When it comes to preparing for retirement, most people believe it’s all a numbers game. But that’s only half the story; to have a long and fulfilling retirement takes more than just money and the key to happiness in retirement lies within things that money can’t buy.
Whether you know what’s in your pension pots or not, you might also be wondering what you’re going to do with your newfound downtime. As with any big lifestyle change, it’ll take time to adapt. But, since we’re healthier and living longer, we now have a lot longer time to fill.
So how will you be making the most of your golden years? And how do you stay happy as you transition into a new way of life? Retirement isn’t as easy as people make out and it doesn’t just involve spending your days with your feet up; it takes careful planning and hard work to get it right.
Preparing for retirement – the challenges and opportunities
The population is living longer, and in 2019 there were 13,330 centenarians (people aged over 100 years old). And whilst this presents more opportunities, it also has its challenges.
The transition into retirement is not an easy path to navigate, and adjusting to finishing work is difficult for many. Research by the Royal Voluntary Service and Legal & General found that immediately after finishing work, 23% missed the routine of working life and 12% also felt they lacked purpose.
Those that had retired within the last five years, 13% said they weren’t enjoying it, with over half (53%) of them putting it down to boredom, 43% attributing it to loneliness and lack of interaction, and the final 31% didn’t feel they had an outlet for their skills of experience.
Academic research has identified the following five common themes in the transition to retirement:
- A growing interest as retirement approaches
- Initial euphoria
- Some stress
- Dealing with adjustments to a new lifestyle
- Settling down
The trend is that people are initially excited about retirement and are engaged in making plans. There’s a sense of relief or euphoria as freedom looms and the responsibilities of working cease.
Once the honeymoon period is over, stress or anxiety may creep in as the reality dawns on you that a huge chapter of your life is closed. Part of your identity may feel lost, and feeling relevant dwindles.
Then comes the adjustment phase. This phase is key to your happiness in retirement, and planning for retirement is crucial for a successful adjustment, shaping how you live your later years of life.
What is the key to happiness in retirement?
As you embark on your journey to your golden years, here are a few key things to ensure a happy and fulfilled third age:
Actively engaging in preparing for retirement before the time comes has a hugely positive influence on your wellbeing and happiness in retirement.
One of the best starting places when preparing for retirement is creating a vision for it. Making a detailed list of your goals and priorities makes retirement real and tangible, and in turn, makes you more likely to achieve them.
The ONS report on personal and economic well-being found that how we spend our money matters, rather than the amount we have. Those spending their money on experiences, such as eating out or going away, had higher life satisfaction levels than those on the same level of income spending money on food, insurance, and mobile phone contracts.
More than a third (34%) of UK employees said that funding retirement was their top money worry. So, as we mentioned before, being prepared and planning for retirement is essential to a happy retirement. We recommend you take stock and check what your retirement income is likely to be, then understand how much you might need. The UK retirement living standards is a great place to start.
The relationship between wealth and personal well-being are strongly related. Although we know that money doesn’t always buy happiness, surplus income does allow the freedom to enjoy experiences, have more leisure time and cope better financially.
Finding a purpose
A huge chapter in your life closes as you finish work. And keeping active and feeling a sense of purpose is one essential element of a content retirement.
According to research, 39% of those enjoying their golden years adjusted well because they found a purpose. One in five (18%) claim that volunteering helped massively, and they were happier, more positive, and less lonely as a result.
With over 10,000 people over the age of 50 volunteering, it can be a chance to rediscover your strengths and awaken your interests again, so if this sounds like something you’d like to try, there are lots of opportunities to volunteer.
Age is a mindset, not a number
We’ve all heard the phrase that you’re only as old as you feel. But, scientists are finding this to be true; age is subjective, and those that feel younger than their chronological age are healthier and more psychologically resilient than those who feel older.
Also, those who think of getting old as a positive experience, with more wisdom, self-realisation and satisfaction, tend to function at a higher level too; they eat better, exercise more and live 7.5 years longer. And, with wellbeing also at its highest around age 70, when we say the best is yet to come, it’s true!
So, as you start preparing for retirement, view this as your gateway to a new and exciting third age, not old age. Plan for things you didn’t get around to in your youth, see the sights you didn’t get to see and try the things you didn’t dare try before.
Family and friends come first
Over the last 18 months, we’ve realised the importance of human interaction more than ever. And just as we had to pull together and stay connected during the pandemic, retirement is no different. Keep those connections strong, spend time with your family and friends, and don’t slip into feeling isolated.
Not only does it keep you busy, but it’s also proven to help you live longer too!
Your retirement, your way
Everyone is different, and everyone’s idea of a perfect retirement is different. Your retirement will be what you make of it.
We work closely with you to understand your vision for the future, your goals and priorities and map this all out along your retirement path. Using cashflow modelling, helps support your journey and provides that all-important financial security. It’s about making the best of what you’ve got and doing more of what you love. It really is as simple as that.
If you would like to talk through your retirement plans or want to know where to start with planning for retirement, one of our independent financial planners would be happy to talk through your financial plan. Feel free to get in touch with us any time to have a chat.