More Than Money

People often focus their retirement planning efforts on meeting financial goals while neglecting other equally important issues. Relevant questions involve not just what financial resources you will have available, but how you will use your time during retirement.

Katherine Schlaerth, an associate professor emeritus at the USC School of Medicine, recently wrote an article for the Los Angeles Times called “Early Retirement is Hazardous to Your Health.” As a geriatrician, Dr. Schlaerth believes that working longer is generally a good thing. She has observed that patients who quit working are likely to gain weight, become hypertensive, and even develop depression. Her observations have been substantiated by several research studies: the Whitehall II study of British civil servants, a recent joint study by the Rand Corporation and the University of Michigan, and an Israeli study. These studies include the following conclusions:

• Continuing to work reduces the risk of cognitive decline.
• Both men and women in countries where people work longer have better memories.
• Those who work longer have better health and are more independent.
  

To illustrate these conclusions, try solving this simple problem. If five people win the lottery and the prize of $ 2 million is divided evenly, how much will each winner get? In a recent study, half of Americans over age 50 gave an incorrect answer. Further, three-fourths of people over age 85 and almost everyone over age 90 answered incorrectly.

How can we apply the lessons from these experiments to retirement?

1. Maintain an activity retirement plan. If possible, keep working. Some people can continue to work part time in their occupations. Retired people can serve as volunteers in various capacities. Pursing hobbies can be rewarding, but some are personal activities that don't include essential interactions with other people.
2. Avoid too much leisure. We can strengthen and lengthen our cognitive skills by keeping active.
3. Aging will eventually decrease our reasoning ability, no matter how long we may be able to defer it. Designate a financial advisor or trusted family member to assist in handling financial matters while you are still able to make good decisions. This will not only benefit you immediately, but will also benefit a surviving spouse.

While I enjoyed lunch at the recent National Association of Personal Financial Advisors Conference in Salt Lake City, I met Jim from Fort Collins, Colorado. I discovered that Jim is eighty years old and still practices as a financial advisor. He is slim, trim, and mentally sharp. I'm sure him would agree with these three lessons.