Ask yourself, and ask some friends your own age, this question: If you could know when you were going to die, would you want to?
Most people answer No to this question. The uncertainty of not knowing, uncomfortable as it is, is more bearable – and perhaps a lot less spooky – than the certainty of knowing that it will all end at a stated time, and that there is nothing one can do about it.
Rather than get into the metaphysics and psychology of that question, though, I want to emphasize its practical significance. It would be so much easier to plan for, and manage, retirement if we just had that one piece of information.
The absence of an answer makes retirement planning unique. Although death is possible at any age, other stages of life have reasonably clear normal ending points. Our youth usually ends when we leave school, which is around age 18 or 22 for most of us, and a little earlier or later for some. Careers usually end in one’s late fifties or early-to-mid sixties. If we are parents, we can anticipate our children growing up and leaving home at a reasonably predictable time. Each major phase of life runs its course, and we typically have a pretty good idea when the next transition will be.
Except for the end of retirement, that is. Granted, retirement does always end more or less the same way – with our dying. So we do have that one (unpleasant) certainty. But when will it happen? If only we knew…
Most of us profess to want long life, but whether we desire it or not, we need to be prepared for it. And there are both good and bad consequences.
The good consequences of a long life are largely self-evident: the opportunity to enjoy the relative ease of retirement, to accomplish things we still want to do, to spend time with people we care about, and to watch and participate as the lives of those a generation or two younger than ourselves blossom. Meanwhile we, too, grow in experience, wisdom, and the appreciation of those around us.
But there are also dangers in long life, prominent among them:
- Financial stress: the longer we live, the harder it is to make our savings last, and the greater the chance that we end up in poverty, or dependent on others.
- Chronic ill health: though we may picture ourselves in old age as still being physically able, mentally adept, and reasonably pain-free, about half of the truly elderly are in fact seriously disabled in at least one of these ways, and if you live long enough, you are pretty likely to end up that way yourself.
- Loss of purpose: those who expect retirement to be one long party (or golf outing, or intellectual discussion, or whatever your fantasy might be), need to think about how tiresome it might become as it stretches out week after week, year after year, decade after decade – and also about how entertained you will feel as your capabilities wane, your old friends die off, and your opportunities for challenge and fun dry up.
It’s too late for most of us to “live fast, die young, and leave a beautiful corpse.” This is not a cause for regret, of course – but a cause for planning, and for taking retirement seriously. We can explore these issues more thoroughly in later postings.
But for now, let’s focus back on our main topic this week: what is your own retirement timeframe? Regardless of whether you want to live to 100 or dread the idea, the reality is that unless you are already diagnosed with a deadly illness, you simply don’t know what your timeframe is, or even what it approximately is.
We humans don’t like uncertainty, though, so we tend to suppress it. There are two common ways of doing this when it comes to life expectancy. Both are flawed.
The first is generic. We hear that “life expectancy” is in the high seventies for men, and the low eighties for women. So we tend to think that’s the timeframe we should plan around. But this contains four errors. The first error is not realizing that these numbers that get bandied about refer to life expectancy at birth. A baby born today has that life expectancy. But those of us who have already survived into our fifties or beyond now have a life expectancy that is longer – for someone of average health, usually in the mid-to-late eighties. The second error is that most of us are in either better or worse than average health, or have good habits (exercise, sensible eating) that extend our life expectancy, or bad habits (smoking, alcohol, drugs, overeating) that diminish it, or have family histories of cancer or heart disease or other conditions, or conversely of long life, that affect our own odds. Our own personal life expectancy is unique to us. The third error applies to those who have spouses or life partners: if both are reasonably healthy, the combined life expectancy – that is, the age when the second death occurs – is higher, generally around 90 or more. The fourth and biggest error, though, is thinking that we will actually die at or about our life expectancy. Life expectancy is merely an average. The reality is that, regardless of almost any other factor, we could die tomorrow, or many many years beyond our life expectancy. So don’t take “life expectancy” too seriously.
The second way many people instinctively think about their probable lifespan is based on when their parents died (or didn’t – many of us in our fifties and sixties still have one or two living parents). We may also take into account the life histories of grandparents, siblings, aunts and uncles, or other close relatives. This data is relevant, but again, we are likely to be very mistaken if we plan to live either long or short lives because others have.
Serious planning for retirement, then, has to be open-ended. We need to do it in ways that recognize that we could die either much sooner or much later than expected. And that illness or disability can also strike at any time, so that however many years of retirement we have, they could be spent mostly in good health, or mostly in poor health. We can all think of close relatives or friends who fall into each of these categories.
So as we slog and blog our way through thinking about retirement, we must always keep in mind that length and quality of life are contingencies, not givens. Whatever specific issue we are considering, whether financial or non-financial, we have to take all possible timeframes into account.
Fortunately, at our age and with our experience, we can do it – at least with a little bit of encouragement and guidance.
Chuck Yanikoski is a retirement adviser who lives and works in Harvard. For more about him, visit www.ChuckYRetirement.com.