Ah, retirement. Regardless of what surveys say about how most Americans are satisfied in their jobs, it’s a good bet that many would ditch the work-a-day world in a nanosecond if they won the lottery.
Since that’s not going to happen, it’s on to Plan B. And as a recent paper makes clear, differentiating between the desired age and the optimal age to retire involves understanding a broad array of factors, many of which don’t even involve money.
It’s that holistic approach that makes “Twenty-Five Factors Influencing the Choice of the Client’s Optimal Retirement Age” a valuable addition to the cache of literature on the subject. Though the paper, co-authored by Widener University professor Kenn Tacchino and his wife Patricia, was penned for financial professionals, it can be equally helpful for individuals.
Published by Benefits Quarterly, the report is accessible and systematic in presenting the dual roles of necessity and choice in knowing when to opt out of the workforce. You can access another summary here. It makes clear that having the financial wherewithal to retire is a necessary but insufficient reason for doing so.
For example, although most people “value the retirement lifestyle, they may not realize what they are losing by ending the work lifestyle,” write the Tacchinos. That loss includes what leaving the workforce will do to their “sense of self.” Potential retirees need to “imagine the retirement lifestyle despite the fact they have no comparable life experiences to mimic.” As such, someone contemplating retirement is not so different from a college student choosing a professional career on the basis of … what?
Overwhelmed by the financial and psychological issues that impact such a life-altering decision, many people erroneously default to age-related “anchor points”: 60 is a nice round number, 62 is when Social Security benefits become available, 65 is when eligibility for Medicare starts. But the study notes that “backing into the decision based on anchor points … may or may not fully define or capture [the prospective retirees’] situation.”
“Twenty-Five Factors Influencing the Choice of the Client’s Optimal Retirement Age” provides valuable food for thought regarding one of the most profound decisions you’ll ever have to make. Because for many people, there really is no sweetness in doing nothing.