Fee-Only Financial Planner - Massachusetts
Menu

//  by 

Retirement is like a trip to a new destination. It’s unfamiliar and unpredictable territory, and your expectations are likely to have a tremendous influence on your happiness and satisfaction in retirement. In a recent article penned for the Nerd’s Eye View, Anna Rappaport wrote about the challenges that accompany the end of our working lives.

“While there are well-established ideas about career planning, the ideas about next steps for people [in their 50s and 60s] are much less developed. People feel like they are writing their own scripts without guidance. Some people reach transition points unsure about when to make a move, what steps to take, and with no idea about what they will do when they reboot or retire.” (1)

The keys to a successful retirement

As a financial advisor, I spend a significant amount of time talking with clients about exactly those issues: when to retire, how to prepare, and what retirement may be like.

Yes, dollars and cents are a critical retirement consideration, but money is not the only important variable in retirement success.

A 2017 research report, Spending, Relationship Quality, and Life Satisfaction in Retirement, found that many retirees who spent less money than their peers derived the same level of happiness from retirement. (2) There were a variety of reasons for it, including:

•    Happy marriages (or happy single lives). The quality of spousal relationships affects retirement satisfaction. Content couples tend to be happier in retirement than discontent couples. Also, unmarried retirees tend to be happier than unhappily married retirees. Resolving marital issues before retirement may improve retirement outcomes and/or improve financial stability. (2)

•    Active social circles. Having meaningful connections with family members and friends (old and new) improves life satisfaction in retirement. If your social group primarily is comprised of co-workers, you may want to take a class, join a group, or begin volunteering to expand your social network. Social interaction also may improve health and well being, according to the National Institute on Aging. (2, 3)

•    Good health. There is a strong, positive relationship between good health and retirees’ happiness. Healthy retirees tend to be more active and engage with friends and family. In addition, since they spend less on healthcare, they may be able to spend more on travel and entertainment. (2, 4)

•    Sense of purpose. “The happiest people view retirement not as an endless vacation, but as a chance to pursue new opportunities and take on new challenges….focus on the people who are important to you and the activities that are worth your time and energy,” advised Tom Sightings, author of the Sightings At 60 blog. (4)

Instead of dreaming about retirement as a prolonged vacation, it’s important to inject some reality. As you make retirement plans, look beyond saving, investing, and tax planning. Think about what you will do in retirement, form habits that will help sustain good health, and make sure you have a strong support network.

I hope you think of me as part of that network. Whenever you want to talk about retirement, give me a call. I’m happy to discuss expectations, realities and, of course, finances.

Sources:

  1. Anna Rapapport. ‘Reboot, Rewire or Retire? Personal Experiences With Phased Retirement and Managing A Life Portfolio.’ Nerd’s Eye View blog. February 27, 2019. Accessed March 1, 2019. [https://www.kitces.com/blog/anna-rappaport-phased-retirement-life-portfolio-health-people-pursuits-places/]
  2. Finke, Michael S. and Ho, Nhat and Huston, Sandra J.. ‘Spending, Relationship Quality, and Life Satisfaction in Retirement.’ Pp. 2-3, 14-15. 2018 Academic Research Colloquium for Financial Planning and Related Disciplines. September 23, 2017. Accessed March 1, 2019. [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3041761] (Download paper or open in pdf)
  3. National Institute on Aging. ‘Research Suggests a Positive Correlation between Social Interaction and Health.’ U.S. Department of Health and Human Services. Accessed March 1, 2019. [https://www.nia.nih.gov/about/living-long-well-21st-century-strategic-directions-research-aging/research-suggests-positive]
  4. Tom Sightings. ‘5 Ways to Be Happier When You Retire.’ U.S. News & World Report. July 31, 2017. Accessed March 1, 2019.  [https://money.usnews.com/money/blogs/on-retirement/articles/2017-07-31/5-ways-to-be-happier-when-you-retire]