People often transition smoothly into retirement and enjoy their new lives right away. However, some people have a more difficult time settling into retirement than their peers. It’s even possible that some of us will delay or put off retirement entirely to overcome our fear of uncertainity.
Regardless of how you feel about retirement, here are the following are five qualities that happy retirees share.
Be a saver, not a spender.
When it comes to retirement planning, numbers are key. And, for good reason. If your retirement income from sources like a 401(k), Social Security, or annuity can support your desired lifestyle, while also eliminating fears like long-term care or outliving your savings, you’ll have more peace of mind. And, in turn, this will increase your happiness.
However, Dan Gilbert, a Harvard University psychology professor and author of “Stumbling on Happiness,” told Time that while having enough money is beneficial, it also has drawbacks.
“Once you get basic human needs met,” Gilbert explains, “a lot more money doesn’t make a lot more happiness.”
It has been found that earning less than $20,000 a year makes you twice as happy as earning more than $50,000. But earning more than $90,000 is barely worth the effort.
In fact, a study by psychologists at Purdue University found that life satisfaction peaks at $95,000 per year, on average. And, when it comes to retirement savings specifically, it plateaus after $50,000 according to certified financial planner Wes Moss, chief investment strategist at Atlanta-based Capital Investment Advisors and author of the upcoming book, “What the Happiest Retirees Know.”
What exactly does this all mean? Well, once you have enough money to cover your expenses and enjoy the occasional treat, like going out to dinner or a weekend getaway, you’re not necessarily happier as your wealth increases.
Does this mean you have to have exactly $50,000 saved at the time of your retirement? Nope. Instead, it’s a goal that you can aim for and adjust depending on your situation and goals. And, to make this goal more attainable, keep these pointers front and center;
Start saving now.
Saving money can make you happier, according to Elizabeth Dunn, who is the chief scientific officer for the financial technology firm Happy Money and the author of “Happy Money: The Science of Happier Spending.”
Her advice is to break your big saving goals into smaller, more manageable chunks, such as those you want to achieve for retirement. By taking small steps, you can develop habits that will last for the rest of your life.
“Just taking the time to create a savings account may have an immediate impact on your overall happiness,” Dunn, a professor in the Department of Psychology at the University of British Columbia, told CNBC.
Increasing your retirement contribution as you establish good habits will ensure that you will have the money you’ll need in the future.
Pay off your mortgage as soon as possible.
Financial experts may suggest that paying off a mortgage shouldn’t be a priority because of the current low-interest-rate environment. However, Moss’ research shows that those who pay off their mortgage by the time they retire are four times more likely to be happy than those who don’t.
“The psychological side of not having a mortgage, perhaps is even more powerful [than the money side], and kind of outweighs the financial argument to not pay it off,” he said.
Adding extra payments or paying more than the monthly amount due can help you pay off the loan sooner.
What you spend on matters.
Maybe you’re planning to purchase a dream home in a new location or buy a recreational vehicle to explore the country. In reality, though, spending money socializing with other people makes retirees the happiest, according to CFP Michael Finke, a wealth management professor at The American College of Financial Services.
He found that spending on durable goods, cars, clothes, and gifts did not significantly increase life satisfaction in retirement. As an example, it may be fun to spend time at the beach, but eventually, it could grow monotonous.
“What makes us happy during our working lives are not necessarily the things that will make us happy when we retire,” Finke said.
“Oftentimes what makes us happy is being around other people,” he added. “Things like driving around in an RV or buying a home in the mountains can make us less happy if it results in social isolation.”
Make your health a priority.
Let’s be honest, money is useless if it can’t be enjoyed. Perhaps that’s why according to the Merrill Lynch/Age Wave report, the majority of retirees think good health is vital for a happy retirement.
What’s more, exercise and a healthy diet have been found to improve your overall well-being. At the minimum, this includes reducing the risk of developing certain diseases, elevating your energy levels, improving your mood, and boosting your immunity.
Like saving money, you should focus on your health sooner than later. But, also keep in mind that it’s never too late to improve your health. It’s been found that getting physically active and adopting a healthy diet late in life significantly lowers the risk of cardiovascular illnesses and is associated with a lower mortality rate.
But, where exactly can you start? Well, the National Institute on Aging, “you should do at least 150 minutes (2 ½ hours) a week of moderate-intensity aerobic exercise, like brisk walking or fast dancing. Being active at least 3 days a week is best, but doing anything is better than doing nothing at all.”
“You should also do muscle-strengthening activities, like lifting weights or doing sit-ups, at least 2 days a week,” NIH adds. “The Physical Activity Guidelines also recommend that as part of your weekly physical activity you combine multiple components of exercises. For example, try balance training as well as aerobic and muscle-strengthening activities. If you prefer vigorous-intensity aerobic activity (like running), aim for at least 75 minutes a week.”
Also, don’t forget to stretch your mental muscles as well. Consider doing a daily crossword puzzle, taking an online course, or learning a new skill to keep you mentally sharp.
Harvard conducted a famous and highly cited study that followed 724 men starting from when they were teenagers in 1938. In addition to collecting health information over time, the researchers asked members about their lives and their mental and emotional wellness every two years. They also interviewed their family members during this 80-year span.
Why? To unlock the secret to happiness. And, here’s what the researchers found.
Happiness is strongly associated with close relationships, such as spouses, family, and friends. “Personal connection creates mental and emotional stimulation, which are automatic mood boosters, while isolation is a mood buster,” says Dr. Robert Waldinger, director of the study. During this time, you should also be focusing on positive relationships and eliminating negative people from your life or at least minimizing your contact with them.
What if you feel that you need to broaden your social life? Volunteer for a cause that interests you. Most likely, you will meet others who share your interests. Also, volunteering provides a sense of purpose, which boosts happiness. This benefit is strongest among people ages 45 to 80 and older, according to a study published in BMJ Open on May 19, 2016.
Or, you consider finding companionship through a dog, cat, or bird. Research shows that having a pet is good for you both mentally and physically, such as combating cognitive decline and a sedentary lifestyle.
Have multiple income sources.
“While the level of income is important (the happy group reported a larger income number than the unhappy group), what also makes a difference is the number of different income streams,” writes Moss in the Atlanta Journal-Constitution. “Diversification of income is a key here.”
Among the happy group, three income sources are average, while less than two are common among the unhappy group. “These sources include Social Security and pension benefits, part-time work, rental income, other government benefits and then, of course, investment income,” he adds.
Maintain a schedule, but not like before you retired.
According to a study from Taiwan, a crucial ingredient to a happy retirement is not how much free time you have. It’s actually how you utilize it.
Instead of blocking out every minute of your free time, the authors recommend setting goals and prioritizing your free time, and then evaluating whether they can be achieved. In addition, they said you should plan your activities on a daily and weekly basis – not hourly. Scheduling your time helps you avoid getting bored, depressed, or isolated.
Need some ideas on how to spend your post-work time? You could find innovative ways to make extra money or babysit your grandchildren every Tuesday and Thursday. Perhaps you could meet once a week with friends for lunch or indulge in a hobby like bird watching or visiting a museum.
FAQs About Happy Retirement Living
What does happiness mean to you?
Arguably, this should be the first question to answer — especially when going through a change like the transition from work to retirement. In order to feel happier, what needs to be changed or what should be done? The things that make you happy might not be the same as those of someone else. As such, think very carefully about what makes you happy and what steps you would need to take to accomplish it.
Is my health up to par?
Regardless of your genetics, you can actively work to ensure your health is as good as possible in retirement. For starters, choose an activity you enjoy. Exercises like biking, tennis, yoga, or walking not only help you live longer, they’re also activities you may actually enjoy.
Additionally, if you’re planning on relocating, don’t overlook the quality and distance of hospitals, specialists, and health facilities.
How should I spend my free time?
The happiest retired people know how to spend their days wisely. This includes spending quality time with family and friends, volunteering, and engaging in social activities like a book club or golf outing. You may also find joy in working part-time, launching a side hustle, mentoring others, or picking up a hobby you’ve always wanted to try.
Does money guarantee a happy retirement?
No. Money doesn’t guarantee a happy retirement. But, it can help depending on your goals and objectives.
To meet your individual retirement goals, it is advised people work with an advisor, instead of providing a blanket figure such as $1 million or $2 million.
Will an annuity make retirement happier?
An annuity can guarantee a lifetime income. The majority of your living expenses in retirement will likely be covered by other sources of guaranteed income, such as Social Security and a pension. As such, you may not need to insure additional income if those other sources cover most of your needs. But, for those who don’t have much of a guaranteed income, buying an annuity could be worth exploring.
In addition, according to articles published in Time and The Wall Street Journal, those receiving a substantial check every month are much happier. Furthermore, studies have shown that they live longer as well.
Article by Albert Costill, Due
About the Author
Albert Costill graduated from Rowan University with a History degree. He has been a senior finance writer for Due since 2015. His financial advice has been featured in Money Magazine, Fool, The Street, Forbes, CNBC and MarketWatch. He loves to give personal finance advice to millennials.