According to the website of Psychology Today, affective forecasting is “predicting how one will
feel in the future.” Their definition
goes on by adding the comment, “[P]eople are far from perfect at it. We misjudge what will make us happy and have
trouble seeing through the filter of the present. Our current feelings blind us to how we’ll
make decisions in the future, when we might be feeling very differently.”
Robert Pagliarini, writing for Forbes, recently cited affective forecasting in warning readers
against retiring too early. I’ve written
before about the dangers of retiring too early: reduced Social Security
benefits; having to purchase health care insurance without an employer’s
subsidy until meeting Medicare eligibility at age 65; potentially life-threatening
boredom, inactivity, and feelings of uselessness; having to accumulate a much
bigger nest egg to cover the extra years of having no job income, etc. Pagliarini’s article explored the psychology
driving people to make what often turns out to be a bad decision to leave the
workforce prematurely.
As it relates to the issue of retirement, the pitfalls of
affective forecasting are that we tend to only recall the best or worst events,
focus on the earliest events of retirement living (not the events 5, 10, or 20
years down the road), think that the event of which we dream will be intense
and long-lasting, and think of that event in the wrong context.
It made sense when I applied it to a real-life situation in
my past.
Nine years ago—almost to the day—I voluntarily left a job at
which I had worked for nearly ten years.
I’ve alluded to that in previous posts; it was a situation where I was
becoming more and more uncomfortable with the company’s policies and had
quickly tired of the antics of the immature and incapable director of our
department. It was the right decision;
I’m still convinced of that to this day.
But I experienced what Pagliarini described.
First, I focused on the worst aspects of my job, but there
was good energy and good work being done there, too, not to mention friends I
left behind. If you’ve had a bad string
of days at your job, wouldn’t that tempt you to leave, and if you’re close to
retirement age—say age 62, the youngest age at which you can take Social
Security—wouldn’t that temptation be even stronger, knowing you have an
alternative income stream you could tap (“I earned the right to retire!”)?
What did I focus on as I walked out the door? “Man, this feels good! I don’t have to answer to THAT boss
anymore! Now I can go find a job I
enjoy.” But what was I ignoring? Remember, this was 2010; unemployment was at
perhaps its highest level in my lifetime.
I’d never had trouble before finding work, but in this context (and
being ten years older than I was in my last job search) would landing the next
job be all that easy? The good feelings
lasted perhaps six weeks, until I had turned down the first job offer I
received. Then the monotony of daily job
searching and being alone at the house began to set in. At one point, about six months in, I drove
past some laborers putting down mulch as they landscaped around a bank. I envied them for having a job. And of course they were probably affectively
forecasting how much more they’d enjoy their lives if they could quit and be
out of the heat and dirt! In short, I
had focused on how I’d feel telling the boss to “take this job…” and not
realistically seeing months down the road and how tough the job market really
was.
I also did not enjoy the “time off” as much as I thought I
would. Don’t get me wrong, I enjoyed
it. But we all dream of having more free
time and imagining the many things we’ll do with it. But free time is precious now because we have
so little of it. Experiencing it is
exhilarating. But what if every day is
Sunday? Does free time become a burden,
an endurance test against boredom? Our
poor job of affective forecasting causes us to take free time in the context of
ourselves as five-days-a-week workers and put it into the retirement scenario
where we work (or volunteer) only a day or two a week, or not at all. You cannot play golf every day for
twenty-five or thirty years.
So stop and apply these warnings to yourself and your
retirement plans. Are you overlooking
the positive aspects of being in the workplace and unwittingly exaggerating the
exhilaration of retirement? It’s almost
like planning a vacation. Sometimes the
best part is the imagining, the planning, and the anticipation. Make sure you don’t make a hasty decision to
prematurely jump the employment ship.
Have a plan for retirement that goes beyond money. I like to write about money, but it is
actually a lesser player in ensuring your happiness. Activity, involvement, friends, purpose,
variety…these are critical components of life-after-work and must be planned as
carefully as your investments and budgeting strategy.
Until next time,
Roger
“We were meant to
enjoy our work, and that’s the best thing we can do. We can never know the future.” Ecclesiastes
3:22 CEV
