Why Early Retirement May Be Disastorous

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.

The Challenges With Early 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.

Putting This To Practice In Your Own Life

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?

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.

Avoid too much leisure. We can strengthen and lengthen our cognitive skills by keeping active. 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.

About the author

Lon Jefferies, CFP®, MBA

Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a Certified Financial Planner (CFP®) and a member of the National Association of Personal Financial Advisors (NAPFA). He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Utah CEO, Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is an expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.

Lon can be contacted at (801) 566-0740 or lon@networthadvice.com. Learn more about Net Worth Advisory Group at http://networthadvice.com and visit Lon's blog at http://www.utahfinancialadvisor.blogspot.com.

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