A bigger nest egg won’t necessarily make you more happy — 3 (free) ways to enjoy a better retirement with less
Ask people what they’re doing to ensure a happy retirement, and they might tell you they’re focusing on saving their hard-earned money — thinking the bigger a nest egg, the better.
People often have expensive aspirations for retirement, including travel, new toys (such as boats) and vacation homes in warm climates. But are these really the things that lead to a happy retirement?
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Not necessarily. While having enough money for a comfortable retirement is important, it may be just as important — if not more so — to have a sense of purpose, maintain strong relationships and stay healthy.
Give more to get more
As more and more research is conducted showing a correlation between volunteering and happiness, you might realize giving can have a bigger impact on your well-being than spending. It doesn’t take a large nest egg to volunteer, and it can give you purpose, provide you with social ties and keep you active.
It’s not uncommon for retirees to struggle to find purpose. Contributing to your community or a cause you believe in may help you find that sense of purpose. Plus, research has shown that feeling as if you have meaning in life can contribute to psychological well-being and better physical health in older adults.
Volunteering can also help you build social ties, which are crucial to well-being and happiness in retirement. The Harvard Study of Adult Development, which has been ongoing since 1938, has found that satisfaction in relationships was “the best predictor of a happy and healthy life.”
Volunteering can help you meet people who are also looking to give back and who share a passion for the same causes.
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Stay active to stay happy
An additional benefit of volunteering is that it can keep you active. We’ve been told ad nauseam our entire lives the benefits of exercise, and it really becomes noticeable in our older years.
Keeping in good shape will help you enjoy physical activities in retirement. Plus, it could help you save money on health care, which stretches your nest egg. The earlier in your adult life that you start exercising, the greater the monetary benefit could be later on. So you may want to approach exercise as you do saving: start early and do it regularly.
The CDC’s recommendations for adults 65-plus include at least 150 minutes of moderate physical activity each week. This group should also add activities that improve balance, such as walking backwards or standing on one leg.
It’s not the size, but how you use it
Of course, a happy retirement will depend to some degree on your finances. After all, a recent study by Allianz found that two out of three Americans are more afraid of running out of money in retirement than they are of death.
Many people focus heavily on a plan to build their retirement savings, but neglect the importance of planning how they’ll get the most out of those savings. A financial plan for after retirement is just as important as one to help you save for retirement.
A financial adviser can help you determine when to take Social Security and how much to withdraw from each of your retirement accounts — and when. An adviser can also help you do this in the most tax-efficient manner so your nest egg, no matter its size, will provide income for as long as possible.
Creating a budget (and sticking to it) can help you think about how you’re spending your money and avoid the temptation to overspend. For instance, if you eat at restaurants less frequently, could you travel to see your grandkids more often? Which will give you more happiness?
Retirement is a major life change, and we’re often so focused on how much money we’ll need that we neglect to consider what might truly bring us happiness.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.