As the Delaware beaches have become an ideal location for those looking to retire, we say this article from Forbes magazine and wanted to highlight “3 Strategies That Are Proven To Increase Retirement Happiness” by Robert Pagliarini for residents entering this next chapter in their life. We are excited and thankful for the many new residents who have chosen to retire at Bayside.
How can you prepare for a successful retirement? It depends on who you ask, but traditional retirement planning has always focused on the numbers: How much have you saved? How much has your portfolio grown? What’s in your 401(k)? Are your investments tax efficient or should you consider a new investment strategy? – and that’s typically as far as most people go when it comes to evaluating whether or not they’ve prepared enough for a successful retirement. They’re not wrong, though. It would be extremely difficult to find satisfaction in retirement without any money, so it’s critical to evaluate your finances, projected growth and future expenses. But how can you take it to the next level and find true retirement satisfaction?
How about by saving more money? Will greater wealth equate to greater happiness later on in life? Up to a point, yes. Research shows that finances do affect retirement satisfaction¹, but once you hit a certain income level, additional wealth doesn’t have the same impact on overall happiness². Are there other steps you can take to ensure your retirement’s a success? Do you even need to worry?
Perhaps, though the majority of retirees are fairly satisfied with their lives. Unfortunately, there’s a segment of the retired population that isn’t content at all. Finances aside, how can you ensure you’re one of the lucky ones? Forget the numbers, and focus on these non-financial indicators of retirement satisfaction to help ensure you’ll find fulfillment later on in life³:
#1) Retire on your own Accord
Make sure your retirement is voluntary. If you’re already nearing retirement and lose your job, it may be difficult to find a new position. Some get discouraged looking for work and decide it makes the most sense to retire – even if they’re not ready to. This transition from unemployment to retirement is a strong predictor of dissatisfaction later on in life. When you’re not in control and are essentially forced into retirement, your situation may not be ideal and will likely be a source of negativity. So how can you protect yourself from this? By investing in human capital.
Whereas financial capital is stocks, bonds and real estate, human capital is your education, experiences, skills and credentials. These are the personal assets you can invest in to bolster your resume and make you more valuable as a professional, bettering your chances of not just finding a new job, but finding the right job that rewards you and compensates you fairly. I’ve seen too many people stop learning, growing and trying to improve themselves once they hit 35 or 40, and that’s a huge mistake. We constantly have to reinvent ourselves and improve ourselves, and even if you’re five years away from retirement, keep learning; it’ll make you more valuable if something were to happen to your job – and not only that, but it also feels empowering.
#2) Retire with a Purpose
Living without a purpose and without a feeling of fulfillment can cause unrest, leading to higher stress, depression and anxiety. Without even realizing it, some people lose their sense of self and drive as soon as they retire and are pulled away from their daily routines and responsibilities at their jobs. Just because you’ve stopped working doesn’t mean you need to abandon your goals and lose all aspirations. Shift your mindset to something more powerful, and start considering all of the new activities you’ll be able to do now that you’re retired and have all this free time. Rather than think of what you’re losing professionally, think of what you’re gaining personally. Now that you’re retired, what do you want to do? You can travel to all seven continents, excel at a new hobby, write that novel you’ve always dreamed of, nurture relationships with your family or even volunteer for a cause that resonates with you. The bonus with volunteering is that you’ll also be making a positive impact.
#3) Retire in Sync
Coordinating retirement with your partner is critical for future happiness. If one spouse retires while the other continues to work for a number of years, conflict can arise. One partner may have the urge to travel, sleep in, spend all day golfing or learning new hobbies, while the other is still confined to a busy 9-5 work schedule. When lifestyles and day-to-day routines are unable to align for months – and even years – relationships can become strained and be a source of unhappiness. To avoid this, ensure you coordinate your retirement with your partner so you can enjoy your newfound freedom together. It doesn’t have to be the same day or even the same month, but make plans ahead of time to ensure your retirements are in sync.
This is just the tip of the iceberg when it comes to finding fulfillment. Picture your ideal retirement. Aside from your finances, what are some of the factors most important to you? What personal considerations will help make your retirement a success?
¹ Chaffin, C. R. (Ed.). (2013). Financial Planning Competency Handbook. Hoboken, NJ: John Wiley & Sons, Inc.
² Diener, E., & Suh, E. M. (2003). Culture and Subjective Well-Being (Well Being and Quality of Life). Bradford Book: Colorado, CO.
³ Wang, M., & Hesketh, B. (2012). Achieving well-being in retirement: Recommendations from 20 years’ research. International Affairs Committee of the Society for Industrial and Organizational Psychology, Inc.
Robert is the owner of Pacifica Wealth, a fee-only fiduciary financial planning firm. Do you want to learn how to create the perfect retirement? Sign-up for the Retirement Satisfaction Webinar now.