There are studies that show early retirement can lead to an early grave. There are also studies that show early retirement can help you live longer. So which is it? Or is early retirement even connected to mortality at all?
The evidence against early retirement
The infamous Shell study
The Shell study is infamous because the results led to many of the misconceptions that people have about early retirement today. A study of Shell employees found that those who retired at 55 had a 37% higher chance of death at age 65 or later than those who retired at age 65. Additionally, those who retired at 55 were 89% more likely to die in the first 10 years after retirement than those who retired at age 65.
There are several problems with this Shell study. It’s only looking at employees of one company, so it can’t accurately represent the population at large. Those who retired early are probably not as healthy as though who retired at 65, either. Many early retirees may have been forced to retire due to health issues, while Shell employees who retired at 65 were probably less likely to have retired due to health concerns. The results are interesting, but I don’t think this proves that early retirement can lead to an early death.
The Social Security study
A study by the Social Security Administration found that men who retired at 62 were 20% more likely to die than men who did not retire at 62. The study also found college-educated men were more likely to retire later than men who did not have a college education.
Since those with a college education tend to have higher career earnings than those without a college education, you’d imagine college graduates would retire earlier since they’re more likely to have the means to do so. The fact that those with those with lower levels of education are retiring earlier means there’s something else going on. Those without a college education are more likely to work in blue-collar jobs, which means they are more prone to physical injury or disability which may lead to forced early retirement.
If you’re forced into early retirement due to a disability or physical injury, you probably have a higher chance of dying earlier than those who reach full retirement age. I don’t think this study is evidence that early retirement leads to an early death, but it might be evidence that early retirement due to physical disability or injury may lead to an early death.
Evidence for an early retirement
The journal Health Economics studied Dutch civil servants who retired early and found that men were 2.6% less likely to die over a 5-year period than those still in the workforce. An analysis in the U.S. found that about 7 years of retirement was like reducing the risk of serious disease by 20%. In other words, retirement was found to be good for your health.
Another study found that poor health among retirees was mainly due to being unmarried, a lack of physical activity, or lack of social interaction. This means that early retirement itself isn’t causing an early death, but other factors, like not being in shape and isolation, were contributing to poor health.
Should I retire early or not?
Studies have shown that early retirement isn’t for everyone. Some early retirees die sooner than those who stay in the workforce, but studies have not conclusively shown that simply retiring early puts you at risk. It’s more likely that some people who are unmarried, lack a social network, or aren’t in good health would be at risk of dying early if they retired early.
Early retirement likely won’t affect your chances of dying early if you keep in excellent shape and keep busy in retirement. Some people live for their work, and they are probably the ones more likely to die early in retirement. Check out our most recent episode, “The Biggest Thing the F.I.R.E. Movement Gets Wrong” for in-depth discussion about withdrawal rates and more early retirement pitfalls.