Retirement needs to be redefined

Let the good times roll.
Let the good times roll.
Image: Reuters/Lucy Nicholson
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Many things would make me happier and healthier: working less, regular spa treatments, a personal trainer. Now, researchers say, I can add early retirement to that list. A new paper from the National Bureau of Economic Research reveals that retirees tend to be happier and report higher levels of health.

It may not sound like a surprising result, but it is. While a dream for most of us, retirement is often associated with isolation, faster cognitive decline, depression, and even shorter lives. A quick survey of academic departments, full of elderly professors, would suggest work can keep you feisty well into your 90s.

It’s hard to know if retirement destroys some people’s health and well-being or if they just retire when they get sick. This study, by researchers from Utah State University and George Mason University, separates health considerations by looking at retirement driven by financial reasons, using Social Security incentives and workplace pensions as statistical instruments.

After controlling for non-health driven retirement, the authors conclude retirement actually improves health and well-being. The study also did not find any meaningful relationship between retirement and health care usage.

Of course, most people won’t be able to retire early, even if it would make them happier. If people continue to live longer and in good health, they will also have to work longer in order to finance their retirement.

With that in mind, people need to consider more work opportunities in retirement. A helpful start is to stop thinking about retirement as an abrupt end to work. Modern, self-financed retirement will probably include a gradual withdrawal from work. Physically able retirees can work part-time in order to maintain some cash flow and socialization. More part-time work in retirement provides needed income, along with the health benefits and joy of less work.