Are you more irresponsible than a teenager?

Bryan Caplan:

[T]here is a strong case that people who fail to save for their own retirement are much more irresponsible than teenage single moms.

How so? You can become a teenage single mom just by yielding to impulse once. And once you have a child, it takes two decades of hard work to make up for your youthful indiscretion. I won’t say “It could happen to anyone,” but there are a lot of responsible adults out there who are lucky that their risky teen-age behavior didn’t happen to mess up their lives.

In contrast, no one fails to save for his retirement because of a few minutes of teen-age passion. To fail to save for your retirement, you need to make the wrong decision week after week, year after year. If you’re too immature to save for your retirement in your twenties, you have a second chance in your thirties, a third chance in your forties, and so on. In short, to fail to save for your retirement, you have to be consistently irresponsible for decades.

I love the counterpoint, though it’s a bit overstated–parenthood is the result of moments of passion and months of failure to abort the parasite. Still, months pale next to decades.

Apparently sixty percent of adults in the U.S. have no retirement account nor other investment holdings. Some of them may have generous pensions coming or own homes without mortgages, but that still leaves a substantial proportion of adults as woefully irresponsible.

So set up and max out that tax advantaged retirement account (, and similar in the U.S.), before new year resolution and tax times roll around.

I occasionally hear people tout the tax advantages of paying mortgage interest, and then reasons why the advantage is easily overstated (only deductions above the standard personal deduction help, it’s spaving), but never that if paying mortgage interest means you can’t afford to max out other tax advantaged investments, the “advantage” is at best a wash. But I haven’t listened to such conversations very closely.

Thanks to Nihcole for the CNN ‘savings gap’ link.

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  1. […] Giving and asking for recommendations for worthy charitable donations seems to be popular this time of year, so I’ll do both, following my earlier unsolicited financial advice. […]

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