This Urban Legend About Retirement Is True


Do you believe in urban legends?

There’s an urban legend within the retirement planning community about an alarming number of aerospace engineers dying within 2 years of retirement. Subsequent studies noticed this trend and went on to assert that, by delaying your retirement, you therefore shorten your lifespan. Of course, these studies were wrong. They made the classic mistake of trying to turn correlation into causation.

But, while the studies may have been wrong, here’s the thing about the urban legend: it’s true.

You may not know this, but my undergraduate degree is in mechanical engineering. Out of college, I worked for several years designing construction equipment, light fixtures, commercial lawn equipment, and packaging machinery. Who were my coworkers? Well, some of them had experience working at a certain aerospace firm.

The stories they told at lunch and on the shop floor were hard to believe – they even seemed to have a hard time believing them. But after hearing the same stories over and over from credible sources, I came to believe they were true. There was a fear and reverence in the way they spoke. It was as if someone had dared them to look in the mirror and say, “Candyman” five times.

In fact, the urban legend eventually grew so infamous that many aerospace engineers refused to retire. They’d come in and sleep at their desks – anything to avoid a fate they saw as inevitable. In one particularly tragic example, an engineer died less than a month after he retired.

If the timing of retirement has no causal links to life expectancy, what was going on here?

I recently stumbled across an article by Neil Pasricha, the author of The Happiness Equation, entitled, “Why Retirement Is a Flawed Concept”. The article resonated with me. Over the years, I’ve seen clients who didn’t follow his framework struggle in retirement.

It reminded me of the aerospace engineers.

Often, we focus on how to retire, but it may be just as useful to ask if you should – and what to do when you finally get there. Today, I want to summarize the ideas in Neil Pasricha’s article, make sense of this urban legend, and challenge you to think differently about retirement.

Retirement Is Made-Up

I hate to break it to you, but retirement is a made-up concept. Before 1890, it simply didn’t exist. If you could travel back in time, do you think you’d be able to explain the concept of retirement to medieval serfs or our distant hunter-gatherer ancestors? Probably not, assuming they didn’t think were a witch and burn you at the stake first.

No, Otto von Bismarck is credited for inventing the concept of retirement. To encourage older Germans to leave the workforce and make room for younger citizens who were increasingly emigrating to America, von Bismarck began implementing laws to stimulate the German economy and increase the security of workers. In 1889, his Old Age and Disability Insurance Law was passed, providing income to workers aged 70 and older.

However, not many people lived beyond 70 in those days. The average life expectancy in Germany during this time was 45 years. So, these pension payments were truly intended to help those considered to be elderly. And keep in mind, there weren’t a lot of office jobs back then.

The popularity and success of von Bismarck’s program caught on, and other countries implemented their own pension programs for older workers. Most of these programs began making payments to workers somewhere between age 65 and 70.

And thus, “retirement” was born.

There was just one problem with the system: people started living longer. Much longer.

Retirement As We Know It

Today, it’s not uncommon to plan for retirement to last 20, 25, or even 30 years. And even that doesn’t account for “early” retirement, which has become even more extreme thanks to the FI/RE movement.

Having free time to pursue our interests is a good thing. However, is the stereotypical retirement of playing golf and drinking pina coladas every day to pass the time between vacations really the life we’re working so hard to support?

While that may sound like fun for a while, it’s probably not the healthiest thing for any of us over the long run.

So, is there a better way to think about retirement?

A Reason to Get Out of Bed

The people of Okinawa live, on average, seven years longer than Americans. They tend to be healthier, happier, and skinnier than the rest of us. How do they think about retirement?

They don’t.

Okinawans don’t even have a word for retirement. The idea of stopping work entirely doesn’t even exist in their culture. Instead, they focus on having a reason to get out of bed in the morning. They have a term for this: ikigai.

A study performed at the Tohoku University Graduate School of Medicine found that participants who had an ikigai, or a reason to get out of bed every day, had better health, lower stress, and longer life expectancies.

Pasricha proposes that humans aren’t designed to retire and do nothing. Instead, we’re happiest when we pursue an ikigai composed of four things he calls the “4 S’s”:

  1. Social connection – people in our lives to fulfill our need to connect,
  2. Structure – a reason to get out of bed every morning,
  3. Stimulation – a mental challenge that keeps us growing, and
  4. Story – being part of a group trying to accomplish something bigger than ourselves.

Instead of a part of our lives filled only with leisure, Pasricha proposes we begin thinking of retirement as an encore career that engages us by adding social connection, structure, stimulation, and a story of something greater.

What I Think Happened to The Engineers

Engineers are problem solvers. They love puzzles. I think, once retired retirement, many of these aerospace engineers lost their reason to get out of bed in the morning. I suspect many of them lost all four elements of Pasricha’s retirement ikigai. While we can joke about how much social connection an engineer might need, it’s not zero. Certainly, they could find themselves suddenly without their familiar structure, stimulation, and story of something bigger at retirement. I think this is what eventually caught up with them.

I know that some of you aren’t going to have any problems leaving work on your last day and never looking back. If this is the case, my guess is that you already have many of the 4 S’s set up in your life to make the transition to retirement easier.

However, if you find enjoyment, engagement, and social connection at work, then it’s worth thinking about your retirement ikigai. What’s going to get you excited to get out of bed in the morning? In financial planning, our focus is often on determining if we can get to retirement. But thinking about what we’ll do with our time (and why) may be the key to enjoying it.

If you need help figuring out your ikigai, then click here to set up a quick, complimentary introduction call to see if Prana Wealth is a good fit. We do still have the capacity to take on new clients.

As a fee-only financial advisor in Atlanta, we can (and do) work virtually with clients all across the U.S. and we’re here to help you when you’re ready.

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