The 5 Things You Need to Retire Tomorrow

Tyler Gardner (0:00)

Autonomy is the one need that retirement appears to hand you in unlimited supply. Nobody tells you what to do ever again, which turns out to be a problem. Because autonomy isn't the absence of constraint, it's authorship. It's the feeling that your choices are yours. Waking up with no constraints and nothing you're accountable to isn't freedom. That's just an unstructured day repeated until you die.

Hello, friends. This is Tyler Gardner welcoming you to another episode of Your Money Guide on the Side, where it is my job to simplify what seems complex, add nuance to what seems simple, and learn from and alongside some of the brightest minds in money, finance, and investing. So let's get started and get you one step closer to where you need to be.

One quick thing before we start, October's pre-order bonus from my book Real Wealth is now live, and it's the one I've had the most fun putting together to date. It's my 10 favorite books of all time, Finance and Otherwise. Each one comes with a note on what you'll actually get out of it, who it's really for, and my honest verdict on whether you'll actually finish it. Because important and enjoyable are two very different claims, and the finance shelf is full of the first kind. Pre-order at tylergardner.com/book, let me know you did, and I'll send it directly to your email in early November.

Welcome back, and I want to start by telling you I'm going to try something a little bit different today, and I'll be upfront that this episode is partly for you and partly for me, as it's the equivalent of my thinking out loud about a second book. I'm already writing a lot of this down, and I thought I'd start sharing some ideas with you. The first one, as you know, comes out December 1st. That book, Real Wealth, is about money. How to build it, how to keep it, how to stop paying people a percentage to click buttons that I know you dang well could click yourself. I'm proud of it, and I obviously hope you read it. But the whole time I was writing it, a second question kept sitting at the edge of the desk, arms folded, patiently waiting, but more nagging me. This is a question that haunts me daily.

Once you have whatever amount you want, whether that's 5 million, 10 million, 20 million, I don't care, once you have it, then what? When the money is no longer the goal, then what?

Because here's something I never resolved after years of doing this professionally. I sat across from a ton of people who had for all intents and purposes, one, like genuinely one. The number was there, the mortgage was gone, the simulations all said, yay, you're going to be successful. And a meaningful percentage of those people were not okay. I'm not talking tragic and it wasn't visible. But these people were just kind of a drift in a way that none of us really had a vocabulary for. Because the entire financial industry keeps insisting that the number is not only the goal, but that the number is also the answer.

So today, I want to offer you all five things that I think you need regardless of what the number says.

Five things that money is genuinely, structurally unable to purchase for you. And the argument underneath all of them is that leaving your job does not solve the problem that your job, ironically, might have actually been solving. I know that's not necessarily what you want to hear on a Monday morning.

Three of these come from a body of research I've become kind of obsessed with. Two of them are mine, and one of those two I expect a certain number of you to resist completely, which I welcome because I've been arguing with myself about it for a year, and I'm happy to turn this more into a dialogue. And as always, before we get into it, familiar ask if this show has been useful to you, if it has made you think differently about money, or laugh, or share it with someone who needed it, please consider leaving a review on Apple Podcasts or Spotify. Takes 30 seconds, costs you nothing, and it helps more people find the show, and helps me know that this endless endeavor in free financial literacy is in fact worth it.

Let's get into it.

Before I get into the five needs specifically, I want to start by establishing the problem before I propose solutions. There's a hypothesis in the aging literature with the wonderfully blunt name of mental retirement. The idea is that when you stop working, you stop being cognitively stretched, and the machinery gets a little soft. The evidence for it is kind of mixed, and I want to be honest about that rather than pick the study that just suits my argument. Some research finds retirement is neutral or even mildly positive. A Swedish population study found memory actually improved across the retirement transition. But a systematic review found weak evidence that retirement accelerates decline in crystallized abilities specifically for people leaving jobs high in complexity with other people. And an Italian analysis using European survey data found that the rate of cognitive decline increases with the length of the retirement spell, meaning the loss isn't a one-time hit, it actually kind of compounds. The most striking finding I came across used data from China's rural pension program. Researchers at Binghamton looked at what happened when a pension became available and people just stopped working. Over roughly a decade, they found cognitive performance declined by as much as a fifth of a standard deviation on memory measures. And the lead researcher said something that I've been thinking about since I read it. The negative effects on social engagement appeared to outweigh the positive effects the program had on nutrition and sleep. His conclusion was that social engagement and connectedness may be the single most powerful factor for cognitive performance in old age. And just stop and think about that for a minute. The pension improved their diet and their sleep, and they got cognitively worse anyway because of what leaving work did to their social lives.