How To Find Satisfaction in Retirement

Happy Retirement

With the baby boomers starting to descend down the other side of the hill with millions soon following, retirement planning has understandably become not only very important but big business as well. Most of what future retirees and financial advisors focus on are how to prepare financially so that not only can people have the choice to retire but once they do they don’t outlive their money. This is understandable as having financial resources is a necessary condition for being able to retire. Yet, as a very interesting article points out that I recently read, does it also improve the odds of having a satisfying retirement? The answer is yes to a degree but no in many other ways.

The authors decided to look at well-being and satisfaction and try to isolate what characteristics of a happy life contribute to a very satisfying retirement. So how did they go about doing this study? They first had to define what characteristics of well-being and positive psychology in so much of the literature is about negative aspects of it. According to a study referenced in the article, there were 94,650 publications related to “depression” and only 4,757 on “life satisfaction”. Obviously, the world of psychological literature is focused much more on negative states versus positive ones. The authors were focused on the positive aspects of psychology. Namely, attaining happiness and well-being.

Satisfaction in Retirement – Start With Happiness

Let’s start with happiness first. There are seven habits of happy people according to research. These are:

  • Relationships
  • Caring
  • Exercise
  • Flow
  • Spiritual Engagement and Meaning
  • Strengths and Virtues
  • Positive Mindset (optimism and gratitude)
  • Accomplishments

Satisfaction in Retirement – 3 Types of Life

According to a renowned author, on happiness Martin E. Seligman, three different forms of life states are the basis of positive psychology. These characteristics can be used in ways to create three ideal life states. They are:

The Pleasant Life: “a life that successfully pursues the positive emotions about the present, past and future.”

The Good Life: “using your strengths and virtues to obtain abundant gratification in the main realms of life.”

The Meaningful Life: “the use of your strengths and virtues in the service of something much larger than you are.”

The authors wanted to determine which of these types of life states add the most satisfaction to the lives of retired people. They did this by focusing on five of the aspects of a happy life to determine which ones are most important in terms of providing well-being and satisfaction within retirement. These are:

Positive emotions – having a  positive view of the present, past, and future.

Engagement – in which there is “complete immersion, absorption, and focus on a particular task or activity, often referred to as flow.”

Positive Relationships in terms of “the pursuit of positive, healthy, and fulfilling relationships with others.”

Meaning – “the full utilization of one’s talents to contribute and belong to something believed to be bigger than one’s self.”

Accomplishment – “the pursuit of success, mastery, winning, the realization of goals, or achievement.”

5 Elements of a Positive Life

With these five elements in one’s life then people can flourish, which is particularly important in retirement when many people lose the structure and support system that a job and work environment can provide.

So what did the study find? Holding all else constant a unit increase in:

  • Optimism (Positive Emotions) was associated with a 14% increase in the odds of reporting a higher level of retirement satisfaction.
  • Perceived mastery (Accomplishment) was associated with a 15% increase. Accomplishment does not end with work so it’s critical this is harnessed in retirement.
  • Purpose in Life (Meaning) was associated with a 28% increase, although one’s religiosity had no impact.
  • Positive Relationships were associated with no increase in retirement satisfaction, although increased support from family increased retirement satisfaction by 14%. In fact, the research suggested that parents providing financial support to their adult children experienced reduced depressive symptoms over time, thereby increasing satisfaction by being less unhappy.
  • Engagement, as measured by reading the newspaper every day and having a hobby, showed no positive increase in retirement satisfaction. There is some question as to whether this is really true given the data limitations and less than ideal measurement approaches.
  • People who were healthier and had more financial resources not surprisingly were more satisfied in retirement than less healthy and less financially well-off people.

My Takeaway

What I took away from the research is that people looking towards retirement in the next 10 to 20 years need to weigh their psychological preparation just as much as their financial plan. We all hear the stories of the person that passes away shortly after retiring because he invested everything in his career and now that he no longer has his career he feels that he has very little purpose or meaning. This lack of meaning and purpose can literally drain him of the vitality to live. The authors suggest that not only is it incumbent upon prospective retirees to think long and hard about this but so should their financial advisors so they can build not only a financial plan for retirement but a plan for satisfaction and well-being to make these years incredibly meaningful, productive, and fruitful.

Over to You:

Do you have a life-work balance? Are you looking forward to flourishing in retirement? Were you aware that there is more than the financial side of retirement preparation? I’d like to hear from you in the comments below.

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