The March 2010 issue of Consumer Reports Money Adviser has an interesting article on how to avoid regrets during retirement. The article, which draws on a survey of nearly 25,000 subscribers, is simultaneously comforting and cautionary. While only about 20% of folks who haven’t yet retired are highly satisfied with their current retirement planning, 70% of actual retirees report they’re highly satisfied. According to the author, the lesson is:
While many of us tend to fret about whether we’re properly prepared for retirement, once we’re actually there we tend to adjust our situation and even thrive.
In fact, the author argues that the survey reveals money isn’t everything. Sure, it plays a large role in contentment during retirement, but other factors matter, too. The article says that to be satisfied in retirement you need to:
- Save early. Forty percent of retired respondents wish they’d started saving earlier. I know I say this over and over again, but you should save as much as you can as soon as you can. Even starting with $10 a month is better than nothing.
- Save often. As important as it is to save early, it’s also important to save often. In other words, save as much as you can afford to. You don’t want to live like a pauper now so that you can live like a king in retirement, but don’t sacrifice your future for unnecessary spending today. Do what you can to boost your saving rate as time goes on. (My wife saves over 25% of her income!)
- Stay healthy. Your health is your most important asset. Without it, you’ve got nothing. And health is so easy to take for granted when you’re younger. I’m just now entering middle age (I’ll be 41 next month), but I’ve been a fool and neglected my health, so I’m beginning to see the mental and financial costs associated with being overweight and out of shape. (Just this morning I took a tumble on my bike that might not have happened if I were 40 or 50 pounds lighter.) Adopt healthy habits, and they’ll repay you in the long term.
- Build friendships. Social capital — those connections we build when we spend time with neighbors, friends, and family — is almost more important than financial capital. Your relationships play a larger role in your happiness than your wealth does. Be positive, outgoing, and an active member of your community.
- Have hobbies. Finally, the Money Adviser article recommends actively pursuing hobbies and interests that keep you engaged with life. Share your hobbies with others. And if you don’t have hobbies, get involved with volunteer and community organizations.
As I wrote Your Money: The Missing Manual over the past few months, I tried to target the J.D. of 20 years ago: the spendthrift and layabout. My goal was to write the book I wish I’d had when I was 20. This process made me think about what I ought to know now. What will my 60-year-old self wish he’d known when he was 40? As a result, I’ve started paying attention to retirement articles like this one. I’m doing my best to glean hints and tips from folks who are already in retirement so that I won’t be caught unaware.
Most of what I’ve learned matches this article: To be happy in retirement, I need to save, I need to be active and eat right, I need to have close friends, and I need to do things I enjoy. In other words, to be happy at sixty, I need to do the same things that make me happy at forty.
I’d love to hear from GRS readers who are at or near retirement: What do you wish you’d known when you were younger. And those of you who are still decades away from retiring, what have you gleaned from those around you? What leads to a happy, healthy retirement?
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I am not near retirement, but I think I am on track to hit all five points. Recently I met a former colleague of mine who was still working. He has had a great career and I admire him for it. Now he has more money than he can spend in the years left in his life. (He is well over 70.) When I asked him why he has not retired yet, he told me that he had no hobbies. “What else should I do with my life?” While I do admire that man for his success, I found it kind of sad that his success is his life. There does not seem to be much else. I rather have less money, but a bunch of friends and hobbies that I can enjoy during my working years and in retirement.
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I am young, and just finishing up graduate school, so I haven’t joined the normal working force yet. Nevertheless, I’ve been saving for the past 6 years.
Despite knowing the truth about retirement, it is really hard to save sometimes. I blame it on something I’ll call “the illusion of youth.” Off the top of my head this is:
1) I’m special. The normal rules don’t apply to me.
2) I’m not like my parents / grandparents / older people around me. I’m smarter than them and won’t make the same financial mistakes.
3) I’ll be rich. When the world sees how special I am (see #1) it will throw money at my feet. Saving now is unnecessary, since I’ll be drowning in cash later.
4) I’ll have an amazing career where I won’t care about retirement.
5) My health will last forever. Working through retirement in my amazing career (see #4) will be easy.
I guess all of these lead back to #1, feeling that you are special, and the problems everyone faces won’t apply to you.
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J.D. As someone who also wil be turning 41 next month, I like your statement that you are “just now entering middle age.” It makes me feel younger.
I would add to David’s comments above: “I don’t make enough to save for retirement. Saving will have to wait.” I felt that way for many of youthful years. The sad thing is, my workplace has been putting 10% of my income into a retirement account since I was 27 years old, and while there were many years where I saved NOTHING on top of that, I have done some saving… and the way my account looks now, even though I’ve never borrowed against my retirement, I will never be able to afford to retire. Lesson learned: you really need to set aside 20%, at least, if at all possible, from a very young age. I’ll teach my child that. I wish I’d known. I’ll keep saving, but it doesn’t look good for me.
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I wish had studied more, partied less. Instilled more self discipline in myself.
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JD, I just wanted to mention that when you said that your “goal was to write the book [you] wish [you'd] had when [you were] 20″, it really resonated with me.
Thanks.
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I’m 56 and am beginning to wonder if one should ever retire if one has a fulfilling job. Unlike the commenter above, I don’t pity the person who is near 70 and doesn’t want to retire. I’m a teacher and I get a lot out of working–interaction with others, including people younger than I am, problem-solving opportunities every day, etc.
Warren Buffett is still working and no one feels sorry for him. Steve Jobs, who is a few years younger than I am, is also still working.
The people at Habitat for Humanity want me to volunteer there when I retire (not for 10 yrs or more0. I feel I do more good teaching poetry than volunteering (which involves tasks that lots of people could do).
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J.D. – good fundamentals for retirement in this post – some of which are sadly disregarded all too often!
As a student, I used to live in a run down part of Glasgow (the biggest city in Scotland) and there were few things more depressing than watching the long line of folk snaking out of the local Post Office once a week waiting to collect their state pensions.
I couldn’t help but feel that the small amounts they were collecting wouldn’t go very far and to that aim I’ve been saving into my pension from as soon as it was practical to do so (started when I was 23, four years ago).
That said, there are downsides to being sensible and peers find my interest in ‘future proofing’ to be an amusing oddity at best, or a confirmation of personal finance nerd status at worst.
Without meaning to wallow in schadenfreude, I can’t help but think that these same peers are going to be complaining about their poor pensions in 20 years time while I try to politely change the topic!
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heehee… save early, save often… just like word processing!
Re: Working forever, if you’re happy, then do it. But don’t plan on it when you’re making your retirement saving decisions. Your company can go out of business, you can be laid off, even in a university with tenure your unit can disappear (like at Arizona recently) though that is much less likely, or you can be offered a great early retirement package that you decide not to refuse.
After leaving your career job (around age 50 or so) it is very difficult to find a job in the same field that offers anywhere near the same wage. This is partly age discrimination, but a large part is that you’ve built up firm specific human capital over your career that makes you more valuable to that firm than to any other firm. You’ll generally take a pay cut elsewhere if you can find work. (Unless you’re lucky enough to be in a heavily in-demand field, but it is hard to predict what those will be at retirement… not many would have predicted the huge demand for highly experienced nuclear engineers today).
That isn’t to say that you shouldn’t change careers if you’re unhappy or more financially independent. Many more people are doing that as a “bridge” to retirement these days. It’s becoming much more common to retire from a main job and then do something fun like barista or the cheese guy at whole foods. But generally there’s a large paycut involved. The good thing is that many of these career changes are planned and not done because of the need for work. The bad thing is that people who need the work most after losing a career job are generally the least likely to be able to get it and the most likely to end up on SSI, SSDI or other government programs.
Getting education and starting a new career is a great way to find new employment as an older worker. Getting that new education signals to employers that you’re still open to change and willing to learn new things.
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When I was 21, my parents cashed in my savings bonds I had acquired when I was a baby and helped me open an IRA. I became more interested in retirement, personal finance and investing than ever before. The importance actually resonated with me. This is by far one of the biggest financial advantages I was given…starting early and my mother/father recognizing the importance for me to learn, save and invest.
As for the health aspect, I couldn’t agree more. My uncle was a cardiologist making a lot of money and came down with a disease that is so rare I’m not sure it’s documented. He was on his deathbed. He saw specialists from around the world and my mother donated her kidney to him. He is alive and doing well. We continue to pray his health continues. He has 2 young children, a wonderful wife and a loving extended family/friends. He would be the first to say he’d give up all his wealth for his health.
Lastly, friendships are by far the most important to me. It’s a goal of mine to meet more people and hear more personal stories than my mind can remember. Building friendships and maintaining them is so vital to living a happy and healthy life. I’ve always been shy at heart but push myself to come out of my shell and each time I do it pays off. Grow friendships, spend time with your family and help those in need…those have to be the 3 best and most rewarding things in life (to me).
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Dude – love GRS, but 41 isn’t middle age!
Is it…?
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I think that if I was running my own business, I would never desire to retire. When people work for themselves, they may see retirement as unnecessary, but that’s because they are doing what they love.
Still, it’s good to have a solid plan in the instance that something goes wrong. And I love the comments above – reminders to me, the young person.
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I read a great article somewhere (Money??) that said research showed we vastly overestimate how much we know about our future selves. (This seems reasonable to me as my 20 yr old self would probably not recognize me now….) It suggested we save and plan for retirement as if for an uncle we don’t know that well. That would mean saving for many possibilities (work not work, healthy not healthy etc.) so the “uncle” would have options. So often we think we know more about the future (“I would never retire”) than we actually do. Save for future possbilities not current desires…
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I have one big question. I am *poor*. Family of 8 and under 13,000 a year income. I do NOT want to grow old and be like my parents, who are 60 and are still paying off old debts, still paying for their home, my mom JUST finished paying off her college loans! Plus, they have NO savings. My mom keeps cashing out her retirement to pay for big ticket items instead of working a couple of extra shifts (she’s very highly paid nurse). So they’ve got nothing, and no fall back.
We are working on getting our income up, but in the meantime, I’d really like to be saving. I don’t want to count on ‘someday’. My problem is, I can put money in a savings account, but it’s really just sitting there. However, I can’t put away large amounts of money at a time. Probably 20 dollars is the most I can manage. I’ve never seen any ideas about what very small change investors do and I’m confused. Most investing/saving seems to be done on a larger scale than what my monthly check is!
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The list of bolded items in this post could easily be titled “how to be happy” with no “in retirement” at the end. Being financially secure, healthy, and surrounded with friends and interesting things to do applies to pretty much everyone, not just retirees.
I don’t really even know what “retirement” is supposed to mean. I have no particular desire to stop working just for the ske of avoiding work. I could define it as “moving to a central American beach and surfing and fixing old sailboats for the rest of my life,” which would be fun, but who knows if I’ll actually want to do that when I’m 60 if all my family lives in California and not Panama.
And one type of retirement planning that always seems to be overlooked — if you own your home outright, with no mortgage payment, it will reduce your monthly expenses by a lot, probably cut them in half.
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I was taken aback by Ramsey’s brazen and unconventional advice in The Total Money Makeover where it was suggested that families address debt first and then refocus their efforts on retirement, that’s radical to say the least. To some extent I agree, if a household is suffering under the crushing weight of consumer debt, living from paycheck to paycheck, scrambling to pay minimum payments on multiple cards, relying on credit cards to handle basic necessities, then the power of full engagement on consumer debt is necessary. Such households typically cannot put anything aside for retirement anyway. I don’t think it is wise to payment off a mountain of student loan debt, mortgage debt, or even a car loan off first before committing a percentage of your take home pay to retirement. Once consumer debt is addressed, a more sizeable percentage of your income can be devoted to retirement.
@ Poster #3 (Kate) – Take heart you still have over two decades of employment left, it’s never too late to turn your life around
@Poster #11 (Meredith) – Start small with what you have and where you are. Sharebuilder allows you to buy fractional shares; you can invest $10 in Microsoft, etc. Also focus on a rainy day fund first.
Last observation, so many people are overwhelmed when they hear these astronomical figures they need for retirement. So many people feel why in the hell should I even try?!? I think it’s important to remember that saving for retirement gives you options. Elderly people who now live in abject poverty could exponentially change the quality of their life with a few thousand dollars.
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@Meredith
You have lots of options that I’m sure everybody will suggest. The one that pops to my mind is that you can save up $20 a month in a regular savings account (maybe ING Direct or Smarty Pig). When it hits an investable amount, you can throw it in as a lump sum. I love my Roth IRA, but I’m sure there are a billion options. You don’t need thousands of dollars to invest in your future. I’d get started on that savings account today. Good luck!
To the article, thanks for the reminder of the post and for all the comments. I’m 27 and am truly trying to save and live in a way that wouldn’t tick off my retirement-aged self. My husband and I make $78,000 and live on about 55% of that and save the rest (pension, 401k, and a Roth IRA…we’re opening another Roth IRA this year). We also hang out with friends and family as often as possible since we’re trying to live for today and save for tomorrow.
We are planning for retirement at age 52…he still hopes to have his hobby job – sports officiating – and I hope we have enough that I can volunteer with the HSPCA and Meals on Wheels without worrying about the inherent costs of volunteer work (gas/energy, vehicle wear/tear, etc).
I really love reading advice from people who’ve already been here and done that…I really hope to make my future self proud.
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@ Meredith (#13) I too began as a VERY small-time investor. $20 at a time tucked away in a savings account is actually great, especially if you can do it regularly. Over time that will become $100, then $500. It can be a fine “emergency fund” when something breaks down; meanwhile it is gradually building up steam for the future.
I am a big fan of Vanguard mutual funds, especially index ones (S&P etc.): very low costs, very stable management. However, most of their funds require $3000 minimum. The exception is their STAR fund, but that is still $1000 minimum.
Another possibility for you is “peer-to-peer” lending. This is where you can lend out your own money, online, to other borrowers. I don’t believe there is a minimum. You can check out prosper.com, the Lending Club, etc. The Lending Club is now touting their AVERAGE returns are 9.65%. If you have only $500 invested there, it’s still $48.25 interest for you every year. If you could build up to $1000 invested there, that’s a sweet $96.5 a year in your pocket. Few stocks or bonds can deliver that rate, year after year, so something to seriously consider.
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@Meredith – hmmm…I think if I were you I’d focus less on trying to save $10 or $20 now, and more on developing a plan to drastically raise my income in 5 years. For the sake of my comment, I’m assuming you have 6 children, one income, and are a SAH parent – are any of those correct? Will some of your children be old enough to do paper routes, walk dogs (or scoop poop!), work as lifeguards, or start a business that interest’s them? If you’re like most of the mom’s I know of large families, you love children and are quite a skilled parent – could you take in another child to watch? (I’d love to find another loving family to watch my kid 2 days a week when I work). Could you start a blog about running an organized family, etc? I think you must be incredibly frugal, creative, and organized if you can run your household on $13k! I’d love to read about it in a blog.
Once you have a plan to get in some more income, without increasing your expenses, I think it will be a lot easier to save!
All that said, I see that your question stated that you’re already working on getting your income up, and want to know how to save. People are giving you good advice – I’d focus first on saving $1000 bucks in a money market, or other low risk vehicle, and then saving up to buy some shares of a vanguard mutual fund for long term savings.
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(1) If life expectancy is 80, then 41 is the start of the second half. If 90, the second third. If 50, carpe diem!
(2) Unfortunately, I didn’t expect a RIF at age 62 with no hobby, family illnesses, and a depression. Save, save, and save some more. Money worries sap all your happiness.
Argh!
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I am a federal special agent who is reaching mandatory retirement(Age 57). It used to be we had to retire at 55 so I feel fortunate to have been able to stay another two years in a job I really enjoy(working cases)! But all good things must end and as most who are forced to retire or lose their job, we go through the grieving process. I am doing that now. I have 5 more months of my law enforcement life ahead of me, I will miss it, but I have been preparing for the last 5 years with saving, getting a second job I love even more(teaching part time at a community college), looking to start a small business, and volunteering for one worthwhile venture. Sure, it SCARES me too. My big paydays are far behind me now!
But looking back after this job and the financial mistakes I have made, I recommend the following: Brown bag your lunch, find positive supportive people(My wife Toni and my children Reid and Sara), turn the negative people into chairs, don’t take yourself too seriously, love what you do, and don’t think that getting a promotion into a higher management level will make you happy…PEACE OUT
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Regarding #17. I have an account with Prosper, and would suggest investing only money that you can afford to lose, not money that may represent one’s entire nest egg. A return of 9.65% looks good on paper, but with 5 year treasuries returning 2.33%, this return is RISKY.
One loan that really bothered me was someone with a AA (best) rating who made ONE payment before defaulting. This loan has been in collections for > 1 year without recovery. My portion of the loan was only around $60, but others invested over $500.
Caveat emptor I guess…
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I retired at age 51 and have loved my second life. I agree that excellent health makes everything else a lot more enjoyable. Hobbies and relationships are important, but I am surprised that “contribution” wasn’t specifically mentioned. My husband will be retiring soon (he lasted 30 years with one company) and he is in the grieving / doesn’t want to let go phase. We will have many challenges (e.g. where do we want to live, what do we want to do) but finances are not one of them. That is because we started contributing the max to our 401Ks as soon as we could, worked very hard and often under dangerous conditions (i.e., not everyone would but the pay was better), and endured decades of taunting (mostly by family) for living well below our means. It is wonderful if you want and can work at your job forever, but it is always best to have choices. Save early and consistently, don’t fall into crazy “get rich” schemes and follow your own path are my words of advice.
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J.D.,
I’ll make a comment on this article at the bottom, but I want to caution anyone that is looking at people touting 9.65% returns with Prosper. The reality of these peer to peer lending sites is that they are beginning to see enormous losses to principal. So you may get a good rate, but ultimately if the loans go south, you lose all your principal. There have been recent articles how the losses of these loans have not been fully articulated and the returns are nowhere near the promised rates. As @Kevin says in 21, a spread of 7.3% above treasuries is risky. Buyer beware, especially given the short track records of these sites. The ratings that these sites give their loans are total BS.
With regard to the article itself: I’m guessing that one reason why people in retirement seem so much happier is that outside healthcare, if you own your own home outright, retirement is cheap! Everything is discounted, you can head to National Parks for the rest of your life for $10. You can travel off peak at your leisure. Every financial advisor tells you that you will want 70-100% of your current income (to invest in their underperforming funds), but the reality is after you stop working, your expenses plunge: no more commuting costs, dry cleaning, new suits, no college costs, etc. We hype up how much you have to have in retirement and then fail to tell people that the day they are gone, they only need $1 in their bank account. That said, you do need a significant nest egg, but if you own your house outright and downsize, carry no other debt, and have decent Social Security income and subsidized healthcare, it doesn’t take that much.
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I just finished reading “The Number” by Lee Eisenberg and it is really about this very thing — how to figure out how much money YOU need to retire. He spends a lot of the book talking about how money is a part of it, but the Number involves fulfillment and satisfaction with the life you are living.
And, Dreamchaser, I’m on the Dave Ramsey plan and it works well for me — I want NO debt now and then I can focus on serious investing. At age 44, I feel like I have time to get debt free and spend 20 years investing 25% to 30% of my income for retirement.
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A great example of happy retirement was modeled to me by my grandpa. He worked as a cobbler in Long Beach, CA. When 4 of their 5 kids moved out on their own, my grandparents sold their shop and moved to a rural California town. There, with the support of social security and the proceeds from the business, Grandpa became a gentleman farmer. Between income to make ends meet and a bit extra from growing avocados, my grandparents were very comfortable. Besides that, my grandpa was realizing a long-time dream to work the land. It happened to also keep him active and healthy. I highly recommend you pick your retirement “vocation” carefully. Do what you love and stay stimulated. You’ll figure out how to make ends meet.
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Although I was lucky enough to retire after 35 years of service at 55, I wished I had had the wisdom I have now of saving more and living a more frugal lifestyle.
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Hey Linda, I too am from Long Beach. I wonder if I knew your grandpa. I also like the idea of farming. To be a steward of the earth, partaking of its bounty, it doesn’t get better than that.
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I’m only 47, but I’m retiring in five years. That’s only because I lucked out with the finances and ended up with the same employer for many years and the employer has a defined-benefit pension.
I’ve been saving the max in a Roth IRA ever since they were invented, but that turns out to still be not much (60K).
I’m great with the friends, hobbies, and health, though.
What I wish I knew when I was younger:
* It’s better to put some extra money into retirement than to rush to pay off my extremely low-interest student loans.
* Continuing to hunt for the right career is a good idea, but so is working toward early retirement, in case I don’t ever find the right career and/or can’t get into it.
* Early retirement is a possibility, even for someone not making a lot of money.
At least I figured out I could buy a house even though I wasn’t making much money and was single. That house will be paid off in three years (or less), greatly reducing my expenses.
I’m also figuring out to replace things with really durable choices. For example, the first time I re-roofed my house, I went with the 30-year shingles (expected to last 23 years in my hot climate) instead of the cheaper 20-year shingles (expected to last 17 years), but next time I’m going with metal. Then I’ll be done replacing my roof forever.
One more thing—just because you don’t ever want to retire doesn’t mean you won’t. There is nothing you can do to guarantee that your health will be good enough to continue with your work (though you can improve your odds) let alone to control various relevant aspects of the economy.
@Adrienne – Thanks for sharing that idea of saving for retirement for an uncle you don’t know that well. Although I feel pretty close to my 52-year-old retired self, I certainly don’t know what I’ll be like at 70 or 95.
@Meredith – start by putting your small amounts in a (supposedly) high-interest online savings account. It will be separate from your other money and earning a little interest. And if your money is just sitting there, at least it’s not shrinking (like in a plummeting market) or otherwise disappearing (because you’re just spending it). As a friend told me during the dot-com crash, “The change I threw in the closet is getting better returns than any of my investments.”
@Tyler – just having a fixed mortgage can slowly reduce your expenses compared to what you would be paying to rent. Interestingly, after paying a mortgage for 14 years the principal and interest part of my mortgage payment (the part that will disappear when I pay it off) has gone from 83% of my mortgage to 60%. When you add in savings for repairs (even if you don’t add in utilities), I’ll only be saving half of my housing expenses when I pay the mortgage off. But if taxes get too high, that probably means the house is worth a lot, so I could sell it and move someplace cheaper.
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My husband worked for 33 years at a job he hated so he could have a “secure” retirement. After 5 years of being retired, He still does not know what he wants to do with himself, is miserable and depressed. Make plans for your life after work. Do all the things you planned on. It costs less than you think. But if you are a penny pincher for all those years it is hard to see the account balances start to go down. Remember, there is a time to spend it. I like the comment from the guy who said If you have $1 left at the end of the month you are rich. If you have 1 day left at the end of the dollars you are poor. I will probably work at a job I love till I can’t do it. Retirement does not look all that attractive from my viewpoint.
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To Meredith: Series EE savings bonds are currently paying 1.20% and you can buy one for as little as $25.00. That’s better than a lot of savings accounts, though you do have to hold the bond for a year and there is a 3-month interest penalty in the first 5 years…
see: http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds.htm
I also wanted to say that while health is really important in making one’s retirement happy, it’s not as important as good health insurance and good relationships. I’ve been retired since July 2008, and in a challenging cancer situation since March of 2009, but I’m still really happy as a retired person, and I’m sure that it’s because the love and friendship are there, the good hobbies and interests are there and while it’s not inexpensive, I have health insurance that is through my old employer and won’t disappear, so I don’t have that worry. You may think that you’d be devastated by ill-health — especially when you weren’t expecting it! — but as studies have shown, even very challenging health situations like paralysis turn out not to affect one’s basic level of happiness, after a short down time, one returns to one’s happiness “set point.”
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Oh, and might I add… don’t wait for retirement. I had a close family member make it to retirement, but not long after. A real loss…
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Quick FYI:
ING Direct Savings (www.ingdirect.com) is at 1.2% right now.
Smarty Pig (www.smartypig.com) is at 2.01% right now.
Both are FDIC insured up to $250,000. They are online savings accounts that are great for storing money that you don’t have to use monthly. It takes about 3 business days to electronically withdraw your money from ING Savings. I don’t have a Smarty Pig account yet, so I don’t know how long it takes, but I know several happy customers.
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#30 (Elisabeth) – thanks for your post, i found it to be quite profound, so many people have this pre-determined list of ingredients of ‘happiness’ – happiness is definitely more nuanced and elusive than that. human beings have the ability to create and sustain a measure of happiness in the most difficult of circumstances. to your continued health, liz.
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I’m with Doctor Stock #31. I think retirement is taking on a new meaning that includes some form of working/earning money AND that, given the trend towards needing to extend our work years, we might as well do work (or play!) that means something to us TODAY, rather than waiting until our “retirement.”
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I am in a very unique situation when it comes to this subject. My husband and I retired a few years ago in our late 30′s. His software startup company was sold in a very lucrative acquisition deal. I am very happy spending my retirement days and have the luxury of taking care of our two young children (no nannies for us). I schedule time to do things for me which make me happy like my dance (Zumba) classes twice a week and believe me these classes have shed the weight right off! Also, at age 41 I have started learning the guitar. Not only do I get pleasure from these two activities, they keep me youthful in mind and body.
Although my husband is officially retired, he can’t just sit and twiddle his thumbs. He started another business and emphasizes it’s just a hobby…a hobby that takes up all his time. He is the type of person that needs to have challenges so I guess working on projects make him happy. We’ve already decided on a future hobby that we’ll do together when he eventually sells this present company, and that is probably to direct and produce a film. I’m really excited about that one!
Keeping active (lots of exercise, involved in my children’s lives), learning/acquiring new skills and staying healthy (making home cooked meals from scratch etc.) have definitely given me happiness in retirement.
Whatever you do, don’t get bored!
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My only regret is that I didn’t choose a career that paid well. I chose to “do what I loved”, which was a huge mistake. Never ‘do what you love’, if it’s not going to pay the daily bills. I’ve always been frugal and a saver since I was a child, but when you’re making poverty-level wages, it’s not much good.
Any young person…make sure you get into a stable career that pays an actual real living wage and has plenty of jobs available. Don’t just get into something because ‘you’re good at it’, or ‘you love it’, because if it doesn’t pay a living wage, you’ll be working low-wage jobs for the rest of your life, financially insecure, and NEVER be able to take a break or retire.
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I retired from the Navy at 39…. Good deal and still able to make it in a second career that pays me double. Lot’s of options out there.
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My uncle says my grandfather told him years ago that when he retired, he needed to find a hobby so he wouldn’t go crazy. He seems quite happy with his woodworking. My grandfather did leather work. I think in both cases they gained a feeling of being productive, the ability to give really nice gifts that didn’t cost them all that much money, and connections with other people with the same hobby.
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You really nailed something. Stay healthy! Eat healthy and get exercise. I am semi retired and if I am not working I bike 4 miles or walk 1 mile briskly every day before the NASDAQ opens. Many my age have a hard time getting out of their chair to get a beer.
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My brother and sister in law died days from each other at 54—that really made us both take a step back and re- evaluate! They sure had great pensions for their retirement at 58- neither child got any of it….
Keep those envelopes going – especially for travel or hobbies. Do the travel anytime the envelope is ready!
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Also,
I would say to learn to enjoy solitude. Some consider it loneliness, however, it is all in your mind.
A certain amount of retirement will be spent alone (i.e. no kids, spouse passes, etc.) Learning to function well alone I would think would be a good skill to learn
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I am not even close to retirement, however, I would like to comment on the point you made about building friendships. There are two things that come to mind when I think of this:
1. A quote from the movie Into the Wild: “Happiness only real when shared.”
2. The Roseto Effect – Where people lived longer because of their sense of community.
I think that this is a huge part of planning for retirement as well. I hope to have plenty of people around to share the last years of my life with.
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The Retire Early Homepage and Early Retirement Board have lots of information regarding retiring in general and retiring early specifically. Many of the comments here have the right idea. Most oft quoted advice: save early, save as much as you can – 20-50% of income, live below your means (corollary to saving as much as you can), know your lifestyle costs and work to have those covered in retirement, have an asset allocation in mind and manage your assets with that allocation, stay healthy.
As for happiness in retirement, I will quote Lincoln: Most people are as happy as they make their minds out to be. I.e., it’s a choice. If you know that you need a more structured environment for happiness (which can come from different activities with work being one of those), then make sure you have that. Self-knowledge is key–unfortunately too many of us don’t give ourselves the times for that self-discovery and knowledge to propel our lives to that which we aspire.
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#36- Brenda – I guess I have the opposite viewpoint. I’m about to be 29 and I really don’t like my job or even my career field. I make great money but watching my bank balance climb just doesn’t make me happy. It’s really hard to get up in the morning and go somewhere I don’t want to be an pretend to care for 9 hours. I practically jump out of my chair 5 minutes before I leave. I choose my field (economics, finance) because I was good at it and I knew I could make good money doing it. I have no idea why I ignored the fact that in college i LOVED my english classes yet majored in economics and math even though I didn’t really like it, I just enjoyed the challenge. I then went to grad school to get my masters.
If I could go back I would pick something I loved. I can’t imagine spending another 30 years with the majority of my time doing something I don’t like, regardless of the money. In fact, my husband is about to be done iwth school and get a job, and my plan is to collect unemployment for as long as I can, have kids and stay home for awile, then go back to school to be a pastry chef. I know I will make only half what I am making now but I just don’t care. As long as I have enough money to be comfortable (we live very frugally) I would much rather love my job than be rich.
To those of you still choosing your majors/career paths – I say pick something you love and would be happy to do for at least 40 hours a week for the next 30 or 40 years! If it pays well, great, but don’t think you need to make $70k a year to be happy. If you live frugally you can still be happy on much, much less.
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Although I’m not at or near retirement, I think that a strong social network is the most important thing to build when you are younger!
I know a few elderly men that died soon after their wife died. But not my grandfather… He enjoyed life to the end! His secret was that he had an excellent social network (and a small dog too). It helped him that he owned a store and was a spectacular saleman.
His routine was, to meet a group of guys for morning breakfast, then at lunch he did the same, but with a different group of men. In the afternoon, occasionally he’d have a friend over to keep him company.
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Timely post. My MIL just passed away at 82 after slowly declining for 20 yrs.
I like the idea of saving for retirement as if for some relative you don’t know well. I don’t know who I’ll be or what I’ll want in 30-40 years. I would love to keep working, but what if I can’t? I would love to live healthy and die quickly, but what if I don’t? I will need money for living, money for health care, a social network to keep me going, people I can trust in case my mind goes before my body. I will have to provide myself all these things. Fortunately I can look to my in-laws, my grandmothers, and my parents for different ideas on how to manage that stage of life.
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@Sara #44 – If you have a husband and a safety net, than yes, you can do what you love. You already have money enough to live on.
But if you’re single, and “doing what you love” doesn’t pay enough enough to even make rent or basic utilities, then it’s folly. It’s better to go to a job you hate and be able to keep a roof over your head, then have no work at all, or work that pays minimum wage, and constantly be fearful of ending up homeless due to not having enough money to even live frugally on.
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J.D:
I’m 40 years old and I’ve been “retired” for 3 years. My definition of retirement, however, is “to do what I want, when I want, within reason.”
This definition is not money centered, which, in my opinion, is why I am the happiest I’ve been in my life — because retirement, for me, has nothing to do with the acquisition of financial wealth — it is a state of mind, primarily of contentment, in doing what you want to do, at least “most of the time.”
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John Jupin (#20):
* Brown bag your lunch
AMEN! I can’t believe how much money I used to spend before I started bringing left overs. It’s a fortune over time.
* find positive supportive people
My wife, bless her heart. Without a supportive spouse, it would be an uphill battle.
* turn the negative people into chairs
If you mean keep on doing your thing and ignore them, that’s what I do when I hear people say that paying off your mortgage early is not a good investment. In the culture of debt, there are those who think that there is “good” debt. It amazes me to no end. Yes, there is “good” debt, and that’s the one you pay off. We are unable to learn from history, which blows my mind; otherwise, a look at what happened during the Great Depression would suffice to settle this issue once and for all.
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I’m with Brenda – although I don’t love my job, it pays fairly well and provides excellent benefits. My salary also allows my family to lead a frugal but fulfilling lifestyle, and my wife can be an at-home mom for our kids, at least until the youngest starts school in a few years. Being less than thrilled to show up at work for 8 hours a day is a small price to pay for the benefits it provides. Plus, if I can make it another 20 yrs at this job, I’ll be eligible for retirement with full benefits and only in my mid 50s. At that point, maybe I’ll consider a second job doing something that I love. Or not.
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