Early Retirement Strategies: Plan to Stay Healthy After You Retire

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Many people today dream of being able to retire earlier than the traditional retirement age of 65. Doing so would enable them to pursue goals and activities that they never had time for while working full-time, such as volunteering, travelling and engaging in their favorite hobbies and sports activities.

However, there’s a growing body of research indicating that retiring early may not be the best thing for your physical or mental health. Of course, retiring early could also put a strain on your well-laid financial plans.

Isn’t This Counter-Intuitive?

This might seem counter-intuitive. When you retire, you’ll be free of the physical and mental stress of working 40 or more hours every week and can spend your days resting and relaxing if you choose. Surely, this should result in improved physical and mental health, it would appear.

The problem is that instead of maintaining their health in retirement, many retirees with lots of excess time on their hands do just the opposite. For example, some retirees adopt a sedentary lifestyle that consists of sleeping late and watching lots of TV. Some pick up bad habits like overeating and excess drinking. And some miss the friendships and camaraderie they enjoyed in the workplace, which can lead to isolation and loneliness.

Without careful planning, these and other factors can lead to a retirement that’s significantly less-fulfilling than what was anticipated. And in a worst-case scenario, they can even lead to early death.

What the Research Says

A recent article in The Wall Street Journal cites a study conducted last year that found that men are two percent more likely to die during the month of their 62nd birthday than they are during the previous month. While this study doesn’t provide a link between mortality and early retirement, it does point to lung cancer and chronic obstructive pulmonary disease as major factors in the increased mortality rate. Smoking and a lack of physical activity are major risk factors for these conditions, both of which may increase upon retirement.

The Netherlands offer a more concrete case study of the potential positive effects of not retiring early on individuals’ health. In 2009, the government implemented new tax policies that provided a 5 percent bonus for those who kept working at age 62, a 7 percent bonus for those who kept working at 63, and a 10 percent bonus for those who kept working at 64. As a result, more citizens between the ages of 62 and 64 kept working instead of retired early.

According to The Wall Street Journal article, researchers at the Center for Retirement Research at Boston College determined that these delayed retirements reduced the five-year mortality risk for Dutch men in their early 60s by 32 percent. The mortality risk for Dutch women was also reduced, but by a lower percentage.

Early Retirement and Cognitive Decline

Additional research indicates that retiring early can accelerate cognitive decline that can lead to mental illness, including depression and dementia. The Wall Street Journal article points to a study that determined that early retirement can significantly reduce cognitive function due to the lack of mental stimulation received in retirement compared to during the working years. Of course, there are things retirees can do to stay mentally sharp, but they usually aren’t as mentally challenging as a full-time job and career.

In addition, early retirement can shrink retirees’ social networks and thus opportunities for social interactions. For many people, the workplace represents their main source of social interactions and friendships. Without the social structure of their workplace, retirees sometimes fall victim to isolation and depression.

Finally, retiring early can be hazardous to retirement finances. Not only may you have to start tapping your retirement account early, but you’ll also have fewer years to build up your retirement savings. For example, one study cited in The Wall Street Journal article estimates that each additional year spent working increases future annual retirement income by nine percent.

Start Planning Early

None of this is meant to suggest that you shouldn’t retire early. But if you are planning an early retirement, it might be wise to think about how you can maintain your physical, mental and financial health after you retire.

Please contact us if you would like to discuss early retirement strategies in more detail.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC's ("Frontier") investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.

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