Sim­ple So­lu­tions

Inc. (USA) - - CONTENTS - By Kathy Kristof

Ev­ery­thing you need to en­joy life after work

Re­tire­ment might sound won­der­ful, but all too of­ten the reality is dis­ap­point­ing. Some 28 per­cent of re­cent re­tirees polled by Na­tion­wide Re­tire­ment In­sti­tute last fall said that life was worse in re­tire­ment than it was when they were work­ing. It’s one of sev­eral sur­veys to find that, for roughly a quar­ter of re­tirees, life after work in­volves iso­la­tion and a loss of di­rec­tion.

“I have come to be­lieve that mankind is not meant to just sit around,” says Larry Ja­cob­son, a re­tire­ment life-plan­ner based in North­ern Cal­i­for­nia. “It usu­ally takes about six months be­fore peo­ple say golf is fun, but there’s no ful­fill­ment.”

Spouses James Pawel­ski and Suzann Pi­leggi Pawel­ski, who study and write ex­ten­sively about the route to hap­pi­ness, say few peo­ple re­al­ize that plan­ning for re­tire­ment con­tent­ment is as im­por­tant as plan­ning for eco­nomic health.

“There are peo­ple who en­gage in mag­i­cal think­ing about re­tire­ment hap­pi­ness, just as some en­gage in mag­i­cal think­ing about re­tire­ment se­cu­rity—they want it, but they take no steps to get there,” says James Pawel­ski, who is also the ex­ec­u­tive di­rec­tor of the In­ter­na­tional Pos­i­tive Psy­chol­ogy As­so­ci­a­tion. He adds that “the habits formed be­fore we are 50 are the big­gest de­ter­mi­nant on how well you re­tire.” So what can you do now to make your re­tire­ment years hap­pier?

Re­duce fi­nan­cial stress

Money may not guar­an­tee re­tire­ment hap­pi­ness— but pay­ing at­ten­tion to it is a good first step. Once you re­tire, you’ll want to be able to cover your reg­u­lar bills with­out worry, says Robert Frick, the cor­po­rate econ­o­mist at Navy Fed­eral Credit Union.

To reach fi­nan­cial se­cu­rity, take three con­crete steps: Pay off debts; con­sider mov­ing to a smaller res­i­dence; and cre­ate reg­u­lar sources of in­come.

Frick ad­vo­cates pay­ing off all debts, in­clud­ing your mort­gage. If mak­ing mort­gage pay­ments once


you’re re­tired is likely to be tough, he sug­gests mak­ing it a late-life ca­reer goal. “The more debt you have, the less happy you are,” he says. “You need to plan to make your re­tire­ment debt-free.”

If you can’t pay off the house be­fore you re­tire, con­sider down­siz­ing, he adds: “If you have a big house—par­tic­u­larly if it’s older—who needs the ex­pense of keeping it up?” Sell­ing will also al­low you to tap decades of built-up home eq­uity, which can help you pay cash for a smaller res­i­dence, and you can put any leftover money into your in­vest­ment port­fo­lio.

Fi­nally, if you won’t have enough reg­u­lar in­come to cover your fixed ex­penses in re­tire­ment, con­sider cre­at­ing a “pen­sion” to fill the gap. You can do this by buy­ing in­come an­nu­ities, which prom­ise to pay a set monthly amount for life, just like a pen­sion. You can do this when you re­tire by buy­ing so-called im­me­di­ate an­nu­ities, which start pay­ing you a monthly stipend right away. (Make sure to avoid what are known as vari­able de­ferred an­nu­ities, which are higher-cost prod­ucts with less im­pres­sive re­turns.)

If you’re more than five years away from re­tire­ment, you can cre­ate this sort of pen­sion the same way you build your 401(k) ac­count, through reg­u­lar monthly in­vest­ments. Lau­ren Minches, vice pres­i­dent at fi­nan­cial-tech­nol­ogy startup Blue­print In­come, says this ap­proach has many ad­van­tages. It lets you di­ver­sify your an­nu­ities among a wide range of in­sur­ers, re­duc­ing the chance that any one com­pany’s fail­ure could de­rail your sav­ings. In­come an­nu­ity re­turns are also set on the date of pur­chase, and in­ter­est rates are his­tor­i­cally low to­day. By buy­ing over time, you can po­ten­tially earn higher re­turns, boost­ing your monthly in­come.

“One of the rea­sons peo­ple be­come so anx­ious when they re­tire is be­cause we go from liv­ing off re­li­able salaries to hav­ing al­most no re­li­able in­come at all,” says Minches. “When you have in­come from a job, what you spend one month doesn’t nec­es­sar­ily jeop­ar­dize what you can do the next month. But when you re­tire, ev­ery dol­lar you spend in your 60s is one that you won’t have in your 70s. That makes peo­ple re­luc­tant to spend any­thing, be­cause they’re wor­ried about how it will af­fect them later.”

Buy­ing an­nu­ities elim­i­nates those wor­ries, as well as the worry of out­liv­ing your sav­ings. In­come an­nu­ities typ­i­cally pay a set monthly amount for life, re­gard­less of how long you live. “It al­lows you to con­tinue liv­ing the way you al­ways have, with money com­ing in ev­ery month, no mat­ter what hap­pens,” Minches says.

In­vest in life after work

The work­ing world cre­ates a set of reg­u­lar so­cial in­ter­ac­tions, which you lose once you re­tire. That could in­crease de­pres­sion and threaten your phys­i­cal health. So­cial well-be­ing is linked to lower lev­els of an in­flam­ma­tory re­sponse mol­e­cule called in­ter­leukin-6, which is con­nected to a wide range of age-re­lated disor­ders such as Alzheimer’s and os­teo­poro­sis. Iso­la­tion also in­creases the risk of high blood pres­sure and dis­ease, ac­cord­ing to the Na­tional In­sti­tutes of Health.

So join a book club; a bridge club; vol­un­teer; set up reg­u­lar golf or lunch or shop­ping dates. The ac­tiv­i­ties are less im­por­tant; what mat­ters is that you see other peo­ple reg­u­larly and stay ac­tive.

Set re­tire­ment goals

The hap­pi­est re­tirees in­clude those with a strong sense of pur­pose, says Cather­ine Collinson, pres­i­dent of the Transamer­ica Cen­ter for Re­tire­ment Stud­ies. You don’t need to set up a new busi­ness or climb Ever­est. Your goals could in­volve see­ing friends, set­ting aside time to see your kids or to babysit your grand­kids, tak­ing a class, or learn­ing a new skill.

Transamer­ica’s 2017 re­tire­ment study found that 97 per­cent of re­tirees with a strong sense of pur­pose were gen­er­ally happy, com­pared with 76 per­cent with­out that sense. These re­tirees spent more time with fam­ily, trav­el­ing, do­ing vol­un­teer work, and pur­su­ing hob­bies.

“It’s very im­por­tant to have a rea­son to get up in the morn­ing and find some­thing that will pro­pel us for­ward,” Collinson says.

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