Early Retirement Is Often A Big Mistake

The Wall Street Journal recently wrote an eye opener of an article which said, “Most people look forward to retirement, a reward for decades of hard work. But like many other pleasures, it may be bad for your health. It may even kill you.”

“How can that be? How can working longer be good for your health? After all, many people dream of – and plan for retiring early. Strenuous, stressful work can wear people down and damage their health. On the other hand, retirees can relax and reinvigorate themselves. They have time to follow their passions that enrich their lives.”

I recall blowing one of my few job interviews during my senior year in college. The interviewer was from the Reynolds Aluminum Company. Most of the interview was spent by his telling me about their great pension plan. I was 21 years old.

My response was that I wanted to know more about their company’s potential and business plans and my possible career path. My interest was not where I would be in 35 years or in getting a gold watch.

Apparently, that turned him off and no offer was made.

My nature is entrepreneurial and I don’t think Reynolds or other similar companies would excite me unless they focused on new opportunities in aircraft or consumer products or whatever. Unless you are a superstar, many of these large companies want you to retire young. If you are making a high salary, they think about replacing you with a number of newly minted graduates for far less money.

The Journal says, “In our rush to leave the office, we don’t realize that retirement has a downside, especially over the long term. Many retirees indulge in unhealthy behaviors. They become sedentary and watch too much television. They eat too much. They drink too much. They smoke too much. Without the purpose of fulfilling work, retirees can feel adrift and become depressed. Without the camaraderie of their co-workers, retirees risk becoming socially isolated. Without the intellectual stimulation that work can provide, retirement can accelerate cognitive decline.

The problem for researchers is measuring which is the more powerful force - the joys of a more leisurely life or the downsides. Many of these studies clearly show that health problems intensify after workers qualify for retirement and abate after policies encouraging work are introduced.

The percentage increase that men are likely to die in the month they turn 62 is 2 % more than in the previous month. When men in their 60’s delay retirement, the drop in their mortality rate is 62%. The evidence shows that retirement can accelerate cognitive decline. The mental exercise that work provides seems to keep people sharp. Learning new skills seems particularly important.”

The Journal says, “Another risk for retirees is that leaving the workforce can leave them socially isolated. Most workers interact intensively with their colleagues, providing camaraderie and social support. Although you would think differently, retirement shrinks social networks and the frequency of social interactions. The impact is especially large for women and college graduates. Smaller social networks and social isolation tend to reduce life satisfaction and impair mental health.”

If you are engaged in philanthropic activities, that is not retirement.

Charitable and unpaid work can involve levels of physical, cognitive and social engagements similar to those in paid work. It reduces depression and loneliness and improves life satisfaction. I’ve done my share. The biggest downside of retirement is financial. Social security replaces only about 40% of a typical paycheck and most of us are living longer. Many seniors still have student loans.

Obstacles to work at older ages remain. One is psychological. Many people feel they should retire by a certain age or earlier because that is the way it has always been. There are tight labor markets today and retention or hiring of older workers is a smart remedy. Discrimination against minorities, women, seniors and others is just plain dumb because you forego the chance to acquire experience and talent.

It isn’t the number of years you have put in, but the quality of those years that count.

Twenty years after graduating from Lehigh, I felt obsolete, so I completed the Owner President Program at Harvard Business School. It took portions of three years while I ran my company by phone. My marketing professor, Marty Marshall, and I had frequent debates and he asked if he could come on my board. After a few years, he suggested that I sell the company. I asked why.

He said, “Environmental issues are becoming more stringent. Competition from China will increase and my major competitors will buy my customers. He was prescient. He also asked if I was getting tired of reporting quarterly earnings though the stock was doing extremely well.”

I asked what I should do with the next phase of my life. Marty said, “Advise companies on strategy, intellectual property and staying out of the minefields.” That is what I do today. I have a number of clients and we keep each other in the learning curve. Despite the hard work, I interact with my clients and their customers, but it leaves me time to call friends, make new ones and do research to stay current. I also do consulting as an industry expert.

We all have different lives in terms of interests, means, health and ambition. I try not to be critical of others and do my best to be there if and when they need me. Some people have health issues or responsibilities which preclude work.

As a road warrior or tourist, I’ve been in almost every state and country north of the equator.

I play tennis every week, race my sailboat in warmer weather and hit the gym at least 3 times a week. I rarely drink, never smoked and am at my army weight. I ride my bike, ski and spent many years running. My wife and I have a busy social life and we enjoy our kids who have been successful in their own ways.

Last night I was in New York to speak to recent Lehigh graduates about their entrepreneurial ventures. I heard about their fears and successes and they explained what keeps them up at 3 AM. They were impressive. I think it was a win/win evening having been there, done that, myself.

Should you consider retiring or maybe diversify with a combination of hard work and fun?

Explore it with your employer. Or if you have your own business, offload some of the responsibilities and delegate. Life can be good. Don’t screw it up.

What do you think?

Ira L. Friedman