Quitting too early is one of the top regrets for senior citizens. Retirement feels like bliss in the initial years of relaxed living, like an extended holiday one could not take while working. However, after a while, there is vacuum. Pursuit of purpose is the source of happiness for most of us. Many of us condition ourselves into believing that we are entitled to this prolonged break and that we don’t have to earn any longer, or be subjected to rigid rules about how our daily time should be allocated.
We also have romantic notions about how we shall pursue interests for which we had no time during our working years. I would urge those who retire in their sixties, as most of us do, to reconsider those notions, and to stay engaged and employed, even if part time, for a few years or more, as long as one is able to. Let us consider the benefits of doing this.
First, not many of us would have saved early, saved enough, or invested aggressively. We have lived and worked through the times when financial markets were not as developed as they are today. Either our corpus was conservatively invested, earning income rather than growing in value, or we managed to save substantially only in the later years of employment, or both. The implication for our retirement corpus is that it is not large enough to chase growth after retirement and provide us the income we really need. Augmenting it with savings as long as we can earn, and drawing an income from another source of gainful employment, is very beneficial.
Second, we are known to systematically underestimate the impact of inflation. Our natural response to cost increase for something we want to consume is to cut back. Retirement is associated with frugality by many. It is difficult to allocate money to expenses that seem to grow every time we incur them, when we know there is no income. In the initial period of retirement, it helps supplement our corpus with an income stream. It enables us to enjoy what we see as an inflation-indexed income as it makes spending relatively easy and comfortable. It also helps the corpus grow in value when it is not drawn down too early.
Third, our social interactions not only keep us active but also enable efforts to learn new skills, and acquire fresh knowledge and information. This can be a welcome change from seeking comfort in nostalgia. Research shows a strong connection between active social engagement and good health of senior citizens. Meeting new people and being willing to experiment with the unknown keeps many cheerful. One of our finest teachers for income tax in grad school was a retired IRS officer. We benefitted from his vast experience, and he loved interacting with the young students.Fourth, being able to do something different from what one did at work can be as refreshing as a long break from routine. My experiments with designing food gardens for others enables me to see capitalism and financial markets from a perspective that was completely unknown to me in my work life. Knowing free market design from my work helps me understand which garden designs will be sustainable and the ones that might fail. It is uncanny how completely different fields like food sciences, community service, and geriatric care can link magically in our minds as we age and develop a perspective.Fifth, the world is redefining itself as we are watching and growing older. There is always something else in which we can fit and find ourselves being useful and gainfully engaged. A cousin who taught maths in school is writing accounts for entrepreneurs in her neighbourhood; a friend who was a media manager is helping a new business create a social media marketing plan; a chartered accountant is now an enthusiastic operator of curated tours to ancient temples. There are enough opportunities for service, employment and entrepreneurship if one cares to look around.
Sixth, the opportunity to get out of the house and engage in another economic activity enables learning and staying updated. Research shows that the seniors who continue to work after retirement are more technologically savvy, can travel independently, protect themselves from scams and frauds, and remain resourceful about how to get things done. Most of these skills are implicitly learnt through interactions with a cross-section of people.
Seventh, the quality and diversity of senior citizens’ conversations improve when they expose themselves to newer experiences. More so, if these activities involve people other than their peers, immediate family or friends. The seniors who talk about their children and grandchildren, achievements and stories that overtly brag about themselves, are politely tolerated only for a limited period of time. Imagine the joys of joining a birdwatching group and becoming a group lead who can describe the local birds in great detail to an eager set of amateurs, and the rapt attention one’s discourse receives.
Why can’t all of this be done without pursuing it as a profession? What if one spends retirement pursuing a varied set of interests? Go back to the first point. If you already have a large retirement corpus that you can’t seem to spend, you may not need to work for a few more years. Even in such a case, I would argue that one can separate the market that is willing to pay you from the market that you are willing to spend on. Before dismissing the thought about work, consider whether money is still a motivator to set you to learn, explore, collaborate, organise, and find purpose on a consistent and sustained basis. Allow an honest answer to guide you.
(The author is CHAIRPERSON, CENTRE FOR INVESTMENT EDUCATION AND LEARNING.)
