Saturday, January 12, 2019

Affectively Forecasting Yourself into a Corner

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,


“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