Among people in their middle age, it is not unusual to think of think of retirement as a goal. Retirement, is seen as a utopia spent on the sands of tropical beaches, vacationing in Paris sipping coffee, taking a gondola in Venice and not worrying about a thing. The popular culture also promotes this. Some business leaders while selling their books use 'do you want an early retirement, then read this' slogan to sell their products. Early retirement or retirement itself is seen as the escape from the rut of work, so we can wander off to this heavenly land to pursue our dreams without having to worry about reporting to someone. The truth is far from this Utopian dream.
One might say, that is a very morbid deduction based on few personal and popular anecdotal evidence. So lets dig into to studies that are done on this topic. The first study I read several years ago was this Greek EPIC Study (EPIC stands for European Prospective Investigation of Cancer and not some study the size of legendary Iliad and Odyssey). Please see below the findings of the study.
In comparison to subjects still employed, retirees had a 51% increase in all-cause mortality (95% confidence interval: 16, 98). Among retirees, a 5-year increase in age at retirement was associated with a 10% decrease in mortality (95% confidence interval: 4, 15).
An earlier study done on employees of Shell Oil Company and published in 2005 concludes
Is it possible that there is a study that has the completely opposite findings? You bet there is. A 2009 study in Germany concludes this
Money - Most people are likely to postpone planning for retirement, leave alone planning ones financial future for the age of retirement. But financial planning is important as it effects everything. It effects your heath, emotional well being, security and at times family ties. Even if you have a pension from work and social security from the federal government, a considerable financial backup may be necessary as the pension may not be sufficient to cover your expenses. If you do not have a pension plan from work then it is even more important. At the minimum, one should make full contributions to your IRA, 401K, 403b etc which are tax deferred . At $16,500/year59½ years, and the life expectancy is 78½. One needs to have a financial reserve to last once post retirement lifetime of about 19 year. The retirement calculator from AARP estimated that I need about $10,000,000 for a good retired life. That's a lot of zeros in there. We are all not millionaires but these calculators want us to have millions. Let's just you are in your mid 30s like me. You have about 25-30 years before you can retire at 60. So in the next 25 years or so you need to accumulate about $10 million in your retirement savings account(s). The calculator also told me that my current savings of 25% will put me $2.5 million below my target required for retirement and that I need to ramp up my savings to either 35% or reduce my lifestyle.
Health - Too much ink has been spilled on this topic. We all know that we need to exercise; exercise physically and exercise restraint on what we eat. And of course the genetic pool we are gifted by birth will have us disposed to certain kinds of diseases and illnesses. The latter part is out of our control and the first part is somewhat within our control. It is hard to find time to exercise with all the commitments to human and non-human entities in our lives. The human entities are our commitments to our family, kids and friends. The non-human are our work, chores, TV, movies and Internet etc. The second part is the diet. I personally struggle with it between bouts of indulgence and self induced diet control. Whatever it is, the key is to listen to your gut. If you pants don't fit as they used it, don't just go and buy a bigger size. It is easier to get from 34 back to 32 than from 42 to 32. Just saying. So whether you exercise or not and diet or not, one must thing to do is have an annual wellness check by your physician. I think we owe it ourselves to spare a few hours in a year for our well-being. Most often, people neglect going to doctors assuming minor irregularities are routine issues only to find that their health has reached a point requiring lifelong medications with considerable side-effects. Don't let that happen to you.
Company - Nobody argues the fact that we humans cherish the company of family and friends. In fact human contact is necessary to stay healthy and sane. In a newyorker article titled Hellhole, Atul Gawande puts a good argument stating that solitary confinement of prison inmates is torture. Retirees experience loneliness, though I cannot claim it to be as severe a torture. We all have friends and company as kids and in school. We lose some or most of them on moving to the workspace. We spend the most productive periods of our lives and the most productive periods of our week days at work and our social networks are forged at work. When we retire, we may lose these social networks for good. The loneliness from loss of company and the enormous amount of free time that one has on retirement can cause a decreased sense of self worth. Some retirees have the luck of being able to live with their family and kids on retirement. If this current generation is any indication, our kids are more likely to live far away from us and we many not be as lucky to live with them. Consider yourself lucky if you manage to live within a driving distance of them. I know few folks who say "I take good care of my kids so they can take care of me during my old age". Besides being very calculative, these folks need a reality check. To me that thought is an insane burden of expectation on the kids. The only alternative, it appears to be, is to follow your mom's advice - "make friends and be nice to your friends'. By this I don't mean to add hundreds of friends on your Facebook. I know some folks do and it is a popularity contest for them. And lets face it, most of us do not have the charm to woo people and have company whenever we like and wherever we go. I mean have friends that are meaningful. Friends that you can share your ups and down, seek advice and offer advice. These friends can be from your family. Even if you have single handful of them, that is more than good to have a happy retired life.
So, I wish you all a wealthy, healthy and joyous retired life in the company of good friends and family.
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Here are more links of interest---
Retiring early at 55 or 60 was not associated with better survival than retiring at 65 in a cohort of past employees of the petrochemical industry. Mortality was higher in employees who retired at 55 than in those who continued working.These studies put my thoughts of early retirement to pause. Both these studies portray a very scary picture for early retirement. But could it be that correlation does not necessarily mean causation. The Shell Oil study adds this caveat - We could not assess directly the issue of whether employees who retired at a younger age were in poorer health than those who retired later as data were not available to identify the type of retirement for each employee. The EPIC study finding suggests that if you want to live longer and healthy, you are better off working longer and retiring later. Though the authors claim to have addressed the matter of 'whether morbidity causes early retirement or early retirement is associated with excess morbidity and subsequent mortality' in their study to conclude that early retirement causes early mortality. However several socioeconomic, occupational and access to health care conditions of the study cohorts in Greece, that were not controlled for, could have influenced the study's conclusion. A detailed response to the study, found here, explains these uncontrolled for conditions in detail.
Is it possible that there is a study that has the completely opposite findings? You bet there is. A 2009 study in Germany concludes this
The youngest male and female pensioners who left the labor market between the ages of 51 and 55 because of their reduced earning capacity faced the highest mortality risk. But healthy people who retire early do not experience shorter long-term survival than those who retire late....early retirement in fact lowers mortality risks significantly by 12% for men and by 23% for women....First of all, individuals with poor health and lower survival chances are filtered out of the labor market. However, healthy pensioners may be protected during retirement. For the former, early retirement is a necessity, for the latter it is an asset. Pension reformers should take health differentials into consideration when cutting back pension programs and increasing retirement age.So where does this bridge to nowhere lead us. Not too far. One thing for sure is that retirement is something that requires some planning. Here are few things that I think are important at the time of retirement - Money, Health and Company. None of these are outlandish. I think we can plan for some of these facets though we cannot completely control them.
Money - Most people are likely to postpone planning for retirement, leave alone planning ones financial future for the age of retirement. But financial planning is important as it effects everything. It effects your heath, emotional well being, security and at times family ties. Even if you have a pension from work and social security from the federal government, a considerable financial backup may be necessary as the pension may not be sufficient to cover your expenses. If you do not have a pension plan from work then it is even more important. At the minimum, one should make full contributions to your IRA, 401K, 403b etc which are tax deferred . At $16,500/year59½ years, and the life expectancy is 78½. One needs to have a financial reserve to last once post retirement lifetime of about 19 year. The retirement calculator from AARP estimated that I need about $10,000,000 for a good retired life. That's a lot of zeros in there. We are all not millionaires but these calculators want us to have millions. Let's just you are in your mid 30s like me. You have about 25-30 years before you can retire at 60. So in the next 25 years or so you need to accumulate about $10 million in your retirement savings account(s). The calculator also told me that my current savings of 25% will put me $2.5 million below my target required for retirement and that I need to ramp up my savings to either 35% or reduce my lifestyle.
Health - Too much ink has been spilled on this topic. We all know that we need to exercise; exercise physically and exercise restraint on what we eat. And of course the genetic pool we are gifted by birth will have us disposed to certain kinds of diseases and illnesses. The latter part is out of our control and the first part is somewhat within our control. It is hard to find time to exercise with all the commitments to human and non-human entities in our lives. The human entities are our commitments to our family, kids and friends. The non-human are our work, chores, TV, movies and Internet etc. The second part is the diet. I personally struggle with it between bouts of indulgence and self induced diet control. Whatever it is, the key is to listen to your gut. If you pants don't fit as they used it, don't just go and buy a bigger size. It is easier to get from 34 back to 32 than from 42 to 32. Just saying. So whether you exercise or not and diet or not, one must thing to do is have an annual wellness check by your physician. I think we owe it ourselves to spare a few hours in a year for our well-being. Most often, people neglect going to doctors assuming minor irregularities are routine issues only to find that their health has reached a point requiring lifelong medications with considerable side-effects. Don't let that happen to you.
Company - Nobody argues the fact that we humans cherish the company of family and friends. In fact human contact is necessary to stay healthy and sane. In a newyorker article titled Hellhole, Atul Gawande puts a good argument stating that solitary confinement of prison inmates is torture. Retirees experience loneliness, though I cannot claim it to be as severe a torture. We all have friends and company as kids and in school. We lose some or most of them on moving to the workspace. We spend the most productive periods of our lives and the most productive periods of our week days at work and our social networks are forged at work. When we retire, we may lose these social networks for good. The loneliness from loss of company and the enormous amount of free time that one has on retirement can cause a decreased sense of self worth. Some retirees have the luck of being able to live with their family and kids on retirement. If this current generation is any indication, our kids are more likely to live far away from us and we many not be as lucky to live with them. Consider yourself lucky if you manage to live within a driving distance of them. I know few folks who say "I take good care of my kids so they can take care of me during my old age". Besides being very calculative, these folks need a reality check. To me that thought is an insane burden of expectation on the kids. The only alternative, it appears to be, is to follow your mom's advice - "make friends and be nice to your friends'. By this I don't mean to add hundreds of friends on your Facebook. I know some folks do and it is a popularity contest for them. And lets face it, most of us do not have the charm to woo people and have company whenever we like and wherever we go. I mean have friends that are meaningful. Friends that you can share your ups and down, seek advice and offer advice. These friends can be from your family. Even if you have single handful of them, that is more than good to have a happy retired life.
So, I wish you all a wealthy, healthy and joyous retired life in the company of good friends and family.
---------------------------------------------------------------------------------------------------------
Here are more links of interest---
Greek EPIC Study - Age at Retirement and Mortality in a General Population Sample
Shell Oil Company Study - Age at retirement and long term survival of an industrial population: prospective cohort study.
German Study - Time to retire--time to die? A prospective cohort study of the effects of early retirement on long-term survival.
Joe Paterno
