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The 9 Keys to a Happy Retirement

What the experts say, plus 8 great retirement books


It turns out that happiness and retirement do go together.

Well, based on the research and books I’ve read and interviews I’ve done since becoming editor of the Money & Security and Work & Purpose channels at Next Avenue in 2011, they can go together if you play your cards right.

And it’s not just about having saved enough money or having a great pension, though both of those help. I’ve come to the conclusion that there are nine keys to a happy retirement, one of them pertaining specifically to couples. I’ll lay them out shortly and suggest a few books that can help you retire happy.

Of course, the definition of retirement isn’t what it was even 10 years ago. For many people, retirement in 2016 is not about quitting your full-time job full-stop at 65 and then living a life of leisure.

What Is Retirement, Anyway?

For one thing, 65 was the retirement date set in 1935 when FDR signed Social Security into law. It made more sense when people didn’t live as long as they do today and at a time when most employers provided guaranteed pensions once their employees retired. A March 2016 Ameriprise study said 71 percent of current retirees rely on guaranteed pensions from their former employers while 75 percent of pre-retirees plan to rely on anything-but-guaranteed 401(k)s when they retire.

Devising a retirement income plan before you retire will relieve stress. But only 52 percent of pre-retirees have done so, according to Ameriprise.

Catherine Collinson, president of the Transamerica Center for Retirement Studies, recently told me that many workers now envision retirement as a transition, something that happens over time. The current catchphrase is “flexible retirement,” which means either going from full-time to part-time work or working in a different capacity or working as long as you’re able.

That said, here are the nine ways to increase your chances of being happy in retirement:

1. Figure out in advance what you want out of retirement. By that, I mean things like: how you’ll spend your days, where you’ll spend them and what would make you fulfilled.

Stan Hinden, the author of How to Retire Happy, recommends starting to think seriously about retirement when you’re around 50 or 55.

One key decision is where you will retire and how much traveling you’ll want to do. Some people choose to retire in another country. It’s not for everyone, but a recent survey of 389 expats by the website Best Places in the World to Retire found that 81 percent were happier in their new country than where they lived before.

Why is that? For one thing, the cost of living was often less — sometimes much, much less. That meant they didn’t need to worry as much about their expenses or finding a high-paying job in retirement.

Many of the expats also said they were less stressed than before because their new country wasn’t as fast-paced as America. Many also said they loved their new “simple life,” especially because they now had more free time to volunteer (I’ll come back to that last point shortly).

If you’re wondering which are the best places in the world to retire, the answer depends on which survey you believe. International Living says the top places are Panama and Ecuador. And the Live and Invest Overseas site has picked the Algarve region of Portugal and Cayo, Belize.

2. The corollary to No. 1 — If you have a husband, wife or partner, talk frankly together about what you both want out of retirement. Neal Frankle, a noted financial planner, recently wrote on Next Avenue that he finds it helpful for couples to discuss their retirement dreams and write them down. Then, he says, they should mark each item as a “must have,” a “want” or a “wish” and be ready to compromise.

One thing you’ll want to figure out is how much time the two of you will want to spend together, since this may be the first time you’re both available all the time.

Hinden told Next Avenue that he and his wife came up with a system that worked for them: Early in the week, they each would spend time alone or with their own friends. Then, toward the end of the week, they’d do things together, like go to museums, theaters or restaurants.

3. Come up with a retirement income plan. By that I mean: sit down and figure out how much your 401(k) and other accounts will translate to in monthly income; how much you’ll get from Social Security and any pension; how much you can afford to withdraw each year (the rule of thumb is around 4 percent) and which accounts you’ll tap first for withdrawals to keep taxes down.

Devising a retirement income plan before you retire will relieve stress once you are retired. But only 52 percent of pre-retirees have done so, according to Ameriprise.

By the way, don’t be surprised if your retirement income or expenses don’t turn out the way you expected. When Ameriprise surveyed retirees, it found three types of expenses were higher than the retirees expected: health care, food and taxes.

4. Choose when to retire and then follow through (if you can). The authors of an excellent book calledThe Retirement Maze surveyed 1,477 retirees to see what made the happy ones happy. One thing they found was that workers who were able to retire by choice were happier than ones whose retirement was thrust on them: 69 percent of the retirees who retired by choice were satisfied with their lifestyle but only 36 percent pushed into retirement said they were.

I realize many people aren’t lucky enough to be able to decide when they’ll retire because they lose their job or their health forces them to stop working. But if you can pick your date, you should.

5. Stay engaged and healthy (if you can). The career coach Bill Ellermeyer says the happiest retirees he knows are either engaged in some kind of meaningful activity or are actively employed. Some have become entrepreneurs; some have started encore careers, doing either paid work or volunteering for the greater good, some are just volunteering here and there.

He also says they “eat well, sleep soundly, play often, exercise at least three times a week and maintain strong social connections.” In fact, a survey by Age Wave and Merrill Lynch of 3,300 pre-retirees and retirees said “good health” as the No. 1 key to happiness in retirement.

6. Get a part-time job in retirement. Some of the happiest retirees are people who phased into retirement by gradually reducing their full-time hours. But if you can’t arrange to do that, then just quitting your job and then finding part-time work can be very satisfying, not just financially but psychically. Studies show that working in retirement helps keep your mind sharp and helps you avoid getting isolated and lonely.

The trouble is, not enough employers are helping their older workers work out a flexible transition to keep a job there part-time in retirement. A recent Transamerica study found that although 61 percent of American workers envision a flexible transition to retirement, only 25 percent said their employers offer the opportunity to shift from full-time to part-time work as they phase into retirement.

So, it’ll probably be up to you to figure out how to work part-time in retirement. Maybe you can take the initiative to come up with a plan through your current employer. If not, try securing a part-time job somewhere else, perhaps by setting up shop as a consultant or a project-based contractor.

7. Learn new things or pursue your passions. Those passions could be ones you had when you were much younger but somehow stopped doing over the years, like playing an instrument or painting. Retirement is a great time to discover new passions, too, by taking classes or finding one-on-one instruction.

Check out local colleges for adult education and continuing education classes, too. These courses could teach you new skills or just provide knowledge for the pure joy of it.

8. Keep a schedule, but not like the one you had before you retired. I came across one study from Taiwan that said the key to a happy retirement isn’t how much free time you have, it’s how you manage whatever free time you have.

The authors didn’t recommend blocking out every minute of every day, but instead advised setting goals and priorities for your free time and then evaluating whether they were appropriate and achievable. Then, they said, organize your activities on a daily or weekly basis — just not hourly. Having some kind of schedule prevents you from getting bored, depressed or lonely.

9. See your children and grandchildren if you have any. Hinden said his favorite tip from his retirement do’s and don’ts list was: Do find ways to be friends with your children and grandchildren, even though they are very busy. You need them, Hinden added, and, whether they realize it or not, they need you.

Incidentally, just retiring itself is likely to make you happier. A study by Utah State and George Mason University professors found that retirement immediately tends to improve both happiness and health, and that the effects of this life satisfaction are long-lasting.

And here’s one last piece of good news: Most retirees say they are happy because of all the things retirement has given them the opportunity to do. In fact, a MassMutual Financial Group survey found that retirement just might pay you a happiness “bonus.” In its poll, 82 percent of retirees said retirement gave them an opportunity to enjoy themselves and about two-thirds said they now had a chance to have new experiences and feel fulfilled.

Finally, my reading list — here are some Next Avenue articles and some books that could boost your chances of a satisfying retirement:

Next Avenue ‘Happy Retirement’ Articles

These Next Avenue articles have more details about the nine keys to a happy retirement:

The Secret to a Happier, Healthier Life: Just Retire

The 4 Traits of the Happiest Retirees

Time Management Is Crucial to a Happy Retirement

The Secrets of How to Retire Happy

Retirement Just May Pay You a ‘Happiness Bonus’

How Couples Can Make Smart Retirement Decisions Together

4 Reasons Expat Retirees Are Happier Than You Are

The One Retirement Book You Need to Read

8 Books for a Happy Retirement

Happy Retirement: The Psychology of Reinvention by Professor Kenneth S. Shultz

How to Retire With Enough Money by Teresa Ghilarducci

The 5 Years Before You Retire by Emily Guy Birken

The Retirement Maze by Rob Pascale

The Couples’ Retirement Puzzle by Roberta K. Taylor and Dorian Mintzer

The Encore Career Handbook by Marci Alboher

Second-Act Careers by Nancy Collamer

Getting the Job You Want After 50 for Dummies by Kerry Hannon

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