Welcome to The Weekend Reccs by Harrison Satcher. This newsletter delivers a lovingly-tailored collection of thought-provoking goodness for your Sunday. Inside you’ll find: (1) a weekly column on economics, politics, or something unexpected, (2) a curated list of links for your enjoyment, (3) a lagniappe (because everyone deserves lagniappe), and (4) a collection of interesting, relevant charts. Grab a coffee and enjoy your morning.
New here? Be sure to subscribe to join the community and never miss an issue.
If you enjoy the Reccs, I’ve made it super easy to share.
The links marked with asterisks (*) are the recommended reads.
Happy Sunday!
I missed y’all last week. Thanks to everyone who reached out to check in on me.
As you may have noticed, like a metamorphosing caterpillar The Reccs has emerged from this short hiatus with a new logo and style! A small group of avid readers (and dear friends) commissioned this great work from the brilliant Allie Laing as a birthday gift—I’m so lucky!
The Long Read: Retirement is death
Takeaway: For most, work provides important intangibles besides income. Retirement, therefore, should be seen not as a period of leisure but rather as paying yourself to do work you find meaningful.
An exceptionally brief history of retirement
Retirement is a fairly modern idea in humanity’s 200,000-year existence.
The Romans developed pensions for soldiers, but pensions for all citizens (à la Social Security) did not exist until the Germans implemented it for those over 70 in 1889—and at that time few lived to live to see 70. At the time it was quite a revolutionary concept, people then mostly just worked until they no longer were able to do so.
Today, life is very different. Living to 70 is expected in most of the world. In America, 3/4th of able-bodied Americans over 65 are out of the workforce. Young Americans hope to retire at 63.
And who can blame them for wanting to retire? The employed spend a full quarter of their time working and decades of marketing have conjured images of a retired bliss that looks like the first 25 seconds of this.
And while most Americans have nowhere near enough savings to support them in retirement (even when complemented with Social Security), a majority of those youth will one day retire.
Yet even if they could Scrooge McDuck their way through their golden years, they should think twice before they leap into retirement.
Retirement will literally kill you, or at least make life worse
Studying the health impacts of retirement can be tricky because people choose when they retire. You might expect, say, someone in bad health to both retire early and die early.
In light of this issue perhaps the most convincing study has taken aim at mortality changes that occur when Social Security benefits begin. The authors find that at the 62nd birthday, when workers become eligible for Social Security benefits, male probability of death increases by 2 percentage points.
What causes 62 to be so much more perilous than 61?
I suppose it could be anything, but the parsimonious explanation is that a ton of the men who now are eligible for Social Security decide to retire and then die.
At age 62 the percent of men retired jumps by 11 percentage points (~27%➡~38%) and we see this increase in deaths.
Yet back when 62 was NOT the age of Social Security eligibility, there was NO increase in retirements nor corresponding increase in deaths.
It is important to underline here that this evidence is completely devoid of the self-selection problem we described before (more on that can be found in the linked paper).
If we were to make the assumption that the 11% newly retired are driving the 2% increase in deaths across all 62 year olds, we’d be talking about a 17% increase in probability of death just by deciding to retire.
In actuality the effect probably is not so large as 17% (some of those that retire were the ones in bad health), but the evidence is very compelling that the increase in your probability of death simply by retiring is greater than 2%.
In short, retirement kills.
…and if it doesn’t kill you, it at least makes life worse. The retired appear to be sicker and more depressed than their non-retired counterparts.
They also take up unhealthy habits such as smoking more and drinking more (but, tbh, that last one could be good or bad depending on how fun you are at parties).
A better way of thinking about it
So if the conventional notion of a leisurely retirement is a bad idea, how should we approach it?
I think we’d do better by asking what it is we lose when we retire.
For many, jobs provide purpose, structure, social connections, and other important fringe benefits that are not directly related to a paycheck.
That purpose may come from deeply Good work such as directly serving one’s community, or may just come from knowing you’re doing a job that needs to be done (a sentiment expressed to me by an octogenarian hotel employee who didn’t need the money).
The structure piece is perhaps the most counterintuitive in that we get more by having less. In my own experience I am much happier when I am on a schedule. I find that even though I have less time per se when I am working, I actually sleep and exercise more because I have dedicated times to do those things.
With these and other pieces in tow I’d argue we can do better than conventional retirements by reconceptualizing retirement savings and its purpose.
Whereas most folks imagine retirement savings to be a lump sum they live off of, I would suggest instead it be imagined to be a future stream of income. Most analyses suggest that it is safe to withdraw 4.5% indefinitely from a well-diversified account invested in stocks (this should not be construed as financial advice). This, then, would suggest not that you have $800,000 saved but instead you have a stable stream of $36,000 (before taxes) for the rest of your life.
This $36,000, now, is not your money to live off of, it is income you pay yourself to do the work you want to do.†
At its core, this is financial independence.
Financial independence is not not working, it is not working for the money.
If you’re lucky, you’re in a job today that you find purposeful enough to do even if you didn’t need the paycheck. If you’re not, you should be asking yourself what that job is.
If you can, you should try to pursue meaningful work today — life is too short and our work takes up too much of it.
But if you can’t you should see retirement (especially an early retirement!) as your chance to do that. It is the time when money is no object (because you are already paying yourself enough to live comfortably).
Want to try to make it as a start-up founder? Go for it; the average age of successful start-up founder is 45. Want to be a line-order cook? You can now quite literally afford to make their scant wages. Want to be a full-time homemaker or caretaker? That most certainly is work too! Just so long as you keep working in a role that gives you purpose.
Millions of people find purpose, structure, and social connections every day outside of a conventional job. That is wonderful. They should keep doing that if they are enjoying it. My point here is that most of us are not so lucky, and that we can find those things perhaps most easily in doing Good, purposeful work that we feel passionate about.
†As with all good ideas, this certainly is not original. I’d be happy to cite the originator of this paradigm shift but I could not find it. Do let me know if you’re aware.
The Links
Lyers* Disaster was averted when a plan to poison a water treatment facility was foiled. However it is really only a matter of time before a horrible attack like this is successful. I would love to read a write-up as to why infrastructure, at all levels, always seems to be crumbling, out-of-date, or otherwise not up to the challenge.
Smol boi, big planet NASA’s Perseverance stuck the landing this week (and got a 10 from the Russian judge!). This is huge news given its multiple missions — search for artifacts of microbial life, test CO2->O2 conversion equipment, climate and rocks studies, etc. However perhaps most impressive to me is that the ~7 minute landing segment depicted in the linked video had to happen without any human interaction. The so-called “7 minutes of terror” came and went within the 11 minutes that it takes for radio signals to travel from Mars to Earth. Our little robot friend was landed by the time we even were informed that the entry had began, and as such the sequence depicted in the video below had to be fully pre-instructed.
Lagniappe
Speaking of retirement things, I’ve really enjoyed golfing this past year. It strikes a unique balance of being incredibly social and intensely internal. I highly recommend anyone who can to give it a try. It can be a very special sort of physical meditation or just a fun time with friends. Whatever the reason you enjoy it, you can keep at it for decades.
Graph(s) of the week
[WaitButWhy] Democrats don’t name their kid Reagan.
[WSJ] Speaking of life expectancy, this is an incredibly sad graph.
[WSJ] We spoke previously about how some folks will lose their jobs due to the minimum wage increase and why that is ok. Professional economists agree that it would not be catastrophic.
[u/theotheredmund] Viewers and critics don’t always agree.
[Pew] Federal prison populations have been on the downtrend.
Keep the faith,
Harrison