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Tuesday, February 7, 2023

Retirement Redesigned

HomeRetirementThe Finish Line Fallacy

The Finish Line Fallacy

There are many fallacies about retirement

A note from Johann

Although I knew what retirement was all about before I reached the day my retirement started, I still made some critical mistakes in my thinking as I launched into it. One of them was based on my perception of it being an event rather than the beginning of a new life stage. Where my thinking took a wrong turn was when I started planning my retirement for a particular day. I was leaving the company I had started after almost 50 years and was focusing on how to celebrate this occasion. The old notion was for a farewell party with a speech or two and the handover of a gift. Traditionally, we say our farewells to colleagues and friends and depart from our place of full-time work into the proverbial retirement sunset. All of this feeds into the belief that retirement is an occasion.

What I am experiencing now is that this new life stage is almost like having a next job. In many ways, it is like the job I had before retiring. I have to plan for daily responsibilities. I have to keep an agenda. The year ahead has to be planned in terms of holidays and other noteworthy events on the calendar. I have to set up a budget and plan how to stick to it and I have to make sure I am maintaining a balanced life.

To make sure that I am not just sitting around idling, I have to construct the elements that will ensure that I have meaning in the time ahead and that I am doing something that will engage my interest and my motivation. Retirement used to be a time to switch off and focus mainly on leisure, but that doesn’t work anymore. The current thinking, and I’m experiencing it very much in my own life, is that retirement is a journey and needs a much longer term focus in order to yield the many benefits of this life stage. The idea that retirement itself is the destination is what we refer to as ‘the finish line fallacy’ and can lead to short-term thinking, which is ultimately detrimental to us.
Johann


Though many of us have been conditioned to think this way, retirement is not a destination. It’s the beginning of a new life phase, one that can last for decades. We make better decisions when we act for the long term, as opposed to short-term satisfaction. The more we plan for retirement with a long-term view in mind, the greater impact we can have on our own future and that of future generations.

Top Articles This Week:

Retirement: The End or a New Beginning?

An image of an elderly couple sitting on a bench overlooking the ocean.

Our take:
Now, with life expectancy in the United States being around 80, and even higher in some countries, it is time we quit looking at retirement as a final anything and start finding opportunities for those extra years.

Article excerpt:
As an “accidental” retirement lifestyle expert, I talk with many people worldwide and participate in many retirement forums. Typically these groups are uplifting and inspiring, but now and then, someone will innocently quip, “now that we are in our final chapter.” Or worse, “now that we are in the final stage of life, all I want to do is …” as if our first act after retiring should be getting fitted for a casket.

How depressing.

Things have changed, and we need to adapt to the new reality. Now, with life expectancy in the United States being around 80, and even higher in some countries, it is time we quit looking at retirement as a final anything and start finding opportunities for those extra years.
It is true if you want to look at things like a pessimist, from the minute we are born, our remaining years are getting shorter. But to brand some random time, in this case, the time when we can finally live a life without the worry of making a living as “the last chapter,” overlooks what is, for many, the most productive and fulfilling times of our lives.
Click here to read the full article on Forbes


How To Set New Life Goals After Retirement

In this excerpt from best-selling author Julia Cameron’s book, It’s Never Too Late to Begin Again, she shares how to break out of a routine and reignite a sense of adventure.

An image of a person at the top of a hill with a flag to symbolise setting life goals to achieve.

Our take:
We see the ultimate dream on the horizon, but between us and that horizon are many small steps. Remembering that each step is, in fact, accomplishable, we are able to move forward. A step at a time, we make progress forward.

Article excerpt:
When we come into our retirement, we become our own boss. Accustomed as we may be to reaching goals set by, or at least involving, others, we are often unaccustomed to setting goals pertaining only to ourselves. Free-form writing first thing in the morning can help with that, and as we undertake the practice of writing those Morning Pages, we may find ourselves naturally setting self-determined goals.

I can set goals in any arena I choose. Creativity, spirituality, fitness, and more. As I set goals, I transform the vague and undoable into the doable.

We can also set large goals in retirement, and it is not uncommon that at this point in your story, the larger goals are whispering to us. Sometimes we are well aware of them. Other times, they sneak up on us. We may feel jealous of others doing something we wish we could do, and it may take an outside eye to help us see what we are looking longingly at.

Writing Morning Pages, keeps our goals in our sight. It is nearly impossible to write, day after day, and not have inklings of what we’d like to do next. And these inklings, ignored, will only grow stronger. Working through our life story often puts us in touch with our authentic dreams. Naming our goal, we may then work backward, a technique my piano teacher calls “chunking it down.” We see the ultimate dream on the horizon, but between us and that horizon are many small steps. Remembering that each step is, in fact, accomplishable, we are able to move forward. A step at a time, we make progress forward.
Click here to read the full article post on Guideposts


Short-Term Thinking is a Long-Term Problem

An image of a young child to symbolise short term thinking.

Our take:
Despite Mischel’s finding that thinking longer term leads to better outcomes — and the warnings by business leaders like Fink, Buffett, and Dimon about the dangers of short-termism — taking a long-term approach isn’t easy. Our brains are wired to think in the moment. This served us well from an evolutionary standpoint when we were hunter-gatherers foraging for food and trying to avoid being eaten, and modern technology has reinforced the hardwiring by targeting our need for instant gratification

Article excerpt:
When it comes to snacking on marshmallows or saving for retirement, taking a long-term approach isn’t always easy because our brains are wired to think in the moment.
In the late 1960s, psychologist Walter Mischel and his colleagues at Stanford University conducted a series of studies on delayed gratification, known as the marshmallow experiment. The researchers presented four- and five-year-old preschool children with one marshmallow apiece and told them that they had two options: They could ring a bell at any point to summon the experimenter and eat the marshmallow, or they could wait until the experimenter returned — usually about 15 minutes later — to earn an extra marshmallow. In other words, the children had to choose between a small immediate reward and a larger later one.

The marshmallow experiment is one of the most famous pieces of social science research ever published.Despite Mischel’s finding that thinking longer term leads to better outcomes — and the warnings by business leaders like Fink, Buffett and Dimon about the dangers of short-termism — taking a long-term approach isn’t easy. Our brains are wired to think in the moment. This served us well from an evolutionary standpoint when we were hunter-gatherers foraging for food and trying to avoid being eaten, and modern technology has reinforced the hardwiring by targeting our need for instant gratification (look no further than the alerts on your smartphone). Understanding how we got here is a good first step toward escaping this vicious cycle, but the solutions to the “new world” problems we face on a daily basis — investing responsibly, saving for retirement, sifting through constant information flow — do not come naturally and will require us to suppress our short-term instincts if they are to have a chance at succeeding.

Clearly, short-term thinking is largely embedded in our way of life. Because our brain cannot evolve faster than our environment, the question is whether it’s even possible to focus on the long term. The answer can be found in the writings of Kahneman, who was awarded the Nobel Prize in economics in 2002 for his work on prospect theory. He famously introduced to the masses the idea of dual-process theory in his 2011 best seller, Thinking Fast and Slow. Kahneman explains the distinction between the unconscious part of the brain responsible for thinking fast (System 1) and the more deliberate part of the brain responsible for conscious reasoning (System 2).

System 1 is emotional, automatic and mostly involuntary. And even though as you read this you are probably thinking it’s the “bad” system responsible for us seeing only short-term advantages, eating marshmallows and not investing for the future, System 1 plays a vital role in supporting our daily life. It is believed to derive from our limbic (more primitive) brain system and, among other things, is responsible for localizing the source of a specific sound, distinguishing that one object is at a greater distance than another and understanding simple sentences — all key traits for surviving in the world thousands of years ago, and still critical today. System 2 thinking is controlled by our prefrontal cortex. System 2, Kahneman explains, is in charge of pointing our attention to someone at a loud party, solving complex math problems and sustaining a higher than normal walking pace. When we are planning for the long term, we are using our System 2 thinking.

The two-system framework is useful for understanding the marshmallow experiment. When analyzing the delay of gratification, Mischel and co-author Janet Metcalfe refer to Systems 1 and 2 as, respectively, the hot and cold systems.8 Their research shows that if a child does not manage to resist the urge to eat the marshmallow now, it does not guarantee that he or she will fail in life. Instead, it means that people need to learn the skills necessary to achieve their goals.

For his part, Walter Mischel, who died last September at age 88, offers hope: “The most important thing we learned is that self-control — and the ability to regulate one’s own emotions — involves a set of skills that can be taught, and learned,” he writes in his 2014 book, The Marshmallow Test: Mastering Self-Control. “They’re acquirable. Nothing is predetermined.”
Click here to read the full article on Worldquant.com


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Other highlights for the week:

Most Popular Daily Thought

The true meaning of life is to plant trees, under whose shade you do not expect to sit. – Nelson Henderson
We work really hard to get to the point of retirement, yet that point is an illusion, really. We refer to it as the finish line fallacy. A trick that narrows our view to make us focus on short-term issues and it stops us from thinking about and planning for the long term. We seldom hear about 10 or 20-year plans post-retirement, yet many of us in reasonable health will live multiple decades beyond the standard retirement age of 65. This is a great big chunk of time in which we can achieve great things – not only for ourselves but for our children and grandchildren too. Developing a long-term view for this time, and even beyond can give us the freedom to think about our purpose in a deeper and more meaningful way – even beyond our own lifespan.
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Quote by Nelson Henderson about the true meaning of life.

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Johann
Johannhttp://www.resetretirement.com
Johann is the founding partner of Reset Retirement where we focus on assisting people with planning for the non-financial aspects of their lives after full-time work. He had a long career in executive search and leadership as the founding partner and chairman of Heidrick & Struggles in South Africa where he was the head of the company’s board practice.

DAILY THOUGHT