Weaning Ourselves Off Of Work: Financial Advisors' Daily Digest
By SA For FAs :
An article in the science journal Nature explores in rich detail the lifestyle and ethical considerations involved in making one's exit from the workplace.
The article was actually published in May 2015. But given that numerous commenters in this forum in their 50s and 60s have reported being forced into retirement, while some millennials have lamented a lack of opportunity to access the career ladder, the intervening years clearly have not eroded the article's relevance.
Though you may wish to read the article in its entirety, its initial conceit is that there are scientists (the journal's target readership) who would like to continue working and feel like they have much to contribute, but whose institutions or government labor laws require their departure. This is apparently the prevailing order in continental Europe. The article brings in examples of scientists in the U.S., where the law became more supportive of older workers. I quote:
Mandatory retirement was phased out of US law starting in the late 1970s, and was ultimately abolished in 1986, although academic institutions had until 1994 to comply. This has resulted in ample opportunity to observe what happens in the absence of a forceful shove out of the door: people work for longer.
That people - or at least highly trained scientists in this case - favor continued employment was the first important insight.
Another idea is that there remains a feeling abroad, in some quarters at least, that there is something wrong with this picture. I quote:
Although mandatory retirement was phased out in the United Kingdom in 2011, its effects can still be felt, says Peter Lawrence, 73, a developmental biologist at the University of Cambridge and an outspoken opponent of age discrimination. 'Many regard people above retirement age as odd to still be working. You feel as if you're not entitled to work.'
Another key idea is one of age-based jealousy. In response to an NIH grant to older scientists to encourage them to hand projects to junior research partners, Nature says the following reaction was typical of the negative reception:
'While I like the idea of transferring knowledge and resources, if you can't do so efficiently inside a typical 40-year career span, then why should you be given longer?' says Paul Brookes, 42, a biologist at the University of Rochester Medical Center in New York.
Unpacking all this, it seems to me there are some fundamental principles that should guide our thinking on these issues. The Nature article itself raises a key economic issue, which is whether older workers remaining in place are hindering their younger peers' career development. Giving older workers the boot may do more harm than good, it says, citing an NBER study:
An analysis from the nonprofit US National Bureau of Economic Research in Cambridge, Massachusetts, for example, found that paying senior individuals to retire actually increases the unemployment rate for younger workers, because older people remain productive and spur the creation of new jobs.
That makes sense to me. Economic activity has "knock-on" effects. The question is how much. Would replacing an older worker with a younger one have even greater knock on effects? Ultimately, this is a judgment call that employers and workers must make for themselves (to the extent that each allows the other to do). In other words, merit should entitle an older worker to remain in place, and a feeling of making a significant contribution would be the motivation for such a worker to want to stay.
Unless, that is, such a worker expected even greater satisfaction from retiring. The Nature article describes a British developmental psychologist, Uta Frith, who retired at 65 and has kept busy ever since furthering her academic interests in ways she could not have done in an institutional setting. "We could never do this if we had to pursue paid work," she said.
In my view, the idea that younger and older workers are rivals completely misses the key point, which is that we're all proceeding through a journey of personal development, which proceeds from dependence to independence. The obstacles we face as we take this trip through life are both physical and emotional, and succumbing to the temptation to fault our elders or the young whippersnappers clawing their way beneath us falls into the emotional category.
Just as surely as a mother takes no umbrage at her baby's cessation from nursing, and as parents are proud of their toddlers who begin to walk and of their young adults who find work and start their own households, the poorly named term "retirement" should be a seen as the ability to fund oneself, without dependence on work. Whether somebody wants to continue his or her professional passion or pursue personal ones is a secondary question. The financial goal is made necessary by the fact that, for most people, work becomes too strenuous, too tedious, or too unavailable to rely on. And thus, seen on this continuum, retirement's financial meaning is nothing other than weaning ourselves off of dependence on employment, though what we do after reaching that threshold may be anything but idle.
Please share your thoughts on this issue in our comments section. Meanwhile, below please find links to other advisor-related content on today's Seeking Alpha.
- Eric Basmajian: A rise in Libor rates has preceded the end of each economic cycle; they're now surging.
- Victor Haghani: Hedge-fund investing tougher to justify after U.S. tax reform.
- Tipswatch: CPI-inflation is holding below the Fed's 2% annual target .
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- For more content geared to FAs, visit the Financial Advisor Center .
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