Recently, I had the opportunity to “geek out” with two of my favorite PhDs—Joel Dickson, Vanguard’s global head of advice methodology, and Michael Finke, a leading researcher in retirement planning. We recorded an episode of The Planner and the Geek, and Michael shared insights from his research study focusing on what drives happiness in retirement. At first blush, it would seem that this topic wouldn’t warrant a research study or even an entire podcast. But delving into the research brings about some interesting learnings!
Michael’s study is unique because it focuses on retirement well-being from an emotional standpoint, not exclusively from a financial perspective.
His 3 keys to retirement happiness are:
Money is just a number
First, “money is just money.” During our working years, we make saving for retirement a priority. Many people focus on achieving a monetary goal, such as saving a specific dollar amount or accumulating a nest egg of a specific size. When we get there, it’s really not the money itself that makes us happy but rather how we spend the money. Essentially, money is an enabler to happiness.
If you use your money for the activities you enjoy or spend it with others, for example, you’ll be happier. Spending money on “things” isn’t necessarily an input to happiness.
Retire in good company
Second, “love the one you’re with.” Personal relationships are very important in retirement because you have more free time. During our working years, we spend many of our waking hours with co-workers, clients, customers, or patients, or on the road. A big part of our social network is tied to the workplace. When we retire, though, we have the freedom to choose with whom we spend our time.
Surprisingly, being close to friends accounts for greater happiness than living close to your kids. Couples who live within 10 miles of their children are significantly less happy. According to Michael’s findings, this is often because only 1 spouse drives the decision to move, or the couple has unrealistic expectations about living close to their grown kids.
Stay healthy to be happy
Third, “if you have your health, you have it all.” This is a factor we can’t completely control, but it can help us realize the importance of maintaining our health during our working years. Health is a key to happiness (and a blessing!) at any stage in life, but it becomes even more important in retirement.
What’s your secret to retirement happiness?
As you read this (or listen to our podcast with Michael), I hope you’re inspired to think about your own definition of happiness. Whether you’re retired or working toward it, I’d love to hear from you: What are your keys to retirement happiness?
Learn more about Dr. Michael Finke at michaelfinke.com.
I’d like to especially thank Michael for his willingness to be part of an episode of The Planner and the Geek. Being in the studio with 2 PhDs turned about to be fun and informative. For me, these are 2 inputs to my happiness at work!