Getting ready for a joyful retirement
Anticipating changes in life during your retirement years can pose an unpredictable challenge. By planning for shifts in both physical and financial health throughout your working years, you can smooth the transition.
According to MassMutual’s 2024 Retirement Happiness Survey, individuals nearing retirement are more inclined to improve their health, augment savings, and cut back on expenses compared to those who have already retired. The research also indicates that a significant majority of retirees report increased happiness (67%) and decreased stress levels (75%) compared to their full-time working days.
Nevertheless, there exists a discrepancy between the percentage of workers who believe they will be happy in retirement (77%) and the actual happiness reported by retirees (67%). Furthermore, nearly two-thirds of workers (61%) anticipate feeling excitement in retirement, whereas only 41% of retirees express such feelings.
While it’s common for retirees to report feeling content, workers often overestimate their anticipated happiness and stress in retirement.
One crucial factor contributing to retiree satisfaction is financial security. 61% of retirees who express greater happiness indicate that they eliminated all debts at least five years before retiring. Conversely, less than half of those who are unhappy in retirement report they did not settle their debts prior to leaving the workforce.
Retirement happiness and overall well-being also significantly affect physical health. Close to half of the retirees who report feeling satisfied emphasize their health preparation through proper nutrition and regular exercise.
Moreover, happier retirees typically engage in more social activities than their less content counterparts, such as spending time with family (76% vs. 58%), engaging in hobbies (64% vs. 44%), and traveling (62% vs. 44%).
On the whole, the outlook for retirement remains more optimistic than pessimistic. A large majority of retirees (78%) affirm they possess adequate to abundant retirement savings.
Even if workers might overrate their expected happiness levels in retirement, they may similarly overestimate their retirement-related concerns. Enhancing both physical and financial health during one’s working years can yield significant benefits in the long run.
Strategies for financial and emotional welfare
Adapting to a new stage in life can be challenging at any age. Thus, it is essential that your financial resources align with your anticipated expenses and that you plan for leisure activities that foster personal joy.
Guidelines for workers:
- Review your current asset distribution: To safeguard against market fluctuations, maintain a diversified mix of stocks, bonds, mutual funds, and other assets of interest. Consulting with a financial advisor can help assess your risk tolerance and whether you need to adjust your asset distribution.
- Determine when to initiate Social Security benefits: Your earnings during your work life and the age at which you begin collecting Social Security will influence your benefit amounts. Evaluate your retirement savings to determine the optimal timing for beginning Social Security payments.
- Project retirement income: Calculate how much you will withdraw from retirement accounts like a 401(k) or IRA and estimate your monthly Social Security income. Having a clear understanding of your anticipated monthly income can aid in adhering to your budget.
- Estimate retirement related costs: Certain expenses, such as healthcare or travel, may escalate as you age. Ensure your retirement plan accommodates these potential increases.
- Identify your retirement residence: Your choice of living location impacts living costs, taxes, and mental wellness. Residing in affordable areas or near family can lessen retirement financial pressures.
Guidelines for retirees:
- Establish a daily regimen: A consistent daily schedule can foster purpose, maintain focus, and provide predictability, helping mitigate mindless expenditures.
- Control the impulse to overspend: Without the framework of a full-time job, it may be tempting to indulge excessively in leisure spending. Ensure that your recreational expenses are factored into your monthly budget.
- Stay physically active: There is a positive relationship between happiness and regular physical activity, especially for retirees. Remaining active can aid retirees in sustaining a positive life outlook and maintaining healthy behaviors, both physically and financially.
- Maintain connections with loved ones: Regular interactions with friends and family can enhance mental sharpness and diminish feelings of loneliness. Individuals who feel isolated during retirement may fall prey to emotional spending. Staying connected within your community can help mitigate overspending.
