Has Retirement Had Its Day?

In today’s Juice, we’re taking a break from investing math around retirement and looking at it from a different angle. An important one. 

We listen to a lot of podcasts over here. The other day, we stumbled upon the Working It podcast from The Financial Times. In it, journalist Isabel Berwick interviewed a professor from Harvard University and columnist at The Atlantic, Arthur C Brooks. 

Brooks is an expert on the science of happiness. He and Berwick addressed the question — Has Retirement Had Its Day? It’s an important question to ask. And we thought the way Brooks approaches it nicely sets the stage for more money-related talk on how to retire. 

Because, the strategies we’ll discuss won’t all service the traditional notion of retirement where, one day, you hand in your resignation letter and never work again. It’ll likely be less linear than that. In fact, you might work past what we have come to know as the typical retirement age, either by choice or out of necessity. 

Brooks kicked off the conversation by putting happiness in context:

… the biggest misconception about happiness is that it’s a destination. It’s actually a direction. You can’t get happy. You can get happier. And this is an important point. A lot of people say, I just want to be happy, but they’re asking for something that’s impossible and wouldn’t even be good. That would mean eliminating negative emotions which keep you alive and safe. It would mean eliminating bad experiences from which you grow and learn. And so the result is that what we really need is to adjust our expectations about what it’s all about.

In mid-life, many people start to feel a sense of unhappiness. As the traditional notion of retirement draws near, maybe they find themselves in a rut or feeling burnt out. Often, according to Brooks, this has something to do with how they feel about themselves with respect to their career. 

The professor also did a nice job putting these life stage in perspective, basically saying you need to realize how your mind and strengths change as you get older: 

… I’ve studied people over the trajectory of their careers, and I’ve noticed that a lot of people get incredibly frustrated because they notice when they’re still pretty young that they’re burning out, losing focus … And there’s a reason for that … the difference between fluid and crystallised intelligence. Fluid intelligence requires working memory and innovative capacity and individual focus, and which you have a lot of in your twenties and thirties that makes you good at what you do, but it doesn’t last … 

The good news is there’s a second kind of intelligence that increases in your forties and fifties and sixties and stays very high well into old age called crystallised intelligence. That doesn’t require working memory, thank God, because things get harder to recall … What it requires is pattern recognition, teaching capacity and the ability to recognise quality in others. In other words, you’re good at building teams, you’re better at being a manager, you’re better at using metaphor and teaching people how to do things. So that’s the second phase of the best career, is to move from the individual problem-solving cowboy to the great professor later on, whatever that means in your specific profession.

In other words, make sure you’re doing the right type of work at the right time in your life. 

You can equate this to most professions. Blue and white collar. 

Think about the bartender who steps out from behind the bar and becomes a brand ambassador. So it’s not just the corporate professional who starts their own consultancy or the Ivy League professor who mentors students after a long storied career of publishing research papers. We can all combat life’s transitions by thinking clearly and proactively about the work we’re doing and how we do it. 

As Brooks notes, if you’re not getting better at your job, you need to think about a change, but this change must go beyond work. It needs to be comprehensive: 

You need to understand actually what will fill you out as an entire person. You need to get away from your dangerous success addictions, and you need to reconnect with the real people in your life …

Humans are wired for progress. Progress is inherently pleasant and satisfying and pleasurable. And when you’re not making progress along a whole bunch of different dimensions anymore, it’s just not fun anymore. 

So, then, according to Brooks, how should we view retirement in the modern era?

That does not mean not working. You need to work in a different way where you can set up a schedule where you’re not rushed … When you’re at the gym, you don’t have to look at your watch the whole time. You say, I’m gonna do a few more sets.

And that not being in a hurry, that opening up the space between the things, actually can be the highest quality of life change in your professional life that you’ve had in a couple of decades and redefine who you are to yourself because you’ll start to enjoy what you’re doing and you know, rebuild in a personal way what your professional life is really all about.

The Bottom Line: At The Juice, we believe successful investing goes beyond picking the right stocks and ETFs. While we like to think we’re pretty damn good at that, it doesn’t mean much if you’re trudging through life without purpose. 

This is especially important in association with long-term retirement planning. Which might mean something different than never working again. 

If you know you won’t retire traditionally, maybe it makes sense to invest for your future (we won’t even use the word retirement) differently. In the coming weeks and months, we’ll present some concrete ideas on exactly how to approach this view of … err … retirement. 

In the meantime, use the feedback link at the end of this email to tell The Juice how you view retirement. We’d love to know your age, the type of work you do and how you plan to transition as you get older. If you’re already there, even better. Maybe we can learn from you.

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