In retirement planning we are routinely advised about how to deal with two major sources of uncertainty. How long we will live in retirement, and market returns over that period of time. All manner of simulations, fancy calculus, and varied means of projections are used. A host of “withdrawal rules” are developed. Tax planning is carefully considered and elaborate schemes to avoid “outliving your money” are laid out. We have commented multiple times in these pages about why this almost NEVER happens because rational decision makers  have enough flexibility to adjust the plan as needed. However, all of this work ignores the first random variable, and not knowing how this one plays out literally invalidates all of the other plans. The simple fact is that you don’t really know WHEN you are going to retire in the first place.

Many roles, including the military and law enforcement have mandatory retirement ages, and this makes the planning a good bit easier. Of course, these dates assume that you remain healthy enough to work until that age, and this is often not the case.  On the other hand, the Employee Benefit Research Institute (EBRI) Retirement Confidence Survey historically and consistently finds that roughly 46% of Americans retire earlier than they had planned and only about 5% work longer. When this happens, it means that the money saved must stretch longer than originally anticipated. On the other hand, this also means that the retirement happens when you are more active, and capable than planned with more time to check off whatever items sit on the “bucket list.”

Failing health is the most common culprit, but it is not the only one. Many people retire when their spouse has the stroke, heart attack, of devastating diagnosis. Some parents retire due to some calamity that meets their child or grand-child. In a quite common scenario the decision is taken out of your hands due to corporate decision making. This can take the form of a downsizing, bankruptcy, merger, or the ever popular “reorganization.”

One common aspect of relatively successful people has been labeled “over-confidence” bias. We think that we will live according to our plans for the simple reason that we always have – even when those around us told us it was not likely to work out. You were told you wouldn’t get that degree, but you did. You told that you wouldn’t get that job or promotion, but you did.  You are near the top of your field because you have out-performed those around you for decades. This sets you up to think that the end-game will play out the way that you envisioned it. And then for whatever reason, it doesn’t.

On Jun 7 I reached exactly 1 week of retirement. My last date under contract was May 31. This was NOT an entirely voluntary exodus. I was informed about 16 months earlier that my contract would not be renewed. This was a bit of a shock since my teaching record, research record, and service record was (and is) superior to at least 90% of the other people in the school. However, I had a short-term contract and an employer facing financial difficulties. This created a good bit of pain and anguish on my part that played out over the next 16 months. I was being run out of town and given an explanation that was clearly bullshit.

This bothered me for quite a while. In fact, it was an awful experience for over a year. Then one day, I had a bit of a revelation. Consider this. Many argue that the greatest NBA coach of all time was Phil Jackson. He had won 6 championships (in addition to another one in the CBA before becoming an NBA head coach.) He was almost universally considered the best in the business. Yet, at the start of the final year of his contract he was informed that his contract would not be renewed – no matter what he did. He was told that even if his team won the NBA championship (which they did) his days as coach of the Bulls were over.

Beyond this, it is almost UNIVERSALLY agreed that Michael Jordan was the best player in NBA history. Michael told Bulls ownership that if Jackson was removed, that was the equivalent of driving him off of the team. In other words, both Phil Jackson (best coach ever) and Michael Jordan (best player ever) were run out of town. This was done after earning the owners untold millions of dollars, increasing the value of the team by Billions, and a track record unmatched in sprots history.

In another league Tom Brady was clearly the best quarterback in NFL history. He had won 6 Super Bowls, taken pay cuts to help the team hold onto other key players, and played through every injury imaginable. Yet the day came when he was effectively told that the team needed to “move in a different direction.” Since the only direction his team ever knew was toward the Super Bowl, I never did figure out what “other direction” they were interested in, but maybe that’s just me.

Babe Ruth began his baseball career in Boston, and established himself as the best home run hitter in the history of the game. But his team owner was deeply in debt, and the rest of the team was not good enough to get a championship. As a result, Ruth was unceremoniously shipped off to New York.

Here is the bottom line. The greatest players, coaches, and managers who ever lived were run out of town by people who couldn’t even dream of doing their jobs. So when this happens to you, not only should you not be surprised. You should recognize that you are in the best possible company that any employee can be in.

With that background, think about how absurd it is to expect that you will be treated any better. You may be a good worker – but you ain’t Michael Jordan. You may be a good leader – but you ain’t Tom Brady. You may be a great manager, but you ain’t Phil Jackson. So if your retirement plan includes fading into the sunset as your employer pays you as they always did because of your great record, it would be wise for you to make sure there is a “Plan B” just in case Plan A doesn’t work out.