As financial advocates and planners, we are typically the first to learn of a potential retirement. Most clients want to know if they are going to have enough money during retirement and how they will make their nest egg last for potentially 30+ years. This is our area of expertise and we pride ourselves in working to help organize a group of financial accounts, Social Security, and potentially a pension and create a simple, yet elegant retirement income plan. In our minds, this is the easy part. The softer science is serving as a sounding board, friend, or potentially even a mentor when it comes to being happy in retirement.
That is what everyone wants, right? A happy, less-stressed part of life when you are doing what you want, when you want, and how you want. Seems easy, right? But research shows that sometimes people fail to always make all the correct “investments” during their lifetime. One can have all the money in the world, but if there is not a sense of fulfillment, retirement is not going to be the picture that everyone looks forward to. So, what can be done to improve happiness in retirement?
Michael Finke, Chief Academic Officer at American College of Financial Services, has been researching the question of what makes people happy in retirement for years. Finke found that there are three pillars to happiness during retirement. Money, Health, and Social Well-Being. Money and health are very straightforward, people are going to be happier if they can pay for the expenses they need/want and if they are in good health. Social well-being, however, is one that many do not think about as they plan for retirement.
As Financial Advocates, we are advocating for client’s finances… how can we improve a balance sheet and retirement projections? However, as stewards to our clients as people, we also recognize that a competing investment is an investment in yourself, your relationships, and your well-being. While this investment is not captured on a balance sheet or investment statement, it will certainly pay dividends during retirement.
So, when you are thinking about retirement savings, we must make certain that you do have enough money set aside for retirement. However, we find that it can be valuable to also plan for investments in your social life as well. When making goals, establish and track the deposits into your social experiences – the number of social events you will attend, vacations you will take, friends who you want to see and how often, etc. While this may sound silly, I would venture to guess everyone can think of a friend who they have said “I wish we could see each other more, we have just been so busy…” Trust me, this goal planning will be much more fun that the infamous “B” word that I am also encouraging people to consider!
If you are married or have a significant other, an interesting fact that Finke also determined was that the extent to which you have a good relationship with your spouse is one of the strongest factors in determining happiness in retirement. So, this weekend, put all the technology/distractions away and spend some quality time with your spouse or significant other.
Did you find this article interesting or helpful? Sign up to receive our weekly commentaries here.
Want a second opinion on your investments, financial plan, or retirement projection? Have a Personal CFO reach out to you here.