Hard Facts About Mortality And Retirement

I need to give you some bad news.  You’re not going to live forever.  Sorry to be so grim, but it’s true!  Your lifespan has a finite timeframe, and as you read this the seconds of your life are ticking away.  Tick…tick…tick…

If you’re like most humans on the planet, you’ll sleep about 1/3 of the day (8 hours), work another 1/3 of the day, and the remaining 1/3 of the day can be used however you desire; although a good chunk time might be spent commuting, showering, washing dishes, and all the usual tasks that consume daily life.  Once all that busy-work is subtracted out, the time under your control is probably only about 3 hours.  That’s not a lot of time to live.

Thankfully, there is a way out.  Otto von Bismark invented retirement in 1889.  Unfortunately, retirement happens at the end of your life.  Initially, the age for retirement in Mr. Bismark’s German plan was 70 years old.    In 1889, not many people made it to 70 (about 10% from the stats I could find).  

Even today, if you follow the standard ages, there’s still not going to be a whole lot of time left for actually living


Life Expectancy

The average life expectancy of males in the United States is 76, and 81 for females.  If you don’t live in the U.S., you can look up the average life expectancy numbers for your country.  They may be slightly better (or worse) depending upon your location.

This life expectancy is just an average (of course).  Stated another way, this means half of us are going to die earlier, and the other half are going to die later.    

(Note:  This isn’t a perfect statistic.  It’s calculated using deaths of all ages, not just those that live to retirement age.  So, things like higher infant mortality could be skewing the number slightly lower.)

There is no guarantee we will even make it to a typical retirement age.   We could die at age 61, before government retirement benefits start.  Mortality increases with age, and the probability of dying really starts to increase after age 65.

Figure 2 is a line graph showing age-specific death rates for 2009.

This doesn’t sound really fantastic does it?  Not only does the standard retirement plan leave you with little life left, the chances of you being in poor health and unable to enjoy it also increases.


Early Retirement Pitfalls

So, right about now, these grim statistics probably have you thinking early retirement sounds like a pretty good idea, right?  What if it wasn’t…

Some research has found that individuals retiring early, died earlier than people taking retirement at a standard age.  Yikes!!

Don’t get too worried though – There could be a number of things going on here:

  • Those who took earlier retirements could have already been in poor health.
  • The daily activity of working keeps people healthier, thus living longer.
  • Without work, individuals who retire early have no purpose and “lose the will to live”.
  • Social factors from work (friendship, socialization, etc.) keep people alive longer.

So is early retirement a bad idea?  Most of the published research hasn’t looked at really early retirements (<50), so we can’t make a definitive statement from the research alone.  Most of the people studied in the research were already over 62.

I do think the research provides a very good warning for anyone retiring:  Give your life purpose in retirement.  Keep yourself active, healthy, and happy.  Or, suffer the consequences of dying earlier.


Even The Government Seems Confused

There’s no authoritative answer for when a person should retire.  While this freedom of choice is great, it also leads to significant confusion for individuals planning retirement.  When is the right time to retire?

The U.S government doesn’t dictate a retirement age, but they do decide when Social Security benefits can start, or 401k funds withdrawn.  Social Security dictates ‘early retirement benefits’ can be received starting at age 62, at a reduced benefit rate.  For those that want the full benefit amount, age 67 is considered the ‘normal retirement age’.  

The 401k system has entirely different ages.  Funds can be withdrawn from a 401k at age 59.5 without penalty.  At age 70.5 Required Minimum Distributions begin….essentially forcing you to take the money or face stiff penalties (and high tax brackets if you take the RMD and continue to work)

Clearly, the government isn’t going to help us figure this out!


Is It A Good Tradeoff?

Pretend for a moment that you live to be age 76 (the average for men).  A very respectable age by historical standards.  When you die at age 76 , that’s only 9 years of retirement, assuming you retire at age 67…slightly less than 12% of your life in retirement.  When you consider that you’ve already traded 33% of your working life (in exchange for money), the trade-off doesn’t seem like a very good deal.  Does it?

If you ask me, 12% is WAY too short…which made early retirement the easy choice.  Retiring at 38, I was shooting for 50% of my life in ‘retirement’.  That seems like a significant portion of my life to actually do something (other than contribute to the capitalist machine).  Endless consumption wasn’t for me.  Time was more important to me.

I may not make it to age 76, but I’m certainly going to try!


So When Should I Retire?

Before you decide if you *should* retire, you need to make certain you *can* retire.  Usually when you retire is dictated by your financial resources.  

For those retiring for more than 30 years, the 3% rule should have you covered.  If you’re financially independent like me, and can retire early without government benefit programs, then you’re golden!

Of course, not everyone is going to have the financial resources necessary for early retirement.  Those of you retiring for less than 30 years, the 4% rule will probably suffice.  If you need to combine personal savings plus government benefits, I suggest using cFireSim to model it.  I personally would look for >90% success rates.

Ultimately, it all starts with financial independence.  The basic process is relatively easy in principle.  Decidedly harder in practice.  Once you get the finances locked down, then you can think about the *should* portion of the question.

Should you retire?  How would you answer these basic questions?:

  • “What will your purpose be after you retire?  What’s going to keep you going?
  • “What’s your plan to maintain or improve your health?  Will you exercise daily?
  • “Without work, will you get sufficient socialization to keep you happy?

When asking yourself those questions, maybe you’ll find you should just keep working!  I’ve heard some people actually find fulfillment in their work….

I can’t argue with that, but many of us find work tedious and boring…merely enriching corporate executives at the cost of our lives.  Blargh!!


Tick- Tock, Tick-Tock

The seconds of your life are still ticking down.  What are you going to do about it?  Is that dinner-out, or that fancy coffee really worth an extra day of your life?  It wasn’t for me.

I say cut the employment cord.  Gain back your life and do something wonderful with it.

tick tock

[Image Credit: Flickr]

8 thoughts on “Hard Facts About Mortality And Retirement

  • March 23, 2016 at 7:31 PM

    Fascinating–particularly your points on why early retirees might have less longevity. I think you’re right that work, for most people, has become synonymous with a social safety net and sense of purpose, and it can be difficult to maintain both after retiring. I’ve heard that the retirees who enjoy the longest, happiest post-work lives are the ones who remain socially active (whether through church groups, badminton teams, whatever) and intellectually challenged (by doing daily crossword puzzles, traveling, reading, yadda yadda yadda).

    You’re right, though, that time is ultimately the most precious resource we have.

    • March 23, 2016 at 9:00 PM

      I was actually kind of shocked to find that research. One would think that early retiree’s would lead healthier lives and the lack of stress from not being chained to a desk would help longevity too. That does not seem to be the case from available research, though it is far from conclusive as I noted in the article.

  • March 25, 2016 at 10:51 AM

    Kind of a stressful article… I’m getting there, but time is not slowing down. Your 3% rule is depressing to me, I won’t be able to wait that long anymore. I’ll be pulling the plug in a year or two, unless something changes dramatically.
    I’ll be roughly at 4% by then, and we’ll see 🙂

    • March 25, 2016 at 11:39 AM

      Life is all just a guess anyway…it’s better to be mostly right than precisely wrong. Meaning, if you’re close to your goal it may be the right choice to jump in.

      Who knows…maybe the markets will be good to us and 4% will work out. In my cFireSim simulations it works 75% of the time using historical data.

      As you said, time doesn’t stop! There will be opportunities to earn more in the future. Perhaps not the ‘big bucks’ that you’re earning today, but probably enough for a modest life.

  • March 25, 2016 at 3:52 PM

    That is indeed some shocking data! However, longevity is closely related to genetics, diet, physical and mental health conditions. I’d be more interested in a study looking at how early retirement affects people’s diet and health for a more convincing conclusion. In that study, they didn’t control health condition before retirement, which apparently greatly affects longevity.

  • May 10, 2017 at 4:56 PM

    WAKE UP PEOPLE, you have been trained like DOGS. Example, you go to prison for 40 years and are released. In prison you are told what to do every day for your time in prison, when to get up , eat, work, relax and go to sleep. When you are released, you are on your own to think for yourself. Many prisoners are out for a few months and are so disoriented that they commit another crime to go back to a structured lifestyle in prison with old friends.
    Now compare this to a work environment, over the 40 year period. The retiree is good for maybe 6 months and is boarded, missing his job, paycheck and friends. I think it comes down to interests outside of work, hobbies, travel and connection to your spouse. Also, WILL I HAVE ENOUGH MONEY???
    Worry will kill you as quick as any disease.

  • October 14, 2019 at 2:25 PM

    My plan is to “come alive” after I retire. I do not like working, and do not really socialize with work people. I have many interests outside of work. I plan to spend more time exercising, and meet with friends. I have 2.5 years before I reach 62 and I can not wait!


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