Does working longer reduce the length and quality of your retirement?

This week, I read two articles that I found to be intriguing and sobering. There are implications for how you should plan to manage your career and finances, and for how you should expect your feelings of fulfillment and happiness to shift in your later years. 

What does this mean for your working years? As one article suggests, could the length of your career even reduce your lifespan and, therefore, the retirement years that you’re working hard to prepare for?

I’m writing to “you” the reader in this post, but I’m also preaching these insights to myself for my own life.

At what age will you reach peak career performance?

The Atlantic shared the solemn story of a man in his 80s, past his prime in his career, who was battling depression and a lack of self-worth. The scope of the article expanded to discuss happiness and fulfillment more generally. 

“Almost all studies of happiness over the life span show that, in wealthier countries, most people’s contentment starts to increase again in their 50s, until age 70 or so. That is where things get less predictable, however. After 70, some people stay steady in happiness; others get happier until death.”

Arthur Brooks, the author of The Atlantic article, went on to explain that giftedness and accomplishment early in life may have a negative effect on happiness later in life. “[Abundant] evidence suggests that the waning of ability in people of high accomplishment is especially brutal psychologically.” Studies found, for example, that former Olympic athletes struggled with a low sense of personal control.

I recommend reading this article in full, but here’s one last portion I want to share. “According to research by Dean Keith Simonton, a professor emeritus of psychology at UC Davis and one of the world’s leading experts on the trajectories of creative careers, success and productivity increase for the first 20 years after the inception of a career, on average. So if you start a career in earnest at 30, expect to do your best work around 50 and go into decline soon after that.”

What do you base your self-worth on? What is your expectation for your later working years? You need to be very intentional in preparing for this season of your life. 

Does working longer take a toll on your health?

The second piece that affected me this week is titled “Retire at 55 and live to 80; work till you’re 65 and die at 67. Startling new data shows how work pounds older bodies.” This is an upsetting introduction to the story, and it sadly sounds familiar — recall my interview with Myles Wakeham when he shared a similar timeline for his father’s working years and retirement.

The theory in this article, which looked at data from pension funds, is that stress from working hard and extending your career can have a severely detrimental effect on your health. The author even suggests that “ten working years could cost you twenty years of your retirement.”

Interestingly, a commenter shared a BBC article that argues against this specific pension study and questions its statistical validity. People retire at different ages for different reasons. 

What does this all mean for your financial planning?

These studies may seem inconclusive on if working longer reduces your lifespan, but adding a decade to your full-time working career will almost certainly come with more stress.

One point of application is to not count on maintaining the same level of income from your current career into your 60s.

What should you do with the knowledge that your ability to perform at a high level may start to decline? 

The path of moderation

There is a possible middle ground that Brooks offers — the distinction between fluid and crystallized intelligence. 

British psychologist Raymond Cattell described these concepts in the 1940s. “Fluid intelligence [is] the ability to reason, analyze, and solve novel problems—what we commonly think of as raw intellectual horsepower. Innovators typically have an abundance of fluid intelligence. It is highest relatively early in adulthood and diminishes starting in one’s 30s and 40s.” 

In contrast, crystallized intelligence “is the ability to use knowledge gained in the past. Think of it as possessing a vast library and understanding how to use it. It is the essence of wisdom. Because crystallized intelligence relies on an accumulating stock of knowledge, it tends to increase through one’s 40s, and does not diminish until very late in life.”

Basically, when it comes to fluid intelligence, use it while you’ve got it! But don’t base your financial and career expectations on maintaining fluid intelligence at a constant level indefinitely. Good health and fluid intelligence into your 60s and 70s is not guaranteed, so don’t delay your retirement until the late years of your life.

Do not base your self-worth on your career

When meeting someone new, people ask you “What do you do?” and you answer with your job title. In our culture, it’s easy to equate your identity with your job.

But the problem is that your job is not a a fixed, secure part of your life.

Consider the role of your faith, family, and relationships in your self-worth instead. Identify your core values and long-term goals. These are parts of your life that a corporation can’t take from you as your ability to perform changes.

A semi-retirement phase can still be a valuable approach to address the challenges discussed in both of these articles. In my view, a semi-retirement passion project centered around enjoyable work that utilizes your crystallized intelligence can help to bridge the gaps.

What are areas of interest where you can apply wisdom from your past experiences? These may be opportune areas to continue to invest in during your later years.

At what age are you planning to retire from your full-time job? What are your expectations for your work performance later in your life, and how does your retirement plan reflect those expectations?

I want to thank my friends Steve from Think Save Retire and the_frugal_millennial_ for sharing these articles this week. I’ve enjoyed the opportunity to consider them in relation to my own retirement planning.

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