Quick and dirty: political donations as retirement savings?

(Warning: not really checked, I hope not insanely wrong. Let me know if you spot a mistake.)

You want to have a nice retirement, right? You're hoping to end up with a bunch of money in a retirement account, so you can use it to pay rent, do things you enjoy, maybe travel a bit.

You're also thinking about your long-term health -- if your body is in OK shape when you retire, it'll be more pleasant to live in, and last longer.

Well, outside your body and your house, how about your city, state, country, or planet? It seems like one of the political parties isn't interested in preserving functional democratic governance or the environment. Maybe some of your "retirement savings" should be in the form of political donations, to the party that seems to want to take care of the place you'll be living?

You've heard about big businesses and really really wealthy people making political donations to try to advantage themselves. Maybe this is your chance to get in on the action and make some self-interested political donations to set yourself up for the future, instead of donating because it'll help other people?

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I thought this was an interesting argument, but some quick-and-dirty calculations make me think it probably doesn't work out -- I highly doubt that political donations are competitive with normal retirement savings. (This doesn't say anything about how good they are at helping other people.)

Spoiler alert: the whole thing is driven by the tiny likelihood that your political contribution makes a difference to political outcomes.

I probably screwed something up in here -- let me know if you spot an error!

Value of saving: If you save $X today, how much is it worth at retirement age (67)? Let's assume around 6% returns in your retirement portfolio -- I think that's already adjusted downward for inflation, but I didn't check very carefully. (I'm ignoring 401(k) matching, tax stuff, and the idea that you might have maximized contributions already, and assuming you can find 6% return somehow.)

The math works out to $X * (1 + interest)^years -- basically, if you know the interest rate and how old you are, you know how much your money will multiply by retirement. Here's a table with some multipliers:

Current age	Years till retire	4%	5%	6%	7%	8%
24	43	5.4	8.1	12.3	18.3	27.4
28	39	4.6	6.7	9.7	14.0	20.1
32	35	3.9	5.5	7.7	10.7	14.8
36	31	3.4	4.5	6.1	8.1	10.9

So for example, assuming 6%, if you save $100 at age 24, you get ~$1,200 at 67. If you save the same amount at 32, you get $770 at 67. Compound interest is crazy! For the rest of this, I'm going to assume about a 7.7x multiplier (~35 years, ~6%).

Say I'm retired from 67 to 97. If I save $100 now, I'll get paid out $770 / 30 years ~= $25 / year.

So, if I save $100 now, that's worth $25/year, every year of my retirement. Pretty nice!

But that means that to be competitive, a political contribution of $100 needs to get me an expected $25 / year value for my whole retirement in order to be competitive with retirement savings. Uh oh...

Cost and value of easy political contributions: US voter turnout is low -- it's only ~50%. So, citation needed, I think the best "shovel-ready" political contribution (that doesn't require you to learn a bunch about the issues) is probably "cause someone to vote who otherwise wouldn't have." Conveniently, the party that wants good things to happen is helped by more voter turnout.

And causing someone to vote when they otherwise wouldn't have prooooobably costs $100 (that link says more like $40, but I expect more investigation to make that cost go up, not down).

So, turning out one vote needs to buy me an expected $25 / year of value during my retirement. Hm. Just to get a feel for this, let's assume you're buying an extremely powerful New Hampshire presidential vote with 1 in a million chance of deciding the president.

For voter turnout to be a good selfish retirement investment, this presidential election going well needs to be worth $25 million per year to me during retirement -- equivalent to a $750M balance at age 67! Did I screw something up in my calculations? If not, it basically makes sense when the election outcome could literally kill me / save my life, but not otherwise.

Let's imagine a more optimistic case: suppose that in a more local-level election, it costs $10 to turn out a vote, votes have a 1/1000 chance of deciding the election. These numbers look absurd to me, but that still means that this one local election going one way or another has to be worth $2500 / year to me during retirement. That's an extremely consequential local election. The presidential case looks more likely to work out -- they have nukes, and apparently we sometimes elect a crazy one.

So this calculation might possibly work out now -- I think it doesn't, but it might -- but it looks really unlikely to work out during a more normal election. You need a huge edge -- like a lot of insider knowledge about some issue or candidate, or an extremely consequential election. Or maybe there's something way better than vote-turnout, and I'm not finding it.

What about when you're older? Recall from before: $X, 35 years, 6% => $X*0.25 per year during retirement. When you're older, that 0.25 will go down, because there's less time for compound interest. How fast does that multiplier drop off?

Age	Multiplier
0	1.65
12	0.82
24	0.41
36	0.20
48	0.10
59	0.05
66	0.04

It drops off slower and slower as you age. Look at that great multiplier for a 0-year-old -- this is a great case for baby bonds!

So at e.g. age 50, I would be getting $10 / year retirement for my $100 investment. I don't think this ever drops off hard enough to make political donations a competitive retirement vehicle.

Some interesting things that came up along the way

• Who knows if "retirement" looks like this in 30 years? Why do people treat this as such stable advice, when "save for retirement" is such a new idea? E.g. 401(k)s didn't exist until the 1970s. Who knows what 2050 will look like?
• Votes now are more powerful than votes in the future will be, both because we can affect the future but they can't affect us, but also because there will be more voters in the future.
• How much is good governance worth to me, directly? Bad enough governance could kill me, but setting that aside, I think maybe it's worth between +$50k / year (guaranteed basic income, around the point of diminishing returns of happiness per dollar) and -$50k / year (by symmetry???). I think it'd be interesting to try to answer this question more rigorously, for more types of people.