Retirement can be defined in principle as the period when our pay, literal or imputed, no longer covers our maintenance consumption needs. Human capital
continues, even so, as long as we earn any imputed pay for helping take care of
ourselves and others. Maintenance is not investment C., and is not deducted in
finding our cash flow and its present value.
(A4.4) showed the growth truism for total capital of any individual as K,=y_+Y, +p,-D,,
recalling that y_is gift received, Y. is self-invested (unrealized) output of both factors, P is plowback from realized output, and D, is recovered decapitalization. For the young under age A, I model K,, as H alone, y_ as invested consumption provided by adults, Y gross as self-invested work, which I model as all work, and D,
as zero. Thus (A4.4) is interpreted as K,=H=C,+W,=C,+W=C +rH, ifage <=A, (A10.5) leading directly to (A10.1)
For adults I model gift received y_as zero. As physical capital acquisition is modeled as beginning at independence (age A), Y, now becomes self-invested output for both factors. Let this show as P. for physical capital. p,, Means pay plowback t, plus plowback from revenue of physical capital, as with the firm. That can show as p(k), .
But I model 7, aS Zero because | see so little of it. Rather I allow reinvestment of pay
APPENDIX A: The Argument in Notation 3/7/16 25
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