When should I retire?

When should I retire is by itself a simple question. Yet, it is a difficult question to answer. Some of us, like myself, made an impulsive decision and acted on it. Sometimes that is the best course of action, in my case, it was not. I retired on a Friday and was rehired the following Monday on a part-time basis. I worked for another 8 years before I finally retired full-time.

Others when they are considering retirement look closely at the economic decisions related to retirement. They look at labour supply, savings rate, insurance coverage, medical needs and their spending habits.

When planning to retire, some people consider how long they expect to live. Advancement in the science of ageing has meant that there has been a rapid increase in the understanding of genetic variation that contributes to longevity-related traits and diseases. In addition, this information is becoming increasingly available to patients and consumers.

Retirement is a period of life where we start to decline in our overall health and stamina and if we want to work, labour opportunities become more limited. To avoid poverty, we work hard over our life to avoid poverty during our old age, by making economic decisions based partly on how long we expect to live.

It is almost impossible to predict how long an individual might live. But here are some factors that may affect your expected longevity. Health status, sex, demographics and lifestyle, and psychological aspects such as optimism have been shown to affect how long a person might live. Importantly. it has been shown that both expected longevity and self-rated health are relatively accurate and complementary predictors of actual longevity. It also has been shown that we tend to update our expectations in case of health shocks and newly acquired health information. As we plan for retirement, we reflect on our health arid its influence on our longevity and on our financial situation.

There has been some research that shows that genetic differences have been estimated to explain up to 25-30% of the overall variation in longevity. To some extent, family history can be used to infer a measure of genetic risk, but an individual would only know the true risk by undergoing a comprehensive genetic screening. This is a long way off, but one day a person will be able to get a series of comprehensive genetic tests that will allow them to make a safe prediction about how long they will live. The question is would you want this information?