opportunities it’s this age group than can struggle to establish their careers and become a burden on the state.

So overall I don’t think retiring early does  reduce tax take.  The only time it would be a big issue is if we have near 100% employment.

Agreed.  Well done on 47 btw, I only managed 49   But you're absolutely right about the job still existing (unless you were genuinely made redundant) and it was the same for me, so that job is providing the taxman with tax and NI.  In fact, the taxman is presumably even better off because as well as my old job still contributing to the taxman's coffers, so am I because I'm still economically active and spend my pension money as well as other savings and investments, all of which contributes to the economy.

So I can't really see how early retirement can be detrimental to the economy unless there is a labour shortage.

And no, I don't have any other part-time employment, nor have I ever wanted any.  I'm now far too busy pursuing all my other interests.  Indeed, I sometimes wonder how I ever found time to go to work at all! (the answer, of course, is by neglecting some of my other interests).

Retiring sub 50 is quite an achievement indeed!  Some people I have met react quite badly to others good fortune, but personally I am always impressed and inspired by other peoples accomplishments.

I agree - it’s very impressive to hear of people retiring in their 40’s. It often requires years of planning and living below your means. I’m sure there’s an element of good fortune to some people’s stories but most I think are more hard earned.

I’m always interested in people’s reactions when people discuss this topic too, as you say many people seem to react really negatively to this. As if they are of the opinion that you have to spend everything you earn and it is somehow insulting to them if you don’t. Or looking from a work perspective they find it insulting that you don’t live to work.

You are correct, good fortunes was not the term I was looking for.  Perhaps "success" would be a better fit.  To also expand about some peoples negativity, jealousy is often a reaction I see a lot when others achievements are mentioned.  It is as if some people think that there is only so much success to go round, and that those that have achieved it are in some way reducing their own chances.  Some people is weird!

barnstar2077

ElephantBoy57 said:

iamnotasoldier said:

Now I know it's not ONS level data set & research, but it seemed most people were aiming to be retired early & got me wondering about if there could be ticking demographic time bomb, with substantial implications for the economy, tax revenues etc esp after the pandemic & record levels of borrowing/spending.

Surely with COVID killing 40,000 more than in a normal year, there will be fewer old people, compared to normal?

Perhaps it is a bit too soon for these kind of comments. 

bluenose1

Thrugelmir said:

Technology has removed the need for many tiers of management and supervisory levels over the past 30 years. 

I was reading a book recently about automation. The conclusion was that computers are now cleverer and will be able to do most things a human brain would normally be required for faster and cheaper. 
 Big corporations are investing a lot of money in this as the potential savings are massive. Whereas before workers have been able to move into other areas the reasoning  is that Intelligent computers will be able to do the vast majority of jobs. Even roles like Doctors as the algorithms can diagnose more illnesses correctly than a human Doctor. They are even training them so they are voice empathetic based on each individual patient. 

It was quite sobering and I do worry about the future of work for our kids etc.