How to Retire Happy – 5 Tips Backed by Science

In order to retire happy you need to have two boxes checked: 1) financial security 2) good health.

These two categories are mutually dependent on one another.

Without wealth, you’ll constantly be worried about maintaining basic needs, as a result, your health will suffer. Without health, you have no energy to enjoy all the pleasures wealth can offer.

Today I want to dive deeper into these two categories and give you some tips – five to be exact – backed by science that will guarantee a happy retirement.

Tip #1 – The Happiest Retirees Have Predictable Paychecks

Whether it’s a pension, rental properties, or fixed annuities, retirees with a predictable income get more enjoyment from spending those dollars than they do using money from a 401(k) or an IRA, says Wes Moss, financial planner and author of You Can Retire Sooner Than You Think: The 5 Money Secrets of the Happiest Retirees.

In addition, a Towers Watson happiness survey found that retirees who rely mostly on investments had the highest financial anxiety. “Almost a third of retirees who get less than 25% of their income from a pension or annuity were worried about their financial future; of those who receive 50% or more of their income from such a predictable source, just under a quarter expressed the same anxiety.”

There are plenty of ways to start building a steady retirement income – and I’ll help you discover lots of them going forward.

Tip #2 – Own a Home Until You’re 80

If you currently own a home, then you know the joy homeownership can offer. However, this joy tends to wane as you get older.

Michael Finke, a professor of retirement and personal financial planning at Texas Tech University, looked at the satisfaction of homeowners versus that of renters from age 20 to 90-plus and found a drop late in life, particularly after homeowners hit their eighties.

“The hassles of homeownership build as you age,” says Finke, “and a house can be isolating.” Although we have the tendency to want to stay in our home forever, Finke advises against that. “You need to plan for a transition to living in an environment with more social interaction and less home responsibility.”

Tip #3 – Have at Least 4 Hobbies

The happiest retirees have hobbies – no surprise. But not all hobbies are created equal. Wes Moss found that the happiest retirees engage in three to four activities regularly; the least happy, only one or two. “The happy retiree group had extraordinarily busy schedules,” he says.

The hobbies most likely to deliver the most happiness to retirees are typically social (think: volunteering, travel, and golf).

Whereas, the unhappiest retirees tend to spend more time reading, hunting, fishing, and writing. Moss says, “The happiest people don’t do things in isolation.”

Tip #4 – Get a Part-Time Job in Your Circle of Competence

The benefits of working part-time in retirement extend beyond financial. Research finds working through retirement can boost your health and happiness. The physical activity and social connections a job provides are a good antidote to an unhealthy sedentary and lonely lifestyle, says medical doctor turned financial planner Carolyn McClanahan.

A 2009 study published in the Journal of Occupational Health Psychology found that retirees with part-time or temporary jobs have fewer major diseases, including high blood pressure and heart disease, than those who stop working altogether, even after factoring in their pre-retirement health.

However there is one caveat. Switching careers in retirement can prove problematic. Retirees who take jobs in their field reported the best mental health, says lead researcher Yujie Zhan of Canada’s Laurier University, perhaps because adapting to a new work environment and duties is stressful.

So if you decide to work part-time after you retire, stick to your circle of competence.

Tip #5 – Don’t Live Close to Your Kids

This is probably the most surprising finding of the bunch. If you want to ensure you have a happy retirement, don’t live close to your children.

“Living within 10 miles of their kids leaves retirees less happy,” says Finke. “People overestimate the amount of satisfaction they get from their kids.”

The jury is still out on why this is true. If you have ideas, let me know.

To a richer life,

Nilus Mattive
Editor, The Rich Life Roadmap

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Nilus Mattive

Nilus is the editor for the daily e-letter The Rich Life Roadmap and a Paradigm Press analyst.

Nilus began his professional career at Jono Steinberg’s Individual Investor Group, where he published his original research through a regular investment column. Later, he worked for a private equity business and spent five years editing Standard and Poor’s...

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