No, You Are Not Going To Die

My ideas about risk mitigation and the Suze Orman appearance on the Afford Anything podcast produced some interesting responses. One, in particular, gave me pause. It seems that many in the financial independence community are particularly concerned about life, health, and long-term care insurance because they have seen data about an increased mortality in early retirees. Although there have been many studies, I believe most of the recent hoopla comes from a study circulated by The National Bureau of Economic Research regarding excess mortality for men retiring at 62 and collecting social security. Although many believe the data to be quite compelling, I am here to tell you a different message. No, you are not going to die.

For many reasons, the data is both misleading and the conclusions are conjecture. This should be the last of your concerns when it comes to retiring early.

The Study

In their own words:

Social Security eligibility begins at age 62, and approximately one-third of Americans immediately claim at that age. We examine whether age 62 is associated with a discontinuous change in aggregate mortality, a key measure of population health. Using mortality data that covers the entire U.S. population and includes exact dates of birth and death, we document a robust two percent increase in male mortality immediately after age 62. The change in female mortality is smaller and imprecisely estimated. Additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes.

True, True, and Unrelated

The good news. No, you are not going to die if you are a woman. The female mortality rate was not statistically significant. There was no effect.

The second part of good news is this study is fairly low on the hierarchy of study methods for proving causation. As many of you know, correlation is not causation. In other words two facts can be true, true, and unrelated. Or at least not directly related.

For example, maybe those that retire at age 62 and take social security tend to be in poorer health to start with than those who delay till a later age. If you are crippled with arthritis, on oxygen for COPD, or struggling with heart disease, you are more likely to retire the minute that social security is available.

This would completely confound the data. Taken in this light, the data shows that people who are unhealthy die earlier than people who are healthy. And, people who are unhealthy tend to retire at an earlier age (ie the first year social security is available) than those who are healthy.

Duh!

Although I am simplifying a bit, and the authors have been quite circumspect about this type of issue, the point remains. Just because two facts tend to run together, doesn’t mean that they are related or at least have a cause and effect relationship. This is the problem with a population based study.

To truly flesh this out you would need to do a double-blind placebo controlled study. People would have to be randomized to a study group that was forced to retire early and a control group that kept working. Differences such as amount of activity and socialization would have to be controlled for. And then data would have to be collected prospectively.

FIRE Is Not The Same As Retirement at Age 62

No, you are not going to die if you retire early. A major hypothesis of the study was that men tended to retire at 62 and then become sedentary and antisocial. Throw in a little alcohol and depression and it’s no wonder we see the rise in mortality.

Our community, however, in no way fits the usual retirement mold. In fact, many of us don’t really even stop working. We just stop working for the man.

We also, as a community, embrace exercise and travel. It is the rare FIRE enthusiast who wants to sit around in their underwear and watch Netflix.

Come to any CampFI and you will meet a group of socially engaged individuals excited about the future and far from depressed.

Final Thoughts

Of course I have oversimplified. While the data presented is compelling, it falls far short of showing that early retirement is dangerous. No, you are not going to die. Correlation does not mean causation.

Retirement could be a time of excitement, physical prowess, and social engagement.

Working at a job that sucks away your soul could lead to antisocial behavior, physical inactivity, and alcoholism.

The choice is yours. Stop letting a vague fear about health hold you back from realizing your dreams.

Whatever they are.