July 25, 2016
Retirement Health: Fiscal, Physical, And Mental
By Michael D. Shaw
The concept of “retirement,” as it is currently understood, is relatively recent, dating back to 1889 Germany, and its chancellor Otto von Bismarck. By all accounts a dyed-in-the-wool conservative, Bismarck proposed this old-age pension system to stave off more radical suggestions promoted by Marxist opponents. As originally conceived, the benefits would kick in at age 70. Of course, this was not terribly risky on an actuarial basis, since most Germans in 1889 did not live that long. In 1916, this retirement age was lowered to 65. Bismarck died in 1898, at age 83.
Military pension plans date back to the Romans, and pension programs for certain municipal employees existed in the US as early as the mid-1800s. Some industrial companies would follow suit in the 1920s, with Social Security being introduced in 1935.
Cynics enjoy pointing out that while Social Security started at age 65, male life expectancy at the time was only 60. That is true if you consider life expectancy from birth. However, a more valid and relevant statistic is life expectancy at age 21. Even in 1935, this was already over age 65. Nonetheless, few will argue that Social Security itself will provide for anything beyond a Spartan existence.
To be sure, financial considerations are paramount in retirement planning, and more on that shortly. But, what about the psychological factor?
Around two years ago, an article appeared on a retirement-oriented website, entitled “5 Warning Signs You Aren’t Psychologically Prepared for Retirement.” The title is a bit misleading in that the “warning signs” described appear just after you have retired, and all express regret. These after-the-fact observations serve as a cautionary tale to those planning retirement:
1. Most days you have nothing special to look forward to when you wake up in the morning.
2. Your best friends are at the job you just left.
3. Your personal identity is wrapped up in the title of the job you had previously.
4. You don’t have any great reason to leave your house during the day.
5. You wish you weren’t retired.
Pivoting back to those financial considerations, it’s no secret that money worries are linked to stress and in some cases depression—at any age. Listen to Larry Klein, founder of popular website RetirementIncome.net…
“Psychological health and financial health are two sides of the same investment coin, so to speak. If a person is economically unprepared for retirement, the stress can be intense; interfering with work, upsetting things at home and making it increasingly difficult to find a route to emotional stability. Preparation is the best way to avoid this circumstance, provided you have the right retirement strategy and follow the right advice about meeting your retirement goals.”
Klein’s site features hundreds of useful, irreverent articles that challenge the conventional wisdom. The material is accessible via menu, or by browsing through the lively thumbnails posted on the homepage. Here’s a sampling of the site’s attitude and focus—culled from the “About Us” statement:
“Unlike others who give you financial information, we do not sell anything. Therefore, we do not have a bias about particular products, investments, insurance or your financial strategy. Our mission is to provide unbiased good sense so that you have a better retirement.”
“Most of what you hear from others is often not true as the information provider has a vested interest in their positions (e.g. the financial adviser who wants to sell something, the financial “expert” on CNBC who already owns xyz stock, politicians who want to get re-elected, etc.)”
As readers of Health News Digest are well aware, there is no magic, simple, secret formula for good health. Rather, it is the synthesis of large amounts of information and what works for the individual. RetirementIncome.net takes the same tack. If you’re of a certain age, I suggest you surf on over.