Here’s an excerpt from an article by a sex worker:
I arrived in New York City from Chelyabinsk, a city right in the middle of Russia, when I was 19 years old, with $300 in my pocket. I turned 24 in March and have managed to save $200,000…
If she continues to save at this rate ($40,000 per year), she’ll have put away $1.44 million in today’s dollars by the time she is 55 years old (a standard retirement age for a government worker). If we assume that her funds are invested in securities that are actually available in the market (the current yield on TIPS is 1.06 percent real; source), she’ll still have adequate retirement funds (though likely nowhere near as large a cashflow as a retired police officer or firefighter who uses the overtime system thoughtfully).
If only we could get our politicians to exhibit this much fiscal prudence! (good first step: laws prohibiting politicians from giving public employees defined benefit pensions, unless they first get a letter from God telling them (a) how long all of their workers will live, and (b) what actual market returns will be for the next 50 years).
This is why I can’t be enthusiastic about someone like Michael Bloomberg as a presidential candidate. He kept ladling out the pension promises to New York City workers. The city won’t become insolvent as long as the following conditions hold: (1) there is no major innovation in medicine that allows retirees to live longer, (2) Wall Street continues to be the world’s money center, and (3) markets continue to boom. That’s a lot of risk to impose on future residents and taxpayers.