According to a 2016 Employee Benefit Research Institute study on retirement satisfaction, almost 90% of retirees say that their retirement is either “very” or “moderately” satisfying. Fortunately, most retirees are happy. A little over 10% of retirees, however, admit that they are “not at all satisfied” with their retirement.
The difference between happy and unhappy retirees
As you might expect, people with higher net worth are generally happier than those with lower net worth, so having a good financial plan is important. People with better health are also happier than those in poorer health. It is heartbreaking when people have big goals for retirement, but then health issues (or even early death) keep them from achieving those goals.
However, I have also known people who have a high net worth and good health who were still not as happy as you might expect them to be. Money and health are very important, but happiness is more complex than just having money and health.
So, what is the key difference between a happy and an unhappy retirement? The key to a happy retirement is to have something that you are retiring to, not just something that you are retiring from. The difference between happy and unhappy retirees is having a purpose.
In Wes Moss’s 2014 book, You Can Retire Sooner Than You Think, he cites data that shows 91% of happy retirees have a clear sense of purpose, while 89% of unhappy retirees are uncomfortable with their sense of purpose. The happiest retirees have a plan for how they are going to spend their life in retirement, not just how they are going to spend their money. They know what they want to do and how they are going to spend their time. They have a reason to get up every day. Many happy retirees have told me that they are busier now than they were when they were still working.
However, if you are retiring because you are sick of your current job and cannot take it anymore, but do not have a plan for how you are going to spend your days going forward, you will probably get a short-term thrill from retiring but might not be happy in the long-term.
Finding A Sense Of Purpose In Retirement
What kinds of things give happy retirees a sense of purpose? Of course, spending time with family is important. Spoiling grandkids is always time well spent.
Some of our clients find a sense of purpose in travel. Meetings with them are full of reports of exotic vacations and cruises. They are excited to tell us where they are going next. Maybe it’s New Orleans or Napa. Maybe it’s a European river cruise, Brazil, Norway, Mexico, or Japan. Maybe it’s exploring art museums or enjoying wine and food festivals. Wherever it is, the adventure of exploring new places gives them a sense of meaning.
Others get a sense of purpose from hobbies and sports. Some enjoy tennis or golf or even pickleball. One of my clients loves to go on kayaking trips. Another races in sailboat regattas. A number of clients enjoy quilting. Retirement gives them more time to enjoy doing the things that they love.
Volunteering is another thing that gives clients a great sense of purpose. Many of my clients help with different ministries in their churches and synagogues. One client enjoys traveling around the South singing in a mass choir.
Financial planning should be about making the most out of this life with which we have been blessed. The goal should not just be to maximize our money, but to maximize our long-term happiness.
We have only one life to live. To help identify your purpose, imagine for a moment that you are at the end of your life. What would you most regret not having done? And what will you miss most about life?
As a Wealth Manager at Pinnacle Advisory Group, my favorite part of the job is helping clients dream about the kinds of lives they would love to have, and then sharing in their excitement as we meet those dreams. If someone you know is considering retirement, we would appreciate an opportunity to meet with them and to help them enjoy a happier retirement.
Pinnacle Advisory Group, Inc. (“Pinnacle”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Pinnacle and its representatives are properly licensed or exempt from licensure.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.