Planning for Retirement (& the GMAT)

Ron Point_GMAT TipsWhen preparing for the GMAT, most prospective students start thinking about the schools they want to attend, the jobs they want to land and the opportunities they want to seize. After all, embarking on a new degree is an adventure that must be carefully prepared and thought out. Some students with long term thinking even begin thinking about something that most people dream of regularly: retirement.

Now, if you’re studying for an advanced degree, perhaps retirement is still many decades (or centuries) off. However, the day will likely come when you at least want to consider retirement, even if you don’t opt to do it for various reasons. Sometimes your economic reality keeps you gainfully employed, but often it becomes an issue of boredom, trepidation and even fear. Why would anyone fear retirement? Isn’t it supposed to be the culmination of your hard work so that you can enjoy your golden years without worrying about work and money? It is, at least in theory. However, in practice, it is a project that should be prepared for just like any other major life change.

In North America, many people retire and move to a sunny, warm climate such as Arizona or Florida. The temperate weather allows many people to enjoy outdoor activities regularly, sometimes in stark contrast to the cooler northern climates. (Winter is coming.) Many people are even opting to retire in other countries to take advantage of the increased buying power of their home currency. No matter whether you plan on retiring tomorrow or in 50 years, it is something you must consider at one point or another in your life.

The GMAT often features questions that discuss relevant topics and that arouse your own interests in order to make the questions more relatable. This is also a double-edged sword because the question must be solvable with only the information contained within the stimulus. Any outside information can’t help you, but the topic may still concern something you’ve contemplated in the past. Let’s look at an example that plays into the retirement theme:

In the United States, of the people who moved from one state to another when they retired, the percentage who retired to Florida has decreased by three percentage points over the past ten years. Since many local businesses in Florida cater to retirees, these declines are likely to have a noticeably negative economic effect on these businesses and therefore on the economy of Florida.

Which of the following, if true, most seriously weakens the argument given?

A) People who moved from one state to another when they retired moved a greater distance, on average, last year than such people did ten years ago.

B) People were more likely to retire to North Carolina from another state last year than people were ten years ago.

C) The number of people who moved from one state to another when they retired has increased significantly over the past ten years.

D) The number of people who left Florida when they retired to live in another state was greater last year than it was ten years ago.

E) Florida attracts more people who move from one state to another when they retire than does any other state.

This problem is a Critical Reasoning Weaken problem, which means that we should be able to identify the conclusion, examine the supporting evidence and find the gap between the two. The conclusion is that the economy of Florida will suffer based on shifting demographics. The evidence is that a smaller percentage of people are retiring to Florida than 10 years ago, coupled with the fact that Florida’s economy is dependent on these retirees. (Nothing about hurricanes or floods, though.)

If we had to predict an answer to this question, it would likely hinge on the fact that the evidence is a 3% decrease of all retirees who choose to move to Florida. Whenever you see a percentage as evidence, it should make you think that you may need to consider the absolute value as well (the reverse is also often true). Just because the percentage went down by 3%, that doesn’t mean that fewer people are actually going. You might still be growing, just growing slower than you were 10 years ago. Let’s look at the answer choices and see if any of them match our expectations.

Answer choice A, people who moved from one state to another when they retired moved a greater distance, on average, last year than such people did ten years ago, discusses the distance of these moves. This is clearly out of scope, as the question is only interested with the destination state, not in the original state. One mile (maybe you’re right on the border?) or one thousand miles are identical in this regard, so the distance travelled won’t matter. We can eliminate A.

Answer choice B,  people were more likely to retire to North Carolina from another state last year than people were ten years ago, is only concerned with North Carolina. There are clearly many other states that people can move to, but none of them are pertinent to the question about Florida. This answer choice is thus incorrect as well (and paid for by the North Carolina tourism board).

Answer choice C, the number of people who moved from one state to another when they retired has increased significantly over the past ten years, plays right into our prediction. Just because a smaller proportion than before is moving to Florida does not mean that there is economic collapse on the horizon. If 20% of one million people moved to Florida ten years ago, we could have more immigration by reducing the percentage to 17% but increasing the number of people to two million. As such, answer choice C weakens the argument significantly, as it could justify a sizable increase in relocations to the sunshine state. Let’s look at the other choices to confirm.

Answer choice D, the number of people who left Florida when they retired to live in another state was greater last year than it was ten years ago, turns the argument on its ear by discussing the number of people leaving Florida. While there is some merit in arguing that people are leaving the state in bigger numbers, it would actually support the argument that local businesses are in trouble. This answer choice is a 180° because it strengthens the argument instead of undermining it.

Finally, answer choice E, Florida attracts more people who move from one state to another when they retire than does any other state, is most likely true in the real world, but doesn’t help us in this question. If I have the most water in a drought, I may still not have much water at all. This answer choice doesn’t weaken the argument because it’s still entirely possible that the economy of Florida will suffer. Answer choice E can be eliminated. We now can confirm that it must be answer choice C.

For strengthen and weaken questions, it’s often best to attempt a logical guess at the answer choice based on the disconnect between the conclusion and the supporting evidence. Some statistical errors appear frequently on the GMAT, such as percentage and absolute number data that can be interpreted differently depending on the context. Like anything else in life, preparation is the key to success. Once you’ve mastered the finer elements of the GMAT, you can even start preparing your own retirement plan.

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Ron Awad is a GMAT instructor for Veritas Prep based in Montreal, bringing you weekly advice for success on your exam.  After graduating from McGill and receiving his MBA from Concordia, Ron started teaching GMAT prep and his Veritas Prep students have given him rave reviews ever since.