Thinking about retiring? The keys to contentment are at your fingertips
by John Waggoner
Some might say that an ideal retirement would find you waking up in a private Mediterranean villa on a mattress made of freshly ironed $100 bills. And it’s true: Money is a big part of a happy retirement for many.
But most people need other things to be happy in retirement. After all, a pile of cash doesn’t guarantee good health, and it’s a poor substitute for meaningful relationships. Sure, you should keep an eye on your nest egg as you prepare for retirement, but don’t lose sight of everything else you need for a fulfilling life once you leave the nine-to-five behind. Consider these secrets to a happy retirement.
Secret No. 1: Money isn’t everything
You don’t need enormous wealth to be happy in retirement. You just need enough.
What’s enough? Many people think they want the same income in retirement as they have when they retire: If their job paid $100,000 a year, that’s what they want to have when they retire. But that’s high: Not only will you no longer be commuting to work and paying payroll taxes toward Social Security and Medicare, you won’t be shoveling a chunk of every paycheck into a retirement account. Most planners say that 80 to 85 percent of your preretirement income is plenty. And if you’ve paid off your mortgage, you may need even less than 80 percent of your preretirement income.
“People say, ‘I’m afraid of running out of money in retirement,’ but most don’t run out of money unless it’s a family crisis or health issue,” says Ray Ferrara, CEO of ProVise Management Group, a financial planning firm in Clearwater, Florida. “What people are really worried about is having to change their lifestyle.”
If you want to have enough money in retirement, make sure your lifestyle matches your budget. How much do you need to cover your bills? How much do you typically spend doing the things you enjoy — such as concerts, dining out and travel? Factor in the cost of health care, too — most people qualify for Medicare coverage at age 65 — to get a more accurate sense of how much is enough for your happy retirement.
And remember that happiness is not just a fabulous vacation or four rounds of golf a week. “Find a way to savor small things,” says Christine Benz, director of personal finance at Morningstar. “Throughout our lives, it’s the little things that get us up in the morning.” It’s a valuable lesson that has been reinforced by the pandemic. Walking your dog, enjoying coffee and the newspaper, having dinner with your spouse — those are what make a happy retirement, and they cost next to nothing.
Secret No. 2: Make health a priority
You can’t control your genetics, which are a big part of how your health will hold up in retirement. But you can actively work to make sure your health is as good as possible.
If you plan on moving to a new place when you retire, check out local hospitals and other nearby health facilities. First consideration: Distance. That place up in the mountains or on a secluded beach may have great views, but how long will it take you to get to a doctor? Even as telehealth has gained popularity amid the coronavirus outbreak, in-person medical care remains essential for certain conditions and during emergencies.
Next is quality of care. If you have a preexisting condition, such as high blood pressure or knee problems, make sure you’re confident in the local specialists. You don’t want to bank on the only orthopedic surgeon in town for a hip replacement.
Find a sport or activity that you like. Biking, tennis, yoga or walking will not only prolong your life, but also help you enjoy it. Frankly, any exercise is better than none. A study of 334,000 Europeans found that the biggest beneficiaries of exercise — those who went from inactive to moderately inactive — had a 16 to 30 percent drop in premature death risk.
And try not to put off doing things you’ve always wanted to do, Ferrara says. “The thing to do is quit planning to do those things you’ve always wanted to do. If you’re healthy and can afford it, do them — because at some point you will have some health issue that will keep you from doing it.” Ferrara’s boat, incidentally, is named “Someday is Today.”
Secret No. 3: Relationships matter
People are social animals, as the pandemic has reminded us all, and people who live in isolation typically don’t live as long, or as happily, as those who get out and socialize. “As much as you like being alone, you might underestimate the benefits of being with people,” Benz says.
According to the Mayo Clinic, the benefits of being with other people are considerable. Adults with strong social support have a reduced risk of many significant health problems, including depression, high blood pressure and an unhealthy body mass index (BMI). Older adults with a rich social life tend to live longer than those who are more isolated, too.
If you decide to move to a new place when you retire, visit it frequently beforehand so you don’t wind up feeling alone. “We tell people that if you want to move somewhere, try living there for three or four months first,” Ferrara says. “Get to know the area, meet people, and see if people are nice. Then make your decision.”
And sometimes, you can even spend money to get new friends. In most cases, buying a new sports car is a bad idea in retirement — but not if it’s because you love being with other people who love sports cars, too, says Benz. “Then it might be money very well spent.”
Secret No. 4: Hone your vision
One of the best ways to get people to save for retirement is to have them make a detailed list of what they actually want from it, says Brad Klontz, founder of the Financial Psychology Institute and an associate professor at Creighton University Heider College of Business. Doing so often results in an immediate increase in retirement savings.
Why? Simply articulating the things you envision for your retirement makes them more real and makes you more likely to achieve those goals. And talking about your vision can even help you understand why you might be nervous about retirement. “Sometimes, people don’t realize that they have a negative vision of retirement,” Klontz says. They may, for example, know people who retired and died shortly thereafter. Or they may have had a parent whose life turned worse after retirement. It’s best to get those negative thoughts out of your head before you retire.
And it’s important that your vision of retirement jibes with the vision of a spouse or partner, if you have one. If your idea is to buy a Winnebago and camp in all 50 states and your significant other wants to live in an apartment in Rome, it’s best to address those issues now, rather than during your retirement party. The coronavirus has disrupted retirement plans for many, so take advantage of the unexpected delay to hone your own vision.
Secret No. 5: Find your purpose
If you want to be happy in retirement, you need to feel like you have a reason for being, aside from playing golf or reading novels.
“In the first six to 12 months after retirement, most people are happy doing things they didn’t have time to do before,” says Klontz. But once the golf season is over and they have finished War and Peace, they become bored and start to wonder why they retired.
“It’s an existential crisis,” Klontz says. “You want to make a difference in the world, and if you don’t have a good answer for why you retired, you end up depressed.”
In earlier societies, people matured into different roles. “You may be too old to be a hunter, but perhaps you’re expected to teach or be a mentor,” Klontz says.
That’s no longer the case in modern society, so you have to plan your own purpose — and that may even be going back to work, says Ferrara. If you like to sail, consider helping to manage a marina, or start a sailing class for adults or teens. Want to make your local community better? Run for town council. “Retirement can be freedom to do what you always wanted to do but never had the chance to do,” Ferrara says.