The Cure for OMY Syndrome
Good news / bad news
Do you really have enough to fling yourself off the corporate hamster wheel? Run another Monte Carlo simulation (or thirty) and you can always find a reason to work just one more year.
One More Year Syndrome is a plague that affects nearly all retirement aspirants at some point. Even when the numbers indicate you have more than enough, it’s hard for the careful saver to believe it.
What if inflation spikes and stays high, or the stock market drops and stays low? What if a 2.794% withdrawal rate somehow isn’t safe enough? What if your 10 year bond ladder isn’t long enough to overcome the most negative of all sequences of return?
When catastrophizing the financial variables gets too absurd, you can always turn to life’s uncertainties to keep you trapped safe and cozy in the soft blue glow of your Microsoft Office lair. What if you, your spouse, your daughter and your dog all simultaneously need long term care for more than a decade? It could happen!
Most millionaires don’t actually worry about running out of money. They know they would adapt - reduce discretionary spending, get a part time job. After all, most people can live pretty well on social security alone, a worst case scenario that is objectively cushy when combined with a paid off house or a partner with their own government check.
Affluent Americans worry more that a catastrophic event may cause a permanent lifestyle reduction (or wipe out their ability to leave a legacy). And that kind of financial blow is unfortunately not a totally irrational concern.
No one feels sorry for rich people with money anxiety, but for better and for worse Americans at every wealth level must live with a high level of financial uncertainty. The financialization and privatization of nearly every industry has driven the cost of necessities as well as volatility risk sky high - but it’s also juiced the profit machines that fattened our retirement portfolios in the first place. There is no free lunch.
Lower level millionaires are in a precarious position; they have too much to qualify for charitable or government support in a crisis, but not enough to weather one and be able to fully rebound. Jordan Grumet argues that wealthy people usually have insurance to cover catastrophes, but setting aside the fact that premiums alone can cost tens of thousands of dollars a year, our social safety net is notoriously full of holes.
Health insurance? Regularly denies claims for care physicians insist is needed. Home insurance? Regularly denies claims when homes are lost in storms or fires. Long term care insurance? You get the idea. Medicaid and other welfare? Only comes into play once you actually do run out of money and find yourself at the mercy of the state (which is doing its best to destabilize its own fiscal position).
In our decreasingly regulated capitalist mecca, stocks may continue to outperform inflation, but you really could face a 7 figure bill due to a natural disaster, lawsuit or health emergency. It’s nearly impossible to save enough to fully banish financial anxiety in this economy.
So we should all just keep working until we die!
I kid. Many high earners still manage to oversave, underspend, and work too long. Fearful of a crisis that is theoretically possible though still statistically unlikely, most retirees die with most of their initial investment still intact, compounding this (very first world) problem for their heirs.
It’s understandable, but it’s not optimal.
The good news is OMY syndrome has a reliable cure. The bad news for math-loving optimizers is that you aren’t going to find it in your spreadsheets. The decision to retire is usually made after crossing a psychological threshold - not a financial one.
In my experience, most people retire after a personal catalyst changes their perspective and causes a realignment of priorities. They get laid off, or the death of a loved one jolts them to life. They need surgery and can’t get enough time off - or a spouse gets a cancer diagnosis. Their company betrays them and they get pissed or demoralized enough to walk.
The cure for OMY syndrome isn’t more money. Incredibly, you could add an extra million to their portfolios and most afflicted patients would hardly improve. The solution is shifting the question from “do I have enough?” to “I’m doing this; how can I make it work?”
In cases like a business sale or inheritance, it still doesn’t usually matter what the stock market is doing or what the latest SWR study shows. The decision to pivot, retire, or otherwise move on is rarely numbers-driven. It’s based on a sudden fierce desire or deep knowing.
Even as a financial professional, I was always skeptical of “The Number.” Most people never calculate one, and those who do move the goalposts continually for all kinds of valid reasons. I’m not arguing that numbers don’t matter at all, but in practice retirement math is actually pretty simple.
People save what they can and then make do with whatever they have when they can’t or don’t want to work anymore. That’s it. To the gall of FIRE obsessives everywhere, most retirees march blissfully toward the grave without ever knowing their MAGI, worrying about IRMAA, or even contemplating the cost/benefit of a Roth conversion!
I didn’t retire from my banking career because I found a formula that convinced me I have enough to definitely be OK for the next 50 years. I left after a mid life awakening sparked by divorce made me reconsider what kind of life I really want. I quit after a career crisis spiked by bitter corporate Kool-Aid I’d been pretending to like for years prompted me to use my “F U” money accordingly.
Never let a good crisis go to waste.
After twenty years of dutiful saving and investing, I’d bought myself the option to be impulsive when I needed it most - and it has been glorious. Oddly enough, I visit my spreadsheets less than ever these days. It turns out that making the decision is the hard part.
If you’ve contracted OMY syndrome, you could just keep saving and wait for external forces to change your money psychology. The time will come, and you’ll be grateful for your financial cushion. But beware: the odds are you’ll end up wishing you’d jumped sooner instead of waiting to be pushed off the cliff.
I help people get organized and use wealth to design a life that feels secure and aligned. A former Wall Street banker and CERTIFIED FINANCIAL PLANNER™, I act as an unbiased advocate without selling products or managing investments. To learn more, visit my website.
DISCLAIMER: I love writing about the personal, emotional, and practical sides of money, but please remember that my Substack is strictly for educational and coaching purposes. The insights shared here are general in nature and do not constitute specific investment, tax, or legal advice. While I am a CFP® certificant, reading this does not create an official advisory relationship, and any comments or likes should not be interpreted as client testimonials. For personalized investment advice, please consult a registered financial professional.
I think your perspective has universal application.
Personally, I can recall many decisions, including when I decided to retire, that eventually were made based on an outside force not related to the math. The key word here in my previous sentence is 'eventually'.
For me, and you touched on this when you said "They get laid off, or the death of a loved one jolts them to life. They need surgery and can’t get enough time off - or a spouse gets a cancer diagnosis", is the outside force tends to be bad stuff.
When bad stuff happens, I can get jolted and decide to make a decision on something that's been lingering.
What I'm trying to do, which I believe aligns with your messaging, is make more big decisions based on genuine excitement and hope--the good stuff--and not wait for the bad stuff to force my hand.
Great article! I was so relieved honestly when my position was redesigned and I just was able to leave easily. I think I would still be there because I enjoyed the work enough and it wasn’t super hard. But I did want to leave. I was too comfortable there though to easily walk away. So I am grateful.