Chapters

00:00 The Value of Time in Retirement

02:09 Life Expectancy and Retirement Timing

03:21 Maximizing Time with Loved Ones

04:33 Action Items

05:28 Next video and disclaimer

Transcript

Hi everyone, I'm Ryan Earley, vested PERS member, former school finance officer, and host of the PERS Pro YouTube channel. If you knew exactly how many visits with your parents, kids, or grandkids you had remaining in your lifetime, would you still go to work tomorrow morning? Let's dive in.

In our last video, we looked at how your relationships, along with purpose, can be the bedrock of a happy retirement. Today, we're looking at the actual duration of that retirement measured in years and introducing the concept of return on time. Time is a finite resource, yet we often treat it as if we have an infinite supply. The price of time: Research suggests we significantly undervalue our remaining years. A widely cited study by researchers at Stanford and Wharton in 2008 found that the average cost for an additional quality year of life is approximately $129,000. The buyback reality: What would the average retiree spend to buy back another year of their life? When asked, many seniors report they would trade a significant portion of their accumulated wealth just to have one more year of go-go health and mobility. Happiness and time: According to TIAA Institute, studies show retirement happiness can be directly tied to time sovereignty, the ability to control when you retire. Those who retire voluntarily to pursue personal interests report a 20 % higher life satisfaction than those who wait until they are forced out by health reasons. Working longer regret: According to a New York Life Insurance Survey, 46% of all current retirees wish they could have retired sooner, and that number is over 50% for those who retired at age 60 or older. The survey respondents would have retired four years earlier on average if they could retire with the same amount of money.

Let's look at the cold hard numbers from the Social Security Administration's Actuarial tables. Many PERS members retire in their late 50s or early 60s but your active years are shorter than you think. Based on the SSA period life table let's look at the approximate time remaining for three common PERS retirement ages 57, 62, and 67. If you are a male you have roughly 16 to 23 years of life left and if you are a female you have roughly 19 to 27 years of life left. But remember, those aren't all go-go years. Go-go years can be considered anything aged 75 and under. If you are a 57-year-old male and decide to wait until 67 to retire, you have traded away nearly 33% of your remaining life and 55% of your go-go years. For a female delaying retirement from 57 until 67, means trading away 30% of your remaining life and 55% of your go-go years. Those are years of peak health you can never repurchase.

There is another time consideration that is often an emotional one, your parents. If you are a PERS member in your late 50s or early 60s, chances are your parents may be approaching or have reached their 80th birthday. This is the phase where the statistical finish line becomes very real. The 80-year-old lifespan: According to the SSA, a male who has reached age 80 has an average of seven and a half years left. An 80-year-old female has an average of 8.9 years remaining. Caregiving regret: A study published in the Journal of Aging Studies notes that older children, those in their 60s, often face a caregiver regret when they realize they spent their parents' last decade of relative health at work rather than present in their lives. Visits Reality: If you work, your time with an 80-year-old parent is limited to weekends and holidays. By retiring early, you aren't just gaining time for yourself, you are potentially tripling the amount of shared time and visits you have left with them. Choosing to work just one more year represents giving away more than 10 % of the remaining time you have left with that parent.

If you are a PERS member weighing the value of your time, here are your action items for today. The buyback test: Look at your annual salary, then look at valuation of a quality year. If your salary is lower than the value of that year, you are theoretically losing wealth by staying at work. The health audit: But be honest about your physical health. If you have go-go goals, like hiking or traveling, Look at the 57 versus 67 chart again. How many go-go years do you have left? Reconsider trading your go-go goals for slow-go dollars. The parent visits: If your parents are 80 or older, look at that seven to nine year remaining life expectancy again. Map out how many visits with them you have remaining based on how often you visit with them while working. This number may be in the single or low double digits if you live far away. How would the number of visits change if you were retired?

Time is the only asset you are guaranteed to run out of. Make sure you aren't so busy building a nest egg that you forget to set aside time to enjoy the nest. In our next video, we'll dive into a very practical question. What month should a PERS member make their retirement effective? There are specific timing strategies regarding your final paycheck, insurance, and cost of living adjustments that you need to know about. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. If you found this video helpful, you can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow-up question about PERS or anything else related to personal finance, please visit our website at perspro.ms and submit your question or topic for a future episode. Thank you for your valuable public service to the state of Mississippi. We'll see you next time!

Disclaimer. This video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.