Retirement isn't for everyone but it may not be for anyone
As the Baby Boomers slowly reach retirement age, it’s likely that stories such as Carl’s will become the norm rather than the exception. The idea of retirement is undergoing a profound sea change. That change isn’t just about our progressively longer lives or our failure to rebound from the recent economic downturn. There’s a lot to be said about not retiring.
If you are interested in reading something about the history of retirement, I suggest you get my white paper on it. But suffice it to say that retirement was never meant as some sort of prize because employers loved what you did. It was a way to bring in younger (and often cheaper) workers. Retirement benefitted employers not workers. Along the way, workers have embraced retirement as a time of leisure but Mary Lloyd, who wrote an article on 5 reasons not to retire, pointed out that not retiring is better for our physical and emotional health. She could have included mental health as well.
A study out of France, which has some of the best Alzheimer’s research in the world, found that workers decreased their risk of dementia for every year they continued working. Those that worked until age 65 had a 15 percent lower risk of developing dementia than those who retired at 60. Of course you don’t have to keep working to stay cognitively healthy and socially engaged but elements of the work environment don’t just encourage those outlets, it tends to require it.
In the Nun Study, more than 600 sisters donated their brains to research. What doctors found was that there were a number of brains that appeared diseased yet those particular sisters did not show outward signs of memory loss. The Nun Study also, happily for me, correlated linguistic ability to lack of Alzheimer’s. But other religious order studies also seem to indicate that education seems to play a role as well. What scientists have concluded is that having a strong sense of purpose doesn’t stop Alzheimer’s but it does often prevent an outward expression of it.
Society places a lot of value on careers and so do individuals. Not having meaningful work often causes depression or a feeling of being empty. Of course, you can also do volunteer work to achieve much the same result. The benefit of continuing to work past some socially agreed upon age is that it lengthens the time frame you have to find a dream job, to start a business or just get out of the house. Working after 65 means that you can be pickier about the work you do so that you don’t have to work for a lousy boss.
If you’re still pulling in a paycheck, then downturns in the economy don’t hurt as badly. Your portfolio’s performance, Social Security’s viability and interest rates will be important but not dire to your ability to pay bills, have a few luxuries or travel.
You can delay taxes if you continue to work. Typically after you reach 70 and a half your traditional 401(k) distributions become required and with them so does the resulting income tax. However, if you put off retiring until after that (and you don’t own 5 percent or more of the company sponsoring the retirement plan), you can defer withdrawals until April 1 of the year after they retire.
A Harvard Business Review article provides at least one reason companies shouldn’t be so quick to push older employees out the door. Unlike the Baby Boomer generation, Generation X is not a booming generation (numbers wise). The number of 35 to 44 year individuals is declining. We’ve heard that fact as a reason why Social Security isn’t propped up nearly so well any more but a real problem may exist in finding individuals qualified to eventually run corporation because there simply won’t be enough learning to do so. Then too, every time someone retires, they take with them relationships, skills, and experience. There’s an expression that goes “every time a person dies a library burns.” Corporations today run the risk that they’ll burn too many libraries, not because their older employees are dying but because they are leaving.