Why Early Retirement May Not Be Your Best Option

More Americans are taking a new approach to retirement.

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The Great Recession has caused many to rethink their retirement plans. According to TIAA-CREF, the economic downturn has caused 37 percent of Americans to put off retirement. With nest eggs depleted, the prospect of dropping the 9-to-5 grind in favor of leisure and the glory of the golden years is now a distant dream.

Recent research, however, reveals that early retirement may not be the panacea many have hoped. A slew of negative health effects has been correlated to early retirement starting with memory decline. And, unfortunately, mental exercises don't seem to help. Lisa Berkman at Harvard's Center for Population and Development states, "If you do crosswords or Sudoku, you get better at crosswords and Sudoku. You don't get better at cognitive behavior in life."

[See 5 Reasons Older Workers are Delaying Retirement.]

Stanford's Center on Longevity discovered that maintaining the rigors of work actually keeps people functioning optimally. Richard Suzman of the National Institute on Aging says, "It may be the mental rigors, the social engagement, or even an aerobic component of work itself." Whatever the exact reason, getting out of bed each day to face the work day creates a healthier and happier you.

It has also been noted by many of the world's great religions that humanity was created to be productive and live with a sense of purpose. Whether due to science or religion, work seems to benefit the human psyche. Retirees are the most vulnerable societal group to become restless and struggle with depression. "Only when we're retired do we discover what we've lost," says Christopher Sharpley, professor of psychology at the University of New England. "Immediately after retirement, there's a strong upsurge in well-being for the first six or so months, commonly known as the honeymoon period. After one or two years, there's a decrease in well-being, which can often turn into serious depression."

Possibly, work isn't as bad as we have been lead to believe. A University of Chicago study revealed the influence of the prevailing cultural stereotype that work is bad and leisure is good. Researchers gave men and women of various ages and occupations a pager that would randomly beep eight times a day. They were each required to keep a log of their emotional state when the pager went off. When at work, 54 percent of respondents reported feeling "strong, creative, motivated, active, and positive." When away from work, a mere 18 percent noted these same positive emotions. When asked how they felt about work, however, the overwhelming majority of respondents said they would rather not be at work, but engaged in leisure activities.

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These findings and others call into question the institution of retirement itself. Strangely, retirement wasn't a cultural concept until the 1880s when Germany introduced the institution into its social structure. Before that time, people worked until death—something that may seem like a terrible plight to some, but that research is showing to have substantial benefit.

Today, however, baby boomers are creating a new normal for retirement—scaling back on work hours while staying professionally engaged. Whether through consulting, reduced hours agreements with their current employer, or branching out as a "seniorprenuer" by starting a new business venture, increasing numbers of seniors are staying professionally engaged. The new retirement is no longer trading work for leisure, but trading work you no longer want to do for work you love to do at the rate you want to do it.

When you look at the facts, it becomes compelling to reject the idea of traditional retirement. Whether you look to the tenets of ancient religions, which state that humanity was designed to live purposefully, or to science, which shows that unused systems run down and go dormant, the results are clear: use it or lose it.

Steve Beck is cofounder of MarketRiders, an online investment advisory and management service helping Americans invest for retirement. MarketRiders gives investors greater peace of mind knowing that they are leveraging the best thinking of Nobel laureates and the investing methods used by the world's most elite institutions and wealthiest families. MarketRiders is on the investor's side, helping reduce investment costs and risks, and increasing retirement savings.