What is retirement anyway?
On first thought most people may think this is a silly question. It's obvious. We all know what retirement is. When you have enough money or can't work any more you stop working. In return for a lifetime of working you generally get Social Security and/or another public or private pension. You may also use various forms of savings and investments (money storage vehicles), if you have them, to help finance the rest of your life.
If you're lucky enough to have both adequate money and good health you start doing all the things you like but didn't have enough time for. You play more golf. You travel. You go on cruises. You take it easy. That's the story, anyway.
If you thumb through AARP publications or watch TV ads for Cialis or drugs for the common diseases of age you would think that the ideal "retirement" consists of couples golf followed by a glass of wine while seated side by side watching a nice sunset with a significant other, possibly followed by who knows what? I like a nice sunset as much as the next person, but I must say that I don't find the sunset a very encouraging metaphor.
I have nothing against golf, either. In fact, I often tease dedicated golfers that I plan to take it up myself if I make it to 90. But I must tell you that golf does not satisfy me as the solution to the big question. Golf and pleasant travel are diversions, very nice diversions. They are things we wish we could do more of when we are too busy. What they are not is a definition of purpose for the last stages of life.
So the big question lingers. Is that really all there is?
I mean, I love to travel. I love the two or three weeks a year I spend with just my wife and the two or three weeks a year we spend with adult children and close relatives. I love making her happy by hitting hours of tennis balls with her, especially in a beautiful environment (a badly maintained but secluded court on a Mallorca hillside stands out among many memories). And I love being around people with whom I can be pretty much exactly who I am without much self-censorship. These are all great things.
What they don't add up to is a mission statement. They don't tell you what you are supposed to accomplish in the final stage of life. I spend a fair amount of time and effort trying not to become decrepit, demented, or doomed to an earlier death than necessary, but that's not so much a mission as a necessary pre-condition.
What's the mission?
Maybe there isn't one. You just run out of steam and shift gears from accumulation phase to distribution phase. That's what the financial models say anyway. What they don't say is what life is supposed to mean in the distribution phase. Accumulation phase has its obvious purpose: You accumulate. What are you supposed to do in distribution phase? What's your mission?
Bismarck And The Concept Of Retirement
Retirement as we know it is a pretty new concept. If you wanted to set a date for its invention, that might be 1889 when Bismarck established the age of 70 for a national public pension. He argued the social justice of this system, but one of his primary motives was to undercut the socialist political movement in Germany.
Before Bismarck - before it became clear that the industrial revolution had changed everything - the majority of people worked on farms. As they grew older they worked less. This is how it was in my family. At a certain point of decline the old ones spent increasing time on the front porch in rocking chairs. Along with the children they got first choice for favorite pieces of fried chicken. They still tried to make themselves useful. They found purpose in tending grandchildren and reminding their children of the unpredictability of weather and market prices. They passed along the idea that it's a bad thing to plant the same crop every year. Planting lespedeza every few years was a good thing. It turned out to be well supported by science as a way to restore nitrogen to depleted soil. The old folks knew.
Life in those days tended to end with a health crisis which couldn't be addressed by the medicine of the time. It wasn't as brutal as the oft-cited Inuit way of leaving immobile old folks on an ice floe (a much rarer practice than once thought) but it wasn't Social Security, Medicare and modern medicine either. I actually wouldn't mind living out my life the old-fashioned way, but the Old Home Place is gone now and replaced by a subdivision. Modern industrial society changed everything - everything except human beings and their basic nature which evolved over some 200,000 years.
For the contemporary individual, all forms of "retirement" come down to one thing. Before that particular moment, one's life is spent in productive activity storing up assets and entitlements. After that arbitrary moment, they are no longer expected to be "productive." Life consists of living as well as possible off of those accrued and stored assets.
Doing what? Being who?
Who are you when you are no longer productive?
Bismarck doesn't appear to have given that much thought, at least until the following year when the young Kaiser Wilhelm II removed him from power. He was 75.
Erik Erikson And The 8th Stage Of Life
When I was in college I had an intense interest in the work of Erik Erikson. Erikson, a Swedish/German psychologist who ended up at Harvard, was the creator of the term "identity crisis." Since I was in the middle of my own identity crisis when I encountered his work, Erikson became my go-to guy on the subject of life crises.
The signature contribution of Erikson was his description of the eight stages of life, the last of which was the crisis of advancing age. It starts around 65, the most common age defining "retirement." Now that I am well into that 8th stage I have found it helpful to thumb through Erikson again.
After Erikson's death at age 92 his wife, also a psychologist, added a 9th stage, the final decrepitude of the "old" old, but I'm not going to address it in this post because it's too grim for me to consider just yet. Give me the ice floe, I think. So I'll stick to the 8th stage, which Wikipedia summarizes this way:
Wisdom, Ego integrity vs. despair-This stage affects the age group of 65 and on. During this time an individual has reached the last chapter in their life and retirement is approaching or has already taken place. Ego-integrity means the acceptance of life in its fullness: the victories and the defeats, what was accomplished and what was not accomplished. Wisdom is the result of successfully accomplishing this final developmental task. Wisdom is defined as 'informed and detached concern for life itself in the face of death itself.'"
What I like about Erikson's 8th stage is that it defines the retirement stage not as a chronological or financial event but as a task. It's a crisis one must pass through in order to affirm one's existence in the face of death. It provides the opportunity to accept the identity achieved over a lifetime and live fully and happily as oneself. I think that serves pretty well as a mission statement.
Erikson would say that the important thing for you to do as you enter this stage of life is to look honestly at who you are and how you have become who you are. This may involve a major rewriting of your personal narrative. The new narrative conceived when you are older should be truer to the person you have become. It is also a way to examine and make peace with mistakes, misdeeds, and false starts. It may well include a few surprises.
Writing an autobiography or family history, by the way, is not a bad activity during "retirement."
I'll share a few pieces of my own revised narrative.
-As boy I wanted to grow up to be President of the United States or a Major League Baseball player, perhaps both. I remembered this recently when filling out a password retrieval question asking what you wanted to be when you grew up. I obviously wasn't alone in these boyhood dreams. Others must have had the same thought because President and baseball player were both on the short list provided, along with the usual suspects such as fireman and policeman. This reassured me that I had been pretty normal.
So I failed? Yes and no. It bothered me a lot when I was in my thirties and it actually led to sleepless nights when I realized that I was not on track to be President and was getting pretty old for a Major League rookie. Why did I not become President? There are some very sound reasons. Other than the fact that becoming President is a very low probability long shot, what mainly stood in my way was that I didn't have the single-minded drive required. I lacked the day-to-day obsessiveness to "climb to the top of the greasy pole," as Disraeli put it. To become President you have to want it really bad. I didn't.
How should I feel about that? It certainly contrasts a boy's view with that of a man in his seventies. I can explain it best through my revision of another narrative. My father was an obsessive collector of data on family and ancestors. His database on our family rivaled that of Icelanders and Mormons (whose library he once visited). I tired quickly of his endless family stories, and didn't bother to conceal my boredom when he dragged me along to visit obscure churches and cemeteries. What really bothered me was that our kinfolk struck me as ordinary - ordinary people of ordinary experiences and ordinary attainments. They seemed to be decent, hard working, and honorable folks, but... ordinary. As a boy, I wasn't interested in ordinary.
I liked books about presidents, generals, ball players or financiers who moved and shook the markets. My relatives were none of the above. Why should I take an interest in their lives? I wanted to do something with my life. My father couldn't help me understand because I think he had not worked it out for himself. He had some of the same ambitions I did and had never gotten himself free of them. In fact he thought I might be his last shot at getting "the greatness thing" done. No such luck.
Being a grown-up is a matter of revising your views on things like being ordinary. You gradually realize that there is nothing wrong with it. In fact, living a good ordinary life is not a bad central goal. It may even be the very best kind of life. Many people don't succeed at it.
Think about presidents. If Richard Nixon hadn't managed to become president he would probably have jumped off a bridge or drunk himself into a stupor every evening (disclaimer: I wrote my senior honors thesis on the early career of this extremely capable but very unhappy man). If Gerald Ford hadn't become president he would have continued to be the same man who cleaned up his dog's poop rather than letting Secret Service agents do it. I got to meet him once before he was president, and he seemed like a good ordinary guy. Which of these two presidents would you prefer to be?
-So why didn't I become a Major League ball player? Short answer: I wasn't good enough. My fastball didn't have enough on it. Rats!! A nice lady on our block repeatedly told me that I was lucky I wasn't a little better or I would waste my life trying to be a professional athlete. I didn't appreciate her insight at the time, but she was exactly right. It would have been a diversion from the real journey.
-Oh, and there's my wife, who thinks I'm pretty savvy about the markets. From time to time she asks why I didn't become a multi-billionaire. She thinks I could have easily become a hedge fund guy. Short answer: Even when I was a kid (and I bought my first stock at age 12), shuffling pieces of paper around in an after-market didn't seem an important enough thing to become the central thing you do with you life. After the first million bucks or so the money becomes at best redundant and at worst a bad thing which distorts your life and encourages bad habits and behaviors.
The other night my wife called me upstairs to watch a rerun of the pilot for the HBO series "Billions." She thought it was right up my alley. I thought it was okay. I told her I thought it was fairly accurate and might serve as the answer to her question of why I didn't wish to become a hedge fund billionaire.
Re: hedge funds, have a look at the hedge fund comments in the Warren Buffett letter just published. The main thing about Buffett is not how many billions he made but the rarity of a person who made billions in the financial markets in a way that can be broadly described as aligned to the constructive elements of capitalism and which left room for basic humanity. He got beyond his billions in a way that makes him interesting as a human being and a source of life wisdom. Talk about a successful 8th stage!
So that's a small bit about my private journey. But what about the larger purpose? Do we all need to offer pithy bits of wisdom like Buffett? What are the special possibilities and obligations of advanced age?
The Wild Man (Or Woman) From Deep In The Forest
Myths provide useful hints about getting through life's major crises. Consider Star Wars - which was largely inspired by very serious studies of mythology by the late Joseph Campbell. Its primary theme is the "identity crisis" of Luke Skywalker, who must accept the difficult challenge presented him and find his identity through a sort of descent into hell (think Odysseus and Aeneas for literal visits to hell within epic literature). A Joseph Campbell principle is that the saddest outcome in life is not being struck down in the pursuit of one's life but failing to accept the call to adventure.
My youthful descent into hell was, of course, Vietnam, which presented challenges at the moral, physical, and existential levels. I have given a dozen reasons over the years for why I volunteered, but deep down I think I knew at a level deeper than conscious thought that it provided exactly the journey into hell that achieving my identity required. I have zero regrets. I don't think I would have minded if it had killed me. Instead it made me who I am. It was the formative experience of my life.
There is a close relationship between the youthful challenge of identity and the older person's challenge of life affirmation. They have the same subject matter. Remember, Star Wars had an important elder figure in Yoda. He had lived the life of a warrior, but lived in solitude on a forest planet until called upon to educate Luke in the warrior's way. A part of it was acquainting Luke with the idea that there is spiritual dimension to it.
My personal favorite version of "the wild man in the forest" is Iron John (Eisenhans), tale 136 by the Brothers Grimm. If it sounds vaguely familiar, that's probably because it was appropriated a couple of decades ago as a text for the men's movement led by the poet Robert Bly (and no, I was never myself a participant in the movement, although I thought it had some good points).
Iron John was a wild man covered with rusty iron hair, apparently a dangerous fellow who lived deep in the woods in a place from which hunters never returned. Eventually Iron John is captured by a single brave hunter and placed in a cage in the palace square.
What follows is a story about learning to break rules. The king's son loses his golden ball, which rolls into the wild man's cage. To get it back, he is required to let the wild man out of the cage. Doing this requires stealing the key, which is hidden under his mother's pillow. The young man performs this task and releases the wild man, who then carries him off into the forest.
When the wild man leaves each morning he gives the boy a set of rules. The boy breaks them, which is of course exactly what he is supposed to do. When he finishes breaking the rules he has earned his place as a man and sets off on a series of adventures. Like Star Wars, the Iron John story fuses the youthful journey - both the lonely hunter who captures the wild man and the young boy the wild man mentors - with an exploration of the role of elderly mentors who are both wise and wild.
Being old means the rediscovery of freedom. You can say any thing you want to. After years of following the necessary rules of middle life, you can throw off your inner censors and say what you really think. As we used to say when we didn't follow standard procedures in Vietnam, "What are they going to do to you, ship your @$$ to Vietnam?"
Kids are a wonderful thing. Everybody in life's 8th phase should try to spend time around them. It's my great good luck that I can still work in a job that does that, teaching tennis on a daily basis. In the process I found my true calling. I enjoy saying outrageous things which kids are unlikely to hear from parents and teachers, but which are true or at least a good stimulus to thought.
If they ask, I am happy to tell them that the existence of God is many negative powers of ten less likely than the existence of the UFO folks from other star systems (also quite unlikely), but not nearly as unlikely as the Easter Bunny (if the Easter Bunny turns out to exist, a lot of china will break in the House of Reason). I will also happily tell them that as far as I can tell, death is a lot like hitting a switch and turning off a light. Kids have asked me these things. I say what I really think. I love my job.
Kids today obviously start out about the same as they always have - curious and interested in encountering and mastering the world - but they seem a little soft and coddled and tame to a degree that I feel damages their best hopes. It's the times, I think, at least in my affluent suburb. Instead of becoming an old grump about this I feel lucky to have the opportunity to do my small bit about it. Luckily the problem of being soft and timid is remediable. I have two themes I share with them.
1. Be tough.
2. Break some rules.
I have always had a high hurdle for accepting fatigue, illness, or injury - for myself, for my kids and step-kids, and for my students. I point at the nearest tree line and say, "If there were a thousand Viet Cong in that tree line, would you be worrying about not feeling well? If not, get back in line and continue the drill."
One day an undersized kid turns up with an inhaler for his asthma. "The inhaler's fine," I said, "just raise your hand if you are within two minutes of death."
The kid sort of looked at me funny, so I added: "I would hate to miss it."
That's the way men talk to each other.
I once bugged a personnel guy about my expected orders for Vietnam and he said, "Don't be in a hurry, Sloan, the guy you're gonna replace ain't been killed yet."
That kid with asthma, by the way, overcame modest physical ability and became one of the best players I ever coached. He played high level varsity tennis. He was tough. He was very proud of his Norwegian ancestry so I named him Olaf. It stuck. Kids were baffled when a teacher called on him by his given name.
Then there were these two twins who were joint valedictorians at every level and perfect in meeting every adult expectation. They were way too nice and well behaved. I gave them an assignment: They had to show up at school for one full day without their homework. I told them it was a test of character. It was a test they had to pass or terrible things would happen in their lives.
I could tell dozens of stories, but then I would turn into my father, which would be a very tedious thing indeed. And, hey, this is a financial site.
What's The Financial Implication?
If you understand that the goal is to live a good ordinary life, life is really pretty inexpensive. You can go places and enjoy things, but you don't have to display anything, show anybody up, or conform to anybody else's expectations about what material goods and money should mean to you. If you do this for ten or fifteen years before retirement, saving regularly, you'll probably have more than enough.
Today as I write this it's Buffett letter day. In our little world, Buffett is our Yoda - the Wild Man special to our area of interest (but you will notice that without calling attention to it he named a woman to succeed Tad Montross). Here's a suggestion. Try reading the Buffett letter as an old guy passing along some wisdom. Skip the numbers and the financial stuff. Take my word: All that stuff is going okay. The best stuff is in little asides and between the lines.
This isn't any kind of formula or road map for being old. There isn't any, as far as I can tell. That's the truth of it. What we have in common is that we're all heading for the same roundup. What do you really want to have been doing along the way? Please share your thoughts. I'll respond.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.