Secrets of a happy retirement

Some people who imagined they’d leave all their worries behind once they quit working are finding retirement isn’t quite as blissful as they dreamed it would be.

In the USA, 2018 data from the Employee Benefit Research Institute (EBRI) suggests the average retirement satisfaction of Americans is falling, regardless of whether they are wealthy or not.

Whilst we don’t have comparable data for New Zealand, we do have this thing called retirement(!), so we should see whether we can learn anything from the USA data.

It’s not clear what’s causing the reduced retirement satisfaction, but part of the problem might be the nature of retirement is changing, and it’s taking people’s expectations a while to catch up. Retirement can stretch for decades, health care costs are rising, and people are more likely to want (or need) to keep a foot in the working world rather than transitioning straight to a life of fulltime leisure.

That transition from busy worker to relaxed retiree isn’t always simple. Although retirement boosts happiness overall, some retirees are happier than others.

What separates the happy from the less satisfied? Perhaps it’s simply that some worked out ahead of time the ten biggest secrets of a happy retirement.

1. Don’t assume it’s all about the money
It’s a cliché to say money can’t buy happiness, but it’s true when it comes to retirement. A big bank balance won’t translate to stress free retirement if there are other problems lurking below  the surface.

Sometimes, the problems are financial,  such as debt. In other cases, they’re personal. Whatever the cause, you shouldn’t assume money alone will make the other problems in your life disappear.

2. But don’t ignore your finances
Money might not be everything, but a steady source of retirement income can go a long way to reducing retirement stress. People with consistent sources of retirement income, such as a pension, are generally more financially confident and less likely to feel pressure to cut spending than  those who rely solely on income from their investments.

3. Stay healthy
The better a person’s health, the more likely they were to say they were having a happy retirement, EBRI found. 80% of retirees who rated their health as excellent said they were very satisfied with their retirement, compared to only 26% of those who rated their health as poor.

The good news is, for many, retirement offers an opportunity to refocus on health and wellness as people have more time to pay attention to nutrition, exercise and living a healthy lifestyle.

4. Find your purpose
Retirement frees up your schedule, but for some people all that unstructured time can be overwhelming. An absence of purpose can lead to boredom, depression and relationship stress. That can be especially true for people whose identity was closely tied to their career.

Think carefully about what your retirement purpose will be before you stop working. That might mean setting yourself up to start a business, looking into volunteer work, or turning a spare bedroom into an artist’s studio.

5. Don’t try to keep up with the Joneses
Pressure to keep up with your friends and neighbours when it comes to holidays, home improvements and hobbies can derail your retirement finances, and your happiness.

If you move in a social circle where people tend to live large and you can’t handle the pressure to keep up, you might need to refocus your energy elsewhere.

6. Give back
Many people plan to dedicate time and money in retirement to giving back. That generosity doesn’t just benefit those you help, but it also increases your own sense of wellbeing.

Volunteer work and other charitable activities are also a great way to find new purpose and meet new people.

7. Stay social
Not having much of a social life can be bad for your health. Studies have linked low social interaction with a greater risk of heart disease and cognitive decline.

To stay happy and healthy in retirement, make time to develop new relationships and nurture existing ones, especially if your social life previously revolved around work.

8. Communicate with your spouse
Even couples with strong relationships can find the transition to retirement is a bumpy road. Suddenly, the person you’re used to spending evenings and weekends with is around all the time. Even if you’re looking forward to getting to know your partner again, you might need to set some boundaries.

Sometimes, that means one person goes back to work, even part time. It also might mean sitting down and having a conversation about what you both really expect from retirement, so neither person ends up unhappy or resentful.

9. Think twice before relocating
Picking the wrong place to move is one of the biggest sources of retirement unhappiness. Choosing a location because it has a low cost of living or you loved holidaying there without considering
other factors—such as whether you’ll enjoy the community or have friends or family nearby—can be a mistake that’s expensive to undo. Pulling up stakes without considering all the potential consequences can be one of the biggest retirement regrets.

10. Be satisfied with what you have
Your retirement nest egg might not be quite as large as you hoped it would be, but that doesn’t have to mean spending your golden years in misery. Assuming you have enough to live comfortably, there are plenty of ways to enjoy your retirement, even if you can’t afford all the luxuries, you might have dreamed of.

The key is to appreciate what you do have —whether it’s your health, family or hobbies —and not stress too much about what you might lack. Once you come to terms with your own retirement reality, you’ll be well on your way to retirement happiness.
 


Disclaimer:  This newsletter is meant to be informative and engaging, hopefully not a cure for insomnia.  Please don’t take this as personalised financial advice.  Discuss your situation with an Advisor.  This is where I need to say past returns are no guarantee of future returns.