Thursday, September 17, 2009

I started flying when I was 16, and have held a flying license for 22 years now. If I was to retire at 60, that means I have another 22 years to go. I mean, I would like to retire tomorrow, but I think 60 is a little more realistic. Actually, the Canadian courts recently found that an Air Canada Captain's civil rights had been violated when he was forced to retire at 60, and it looks like the age will be bumped up to at least 65. While I respect a person's decision to continue to work as long as they can/want to, there are some pretty serious consequences to that decision.

If I retire at 60, I will likely live to be 77 or so, at least according to the latest data. However, if I retire at 65 I will likely live to be only 68 or so, which would put a serious crimp on my plan to sit on the beaches in Jamaica for twenty years, drinking pina coladas and tending to my hemp farms.

Dr. Ephrem Cheng did an actuarial study of life span vs. age at retirement, based on pension cheques sent to employees of Boeing Aerospace. Yeah I understand that only a small chunk of the employees were actually pilots, but that also tells me the stats likely hold true for everyone, not just flying guys. I swiped one of the tables from the study to show you:



See what I mean? For people who retired at the age of 50, their average life span is 86; whereas for people retired at the age of 65, their average life span is only 66.8! If you do the math according to the actuarial tables, you lose about 2 years of life expectancy for every year you work after age 55.

The Boeing experience is that employees retiring at age of 65 receive pension checks for only 18 months, on average, prior to death. Similarly, the Lockheed experience is that employees retiring at age of 65 receive pension checks for only 17 months, on average, prior to death. Dr. David T. Chai indicated that the Bell Labs experience is similar to those of Boeing and Lockheed based on the casual observation from the Newsletters of Bell Lab retirees. A retiree from Ford Motor told Dr. Paul Tien-Lin Ho that the experience from Ford Motor is also similar to those in Boeing and Lockheed.

I understand that there are many varied and complex reasons for this: People who retire early tend to be more wealthy with more access to high-end healthcare, while people who retire later tend to do so either because they need the money (which could be stressful) or they just need to work all the time (which is also hard on the body).

In my case, I'm hoping that careful investment coupled with Lisa eventually taking over the world (she has a particularly keen business sense) will give us the financial ability to depart the working world while we (mostly me, as I'm 13 years old than her) are still young enough to enjoy retirement.

Alright, I'm off to go check my RRSP balance and plan for July 2031 :)

5 comments:

Anonymous said...

Good information! I think that work has to be clearly defined. If we work after age 55, why do we make that choice? As you point out some do for financial reasons. Others do because "work" is actually what makes their bells ring.Would it be work if you were flying your own Beaver complete with barbeque on the wing into lakes filled with pike willing to leap onto the Barbie? I know current stats tell us the majority of Canadians don't love their work, but at least 38% of us do and choose to keep at it , despite the perils predicted by the actuarial tables. If you love doing it, is it work??

IslandFlyer said...

Due to a couple of fortuitous factors I took the freedom fifty-five option and left my office in the sky. Regrets? Not about leaving the airline industry where the locked flight deck doors and increasingly busy airport ops were giving me a growing sense of claustrophobia. If however, someone offered to ride shotgun for me while I flew a few IFR approaches in their A319 I'd say "Yes!" in a heartbeat. Yahoo!

I now get my choice of what work I do, and when I do it. I haven't so much "retired" as redirected. I can't understand folks who get bored after leaving their primary source of work.

And my homebuilt aircraft still provides me with ample excuses to hang out at the airport. Any day at an airport is a good day.

Aluwings said...

Re this statement in that study: "many of these late retirees do not live long enough to collect all their fair shares of pension money such that they leave a lot of extra-unused money in the pension funds resulting in the over-funded pension funds."

This study is dated 2002 - the height of the recent economic "bubble."

Since then, greedy/ingeniouis/wunderkid CEO's have found creative ways to raid perceived pension plan surpluses while paying themselves and their cronies obscene bonuses. I doubt right now if there's a pension plan in any airline-related industry that isn't seriously under-funded!

This new reality will provide a strong stimulus for the "keep working till you drop" crowd.

Aluwings said...

Can't resist one more comment:

This isn't a very sound research paper. For example just because there is a correlation between the two scales, there is no evidence presented to prove a cause-effect relationship. So this conclusion is bogus: "... for every year one works beyond age 55, one loses 2 years of life span on average."

The author also includes hearsay and makes equally poor presumptions throughout. He also focuses in on a very small subset of what makes a desireable employee. It sounds a lot like a justification by a young man trying to encourage his older colleagues to move on and make room for his own advancement!

I'd suggest that a better indicator of your personal longevity is to look into your own family history and consult the insurance industry's actuarial tables.

hovlandw said...

The Boeing company has a webpage that contradicts the idea that working longer decreases longevity for their retirees.

www.boeing.com/companyoffices/empinfo/benefits/pension/seminars/Rumor.pdf

Here's an excerpt:

“The idea that working longer will
shorten a Boeing employee’s life
expectancy simply isn’t true,” said
Julie Curtis, an actuary at Boeing.
I’ve been looking at the data since
1983, and the length of a retiree’s
life is unrelated to the age at his or her retirement. Our retirees tend to live a long time no matter how old they are when they retire. If the charts were accurate, we wouldn’t have the large number of retirees that we do
(nearly 500,000) and the large amount of pension payments (more than $2 billion a year).”
The first inaccurate life expectancy chart surfaced in the early 80s, and versions of it have been floating around for years – almost as an “urban myth.” The Internet now spreads the misinformation farther, faster, and in a more professional-appearing form. Boeing and many other companies have tried to dispel the misconception.
Unfortunately, the bad news – even though it is fiction – catches people’s attention, while the good news (that Boeing employees generally live longer than the national average), is accurate but often overlooked.