SECRETS to a HAPPY RETIREMENT // 3 KEY areas to greater satisfaction in your retirement!

I wanted to highlight this research in more detail that was by Dr Michael Finke that discusses what makes a happy retirement. I think what is interesting about all the points raised is that these are all things that we would largely expect but that we possibly wouldn’t actively think about or invest in and hopefully in highlighting these things gives us the best chance to potentially take steps towards improving our retirement outcomes.

The evidence from the research suggests that, rather obviously, the level of wealth and income does have an impact on life satisfaction but that it is also our relationships and health which help to ensure a retirement that will provide the maximum level of life satisfaction. It is key that we consider not only our wealth but that we also invest in our health and achieve a high quality relationship with our spouse and friends.

Now some of this goes back to the very basics of Maslow's hierarchy of needs which is largely applicable to all of us whether retired or not. Once we have enough income to satisfy lower order needs such as safety and physiological needs we will then typically spend to satisfy higher order needs to maximise satisfaction, that would mean spending on things that provide us with a sense of belonging, self-esteem and self-actualisation.

What we then need to consider is what spending in retirement actually results in making someone happier and we can also consider what things people spend on that don’t necessarily result in a lot of additional happiness.

So broadly a happy retirement can be broken down to 3 very specific areas. The first of these which we have looked at in previous videos is the money element. How much someone has as a retirement income relative to their spending is a significant predictor of life satisfaction. The ability to retire and not be concerned about running out of money or having a significant change in the standard of living is huge.

Not having to worry about money is clearly and quite frankly an obvious issue that ideally none of us would want to contend with pre or post retirement. It becomes more obvious in retirement as we become reliant on our own resources and assets that we have accumulated and we can see that money being taken out of our retirement savings as opposed to employment income or self employed earnings that are ultimately only limited by our an employment or available work.

Research Paper:

https://papers.ssrn.com/sol3/papers.c...

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