I recently attended a
webinar titled Creating a Fulfilling Retirement presented by Fidelity
Investments. Below are eight of my key take-aways:
Three
Happiness Components- The speaker noted that money
(income and wealth) is only one part of the retirement happiness equation.
While happiness improves with higher earnings, especially guaranteed income
like a pension or annuity, two other key factors are relationships
(interestingly, a spouse and friends but not children, according to one study)
and health.
Happiness
Investments- All three retirement happiness factors
(money, relationships, and time) are “investments” that require regular time
allocations. For example, time for exercise and eat well and to build and
maintain relationships. The greatest wealth is good health.
Retirement
Pursuits- When people are working, their weekend activities are
a getaway. In retirement, when “every day is Saturday,” they need to think
about how they will fill their days. Otherwise, they can become bored,
depressed, and/or isolated. A common retirement task is finding balance among
different activities.
Spending
Money- Retirement spending can be very successful if it
provides an entry into socialization activities. An example of so-called
“social spending” is purchasing a classic car to be able to participate in car
shows and informal get togethers of car enthusiasts.
Congregate
Living- There are different stages of aging and different mindsets
associated with each one. For example, people who reach their 80s are often
happier to live in shared housing arrangements for less isolation, less
maintenance, and more well-being checks vs. “young old” retirees in their 60s
and 70s who still prefer to live in single-family homes.
Long-Term
Care (LTC) Need- The need for LTC is not determined by
age but by life events and an inability to perform activities of daily living
(ADLs). Not everybody needs LTC insurance, but everyone needs a LTC plan,
including a liquidation plan to sell assets to free up money for LTC.
Common
Errors of Retirees- Two common errors that were mentioned
were underestimating health care costs (estimated to be $165,000 for 65 year
olds for the remainder of their lives, excluding LTC) and underestimating
irregular expenses for things like car repairs and dental bills.
Guaranteed
Income Sources- Retirees with a “retirement paycheck” of
regular monthly income from Social Security, annuities, and/or pensions that
pays all of their living expenses are generally happier- and spend more money
in retirement- that those who have to withdraw money from invested assets
(e.g., a 401(k) plan) and worry how long their money will last.
At the end of the webinar, attendees were encouraged to "make retirement the best chapter of your life." For many people, the last third of their life is their happiest.
This post provides
general personal finance or consumer decision-making information and does not
address all the variables that apply to an individual’s unique situation. It does
not endorse specific products or services and should not be construed as legal
or financial advice. If professional assistance is required, the services of a
competent professional should be sought.
