Early Or Late, Retirement Requires Plan Beyond Money

The Wall Street Journal recently published an article headlined “The Case Against Early Retirement.” Because I am a true believer that you can retire early, and you can do so happily, I immediately devoured the piece.

While I disagree with the headline, the article actually does present evidence for something I’ve long preached — the critical importance during retirement of what I’ve termed “core pursuits” — hobbies and activities that one pursues with passion and regularity.

You probably spend at least some time daydreaming about your final day on the job. It’s normal to crave the freedom that retirement brings. But the WSJ piece cautions you to rethink this type of reverie.

The article’s author boldly posits that, “Most people look forward to retirement. … But like many other pleasures, it may be bad for your health. It may even kill you.”

This opening sentence rubbed me the wrong way on many levels, primarily because a big chunk of my professional life is devoted to helping folks retire early and enjoy a happy retirement. As I read on, I realized that the article actually supports the concepts I’ve identified that lead to a happy retirement — it just does so in a more alarmist way.

In my book, “You Can Retire Sooner Than You Think,” I used survey data from over a thousand retirees to pin down some key factors that make for a happy retirement.

On the financial side, there’s having at least $500,000 socked away, having no mortgage or being within five years of paying it off, and having multiple income streams. On the personal side, there are the concepts of adventure, social supports and physical health. The idea is that the financial piece will support the personal piece, so you can live a joyful retirement.

In the WSJ piece, the studies referenced indicate that once a person retires, they tend to become less happy, which leads to withdrawal from life, diminished social networks, and poor physical health.

Why? As the article points out, without the structure of traditional work, people tend to become sedentary and indulge in things that are harmful to their health, such as overeating, excessive alcohol use and smoking. Retirees can fall prey to depression and, without their daily dose of coworker interaction, become socially isolated. All of these factors can, in turn, lead to cognitive decline.

study from Cornell University and the University of Melbourne explored a statistically significant uptick in the mortality rate in men during the month they turn age 62, and concluded that these deaths were “driven largely by increases in deaths from lung cancer and chronic obstructive pulmonary disease.” The researchers attributed this phenomenon to the fact that 62 is early retirement age for Social Security, or the age at which one may be forced into an early retirement by their employer. And, once retired, men may increase the amount they smoke and/or reduce their physical activity — behaviors that contribute to these types of deaths.

Another study cited by the WSJ shows the other side of the coin. The Center for Retirement Research at Boston College analyzed data from the Netherlands from 2009, when the country introduced a government bonus program to incentivize those 62 and older to work longer. This incentive policy ended in 2013, so researchers were able to isolate the data from the five-year period (2009-2013) to explore how the policy impacted mortality. The result? The five-year mortality risk for men in their early 60s dropped by an incredible 32% while the incentive program was in effect.

In my opinion, this study demonstrates the power of a sense of purpose, of accomplishment, of progress and curiosity. These are some of the best medicines available to combat the decline that can come with aging.

As to the social piece, a study from Cornell and Syracuse University found that, post work, the size of a person’s social networks can shrink and the frequency of social interactions can contract. The data indicates that this experience is most common among women and college graduates. As the article points out, “smaller social networks and social isolation tend to reduce life satisfaction and impair physical and mental health.”

And speaking of mental health, in 2014, a French study of 500,000 retired, self-employed workers found that dementia was significantly less common among those who retired later versus earlier.

I can’t dispute any of this data; facts and numbers are what they are. But I believe there is a solution. My research shows that the answer to these potentially bleak outcomes lies in core pursuits. And there’s data on this point in the article, too.

Many studies, including a recent report from the Foster Grandparent and Senior Companion program, found that volunteering has many of the benefits of employment. Indeed, this unpaid work may even be more fulfilling. The studies found that volunteering “reduces depression and loneliness and improves life satisfaction for adults.” Now that’s what I call a great core pursuit.

And it doesn’t stop there. My research found that the happiest retirees have an average of 3.6 core pursuits, while the unhappy average only 1.9. What’s more, it doesn’t really matter what your passion is, so long as you actively pursue it. Social activities do rank high on the happiness scale, but so do rewarding, solo endeavors like gardening.

Overall, I disagree with the WSJ article — you don’t have to forgo retirement to maintain happiness. But I do appreciate how the article brought some much-needed attention to a very serious aspect of retirement planning. By exploring the seriousness of an unhappy retirement through data on critical topics like depression, cognitive decline and even mortality, the piece paves the way for people to identify how to “do things right” during their own retirement.

The common factor in all of these studies was inactivity – the opposite of adventure, the opposite of social supports, and the opposite of caring for our physical health. By filling your days doing the things you love — whether volunteering, singing in the church choir, or taking classes at a local college on a subject you’ve always been interested in — you can stave off the inertia that leads to withdrawal from life.

Of course, you want to have the money piece in place. But, as the WSJ illustrates, it’s not enough to have enough money for retirement. It’s equally important, if not more important to know how you will spend your post-career days and years.

This is true whether you plan to retire at 50 or 80.


The original AJC article appears here.

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