This actually makes 0 sense. Like, do you even understand what you're saying? The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it?
The stock market increasing is not the same thing as inflation. What you're saying makes sense only if you are referring to stock market valuation... strictly retiring because inflation is high makes no sense.
> Like, do you even understand what you're saying?
That comment is unnecessary and has the effect of making people feel bad.
I think the rationale is that wages are stagnant in comparison to investments (stocks) and costs (inflation). So there's decreased incentive to focus on wages as a form of income, and more incentive to focus on investments.
I've definitely felt this personally, as my income shifts towards investments, my will to work for a wage has decreased. That shift has increased because I've accured more investments, but also because investments have grown kind of ridiculously compared to my wage.
> This actually makes 0 sense. Like, do you even understand what you're saying?
It makes perfect sense if the decision to work is based on real, after-tax income. Change the comment to say "the tax rate keeps climbing so I quit working" and it would not occur to anyone to challenge it.
Once you have enough saved to generate income covering the very basics (probably somewhere around $30k/year in a LCOL area in the US) it becomes a question of whether selling a 40-hour block of your time on a weekly basis is worth it. For this individual, it is not.
If you don't understand second-order effect that is. What happens when everyone stops working, either QoL falls or prices rise. Labor force rate is at 83.8% for prime age workers. (Most of the QoL add comes from immigrant labor while most of the QoL extraction comes from high tech. So this does complicate the math) The govenment then lacking revenue extracts more from prime age workers and raises the retirement age and early withdrawal penalties.
I saw this coming from a mile away. Jobs just don't pay enough anymore, especially with inflation eating away at money faster than pay raises and housing becoming unaffordable for the majority. It's barely worth it to work. But that is what US capitalism has optimized for. Prioritizing the rich capital owners over the proletariat with tax cuts, regulation cuts, not enforcing monopoly laws, spending money on wars and bailing out the large companies etc.
Would you rather spend your savings before or after they become worthless?
>The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it?
Inflation does incentivize spending, yes. Would you rather have 100 kilos of rice today, or wait and have 99 kilos of rice tomorrow for the same price?
> Inflation does incentivize spending, yes.
All inflation incentivizes is finding an asset class that isn't devaluing. If that is what you mean by "spending" then we align. But does inflation incentivize spending money on depreciating assets? Only for fools.
??? "All" it incentivizes? Uh, no. The vast majority of people don't treat their salaries as an investment opportunity, they have to live off it. If you need to fix your water heater, you might get it fixed now while inflation is high than wait until winter (not a great example given the time scales involved, but it gets the point across). Even if you have nothing that you desperately need, if inflation is really high you might blow it on something frivolous because if you try saving it it won't be worth anything in one or two year's time.
Inflation doesn't push people towards non-devaluating assets, it pushes people to get rid of currency by any means they have available.
???
OBVIOUSLY if you absolutely HAVE to spend money because your life depends on it (ex: hot water) then you're going to be incentivized to spend it sooner rather than later in an inflationary market.
I'm referring to discretionary spending. Eating out. Buying a new laptop. Traveling. Etc.
This statement: "it pushes people to get rid of currency by any means they have available." is just flat out wrong. If you're draining your bank accounts on discretionary purchases right now, that's your mistake.
I would include retiring before you absolutely have to as "discretionary". Now is not the time to make a decision like that, when the alternative is a smarter financial decision (work, save, invest in assets that aren't devaluing at the same rate as currency).
It's not flat out wrong. If the means you have available include investing, you might do that. If they don't, you're still better off spending it on something not strictly necessary now that you're able to than saving it to have its purchasing power be eaten away by inflation.
Stock market returns will tend to exceed inflation. Salary may not. It's quite possible for inflation to make your salary shrink in real terms, making it no longer worth working if you can afford to retire.