I read about a planner who encourages his clients to fill in a daily calendar for the first three months of their retirement in anticipation of what they would do to fill their time. I have had clients tell me they are bored in retirement. We have all heard stories of rapidly declining health shortly after retiring. As we consider the transition into retirement, I recall listening to Dr. Michael Finke speak about his research on life satisfaction in retirement on both a webinar and at a seminar I had the pleasure to attend. A Ph.D. and CFP ®, Dr. Finke is a professor and director of retirement planning at Texas Tech University. I truly enjoy listening to him talk about the goal of retirement, which is to get the most out of your retirement years. It is not about the dry economics of it (e.g., your rate of withdrawal and “success rate”), but how to use that money to get the most out of a retirement lifestyle.
His research shows that we do get more sleep and watch more TV in retirement, but the key to a more successful retirement is to buy activities that are not passive. The more active you are, the less likely you are to experience geriatric conditions later in life. He calls it making an investment in health. He says activities is the commodity, not money, for providing life satisfaction in retirement.
Another strong predictor of a healthy and happy longevity is socializing. Work provides many of our social connections. Continuing to interact with others is key, but losing your social network is very real in retirement. You have to make an investment in social contacts. I was not surprised to learn that women are better at maintaining social contacts, but humored to learn that some financial planners recommend relationship counseling for couples prior to retirement. Apparently, the men tend to follow their wives around, since the women have the social networks in place.
Another interesting item of research from his studies indicates that moving to live closer to children and grandchildren actually results in lower retirement satisfaction. It made sense to me after he noted that the children and grandchildren are extremely busy in their own lives and may not make the time for you that you hoped/expected/anticipated. I have heard stories to validate this from friends.
I like his expression that most of us think retirement will look like our working life without the work. However, work provides much of our social interaction and feeling of productivity. As a result, pre-retirees can benefit from understanding what makes for a satisfied retirement. He concludes by noting that at any level of retirement income, you can invest in yourself to live a longer and better life in retirement.
Cathie Straub, CPA, CFP®
Director, APCM Wealth Management for Individuals
Gwen Kennedy, Ph.D., and Deeta Lonergan have been coaching people through major life transitions for over 30 years. Please join us at our Empowered Women Smart Money event on Wednesday, September 30, 2015 to hear their thoughts on finding your purpose, passion, and adventure in your retirement years.