Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Retire early, live longer
Old 02-27-2004, 04:04 AM   #1
Early-Retirement.org Founder
Developer of FIRECalc
dory36's Avatar
 
Join Date: Jun 2002
Posts: 1,826
Retire early, live longer

I posted this in a thread about the life of the social security system, but as some may not read that thread, I thought it was worth posting here as well.

As one of those people who likes to examine the numbers myself, I wish I could find raw data on the topic of the article below, but so far that hasn't been successful.


Here is an excerpt from a study (see http://faculty.kfupm.edu.sa/coe/gutu...sc/Retire1.htm for the full (translated?) article, which also discusses years of maximum creativity etc.).

Longevity Vs. Retirement Age

The pension funds in many large corporations (e.g., Boeing, Lockheed Martin, AT&T, Lucent Technologies, etc.) have been "Over Funded" because many "late retirees" who keep-on working into their old age and retire late after the age of 65 tend to die within two years after their retirements. In other words, 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.

Dr. Ephrem (Siao Chung) Cheng provided the important results in the following Table 1 and the associated chart from an actuarial study of life span vs. age at retirement. The study was based on the number of pension checks sent to retirees of Boeing Aerospace.





Table 1 and the chart indicate that for people 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. An important conclusion from this study is that for every year one works beyond age 55, one loses 2 years of life span on average.

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.

The statistics shown in the Pre-Retirement Seminar in Telcordia (Bellcore) indicates that the average age that Telcordia (Bellcore) employees start retirement is 57. Therefore, people who retire at the age of 65 or older are minority as compared to the number of early retirees.

The hard-working late retirees probably put too much stress on their aging body-and-mind such that they are so stressed out to develop various serious health problems that forced them to quit and retire. With such long-term stress-induced serious health problems, they die within two years after they quit and retire.

On the other hand, people who take early retirements at the age of 55 tend to live long and well into their 80s and beyond. These earlier retirees probably are either wealthier or more able to plan and manage their various aspects of their life, health and career well such that they can afford to retire early and comfortably.

These early retirees are not really idling after their early retirements to get old. They still continue doing some work. But they do the work on the part-time basis at a more leisure pace so that they do not get too stressed out. Furthermore, they have the luxury to pick and chose the types of part-time work of real interest to them so that they can enjoy and love doing that "fun" work at a more leisure pace.

The late retirees are small in number, tend to die quickly after retirement and disappear from the population of old people beyond the age of 70. Late retirees, therefore, have very little weight on the statistical average life expectancy of the population of "old people" dominated by the early retirees.


For what it's worth (about what you paid...), when looking for other similar articles I found little, but I found several talking about the issue that public policy favors later retirement, so that increased SS contributions and decreased withdrawals will keep that system healthy.

I guess I will stay out of decisions about how many years of your life you are willing to give up to help the SS fund. That seems like a decision we must each make for ourselves.

As for me, hmmm.. my health, or SS's health... let me think... -- let me get back to you on this.

Dory36
__________________

__________________
Often uninformed, seldom undecided.

Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
dory36 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Retire early, live longer
Old 02-27-2004, 05:18 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Re: Retire early, live longer

The problem I have with this stuff is that it raises more questions than answers- do people at Large Corporations(?all with good health plans) work to 65 because they're not healthy so they can keep coverage? Issues of data mining come up - are stress, poor financial planning, lifestle, hourly vs salary, etc., comingled?

Hopefully there will be more studies forth coming.

My opinion(not data) from aerospace is line foremen and lower management worked as long as they could and croaked early - they got it from both ends - hourly and upper management. Is that true - I have no idea - just an opinion.
__________________

__________________
unclemick is offline   Reply With Quote
Re: Retire early, live longer
Old 02-27-2004, 05:54 AM   #3
Early-Retirement.org Founder
Developer of FIRECalc
dory36's Avatar
 
Join Date: Jun 2002
Posts: 1,826
Re: Retire early, live longer

You are right - too many questions and not enough answers to take something like this at face value.

I discovered somewhere else that the original author later felt the original data was contaminated by failure to consider typical lifespan for the timeframe of the retirement -- i.e., lots more people worked until 65 when the average lifespan was much closer to 67, and more retired early in more recent years when the lifespan is edging towards 80 or so.

His conclusion after further analysis was that the correlation between lifespan and retirement age was about .37. Sorry to report, this was about the only hard number he provided.

This figure, at the low end of "moderate" by some folks' characterization, wouldn't invalidate the whole concept, but it would make the impact much less. Probably about the same as any one of the factors in the lifespan quiz recently posted. I would love to see the correlation on those.

This is why I like raw data. My grad school advisor really pounded that into me. He loved to point out that when the average incidence of hair cancer in a random population of 10,000 was 5 cases, and the incidence changed to 10 when the population was composed of people who used Brylcream, then the headline always said that Brylcream doubles your chance of hair cancer!!!!

Somehow, they never reported it as 99.9% of people won't get hair cancer at all, whether or not they use Brylcream.

(The prof used real numbers, diseases, and behaviors, but I can't remember any of the real ones and a quick search doesn't reveal any on the internet. See Walch's "True Odds" for an interesting book on this subject.)

Dory36
__________________
Often uninformed, seldom undecided.

Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
dory36 is offline   Reply With Quote
Re: Retire early, live longer
Old 02-27-2004, 09:17 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Retire early, live longer

Hah, I posted about the same thing in the other thread referencing this.

I used to do such studies as a part of my job. Its amazing what the data will confess to under the right types of torture.

I've seen a lot of studies that were intentionally or unintentionally warped. About 9 years ago I worked for a startup that did business taking apart other studies to demonstrate where they "goofed" and then respun their data to produce alternative "results".

Who sponsored the study usually had a great deal of influence on the results. I'll go read this study and see if they talk about methodology and process, but at first blush I'd guess the aerospace companies paid for it, and their intent was to either convince more people to take an early-out package or to allow them to dip into the pension fund because all that money is clearly not needed.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Retire early, live longer
Old 02-27-2004, 09:36 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Retire early, live longer

That was a quick study of the study. Its long but interesting and salient to both this topic and the overall board topic. I will shorten or remove it if the length is considered displeasing to anyone.

Ephrem Cheng built this analysis on the basis of data he got second hand from Boeings actuarial department, and it was "supported" by anecdotal information from other people.

It is initially suspicious because of the linearity of the data itself.

On further review and when Ephrem was challenged, he recontacted his actuarial friends at Boeing who acknowledged that the data had been "floating around" for more than 20 years and nobody knew where it had actually originated.

A current study done at Sandia labs in 2001 indicated that regardless of the retiree date, age at death spanned a 30 year period. The correlation between retirement age and longevity was only .37, extremely low.

On recontacting Boeing with this new Sandia data, Boeing acknowledged that the new data was consistent with current data they were using.

The determination from this is that the original Boeing data was a hoax or simply a bad conclusion drawn from bad, aged or mixed data.

Further summarization from the re-analysis:

"In statistical analyses, the analyzers are often under substantial pressure to get a reasonably large sample size to yield stable statistics. For example, the Sandia retiree study covers the 50-year period from November 1951 to May 2001 and involves about three different generations of people assuming 20 years for each generation. Some of those people who retired in the early 1950s in the Sandia retiree study may be born in the 19th century. Therefore, such statistical study of retirees mixes populations not only from different generations, but also from different centuries with very different average life spans. We shall call such retirees life span statistics as a “composite” life span statistics in view of the time dependence of life span.

Since the retirees who retired in early 1950s may have an average life span shorter than those retired in late 1990s, 2000 and 2001 by about 21 years, such mixture of three generations of retirees in the statistical analysis may increase the range of scattering of data from their average values by about 21 years and contribute to the obscuring of the possible either positive or negative effect of age of retirement on life span if there is any effect at all. It may also contribute to the low correlation coefficient of 0.37 between age of retirement and the life span in the Sandia data.

One of my classmates reminds me that the large-scale epidemiological studies indicate that the workers tend to be healthier and tend to live longer than the non-workers, on average, and is know as the Healthy Worker Syndrome (HWS).

Similarly, the composite old Boeing retiree data may also contain retirees who may also be born in the 19th century with an average life span much shorter than that of our current generation of working people in the 21st century.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Retire early, live longer
Old 02-27-2004, 09:36 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Retire early, live longer


8. Possible Reduction of Life Span for Old Workers

The scattering plots of the Sandia data indicate that:

(1) In the range of age of retirement from 55 to 65, there was no reduction of life span due to increase of age of retirement.
(2) However, there appear to be some reductions of the life span for age of retirement greater than 65.

There are at least two possible reasons for the appearance of reduction of life span for age of retirement beyond 65:

(a) The burn-out and stress-out effect when the workers get very old and get close to within 10 years of their average life span, and
(b) Artificial distortion of statistics due to some missing data caused by limitation of such retiree study as explained in the following Section 8.1.

8.1 Artificial Distortion of Statistics

In the Sandia retiree data covering 50-year period from November 1951 to May 2001, we shall use the following two sub-groups to illustrate the effect of artificial distortion due to some missing data:

(O) The early and oldest group of retirees who retired in the period from 1951 to 1956, and
(Y) The youngest group of retirees who retired in the period from 1996 to 2001.

With the 50-year time difference, the average life span of the oldest group (O) is shorter than that of the youngest group (Y) by about 21 years according to Table 1.

Effect I - When the data of the deceased retirees are plotted on the scattering chart in the year 2001 for the age of retirement beyond 65, most of the youngest group (Y) with long life span are still alive in the year 2001 and are missing on such scattering chart for deceased retirees.

Effect II - On the other hand, most of oldest group (O) with shorter life span probably all died already by the year 2001 and all showed up in the scattering charts beyond the age of retirement of 65. Therefore, the data points that show up in the age of retirement beyond 65 tend to be dominated by the oldest generation (O) with shorter life spans.

The effect I plus the effect II on the scattering chart give a visual impression of reduction of life span beyond the age of retirement of 65 on the Sandia data.

In principle, the Sandia retiree data for the retirement period from 1951 to 2001 should be analyzed in sometime after the year 2030 to avoid this artificial distortion due to the missing data. The analysis team has to wait for at least 30 years until all those in the youngest group (Y) with very long life spans have died in order to get the correct and accurate statistics for the age of retirement beyond 65.

However, when those Sandia vice presidents and many employees were stunned by the old Boeing retiree data, they probably could not wait for 30 years to get the answer. They probably asked for immediate data analysis in the year 2001 for all retiree data up to the year 2001. This process led to the artificial distortion of the statistics at age of retirement beyond 65.

8.2 Exaggerated Effect of Age of Retirement on Life Span

Therefore, I believe that both the distortion effect and the burn-out effect contributed to the appearance of the reduction of life span beyond age of retirement of 65 on the Sandia data. This probably is also the primary reason for the substantial reduction of life spans beyond the age of retirement of 55 on the old Boeing retiree data. If the effect of the artificial distortion were removed in such statistical analyses, the remaining real effect of age of retirement on life span would be much smaller than those shown on the Sandia data for age beyond 65 and on the old Boeing retiree data for age beyond 55. One may even speculates if the effect of age of retirement on life span might swing from the negative side to the positive side if the artificial distortion effect was removed.

Therefore, the effect of artificial distortion due to missing data exaggerated the visual impression of the effect of age of retirement on life span and caused many readers to be greatly surprised and stunned.

In this sense, the controversial statement in Section 2.1 for the old Boeing retiree data should be labeled as “exaggerated and distorted statement”.

8.3 Threshold Age of Retirement

For convenience of discussion, we shall call this age of retirement of 65 on the Sandia data as the threshold age of retirement beyond this threshold the reduction of life span begin to show on the scattering charts.

8.4 Time Dependent Threshold Age of Retirement

Since the average life span of general population is increasing with time, we expect that the threshold age of retirement also increases with time.

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Retire early, live longer
Old 02-27-2004, 09:36 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Retire early, live longer

The composite old Boeing retiree data indicate that the threshold age of retirement is about 55, which is shorter than that (i.e., 65) of the Sandia Study by about 10 years. Based on the time dependence of life span in Section 6, the 10 year difference in life span translates to about 23 years difference in time assuming 8.7 years of increase in average life span for every generation of 20 years. Since Sandia data covers retirees up to 2001, then we infer that the old Boeing retiree data probably covers retiree data up to about 1978.

This estimation of 23 years is reasonably consistent with recent response from Boeing Actuaries Services indicating that the old Boeing retiree data has been floating around in the industry for more than 20 years.

Therefore, the controversial statement in Section 2.1 probably makes sense ONLY to those older generations of people in the old Boeing retiree data with an average life span shorter than that of Sandia Study by about 10 years.

It is, therefore, inappropriate to apply the statistical implications of the composite old Boeing retiree data to our current generation of workers because of the 10-year difference in the average life spans and because of the artificial distortion effect.

8.5 Threshold Age of Retirement of Current Generation

The average life span of our current generation of workers will be even longer than those of composite Sandia retiree data because the “composite” Sandia retiree data still contains retirees who retired as far back as 1951. Some of those retirees might have been born in the 19th century.

Therefore, the threshold age of retirement for the current generation of working people in the 21st century will be greater than 65.

9. Reasons for Apparent Contradiction

The key reasons and factors contributing to the apparent contradiction between the old Boeing retiree data and the Sandia retiree data are summarized in the following:

9.A Both Boeing retiree data and Sandia retiree data suffer the artificial distortion effect that greatly exaggerates and distorts the effect of age of retirement on life span in the tail end of very old age of retirement.

9.B However, the threshold age of retirement for the tail end of old age in the old Boeing retiree data is shorter than that of Sandia retiree data by about 10 years because of the time dependence of life span (see Section 6) and the estimated 23-year difference (see Section 8.4) between old Boeing retiree group vs. Sandia retiree group.

9.C The center range of age of retirement of greatest interest and attention to most readers regarding the possible impact on health and life span is from 55 to 65.

9.D The Sandia retiree data appears to be quite normal and reasonable within the center range (9C) of great attention. The artificial distortion effect shows up in the tail end beyond 65 of the age of retirement of Sandia retiree data where not many readers pay much attention and not many readers get too excited about the artificial distortion effect in that far tail end.

9.E On the other hand, the 10-year shift in (9B) moves the artificial distortion effect from far tail end into the center range of greatest attention (9C) in the old Boeing retiree data. The strong spot light on the artificial distortion effect in this center stage caused many readers to be greatly disturbed and stunned by the old Boeing retiree data.

In this sense, the old Boeing retiree data looks terribly bad whereas Sandia retiree data looks very good and acceptable to most readers even though both sets of data suffer the similar artificial distortion effect in the tail end.

10. Conclusion

The new retiree data from Sandia Labs does not indicate any clear influence of age of retirement on the life span for age of retirement below 65. Furthermore, the well-known trend of increasing life span with time may push this threshold age of retirement further up to a much older age in the future.

The controversial statement in Section 2.1 may be applicable only to the older generations of retirees in the composite old Boeing retiree data. However, the possible effect of age of retirement on life span in the old Boeing retiree data is greatly exaggerated by the artificial distortion effect described in Section 8.1

The current generation of working people in the 21st century is enjoying average life spans much longer than those of older generations in the composite old Boeing retiree data. With this understanding of time dependent life span and the artificial distortion effect, the current generation of working people should not be stunned by the exaggerated and distorted statement in Section 2.1 but should express their sympathy to those older generations of people who had much shorter life spans such that they got burned out much earlier in the age range from 55 to 65.

11. Qualifications

Readers should keep in mind that the retiree data discussed in this article and in the previous article all come from HiTech engineering companies. The statistics for retirees from the general population or from other types of jobs may not be exactly the same as those of HiTech engineering companies."

The full analysis is found here:
http://www.cie-gnyc.org/president2002/life_span.doc

With the further caveat that THIS study, while it appears well formed and the data attributed, the data sources for this have not been confirmed by any third party.
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Liquor commercial with Retire Early theme free4now Life after FIRE 14 08-19-2006 04:40 PM
The Retire Early Home Page Old Admin Forum Admin 79 05-19-2006 08:58 AM
How to retire early dory36 Other topics 8 03-05-2006 10:27 AM
Vacation in Iraq! Retire Early! tozz Young Dreamers 22 07-07-2005 09:20 AM

 

 
All times are GMT -6. The time now is 05:44 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.