A Cruel Choice

Why pay attention to convergence?  Maybe because it matters, as in “poorly handled it might kill you.”

People have known for some time that retirement is life-threatening.  Some professions more than others, but no one is immune.  I once had a client ask if she could collect on newly-retired husband’s life insurance if she killed him.  Seems his skill at manufacturing methods and efficiency did not translate well to managing the house and the grocery purchases.  She went to work and they flourished in their new roles.

Most people understand the idea of financial convergence.  Better to have the mortgage paid off and the kids educated before retirement.  More subtle, there should be some money around in your retirement fund that is liquid.  GICs that mature two years too late might be an issue.

Fewer people understand lifestyle and how quickly it changes when you retire.  If five weeks holidays are hard to deal with in a block, how will 52 weeks work-free suit you?  You need to know the answer to that question years before you retire.

You must have another set of friends and acquaintances.  The downtown ones that you work with, go to the gym with, have lunch with and who share your business interests will be of little use in the ‘burbs after you retire.  You will miss them.

How crucial is your work to your self-image and well-being.  If you live for your work, you will need intense hobbies and pastimes to make that loss inconsequential.  Again it may take years to develop them.

For busy people and especially for the ones that like to be busy and working toward a team goal, retirement is life-threatening.  What am I for, what can I still do, with whom can I share common goals, and how do I deal with isolation, are all real and important questions.

Many people like their work.  They have reached the “It isn’t the work I don’t like, it is the having to work, I don’t like.” phase of their life.  How do you plan to replace that loss?

It is hard enough to retire on your own terms.  Being “retired” at the wrong time can be devastating, even if the finances work.  No time to adjust.  Begin as soon as possible to build up the psychological resources you will need.  Today, no one can be sure they will be allowed to work until normal retirement age.  Have a plan B just in case.  Early forced retirement is seldom a good thing.

All of this has been studied in some detail.  One such is here.  The University of Michigan has followed 26,000 people over 50, every two years since 1992.  The general result,  retirement is not healthy for most people.  In a similar study, Susan Rohwedder at the Rand Corporation found that cognitive ability diminished.  Another researcher, economist Michael Insler, found that in respect to some serious illnesses, that retirement was good for you.  Obviously the knowledge is still developing.

Seriously though, we will all decide for ourselves.  If you are prone to physical disease like cancer or heart disease, it might be good for you.  If mental issues like loneliness, feelings of worthlessness, or physical ones like hypertension or arthritis trouble you, then maybe not choose retirement.

When preparing for retirement prepare all aspects of it not just financial pieces.  As with many things in life, there is no definitive answer for any one of us.  There remains one truth however.

Life has a cruel choice for us,  “Work or day-time television.”


Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.