I don't expect to retire - I'm going to work until I die

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.

Postby Shakespeare » 21 Oct 2005 22:55

It's entirely possible that poor health was the motivating factor for early retirement (or, at least, one of several factors).
With apologies to Georges, anecdotal "evidence" [yes, I know] suggests that many people - particularly males - live for their work, and die shortly after retirement. Most of us know of several such individuals.

(I'm sure there are studies on that, but it's far outside my field.)
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Postby dakota » 22 Oct 2005 10:39

It's entirely possible that poor health was the motivating factor for early retirement (or, at least, one of several factors).


Health was the determining factor in my retirement but only by one year as I was going to retire the following year anyway. I loved my job but never had the inclination to work the rest of my life. :lol:
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Postby Brix » 22 Oct 2005 11:58

Early Retirement May Mean Earlier Death


Hey presto! A thorny actuarial problem our political [s]masters[/s]leaders are currently fretting about magically resolves itself. :wink:
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Postby gyrfalcon » 22 Oct 2005 13:52

FWIW, (nothing), I had concluded yrs ago that retirement at any age is a major survival risk for *men* & I had also decided (oh so predictably) that this would not be the case for myself.

Why ? Simple. I'm healthy & have many interests that have nothing to do with my former employment. Many don't = Danger.

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Postby Shakespeare » 10 Jan 2006 10:24

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Postby birdinhand » 12 Jan 2006 15:36

A very interesting thread. I will add in my two bits.

I retired about 15 months ago at age 58 with an income of about 60 percent of my 2004 income (no CPP or OAS yet). I am one of the fortunate ones with a DB pension that is indexed to inflation. My standard of living is much the same as before except that I travelled for about 75 days through six countries last year.

Although, I had not planned on retiring that soon, I was sort of forced into retiring as a result of restructuring of my position. At that time, I came across rthe following article which helped me make up my mind.

Some of you may have seen it, it may be new for others. It did help me make up my mind to retire and not look for another job and retire. I constantly get asked the question, "Are you not bored, how do you keep yourself busy?

The reality is that between travel, gym, investments and volunteer work, I am busier and seem to have less time than I was during my working years. I do not miss thre rush hour traffic.

In any here is the article that I had mentioned.

Optimum Strategies for Creativity and Longevity

By Sing Lin, Ph.D. 林星雄 博士

Member of National Council of
Chinese Institute of Engineers – USA/Greater New York Chapter, and
Member of Board of Director of
National Taiwan University Alumni Association – Greater New York
March 2002

1. Most Creative Years in the Life

The Nobel Laureate, Dr. Leo Esaki, delivered the distinguished lecture entitled "Innovation and Evolution: Reflections on a Life in Research" in the University of Texas at Dallas in the afternoon of Feb. 23, 2002 during the 2002 US National Engineering Week. In this lecture, Dr. Esaki indicated that most of the great discoveries and innovations by the Nobel Laureates occurred at the average age of 32 even though the Nobel prizes were awarded 10 or 20 years afterwards. Furthermore, Dr. Esaki indicated that the peak creativity of most scientists occurred around the age range of 20 to 30 years. As one gets older, the experience increases but the creativity decreases steadily with the age.

It is, therefore, very important to stimulate, encourage and cultivate many young people to get interested in science and engineering at their young age and to provide the optimal R&D environment for these very powerful young scientists and engineers to unleash their very strong creativities during their most precious and creative years around the age of 32.

2. Longevity Vs. Retirement Age

The pension funds in many large corporations (e.g., Boeing, Lockheed Martin, AT&T, Lucent Technologies, etc.) have been “Over Funded” because many “late retirees” who keep-on working into their old age and retire late after the age of 65 tend to die within two years after their retirements. In other words, many of these late retirees do not live long enough to collect all their fair shares of pension money such that they leave a lot of extra-unused money in the pension funds resulting in the over-funded pension funds.

Dr. Ephrem (Siao Chung) Cheng provided the important results in the following Table 1 and the associated chart from an actuarial study of life span vs. age at retirement. The study was based on the number of pension checks sent to retirees of Boeing Aerospace.




Table 1 – Actuarial Study of life span vs. age at retirement.

Age at Retirement Average Age At Death
49.9 86
51.2 85.3
52.5 84.6
53.8 83.9
55.1 83.2
56.4 82.5
57.2 81.4
58.3 80
59.2 78.5
60.1 76.8
61 74.5
62.1 71.8
63.1 69.3
64.1 67.9
65.2 66.8





Table 1 and the chart indicate that for people retired at the age of 50, their average life span is 86; whereas for people retired at the age of 65, their average life span is only 66.8. An important conclusion from this study is that for every year one works beyond age 55, one loses 2 years of life span on average.

The Boeing experience is that employees retiring at age of 65 receive pension checks for only 18 months, on average, prior to death. Similarly, the Lockheed experience is that employees retiring at age of 65 receive pension checks for only 17 months, on average, prior to death. Dr. David T. Chai indicated that the Bell Labs experience is similar to those of Boeing and Lockheed based on the casual observation from the Newsletters of Bell Lab retirees. A retiree from Ford Motor told Dr. Paul Tien-Lin Ho that the experience from Ford Motor is also similar to those in Boeing and Lockheed.

The statistics shown in the Pre-Retirement Seminar in Telcordia (Bellcore) indicates that the average age that Telcordia (Bellcore) employees start retirement is 57. Therefore, people who retire at the age of 65 or older are minority as compared to the number of early retirees.

The hard-working late retirees probably put too much stress on their aging body-and-mind such that they are so stressed out to develop various serious health problems that forced them to quit and retire. With such long-term stress-induced serious health problems, they die within two years after they quit and retire.

On the other hand, people who take early retirements at the age of 55 tend to live long and well into their 80s and beyond. These earlier retirees probably are either wealthier or more able to plan and manage their various aspects of their life, health and career well such that they can afford to retire early and comfortably.

These early retirees are not really idling after their early retirements to get old. They still continue doing some work. But they do the work on the part-time basis at a more leisure pace so that they do not get too stressed out. Furthermore, they have the luxury to pick and chose the types of part-time work of real interest to them so that they can enjoy and love doing that “fun” work at a more leisure pace.

The late retirees are small in number, tend to die quickly after retirement and disappear from the population of old people beyond the age of 70. Late retirees, therefore, have very little weight on the statistical average life expectancy of the population of “old people” dominated by the early retirees.

Several years ago, a Japanese friend of mine told me that most Japanese people retire at the age of 60 or earlier. This may be one of the factors contributing to the long average life span of Japanese people.

3. Changing Trend of US Pension Plans

The traditional pension plans of many major US companies used to place a lot of value on the experience of long-term older employees by increasing the pension money rapidly and nonlinearly for long-term employees as their age + service year increases beyond the threshold of the rule of 75. Most long-term employees cross this critical threshold at about the age of 55. On the other hand, the early retirees incur very heavy penalty in pension and in other associated retiree benefits (e.g., employer paid medical insurance, employer paid life insurance, death benefits for family, etc.) when they retire before they meet the rule of 75.

However, in recent few years, many large US corporations are switching from their traditional retirement pension plans to the new portable Cash Balance Plans. The new portable cash balance plans are much more favorable to the younger employees but are very unfavorable to the long-term older employees. Some older long-term employees found that when their employers switched from the traditional pension plans to the cash balance plan, their pensions were reduced by 30% to 50%.

One of the implications of this trend towards the new cash balance plan is that the US corporations are now placing more value on the higher creativity and adaptability of younger employees and less value on the experience of the older employees. This is consistent with the accelerating pace of innovations and technology advances. The creative and dynamic younger employees are better positioned, than the older employees do, to keep up with the faster pace of technology advances.

4. Conclusion and Recommendations

The most precious, creative and innovative period in your life is the 10-year period around the age of 32. Plan your career path to use this precious 10-year period wisely and effectively to produce your greatest achievements in your life.

The pace of innovations and technology advances is getting faster and faster and is forcing everybody to compete fiercely at the Internet speed on the information super-highways. The highly productive and highly efficient workplace in USA is a pressure-cooker and a high-speed battleground for highly creative and dynamic young people to compete and to flourish.

However, when you get older, you should plan your career path and financial matter so that you can retire comfortably at the age of 55 or earlier to enjoy your long, happy and leisure retirement life into your golden age of 80s and beyond. In retirement, you can still enjoy some fun work of great interest to you and of great values to the society and the community, but at a part-time leisure pace on your own term.

On the other hand, if you are not able to get out of the pressure-cooker or the high-speed battleground at the age of 55 and “have” to keep on working very hard until the age of 65 or older before your retirement, then you probably will die within 18 months of retirement. By working very hard in the pressure cooker for 10 more years beyond the age of 55, you give up at least 20 years of your life span on average.






Need less to say, I highly recommend, "retirement" for those waffeling about it. It is your decision and not one dictated by your "Financial Planner"

Cheers
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Postby twa2w » 12 Jan 2006 23:09

Recent article in, I believe, the Post stated exactly the opposite of this in terms of life expectancy. Their stats showed retire early die early.

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Postby steves » 13 Jan 2006 00:20

I agree. This seems to be a badly contrived study. Someone has an agenda here.

I can see now how distorted facts and findings can get into the 'I read a report that said.......xxxxxxx' mill.

These stats seem completely off the wall, IMHO.
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Postby brucecohen » 13 Jan 2006 12:56

There's a possible explanation for the apparent discrepancy in the stats cited by birdinhand and those posted earlier that correlated early retirement to early death.

I don't remember if the the early retire/early death stats recognized that many people are forced to retire early because of poor health. bird's stats resulted from a study of Boeing retirees. Boeing had (has?) a highly skilled, highly paid workforce. There is a correlation between socioeconomic status and health. The Boeing retirees might have been much healthier than the sample group in the other study.

There's also the issue of social engagement. Those who voluntarily retire early and have pursuits that keep them active, especially mentally active, are likely to live longer than those forced into retirement who are just couch potatoes.
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Postby birdinhand » 13 Jan 2006 21:48

The variance in interpretation of the data in different studies to different conclusions is not unusual.

With respect to the "Sing " study quoted in my earlier post, there has been some rationalization of his conclusions as follows:

Typically a person who will work to age 65 or later is likely a workaholic, loves his job and likely has no other interests outside work or hobbies. In my personal experience, I have come across few people like that. When these people are forced to retire at age 65 (that would be the case in "Sing " study) they find a big void in their life and staying at home becomes a challenge for them. They feel useless and are essentially counting their days. This, however, does not apply to every body retiring ast age 65.

On the other hand a person retiring early say at age 50 or 55 has likely planned for retirement, both financially as well as emotionally. These individuals likely have other interests and hobbies, which they may turn into successful part time careers or ventures, or may enjoy contributing to the community through volunteer work. Such individuals are likely to be physically and mentally more active and therefore may live longeer.

There are really no hard or fast rules and probably there are exceptions and a counterstudy to every published study. I know individuals who are working full time at age 80 andsome of them are extremly affluent. Yet I also know individuals who are retired at age 50 with very modest pensions and really enjoying their retirements.

Each individual case is different depending one's family committments, health and financial circumstances.

Unfortunately, the financial industry tends to scare people indicating outrageous figures and percentages needed to retire comfortably.
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Postby steves » 13 Jan 2006 22:15

Look, someone posts a table titled Actuarial Study which says that on average someone who retires at age 65 lives only another 1.5 years and people take this as gospel.

This is absolute BS. My take would be that the individual who retires at 50 is probably ill and unable to work. I would expect that his le would be less.

In fact, I am going to publish my own Actuarial Study which shows the exact reverse of this 'study'.
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Postby Brix » 13 Jan 2006 23:25

Funny that the recent British study is considered new and surprising. A US government study published back in 2001 concluded much the same about the correlation of early retirement and increased mortality.
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Postby Bylo Selhi » 14 Jan 2006 09:52

The people who work into their 60s and 70s don't actually live longer. It's just that, to them, it feels longer ;)
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Postby dakota » 14 Jan 2006 10:06

Bylo Selhi wrote:The people who work into their 60s and 70s don't actually live longer. It's just that, to them, it feels longer ;)


In my dad's case it is no illusion, retired at 65 and wil be 99 come April.."God willing " he says :)
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Postby blonde » 14 Jan 2006 16:25

For 10%ers, with Mega-Money, retirement is designed to have fun.

Birthdays are a very good thing.

More birthdays = more time to have fun.

Those who plan to work til they die will do exactly that...
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Postby dakota » 18 Feb 2006 10:48

Rethinking our fears for retirement
Feb. 18, 2006. 01:00 AM


What are Canadians really worried about when it comes to retirement? Inflation or out of pocket health-care costs? Not enough retirement income or outliving their savings?

A recent survey for Fidelity Investments sheds some surprising light on what keeps us up at night.

The survey, conducted by Strategic Counsel in late August, involved asking 1,380 Canadians age 45 and older what they consider the biggest threats to nest eggs. (The margin of error is plus or minus 3.1 percentage points 19 times out of 20.) The answers were divided into two categories, retired and non-retired.


http://www.thestar.com/NASApp/cs/Conten ... 9048863851

A lot of people seem to prefer worrying about retirement rather than enjoying it. :roll:
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Postby Shakespeare » 09 Mar 2006 14:02

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It's Only Easy When It Doesn't Seem Important

Postby hocus » 10 Mar 2006 07:33

The number of people that I speak to who are in the "boomer" generation and have less than $100,000.00 in their RRSP is utterly amazing.

The key is making a plan, any plan. You can't improve your plan over time if you don't first put in place some sort of plan.

A lot of people are intimidated by that first step. And the longer they go without doing so, the more intimidating it becomes. The numbers get worse over time.

It would be easy for a 25-year-old to make a plan. But it doesn't seem necessary.

It's necessary for a 45-year-old. But at that point it's hard a hard task to face up to.

Rob
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Postby Matador » 12 Mar 2006 10:55

I plan on retiring at age 56-57 and my goal is $50K of retirement income.

Why $50K you ask? Well with hugh range of numbers being suggested for nesteggs ranging from between $300K - $2M we decided to live off one of the two incomes and save the rest. That income is ~ $50K so after retiremnt when expenses decrease I'm sure it will be adequate.

I'm 54, and will need ~$800K, assuming 6% investment gain, 2.5% inflation, and death at ~91.

The portfolio only starts to seriously decline mainly due to inflation after age 80 so there is an excellent chance the government will receive estate tax on the whole $800K nestegg.
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Postby northbeach » 12 Mar 2006 11:14

Are you saying you will be drawing $50K based on an $800,000 nest egg.

What investment return do you expect. Have you factored in CPP and OAS that will kick in a few years into your early retirement.

If greater than 4% than some comments made at this web site claim you may run out of money.
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Postby Norbert Schlenker » 12 Mar 2006 11:25

Matador, I think you are really overestimating your chances of success. Try downloading one of Gummy's Monte Carlo spreadsheets (e.g. from http://www.gummy-stuff.org/MC-X.htm ) and playing around.

You must be presuming either that your $50k annual withdrawal isn't indexed for inflation or that there is no variation in the returns available in the market, probably both. Neither is a good assumption in my opinion.
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Postby steves » 12 Mar 2006 11:25

You will need 1.1M if you plan a 'die-broke at 91' strategy and 1.4M for a 'die-broke at 100' strategy. Living in Ontario.

Mind you, maybe $800K would be about right.... can you imagine shovelling snow 5 months of the year when you are 91?
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Postby steves » 12 Mar 2006 11:53

I should have added that this assumes all your capital is RSP in nature. If you are sitting on a sizeable chunk of nonreg/equity, then your 800K might well be correct.
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Postby WishingWealth » 12 Mar 2006 14:42

Was just going through some/many of the links provided here, my own bookmarks on financial planning etc...
The last one I read (Clements on debt), made me realize how this press is preaching to the converted.

I wonder how many people with debt problems will be reading him or the many columnists like him.
Looks more like reading all this just reinforces the fears in all the Chicken Little among us.
Hey at least, we're not like 'those' people.

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Postby Matador » 12 Mar 2006 22:06

Okay, I just fired up the spreadsheet again.

If we want to retire when I'm 57 with $50,000/yr income indexed for inflation @ 2.5% with an assumed annual rate of return of 6.0% our money will run out in 38 years. The starting principal is $800,000.

The nestegg value will be $799,169 when I'm 80, which is the basis for the comment about estate taxes getting a windfall should I die @ 80 years young. I guess we would both have to die at the normal age for Revenue Canada to have a substantial gain.

Calculation Assumptions:
(1) Early CPP @ 60 for both of us. My CPP =$500/month. My wife will get $250/month. Both indexed for inflation.
(2) Normal OAS income will apply for both of us. Also indexed for inflation.
(3) One of us will die @ 81 years of age.
(4) My wifes has other pension income of $200/month.
(5) My wife is one year younger than me.

Our savings are about 40% outside the RSP but it is not factored into the calculation.

I'm not challenging Gummy's math, just stating what my spreadsheet says. Feedback requested!
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