Many people imagine their retirement as one of the best times of their lives. Most dream of traveling, enjoying hobbies like golf or yoga, and going out to dinners with friends. Indeed, most people find that retirement is the happiest period of life.¹ According to research, of all periods of our life, most people are happiest and most content between the ages of 65 and 74.²

However, research also shows a troubling undercurrent of sadness, dissatisfaction, and even depression among retirees. While most seniors are indeed happy a higher percentage of them are feeling more dissatisfied than before.³ According to a study from the Employee Benefit Research Institute, the percentage of retirees who describe retirement as “very satisfying” dropped from 60.5% to 48.6% over a 15-year time period.⁴ Experts suspect that the drop in satisfaction may come from either:

• Difficult financial conditions
• Lack of direction and purpose in this phase of life
• Choice of activities and time allocation during retirement

The risk of dissatisfaction in retirement is real. A study by the National Institutes of Health found almost one-third of retirees are clinically depressed.⁵ This affect was particularly prevalent in men.⁶ Why would this be? Many believe that if they could save enough money, stop working their stressful jobs and relax they’d be completely happy. While having enough money in retirement is critical that doesn’t seem to be enough to feel consistently happy. Many retirees report that leaving work created a loss of the routine, a loss purpose, less social interaction, and lower self-esteem along with a sense of loss and depression.⁷ Simply stopping working, by itself, is not enough to create a meaningful retirement.

So, do we know what creates a happy retirement or is it a mystery why some are happy and others are dissatisfied? A recent research report provides some good news for retirees as well as those who are still working. Many of the keys to a happy retirement are based on simple, daily decisions on how we allocate our time and do not require excessive spending. The study found that the happiest retirees allocate their time to specific activities and avoid others.⁸ It found that retires who engage in active activities such as volunteering, socializing, exercising were happier than those who engaged in passive activities such as staying at home, running errands, and watching television.⁹ In fact, some of the lowest happiness ratings were assigned to those who stayed home alone.¹⁰

One interesting finding from the study is that household wealth did not affect how participants allocated their time. This is significant because some may believe that a happy retirement is reserved for the wealthy who can afford luxuries such as frequent international travel. According to this report an important factor in having a happy and enjoyable retirement is how retirees allocate their time. Having said that, research clearly shows that having sufficient retirement income is a major predictor of happiness and well-being in retirement.¹¹ We believe the first step in retirement planning is having a clear plan on how you’ll save, invest, and pay for retirement. Creating and monitoring that financial plan comes first because without enough money the other issues are irrelevant. After that is settled then the question of how you’ll spend your time is vitally important.

The study also explains why some retirees, particularly men, may struggle in retirement. If a recent retiree is isolated from others, watching television, and not taking care of their health they are at greater risk of sadness and possibly even depression. The key is to allocate time to positive activities that build friendships, contribute to the greater good by solving problems through work or volunteering, exercise, and avoiding passive activities. Many women seem to do this more naturally than men.

Enjoying a happy retirement is not a mystery or accident. It is a result of intentional choices about how we prepare and spend our time. Working professionals who want to enjoy retirement can prepare for retirement now by making changes in how they prepare and allocate time so they’ll have friends, causes, and habits to enjoy in retirement. These could include:

• Turning off the TV and phone scrolling to go for a walk with a family member, neighbor, or friend
• Changing your diet to lower the risk of chronic illness by avoiding processed foods and saturated fats, sugar, and simple carbohydrates in favor of fruits, vegetables, beans, and lean protein¹²
• Setting up a weekly time to exercise or enjoy a sport with a friend or group
• Socializing with colleagues and neighbors on a regular basis
• Volunteering on a regular basis
• Joining a sports team or hobby group to get out of the house and be with others
• Working with a qualified advisor to assist you with saving enough, investing properly, and preparing a full financial plan for retirement
• Picking one hobby or recreational activity you enjoy and setting aside time to enjoy it

Enjoying a happy retirement depends on sound planning and investments in your finances and your time. If you’d like a second opinion on whether you’re prepared for a happy retirement, please contact us by emailing info@summithillwealth.com.