Does Retiring Early Mean Living Longer?

runnerThere are many studies to show there is a strong correlation between early retirement and longevity.

What these studies have shown is that people who take early retirement, say in their mid-fifties, live  well into their 80s, therefore collecting 25+ years of pension cheques. However, later retirees typically in their mid-sixties, collect less than 2 years of pension cheques on average. Why is this so? Most likely, the fact that wealthier retirees who were able to call it a career at 55 probably managed their time, health and money better than those who were unable to retire before age 65.

“The hard-working late retirees probably put too much stress on their aging body-and-mind such that they developed various health problems, which eventually forces them to quit and retire. Given their long-term stress-induced serious health problems, they die within two years of their late retirement…. Early retirees continue doing some work. But they do the work on a part-time basis at a more leisurely pace so that they do not get too stressed out. Furthermore, they have the luxury to pick and choose the type of part-time work of real interest to them so that they can enjoy and love doing that work.”  (Dr. Sing Lin, 2002)

The below table from an actuarial study of life span vs. age at retirement illustrates precisely this point. The study was based on the number of pension cheques sent to retirees of Boeing Aerospace. The same results were generated when analyzing many other large US companies.

chart 300x276

Source Link

Results show that on average, from the age of 55, you lose nearly 2 years of life for every year you defer retirement. Very staggering especially when you add to the fact that Canadians struggle with their health in the final 10 years of their life, on average.

For those of you who are just starting your career, think long-term. Have a plan that is realistic and achievable. For anyone currently in their mid-fifties to early sixties, IF (and it’s a big IF) you have a decision to make regarding when to retire, make it sooner than later. Map it out yourself or sit down with an advisor to see what it looks like. You WILL live longer for it.   


About Stephan Desbiens, CIM, PFP

Partner & Associate Portfolio Manager

Stephan Desbiens joined Exponent as a partner after 16 years of working with retail and institutional investors, mainly with 2 of Canada’s largest banks. Having successfully served private and corporate clients as an Investment Advisor, he recognized the need for truly dedicated portfolio management.

Contact Stephan Desbiens

Exponent Investment Management