The Secret to Happier Retirement
Recently I received a copy of a Wall Street Journal article from July 27th, 2005 titled
“The Secret to a happier retirement. Friends Neighbors and a Fixed Annuity”.
The funny part of this is I actually remember this article. At the time I was managing money and it did not fit my world view of retirement. Like many others, I have rethought what is important in retirement. Maybe it is because I am now 15 years older and closer myself to retirement or perhaps it is the perspective that working with people for so long about their retirement that this article struck a chord with me. I am not going to go into the whole article but just the 7 points it highlights.
- Value your time. This may seem an odd place to start, but I have seen so many people spend retirement doing things they do not like to do. Admit that you do not like certain tasks and have others do them for you.
- Think Ahead. What do you want for your future? In particular what impact would something like a long-term care event do to your plans?
- Expect less. Whether this is from the market or family if you expect too much you are bound to be disappointed. Working from a best-case scenario often does not work out. If you expect less and get more you will be happier than if you expect the most and get less. It is psychological.
- Pick your neighbors. Living in an area with people of similar resources will serve you better than living with people that will stretch your budget. If this means downsizing and living in a smaller place you will be happier than the stress of a large house and people that have more disposable income than you have.
- Buy yourself income. Years ago, this was provided by employers in the form of pensions. With 401(k) type retirement plans now the most common form of retirement plans, you need to replace the pension with a fixed annuity to guarantee income for life. There are many articles about the freedom this provides as most have lived off a paycheck for their working career and not managed a portfolio. This is why I like to create paychecks not portfolios in retirement.
- Work in retirement. I am not saying full time but finding something to do is very important. It gives purpose to life. It can be working as a volunteer, working in your garden, working part-time at a business, or using your vast knowledge to mentor someone just starting out. If you need additional income this will also help balance your income needs.
- Invest in friendships. Having people in life that you enjoy is one of the best ways to be happy in retirement. Travel, dinner, or just relaxing by the pool can provide the happiness that many desires but lack. It is an investment so work on it and enjoy retirement.