No, You Are Not Going To Die
No, You Are Not Going To Die
My ideas about risk mitigation and the Suze Orman appearance on the Afford Anything podcast produced some interesting responses. One, in particular, gave me pause. It seems that many in the financial independence community are particularly concerned about life, health, and long-term care insurance because they have seen data about an increased mortality in early retirees. Although there have been many studies, I believe most of the recent hoopla comes from a study circulated by The National Bureau of Economic Research regarding excess mortality for men retiring at 62 and collecting social security. Although many believe the data to be quite compelling, I am here to tell you a different message. No, you are not going to die.
For many reasons, the data is both misleading and the conclusions are conjecture. This should be the last of your concerns when it comes to retiring early.
The Study
In their own words:
Social Security eligibility begins at age 62, and approximately one-third of Americans immediately claim at that age. We examine whether age 62 is associated with a discontinuous change in aggregate mortality, a key measure of population health. Using mortality data that covers the entire U.S. population and includes exact dates of birth and death, we document a robust two percent increase in male mortality immediately after age 62. The change in female mortality is smaller and imprecisely estimated. Additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes.
True, True, and Unrelated
The good news. No, you are not going to die if you are a woman. The female mortality rate was not statistically significant. There was no effect.
The second part of good news is this study is fairly low on the hierarchy of study methods for proving causation. As many of you know, correlation is not causation. In other words two facts can be true, true, and unrelated. Or at least not directly related.
For example, maybe those that retire at age 62 and take social security tend to be in poorer health to start with than those who delay till a later age. If you are crippled with arthritis, on oxygen for COPD, or struggling with heart disease, you are more likely to retire the minute that social security is available.
This would completely confound the data. Taken in this light, the data shows that people who are unhealthy die earlier than people who are healthy. And, people who are unhealthy tend to retire at an earlier age (ie the first year social security is available) than those who are healthy.
Duh!
Although I am simplifying a bit, and the authors have been quite circumspect about this type of issue, the point remains. Just because two facts tend to run together, doesn’t mean that they are related or at least have a cause and effect relationship. This is the problem with a population based study.
To truly flesh this out you would need to do a double-blind placebo controlled study. People would have to be randomized to a study group that was forced to retire early and a control group that kept working. Differences such as amount of activity and socialization would have to be controlled for. And then data would have to be collected prospectively.
FIRE Is Not The Same As Retirement at Age 62
No, you are not going to die if you retire early. A major hypothesis of the study was that men tended to retire at 62 and then become sedentary and antisocial. Throw in a little alcohol and depression and it’s no wonder we see the rise in mortality.
Our community, however, in no way fits the usual retirement mold. In fact, many of us don’t really even stop working. We just stop working for the man.
We also, as a community, embrace exercise and travel. It is the rare FIRE enthusiast who wants to sit around in their underwear and watch Netflix.
Come to any CampFI and you will meet a group of socially engaged individuals excited about the future and far from depressed.
Final Thoughts
Of course I have oversimplified. While the data presented is compelling, it falls far short of showing that early retirement is dangerous. No, you are not going to die. Correlation does not mean causation.
Retirement could be a time of excitement, physical prowess, and social engagement.
Working at a job that sucks away your soul could lead to antisocial behavior, physical inactivity, and alcoholism.
The choice is yours. Stop letting a vague fear about health hold you back from realizing your dreams.
Whatever they are.
There are big differences in retiring because you have to, retiring because you can, retiring because you planned to, and retiring because you want to. At age 50 I could retire because I planned to. Turned out I didn’t want to yet. I wanted to at age 54 and moved on to a new mission. I think I will live longer without the stress.
Dr. Cory S. Fawcett
Prescription for Financial Success
I agree. When you retire because you planned to, you are leaving the game at the heights. I can’t imagine this is bad for you.
Love the post Doc. I would imagine a medical study on the FIRE path would show it to be the most optimal for increased longevity. One of the biggest FIRE benefits I see is the access to community and new friendships at a time when most fall into isolated environments.
Totally agree, FIRE people are just happier long term.
Thanks Doc G for eloquently explaining this. When I first came across the study I thought the conclusions were counterintuitive and your points support my original beliefs.
I thing confusing correlation with causation often leads to counterintuitive results.
Uh oh, now that I know I NOT going to die, I have to worry about running out of money when I’m 120 years old or so 🙂 Great point about the lack of a double blind study and how that throws off the statistics. So much of the headline news is like that. Good eye!
The headlines are so sensational. Unfortunately, rarely to people dig in and see the finer points.
What’s funny is that even a good majority of her core audience will probably never be millionaires! Yet she is shaming 30 somethings for retiring early with 2 million dollars….. This isn’t a common occurrence in America. Even for people in their 60’s and 70’s….. Yet they manage to “suffer” their way through the rest of their lives lol
Personally, I try to separate these “personalities” from their message. There’s no doubt that that single podcast interview, got Paula a TON of downloads, and Suze Orman more publicity, just in time for her new book.
Even we get views just for talking about it lol, so I’d say the interview as a whole was a win-win-win. I’m good with that! But as you said, FIRE is different! You will not die, you can choose to continue earning income even in “early retirement”
Cheers man!
True. I guess a win for all of us. I didn’t think of it that way.
Good Post!! Couldn’t agree more! Mortality and retirement are two separate things.
Retirement presents an opportunity for change ; whether it’s lifestyle or pursuing/ building in a new way .
There are those, sadly, who when they do retire, are simply lost without the work that defined them , the routine and structure.
Guess it can be a positive adventure or a gloomy experience , depending upon the individual .
Yep. We can somewhat self determine.
I read a study comparing Fairfax VA and McDowell WVA. Men in Fairfax lived to 82 on the average, women to 85 and had a median income of $107K per household. In McDowell men lived to 64 and women to 73 and had a median family income around $25K. The two counties are separated by only 350 miles. That is your controlled study and it should be of some concern to any retiree. The difference is ascribed to income, status, access to services and lifestyle. In another study, single men were 32% more likely to die than married men and single woman 23% more likely to die than their married counterparts. Here is a real kicker, men ages 30 to 39 had a 128% higher risk of death compared to their married counterparts. If men got past 40 their longevity tended to normalize but were still more likely to die than women. Clearly how you live, where you live, age, marital status and income level matters. The cost is cumulative. Co-incident with longevity is the increase in metabolic syndrome or insulin resistance. Metabolic syndrome includes centripetal obesity (that beer belly) internal fat accumulation around organs, hypertension, DM type 2, cardiac disease, and lipid profile abnormality. Insulin resistance starts early, in the 30’s maybe even 20’s, and builds over decades and is virtually entirely a pathologic response to the American diet. It takes a while (decades) for the syndrome to begin to manifest it’s subsequent “diseases” DM HTN CAD obesity etc. Go to your HS 20th reunion and you will see it’s emergence. The high school jock who now weighs 350 lbs and needs a scooter to get around. Go to your HS 40th reunion and it will have consumed half of your class. Age 62 is about when end stage is reached and by then you’re either on a dozen pills to manage the pathology of HTN DM CAD etc., or you’re on the road to perdition. Just go walk around the Walmart if you don’t believe metabolic syndrome and insulin resistance is a real killer. In fact it may be the cause of neurodegenerative disease (AD an PD) and a stimulant to cancer. AD and PD may be the long term manifestation of metabolic syndrome on the far side of the BBB.
Retirement is definitely a change. You move from the low risk of being taken care of (W2, healthcare insurance, lifestyle security, paid vacation, retirement accumulation etc.) to the high risk of taking of your own healthcare insurance, lifestyle security, and your portfolio switches from accumulation to deflation. You may have a scheme to control portfolio deflation (side gig, real estate, etc) but the loss of the W2 and it’s risk mitigation (all of those benefits) necessarily causes relative portfolio deflation as in a negative rate of growth compared to accumulation, and no two ways about it that is stressful, especially since our brains are hard wired for risk avoidance. Stress is the sine qua non of illness. I think this bears looking into and not just blowing it off as statistical stupidity. Information is power denial is a river in Egypt, or the road to perdition.
and no two ways about it that is stressful, especially since our brains are hard wired for risk avoidance. Stress is the sine qua non of illness.
See, I think The FIRE folks would say that the W2 job is stressful and can cause all the same health consequences if you don’t RE.
That kinda was my point.
Thanks for this Doc. I’m so glad I won’t die tomorrow. Suze had me worried…. 😉
Me too! I totally agreed with everything she ever said up to now.