What makes a happy retirement?

The journey towards retirement is long and pretty complex. But where will that journey actually take you? At OnTrack we understand that retirement is about more than just money, but our evidence-based approach meant we needed to find out how much more. So, we built a psychometric study and asked lots of retired people about their lives.

It turns out that happiness is pretty hard to quantify, so we concentrated on the idea of satisfaction with life. While everyone is slightly different, in the end we found 6 common concepts:

1. Believe in something

People who had stronger values tended to have a higher satisfaction with life. This was measured using the Schwartz Portrait Values Questionnaire and frequency of religious interaction. Interestingly it didn’t matter which values were held strongly – it was simply holding strong values that were associated with better life satisfaction.

2. Try not to be a recluse – socialise a bit

Having people you can talk to about problems – and it doesn’t need to be a lot of people – is also associated with higher life satisfaction. Interacting with those people through community or social clubs on a regular (but not necessarily frequent) basis was a strong predictor of higher satisfaction with life scores.

3. Look back on life and see the things you have accomplished

By far the strongest predictor of a satisfied retirement was a sense of accomplishment. Looking back on life and being able to identify the key successes. This wasn’t about being the first astronaut on the moon type of accomplishments – it was about the things you will feel proud of later in life.

4. Try not to get hung up on every detail

Of all the personality traits (as measured by the Big Five Inventory) we looked at, the only consistent predictor of satisfaction was a low score on neuroticism. The less stress you make for yourself the better.

5. Make sure you can afford the essentials in life

When it comes to finances, there was a clear break around being able to afford the essentials in life, but once a basic standard of living was covered, more money didn’t make for a more satisfied retirement.

6. Have a life (retirement) partner

Having someone to share the ups and downs of retirement with makes the whole journey easier for both of you.

When asked about the best things about retirement, common words were “Freedom” and “Time”, while the negatives were mostly about “Health” and “Loneliness”.

Good retirement planning needs to address these 6 factors – it is more than just a plan to maximise wealth. At OnTrack, we work with our clients to provide an holistic retirement plan – digitally delivered, at low cost, and personalised to user needs.

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