Retirement: It’s not all about the money

Retirement is a significant transition for the majority of people who retire. Most of us will feel conflicted about the end of our working lives and the start of our “second half.”

For some, it will be a relief and something they have long anticipated, but for others, it will be a source of dread. This anxiety could be caused by concerns over running out of money, feelings of insecurity or lack of control, or other issues that we will address here.

While an individual’s wealth and health are obviously important for anyone approaching retirement, we have discovered that other factors are usually more important in determining retiree life satisfaction.

Surprising findings about retirement happiness

“Retirement: The Now and Then” is a Fidelity International poll of over 1,500 Australians over the age of 50 that delves into the many elements that influence retiree happiness, with some surprise conclusions.

The survey found that the top four drivers of overall life satisfaction for experienced retirees (those with more than 10 years living in retirement) were:

• Purpose
• Control
• Confidence, and
• Emotional experience

Emotional experience relates to the sense of optimism and contentment that retirees feel. It was the strongest driver of overall life satisfaction and significantly more important that health and wealth.

Positive emotional experiences are frequently associated with well-planned retirement journeys, or ones in which retirees’ plans did not work out but they already had a Plan B or backup plan. Negative emotional experiences are frequently encountered by people who have not effectively planned and have been forced into retirement due to job loss or other causes beyond their control.

Lessons from the ‘elders’

There is a lot to be learned from those who have journeyed before us and retirement is no different. The study surveyed experienced retirees about lessons learned and unexpected hurdles. Many said they underestimated the emotional impact of retirement, such as losing their sense of purpose and their personal identity when they retired.

Many also said that due to unexpected life events – such as losing a partner, health and mobility issues or dealing with homecare and aged care needs – they needed to be flexible and had to adapt and change their plans during retirement. Some downsized their homes or returned to work, to do more in retirement.

The two most important pieces of advice that late retirees can give to pre-retirees are emotional rather than financial. Having a positive and optimistic attitude on life received the joint highest vote (64% of respondents) in the study. Also, according to 64% of respondents, invest in your health early on rather than later.

Being flexible and adaptable came in second at 61%, followed by finding purpose outside of work at 58% and seizing control early at 55%. With 52% of the vote, having a backup plan was also important.

Plan beyond wealth

We hope that some of these insights can be incorporated into pre-retirees’ retirement planning. It’s not simply about wealth, the quantity of one’s retirement savings, and how to accumulate it over time. There are other variables that can contribute to a fulfilling and joyful retirement.

According to the survey, having a positive outlook and a sense of confidence, taking responsibility, and generating a sense of connection with friends, family, and community are all important factors in creating and maintaining a happy retirement.

Source: https://www.fidelity.com.au/insights/investment-articles/retirement-the-now-and-the-then/