Why Retiring Can Be Dangerous (and What to Plan for Instead)

When I was 30, I met an energetic Ameriprise rep.

“When would you like to retire?” he asked me.

“Never,” I replied. I was doing exactly what I wanted to do, and couldn’t think of a single reason why I’d ever want to stop doing it.

My unexpected answer pushed him off-balance. Still, he gamely came back with, “When would you like to be able to retire?” Now that was a more interesting question, so I engaged with him.

That small difference in approaching “retirement planning” is critical. But here I’d like to take it a big step further.

In my opinion, retirement is dangerous, not something to look forward to at all. Here’s why.

Why Is Retirement Dangerous for Your Mental and Social Health?

If you’re stuck in a dead-end job, with a boss who’s a real jerk, and co-workers that are so annoying that if you never see them again it would be about 20 minutes too soon, what you should be planning and working toward isn’t to plant yourself in front of a TV for the rest of your life. What you should be striving for is finding a job that’s a better fit (or better yet, starting your own business, but that’s beyond our scope here).

So, for this discussion, let’s assume you find your job at least somewhat interesting, challenging, and fulfilling at least part of the time. Let’s also assume that even if your co-workers and boss aren’t your best friends, you enjoy chatting with them over coffee or lunch, or at the proverbial water cooler.

Now imagine suddenly losing all those social connections.

You no longer experience the sense of accomplishment that comes from completing a challenging project.

You can no longer answer the question, “So, what do you do?” with “I’m an architect/engineer/designer,” or fill in the blank with whatever else it is that you do.

When someone asks you what you do, they’re really trying to connect with what’s important in your life. It’s verbal shorthand for finding what overlap you may have in interests, habits, education, training, etc. that can start a conversation you’d both enjoy.

If your answer is “I’m retired, I watch TV all day,” or “I’m retired, I fish off the pier all day,” that conversation is likely dead on arrival (unless they happen to also be retired and watch TV or fish all day every day).

In short, retiring in the accepted sense leads to breaking most of your existing social contacts. It reduces your mental engagement with things you find challenging and worthwhile. You may have a hard time finding a reason to get out of bed every morning. This lack of stimulation and connection often leads to loneliness, depression, and a sense that you’re simply waiting to die.

As Harvard Health says, “In retirement, you expect to have more time — but to do what? Doing either too little or too much can lead to the same symptoms, such as anxiety, depression, appetite loss, memory impairment, and insomnia.”

A 2016 study published by the Institute of Economic Affairs, a London-based think-tank, found that retirement “increases the probability of suffering from clinical depression by 41 percent.” Further, doubling the number of years spent in retirement was found to “increase the probability of suffering from clinical depression by 17 percent.”

What Should You Plan for Instead of Retirement? Financial Independence

My biggest disagreement with the Financial Independence Retire Early (FIRE) crowd is that early retirement is even worse than retiring “on time,” whatever on time might mean as distinct from early. It’s why I dislike the term “retirement planning.”

Imagine for a moment that at work you only do the things you want to do, that enliven you. You never have to do things that drain you emotionally or frustrate or annoy you. Imagine you find the work you do meaningful, fulfilling, challenging, and worthwhile. As hard as it might be for you to imagine that right now, do it anyway and hold that vision in your mind and heart for a couple of minutes.

Would you ever want to stop feeling that?

I wouldn’t.

So, instead of planning for early retirement, plan for achieving that vision.

I know it isn’t easy to accomplish. Few people are fortunate enough to be paid to engage in their hobby, in the words of my first professional mentor.

But what if you didn’t need any pay? What if you could do the work of your vision as a volunteer? There’s no shortage of need for people willing and able to do important work, there’s just a shortage of funds available to pay them.

This brings us to the part I love about FIRE – financial independence. It’s when you reach a point where if you never worked for pay again, you’d be financially secure. That’s what you should plan for, instead of retirement, because then you can more easily concentrate on finding and engaging in your calling.

But what if you don’t want to have to wait for years and decades to reach that point?

In that case, save even more aggressively and live an even more frugal lifestyle, so you can reduce the size portfolio you need, reach it earlier, and possibly take a pay cut less extreme than 100% in return for doing your visionary work long before your hair grays. Remember that what you can accomplish is mostly limited by the size of your “why.”

The Bottom Line: Plan for Meaningful Work, Not a Life on the Couch

Contrast the vision of doing meaningful, fulfilling, challenging, and worthwhile work vs. years of existing as a couch potato. Not much of a contest, is it?

That’s what you should be planning for.

That’s what will motivate you enough to set aside enough money now and for years more, so you’ll be able to reach the point where you can do work you enjoy, at the level of effort you want, with no dire financial consequences for not working harder or on annoying irritating things.

And who knows… maybe if you don’t need to earn a dime from doing the work you truly want to do, you’ll find that people keep pushing money into your pockets anyway, just to make sure you keep doing it.

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