Have you thought about how to be happy in retirement? We all want to enjoy that time, but the challenge is to balance a fulfilling life today as well.
Written from the perspective of a family man in his 30’s, this post covers some suggestions on planning for a happy retirement, preparing for life after money, all while striking a balance with enjoying an enriched life today.
Will you have a Happy Retirement? Tips, Preparation, and a Balanced Approach.
There is so much material on the internet about Retirement. Frankly, I find it can be overwhelming, difficult to accomplish, a little gimmicky, and out of touch.
Too many approaches feel like an “all or nothing” ultimatum. I find myself wondering: “what is the point of working my fingers to the bone, sacrificing time and precious memories with the family, all to barely scrape together an existence in my golden years?” As we will discuss, retiring happily is not exclusively about money!
I choose not to live that way, and avoid that mindset! My approach is a happy retirement in exchange for hard work – without making it too rough for the here and now. For my wife and I, Mêtis in our Happy Retirement Matters is about being effective, practical, and results-oriented.
Tips to Secure a Happy Retirement and a Positive Mindset
Here are some of my ‘go-to’ tips for staying sane. Life is a blessing, and the journey is what makes it shine or breaks it down. One can be miserable in any situation, even with buckets of cash! So, let us focus on a balance between money and thriving.
Dare to live the life you have dreamed for yourself. Go forward and make your dreams come true.
– Ralph Waldo Emerson
Free Time and People Time.
One of the things I look forward to in retirement is having more time to invest in interests and in people. Ideally, without the full-time workload, the time can be re-focused on hobbies and interests. For example, some of mine are getting outside more often with the garden, hiking, camping, and travel to the many amazing places in the world with my family.
I’d also very much like to get more involved with charitable work. Making a positive impact in someone else’s life is a reward altogether. Ideally, I plan on aligning my passions and interests accordingly – two birds with one stone.
I am also planning on taking time to just sit there and smell the roses and walk through the extra-crunchy leaves. What are some things you are looking forward to?
Your Best Life ahead!
When the going gets rough, focus on the future. Take pride in the fact that your younger self is preparing for your older self. My friend, you are in the best position to take care of yourself! This goes for the loved ones in your care as well. Thinking about them, and putting them centrally in your retirement plans brings a healthy perspective.
Avoid self-centered planning and imagine the beauty of seeing a life of handwork paying off… with interest! What can you do today that will blossom and grow into something beautiful? In the same way, what are things to avoid that will create hardship down the road? Both good and bad habits shape are shaping your future.
What Retirement Age? When can I retire Happy?
While there is a posted range for retirement age in a Social Security sense, I plan on retiring from full-time employment as quickly as I can (provided the rest of my plan works out). However, average life expectancy is increasing, and outliving one’s finances is something to anticipate and prepare for. This process and plan will be different for everyone, and carefully consulting your family’s trusted financial advisor is very important. (More on finances, below!)
Working in Retirement?
Just because you retire from full-time employment doesn’t mean you have to stop working, either. In retirement, lots of people end up getting another job, perhaps only part-time, to help keep up. Besides the money, this interesting study from Harvard suggests there could be added benefit to working healthy jobs (i.e. low stress) in retirement.
Residence
Making sure you have enough money to support your lifestyle, and adequate finances for medical costs are important. However, you should also consider your living arrangements: does the geographic location and do the logistics of your residence support your goals and situation? Here are some ideas to start brainstorming about where to live in retirement.
Life in Retirement
Aside from a part-time job, ask yourself how you’ll be spending all that time! What hobbies, key interests, and travel goals do you intend to satisfy and explore? These types of questions will help determine how much money you’ll need to save. For example, aggressive travel plans might involve a different plan vs. staying in place.
Keep in mind, “life happens” and you’ll want to be thoughtful about how you prepare. Plan for some “extra” to account for the unexpected.
Estate Management
Take a moment and figure out who and what you’ll need to establish before retirement. While these can be a little awkward to discuss, it is absolutely worth it. Don’t wait until you’re in a tough situation, it could be much more difficult.
Think about Powers of Attorney, Trusts, Wills, and start looking for a trusted attorney, tax advisor, and financial advisor before you’re well along in retirement. Ask friends and family for recommendations, and really take the time to do your homework on the professionals you chose to employ.
It is also important to consider what you’ll leave the next generation. Remember, an inheritance for your children is much more than just money. Prepare accordingly, and don’t forget to make incredible memories in the here-and-now.
Finances
These first pieces, listed above, will help to give you an idea about what finances you’ll need to plan for. It may be more, and it might be less than you thought! Think about how you’ll solve the income needs in your golden years before you get to retirement. Whatever your path, make sure to carefully review your investment selections. Making enough income to support your lifestyle can come from several sources – more on this, below!
Preparing your Finances for the Next Chapter in Life
You don’t want to outlive your finances in retirement, and you don’t want to never have lived nor experienced anything. So, where is the balance? What are the big items that we all have a better degree of control over? Here are a few to think about, but first a quote!
You have to BE VIGILANT. You have to be ON GUARD. You have to HOLD THE LINE on the seemingly insignificant little things – things that shouldn’t matter – but that do… Don’t expect to be motivated every day to get out there and make things happen. You won’t be. Don’t count on motivation. Count on Discipline.
– Jocko Willink, Discipline Equals Freedom
Life after Money? Moving on with the Next Phase.
For most of us, there is no way around it: money is and will continue to be something we have to keep an eye on. This is where careful planning and discipline come into play. It doesn’t mean sacrificing everything before retirement and not having a life. Set aggressive goals for yourself, and stick with it! You can do this!
Don’t be Naive…
However, a successful retirement does require an intentional and dedicated effort. Consider each of the points we’ve covered so far, and view them through the lens of discipline. You can see how retiring happy is achievable, but it is not accidental!
If by not making a choice to control what you can you think you’re avoiding conflict, then you are mistaken. Indecision is a choice and a bad one at that!
…or a Scrooge!
Watch out for greed and self-centeredness – don’t be a Scrooge! Focus on money too much and you’ll never have enough. There’s always another toy, trip, or tasty morsel to consume.
Additionally, there is a deep joy that comes from helping and supporting those in need. Part of the happiness factor we desire in retirement can come from giving money away. Have a passion for charity? Plan accordingly.
Balance is Better.
I truly believe there is more to life than money, and I think it is essential to guard against letting yourself be overwhelmed by it.
That said – yes, money is important and it is necessary for retirement; we’ll cover more on that below. One extreme is Scrooge; the other is being too naive. Find financial harmony in balance.
Health Care Costs in a Happy Retirement
As within the rest of the post, I’m talking about the 85%. The “big items” that we have more control over and make a meaningful difference. There is always the chance that something unexpected occurs. However, we cannot live our lives in fear of that. Nor should we sacrifice the 85 for the chance that something bad happens.
That concept especially rings true for healthy decisions. Maintain your physical and mental health throughout your life. Put down the junk food (physically, and mentally) and clear your arteries and mind. This makes today better, and it helps cut down on future setbacks from poor health choices.
Health care costs can be a big piece of retirement and it is a good idea to review this earlier, even if only in a planning sense. Get active, and get planning.
Health Spending Accounts
Aside from healthy habits today, I think the HSA is an excellent vehicle to help combat medical costs in retirement. Save as much as you can today, and don’t compromise. If possible, don’t draw from it now; save it for retirement!
Long-term Care Insurance
You should also carefully consider Long-term care insurance (LTC). The future is an unknown; take some to investigate your options and plan accordingly. Medicare doesn’t cover everything, and this insurance could help address those long-term care needs.
Medicare
This is not something to “feel out” when the time comes – failing to plan properly could result in unintended negative consequences. Medicare can be a bit complicated! You will definitely want to review your own circumstances and have a plan for what you’ll need and when you’ll need to register.
Retirement Accounts
Saving for Retirement is important, and your retirement accounts require discipline and focus. Both from your employer, and individually, these are absolutely essential tools to manage inflation and tax implications. Take advantage of your employer’s 401(k) match, and make sure you automate your contributions.
Don’t have a 401(k)? IRAs are also a fantastic way to save for retirement; they are a great way to cover that gap. Look into one for you and your spouse, and consider a Roth IRA.
Pensions are quickly becoming a relic of the past. IRA and 401(k) plans are two vehicles (and others including 403(b), etc.) offering effective ways to automate your retirement savings. Not sure how much to contribute? Try for 10-15% of your gross income each paycheck, including your employer’s contribution.
While all financial plans are certainly different on a case-by-base basis, here are some common strategies to review with your trusted advisor:
- Follow the 4% rule (or a modified approach depending on asset allocation and inflation, etc.).
- Create passive flows of income from various investments such as rentals, side-gigs, and the like.
- Include specific annuities tailored to your portfolio (be very careful with these advanced products).
Social Security
Ah, yes, good ol’ Social Security. Unfortunately, a very large part of this depends on the government managing the program properly. I’ve never been one to fully depend upon Uncle Sam, and it is important to know the details to ensure you maximize your benefits.
- If you were born in 1960 or later, you can start drawing Social Security benefits as early as 62. However, the benefit will be reduced for the wage earner and spouse. While reduced, you draw the benefit longer.
- By delaying those benefits (i.e. wait until you are older), you and your spouse can draw the maximum value. However, it will be for a shorter time.
The Social Security Administration has some good points about the “big picture,” how your finances play out together, and underscores the importance of planning ahead.
Support a Happy Retirement by Unlocking a Balanced Approach today
With discipline, and balance in our approach we can get our finances and retirement plan started and growing. Soon, we’ll have a slew of financial wins in place. It will be easy to want to spend what we’ve just worked so hard to save. We must stay focused on the long-term while also providing quality experiences for today.
People will work so hard to put themselves in a fantastic financial position. They will do whatever it takes to get ahead of the game. But then, just when it looks like they’re winning, it’s like their brains take a coffee break and their impulses take over. That’s when people fall into stupid temporarily—just long enough to finance a boat, or an unreasonable new home, or a convertible, or some fancy jewelry, or even a vacation around the world.
Chris Hogan, Retire Inspired
Budget Early and Budget Often.
I think the budget is one of the most powerful tools available. It keeps us on track today, and it keeps you out of trouble in retirement. Use it to live within your means – and use it to aim for future goals as well.
If you want to travel in retirement, then a budget will help you make that dream into a reality without destroying the rest of your retirement with over spending.
Kill that non-mortgage Debt…
When I think about life in general, I want to be debt-free. Even more so in retirement! From personal experience, debt can be quite the storm cloud on life. Especially non-mortgage debt (provided your mortgage is within your means).
If you find yourself buried in debt, I suggest an aggressive approach to paying off debt as early and quickly as you can. This will keep the discomfort to a minimum. My wife and I tried the “rip the bandaid off” approach, and the slow debt payment approach. We have the bandaid approach far superior and much better psychologically (as well as financially).
…and never go back!
One of the reasons I like the quote at the beginning of the section is because it reminds me to stay focused, and committed. It can be all too easy to start unnecessary spending after working very hard to get out of debt. Make sure you are very careful to consider the ramifications of a big purchase and don’t make impulse buys.
Your Life Style in a Happy Retirement – Dream with your Loved Ones!
Take time today, and on a regular basis, to dream. Dream about what you want out of life today and in the future, and then plan accordingly. Start at a high level, brainstorm, and dream big. Then, after you identify recurring themes, you can start to put the pieces into place.
Good Communication is Essential.
Another very important component to a happy retirement is the quality of communication with your spouse. I believe this is true throughout life. Finding that you disagree on something? Talk it through, be patient, practice humility, and use the experience to strengthen your relationship as well as prepare for retirement.
Work Hard and Keep looking forward!
Use these points and details about focus, planning, and discipline as fuel for your fire. Don’t get overwhelmed in minutiae; focus on the 85% and control what you can. Much of this is accomplished with upfront hard work and then can be managed semi-passively for decades leading into retirement. For me, this means less stress before and during retirement!
No matter the point on your financial journey, it is never too late to plan and prepare for a happy retirement!
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