April 22, 2016
Retirement Lessons for 2016
There is a problem with the current definition of retirement: The average of statutory retirement age in the 34 countries of the Organization for Economic Co-operation and Development (OECD) in 2014 was 65 for men and 63.5 for women, but the tendency all over the world is to increase the retirement age. This is also reflected by one study that found just over half the Asian investors surveyed region-wide said they agreed with raising the retirement age, with a quarter disagreeing and the remainder undecided.
1. Today we trade intellectual capability, not physical capacity
One of the biggest reasons for this change is the fundamental changes in how value is created today versus a hundred years ago. What is the expiration date on your intellectual capital (knowledge)? Bodies tend to wear out as we age. My dad, a healthy 83 with a PhD in engineering mechanics, just went “back to work” helping PhD students with their dissertations. He loves it! (It doesn’t even sound like work)
There is an expiration date of your physical capital (labor). Intellectual capability however can continue to grow well into your mature years. Another example, ask 83-year-old Warren Buffett what the expiration date is on his intellectual capital. Think about the compound effect of wisdom. There is a compounding effect, whether it’s financial assets or intellectual assets. That is the worst time to begin drawing down on your “assets”.
In other words: As long as you are fascinated by what you are doing and are lucid you can keep doing what you are doing. It’s when we stop using our intellectual capacity is when we begin the downward spiral.
2. Retirement can be an artificially imposed finish line
We had dinner Saturday night with some friends who recently “retired”. When I asked why he told me the company has a 62 and done rule. I asked him if he felt “done”. His response was “No, I am launching my next career”. Somebody else, an institution or government or culture, is telling us when we should retire. He didn’t choose that date, someone else did.
3. Retirement is an unnatural act
The word “retirement” didn’t really exist until 100 years ago. It made more sense to take you out of the physical activities, such as the assembly line, and replace you with a 22-year-old.
4. The real benefits of working
Okinawa, an island of Japan, is said to be the healthiest place on earth. The Okinawan’s secret lies in their diet and their attitude towards life. Interestingly, they also do not have a word for retirement.
They do, however, have a word “ikagawa” which roughly translates to mean “what is your reason for waking up today”. Retirement has stripped that from many people’s lives.
On the flip side, one study showed the average IBM retiree collected 24 checks before passing away.
Purpose is very powerful in keeping the mental state alive. You need to allocate your money towards purposeful engagement.
5. Collect a Playcheck
I heard an interesting word play recently- playcheck. Although it is not defined in the dictionary, the definition is intuitive- getting paid for doing things you like to do. We were at the grocery store recently and I asked the cashier how she was doing. She responded, “not bad”. I had to ask, “what does that mean?” Her response, “I’ll be better when the weekend starts”. There is an all too prevalent example of someone working to live not living to work because they don’t enjoy what they do.
“Choose a job you love and you’ll never have to work a day in your life” – Confucius
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