Happy Retirees? Maybe Not Why Life Satisfaction Isn’t Necessarily ‘U-Shaped’ After All

Happiness, experts say, is U-shaped: generally speaking, we are happy/full of life satisfaction as young adults but, as we reach middle age, we become less satisfied, with a trough in one’s early 50s; from this trough we rebound to ever-increasing satisfaction levels as we age. It’s remarkable, really, considering the physical infirmities we face, plus financial worries, loss of loved ones, and more. What explains this? We become wiser and we are able to see all of life’s ups and downs with a greater sense of perspective.

But what if that’s not true?

A new working paper by Peter Hudomiet, Michael D. Hurd and Susann Rohwedder, researchers at RAND Corporation, suggests an entirely different answer: older individuals have greater life satisfaction because the less-satisfied folk have been weeded-out. And by “weeded-out” I mean that they’re dead or otherwise unable to reply, because the likelihood of dying is greater for those who have less life satisfaction. When they apply calculations to try to strip out this impact, the effect is dramatic: rather than life satisfaction climbing steadily from the mid-50s to early 70s, then remaining steady, they see a steady drop from the early 70s as people age.

Here are the three key graphs (used with permission):

First, life satisfaction plotted by age without any special adjustments:

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Life satisfaction by age, unadjusted
Life satisfaction by age, unadjusted used with permission

Second, the difference in mortality between the satisfied and the unsatisfied:

Mortality by age and life satisfaction
Mortality by age and life satisfaction used with permission

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And, third, the same life satisfaction graph, adjusted to take into account the impact of the disproportionality of deaths:

Life satisfaction adjusted for death rates
Life satisfaction adjusted for death rates used with permission

In this graph, the blue line represents the unadjusted outputs from their calculations, the orange line is smoothed, and the grey line adds in demographic, labor market and health controls, to strip out the impact of, for example, people in poor health being less satisfied and try to isolate the impact solely of age.

Here are the details on this calculation.

The data they use for their analysis comes from the Health and Retirement Study (HRS), a long-running survey of individuals age 51 and older at the University of Michigan, sponsored by the National Institute on Aging. It is a longitudinal study; that is, it surveys the same group of people every two years in order to see how their responses change over time, adding in new “refresher cohorts” to keep the survey going. The survey asks about many topics, including income, health, housing, and the like, and in 2008, the survey also began to ask life satisfaction, on a scale of 1 to 5 (”not at all satisfied” to “completely satisfied”).

One simple way of analyzing the data is to look at how life satisfaction ratings vary based on survey participants’ characteristics. The average reported life satisfaction of those between ages 65 – 74 is 3.91, just slightly below “4 – very satisfied.” But those who rate their health as “poor” average out to 3.13, or not much more than “3 – somewhat satisfied,” and those who rate their health as “excellent” average to 4.34. Those who have 2 or more ADL (activities of daily living) limitations some out to an average of 3.32 vs. 3.97 for those with no such limits. Those who are in the poorest quarter of the survey group come out to 3.7 vs. 4.07 for the wealthiest quarter. (See the bottom of this article for the full table; this table and the following graphs are used with permission.)

But here’s the statistic that throws a monkey-wrench into the data:

“On average, the 2-year mortality rate [that is, from one survey round to the next] is 4.4% among those who are very or completely satisfied with their lives, while it is 7.3% (or 66% higher) among those who are not or somewhat satisfied with their lives.”

As a result, “those who are more satisfied with their lives live longer and make up a larger fraction of the sample at older ages.”

Now, this does not say that being pessimistic about one’s life causes one to be more likely to die. Nor does it say that this pessimism is justified by being in ill-health and at risk of dying. But this statistical connection, as well as further analysis of survey drop-outs for other reasons (such as dementia) is the basis for a regression analysis which results in the graph above.

What’s more, the original “inventor” of the concept of the life satisfaction curve, David Blanchflower, published a follow-up study just after this one. One of their key concepts is the notion of using “controls” to try to identify changes in life satisfaction solely due to age rather than changes in income over one’s lifetime, for example, or other factors, and there has been extensive debate about whether or to what degree this is appropriate, given that the reality of any individual’s life experience is that one does experience changes in marital and family status, employment status, and the like.

Having received pushback for this concept, they defend it but also insist that the U-shape holds regardless of whether “controls” are used or not. At the same time, Blanchflower is quite insistent that the “U” is universal across cultures, though (see my prior article on the topic) it really seems to require quite some effort to make this U appear outside the Anglosphere, which is all the more interesting in light of the John Henrich “WEIRDest people” contention (see my October article) that various traits that had been viewed by psychologists as universally-generalizable are really quite distinctive to Western cultures and, more distinctively, the United States.

But here’s the fundamental question: why does it matter?

On an individual level, to believe that there is a trough and a rebound offers hope for those stuck in a midlife rut. It’s a form of self-help, the adult version of the “it gets better” campaign for teenagers.

On a societal level, the recognition of a drop in life satisfaction for the middle-aged might be explained, by someone with the perspective of the upper-middle class, as the result of dissatisfaction with a stagnating career, failure to achieve the corner office, the challenge of shepherding kids into college, and the like. In fact, when I wrote about the topic two years ago, that’s how the material I read generally presented the issue.

But Blanchflower’s new paper recognizes greater stakes: “These dips in well-being are associated with higher levels of depression, including chronic depression, difficulty sleeping, and even suicide. In the U.S., deaths of despair are most likely to occur in the middle-aged years, and the patterns are robustly associated with unhappiness and stress. Across countries chronic depression and suicide rates peak in midlife.” (In the United States, among men, this is not true; men over 75 have the highest suicide rate.)

And what of the decline in life satisfaction among the elderly?

The premise that the elderly become increasingly satisfied with their lives as they age is a very appealing one, not just because it provides hope for us individually as we age. It serves as confirmation of a more fundamental belief, that the elderly are a source of wisdom and perspective on life. Although it is Asian cultures which are particularly known for veneration of the elderly, the importance of caring for those in need is just as much a moral imperative in Western societies, even if without the same sense of “veneration” or of valuing them to a greater degree than others in need.

Consider, after all, that the evening news likes to feature stories of oldsters running marathons or competing in triathlons or even just having a sunny outlook on life; no one likes to think of the grumpy grandmother or grandmother from one’s childhood as representative of “old age.” In this respect, “old folks are more satisfied with life” provided an easy to make the elderly more “venerable.” Hudomiet’s research might force us to think a bit harder.

As always, you’re invited to comment at JaneTheActuary.com!

Full table of impact of demographic characteristics on life satisfaction:

Impact of demographic characteristics on life satisfaction
Impact of demographic characteristics on life satisfaction used with permission

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Elizabeth Bauer

Elizabeth Bauer

Yes, I’m a nerd, and an actuary to boot. Armed with an M.A. in medieval history and the F.S.A. actuarial credential, with 20 years of experience at a major benefits consulting firm, and having blogged as “Jane the Actuary” since 2013, I enjoy reading and writing about retirement issues, including retirement income adequacy, reform proposals and international comparisons.



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Why Fargo North Dakota Might Be A Better Retirement Destination Than Florida’s Sunshine


The grisly Oscar-nominated comedy Fargo opens with a blinding white landscape, the fog of a blizzard obscuring flat plains blanketed with snow as far as the eye can see. Although none of the movie was actually filmed in Fargo, North Dakota and very little of it is set there, the winter climate it presents is appropriate. It looks like just about the last place you’d want to live.

“It is aesthetically not the prettiest place on earth,” says Erik Hatch, the owner of Hatch Realty and a lifelong Fargo resident. “Topography-wise, it was not given the gift of mountainous hills and rolling landscapes. Weather-wise, it’s just damn cold… But I’m going to say what everybody says about their community, and yet I know that I’m right. The best people on earth live in Fargo.”

Talk to anybody from Fargo, a city that embraces the slogan “North of Normal,” and it might seem like they have some form of Stockholm syndrome rattling off all the endearing qualities of their hometown. But the data supports them. Fargo is the only city that has been on Forbes’ Best Places to Retire list 10 years in a row, accounting for metrics like cost of living, doctors per capita and walkability.

Its median home price of $228,000 is 20% below the national median, and Fargo real estate is a safe investment with the population growing at a steady rate of about 4 percent per year, nearing 125,000 at last count.

People have gravitated to Fargo for jobs in a number of industries: healthcare, technology, education and agriculture. The $500 million Sanford Medical Center just opened in 2017 as the largest hospital in North Dakota, complete with a Level 1 trauma center, cancer research and cardiovascular care to give aging adults peace of mind. Microsoft’s Fargo campus employs 1,600, and North Dakota State University enrolls more than 13,000 students.

“Areas where I used to go out and hunt in the morning, doves and things like that—now they’re neighborhoods,” says Fargo mayor Tim Mahoney, who has lived in the city for four decades and works as a general and vascular surgeon.

The Milken Institute ranks Fargo as the 14th-best small metro area for successful aging out of the 281 it evaluated, citing its stable economy, quality healthcare and cultural amenities and public libraries in town. NDSU regularly brings musical groups to its campus to perform, and its 1,000-seat Festival Concert Hall hosts Fargo’s symphony orchestra and opera.

Brian Arett, director of Valley Senior Services, which supports retirees living independently in the region, says Fargo serves as a magnet for people in small surrounding towns who don’t have easy access to hospitals or these sorts of daily activities as they age. His organization offers benefits like Meals on Wheels delivery or cheap rides to and from appointments or events, and Fargo’s public bus system helps them get around town as well.

“I know it’s the butt of some jokes in our country, but for this area, Fargo is a fairly robust metro community,” Arett says. “In rural North Dakota for instance, or northwestern Minnesota, which is fairly rural, there aren’t a lot of communities as close as Fargo that have that variety of options for older people.”

That’s the elevator pitch for what makes Fargo an enticing place to retire, and residents are quick to offer counterarguments to any drawbacks.

Winters are bitterly cold, with temperatures dipping below zero on an average January night, but Fargo’s airport offers nonstop flights to Phoenix for snowbirds in search of a respite. The airport also makes it convenient for retired people to visit their children and grandchildren. The beach may be upwards of 1,000 miles away in either direction, but Detroit Lakes, Minnesota, less than an hour to the east, makes for a fine summer weekend getaway. It’s more of a hike to get to major professional sports games in Minneapolis, but NDSU has its own national champion football team that frequently brings ESPN’s College Gameday show to Fargo on fall Saturdays.

A Chilly Bargain

Fargo is cheaper than typical retirement hotspots and stacks up favorably in the essentials.

The diverse economy has attracted a slightly more diverse group of young people to Fargo—though it’s still predominantly white, Mahoney says its minority representation has grown from 7% when he started on the city council in 2005 to 15% today.

“I think my citizens sell it better than I sell it,” Mahoney says. “You’ll find a pretty friendly contrast to New York.”

The friendly Midwestern vibe also manifests in a low crime rate, with fewer homicides reported in all of 2019 (five) than were crammed into 90 minutes of the 1996 movie that bears the city’s name (seven).

And yes, it comes with the territory that anybody from Fargo knows they’re likely to be asked by outsiders about the film, complete with its lampoonish accents and enthusiastic “you betcha’s.”

“When it first came out, I thought, ‘Oh my gosh, this is insulting,’” says Hatch, who himself speaks with a barely detectable Midwestern cadence. “There was an uproar.”

The city has come around in the quarter century since. Now, tourists can see the infamous wood chipper prop used as a fictional murder accessory on display in Fargo’s visitors center. If they visit in the colder months, they’ll find people occupying themselves at times like they did in the movie: lamenting the weather with neighbors, sipping coffee in diners and watching hockey on TV. What they won’t find is Siberian desolation.

“Back in college, I camped outside of Best Buy on Thanksgiving to go to Black Friday with literally hundreds of other people, just to get a cheaper TV. So people still do the things that happen in other parts of the country. That still happens here,” says Hatch, an NDSU alum. “It simply is approached with more clothes on.”

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I’m an assistant editor at Forbes covering money & markets. I graduated from Duke University, where I majored in math but spent more time following its basketball team around the country as the sports editor and a beat reporter for our student newspaper, The Chronicle.

Source: Forbes


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