What makes a happy retirement?

That’s the million dollar question, “What makes a happy retirement?” 

Everyone has their own opinion, but let’s dive deeper into my experience, and the research.

You may be surprised to know that money is definitely a contributing factor to a happy retirement, but certainly not the only factor.

As I talk with clients who are preparing for retirement, the first question many ask is, “What’s my number?” Meaning, how much do I have to save before I can retire? This is important and a big piece of the retirement puzzle, but surprisingly, not the only piece of the puzzle. In fact, everyone’s “retirement number” varies depending on the lifestyle they want to live in retirement and how much they have saved through a 401(k), IRA, pension, social security and other asset income.

As many of my retiree clients told me, they wanted enough money to get by, but you don’t have to be super wealthy to be happy. 

In fact, life satisfaction tops out at an annual income of $95,000 according to a study by Purdue University. Enough money to never have to worry about going broke or paying for medical costs is important, of course. 

But money is not the only, nor most important piece of a fulfilling retirement. 

So, once you have your financial plan in place, and that’s where I help clients figure out their “retirement number”, it’s essential to focus on all those things money can’t buy.  

There is no correct “order” of the following non-financial assets to experience an amazing life in retirement. As with all things, it depends on the individual and their needs, wants, and desires to live a fulfilled life.

I do think it’s important for those planning retirement to realize there is more that goes into living a happy life in retirement. And retirement isn’t an “event” in my book. It can be a transition as we go from full-time work to part-time work and more volunteering or travel or time with the grand kids, or a combination of all of the above. 

So here’s my list of what makes a happy retirement:

1. Good Health: What good is money if you can’t enjoy it? The majority of retirees say that good health is the most important ingredient for a happy retirement, according to a Merrill Lynch/Age Wave report. Studies show that exercise and a healthy diet can reduce the risk of developing certain health conditions, increase energy levels, boost your immune system, and improve your mood. It’s never too late to get moving and eat healthy.  The National Institute on Aging has all sorts of great information on how to get started with an exercise program and to stick with it.
2. Social Connections: Activities with people we like can boost life satisfaction, especially when our social networks shrink after leaving the workforce. Happier retirees were found to be those with more social interactions, according to one Gallup poll. A low level of social interaction is just as unhealthy as smoking, obesity, alcohol abuse and physical inactivity. So stay connected whether it’s texting, emails, zoom, video chats. Now’s the time (thanks Covid) to become more tech savvy so we can “see” and talk with our loved ones.
3. Purpose: While fun, the stereotypical leisure activities (think golfing, strolling the beach or reading a novel) associated with retirement don’t provide a sense of purpose or meaning, which is what many of my clients say is important. One place retirees find a sense of purpose is work. In a Gallup poll, nearly 3 in 4 Americans said they plan to work beyond traditional retirement age, with the majority planning to do so because they “want to,” not because they “have to.” Another place many retirees find fulfillment is through volunteering. The same Age Wave/Merrill Lynch study referenced above found that retirees were three times more likely to say “helping people in need” brings them happiness in retirement than “spending money on themselves.” Further, those who donated money or volunteered felt a stronger sense of purpose and self-esteem and were happier and healthier. If you’re wondering how to get started looking for a place to volunteer, check out VolunteerMatch.org which lists volunteer opportunities that are searchable by city and category, such as animals, arts and culture, health, literacy and seniors.
4. Education: Exercising your brain may help prevent cognitive decline and reduce the risk of dementia. “Challenging your brain with mental exercise is believed to activate processes that help maintain individual brain cells and stimulate communication among them,” according to Harvard Medical School’s Healthbeat newsletter. Exercising your brain requires constant stimulation. Choose something that is new and that you enjoy. Consider taking a class from a senior center or community college, learning to play an instrument or making it a habit to regularly visit the library and pick up a new book. The National Institute on Aging also provides a list of activities that can help improve the health of older adults, ranging from visiting local museums to joining a book or film club.
5. Optimistic Attitude: This is where that “glass-half-full” attitude really pays off! Some of the benefits include lower risk of developing cardiovascular disease and other chronic ailments and a longer life. An article, published in the Proceedings of the National Academy of Sciences (PNAS), indicates that people with higher levels of optimism lived longer. Optimistic women had a 50% greater chance of surviving to age 85, and optimistic men had a 70% greater chance. The best news is optimism is a trait that can be developed. Start by reframing every negative situation in a positive light. Another way to rewire your brain is to write down five things you’re grateful for before going to bed. Check out six specific tips in this report to learn more about retraining your brain to be more optimistic.
6. Gratitude: Studies by psychologists Robert Emmons and Michael McCullough show that people who counted their blessings had a more positive outlook on life, exercised more, reported fewer symptoms of illness and were more likely to help others. This is further supported in work by psychologist Nathaniel Lambert that finds stronger feelings of gratitude are associated with lower materialism. Gratitude enhances people’s satisfaction with life while reducing their desire to buy stuff. Yeah! This means your retirement savings will go farther! Enhance your attitude of gratitude by writing down all the good things that happen in your day. I do this nightly so I end my day on a positive note. 
7. Pets: Dog owners who walked their dogs at least once a day got 20% more physical activity than people without dogs and spent 30 fewer minutes a day being sedentary, on average, according to a study published in The Journal of Epidemiology and Community Health. Research has also indicated that dogs help soothe those suffering from cognitive decline, and the physical and mental health benefits of owning a dog can boost the longevity of the owner. Don’t want to take on a pet? How about becoming a foster parent to a dog in need? Check with your local animal shelter to volunteer. It will help you and the animal in need.

There’s a lot to consider when preparing your retirement plan. In fact, a lot more than just the dollars and cents. So check with me on how to figure out your “retirement number,” and then make sure you’ve thought through, and planned for some of the other items that make retirement an amazing life!