Originally published on Advisor Perspectives, July 17, 2018

A focus on early-retirement planning could cause your clients to die prematurely.

Much of the advice you provide is geared towards planning for retirement and insuring your clients are able to maintain their quality of life after they stop working. Here’s what you may not know: There’s compelling data showing a link between early retirement and death.

Troublesome data

One study from the Social Security Administration found men retiring exactly at age 62 increased the odds of dying by 23%, compared to men retiring at 63, and by 24% compared to men retiring at age 64.

These results persisted after controlling for current age, year of birth, education, marital status and race.

The study also found less educated male employees who retired early faced an even higher risk of mortality.

Over the 18-year period studied, a one-year difference in retirement “was associated with an 11% lower risk of all-cause mortality.” Significantly, similar results were found in the unhealthy retirement group, which reduced mortality by 9% when they delayed retirement.

A study on the relationship of early retirement and mortality for blue-collar workers in Austria showed a 13% increase in the possibility of dying before age 67 among early retirees in males, but no adverse effect for women.

Contrary data

The news is not all bad for early retirees. A study of retirees in Israel found no support for the association between early retirement and mortality. The study found those who retired earlier had the same lifespans as those who didn’t.

There’s even better news in a study using “Dutch administrative micro panel data.” It found that early retirement “decreased the probability that a man dies within 5 years by 2.6 percentage points.”

Practical ramifications

These conflicting studies have practical ramifications for advisors.

Better financial planning

For many Americans, the decision whether to retire early is moot. One survey found almost 20% of those over 44-years old have no retirement savings. Almost 50% of Americans don’t have sufficient savings to maintain their quality of life in retirement.

You perform a valuable service by helping your clients save more, spend less and invest wisely.

Don’t make assumptions

We all have a tendency to project our beliefs and biases onto others. Instead, don’t assume early retirement is the right choice for all your clients. For some clients delaying retirement – and maybe never retiring at all – may be a choice better suited for them.

Instead of “planning for retirement,” the discussion with your clients should cover subjects like: What are your goals for later stages of your life? Do you enjoy your job? If not, should you consider a new position or even changing careers? Do you feel an “obligation” to retire? What’s your ideal scenario for life after 60?

The job of a real “holistic financial planner” is to stimulate discussion and present data that empowers clients to make decisions in their best interest.