Retired and loving it. What did they do right?

Another day, another 10,000 Baby Boomers will turn 65 (according to the Pew Research Center.)

Some have been waiting anxiously for years for that big day when they can walk away from that 9 to 5. Others will go into retirement kicking and screaming.

Even those who have been anxiously awaiting retirement for years are not guaranteed to live happily ever after. One thing is certain. Retirement is not for everyone. And the more you plan, the better it goes.

One financial planner tells stories about a client who just couldn’t wait for retirement. He had set his magic number at 30 years and he wasn’t budging from that number. However, when he retired he was miserable. He had not put much thought into how he would spend you days.

So, a good question is: What’s the difference between a happy retiree and an unhappy one?

You might think the easy answer is money, but that’s not necessarily true. Money can be important, but that’s not necessarily the thing that separates happy retirees from the unhappy ones. After all, people with money worry about running out of money in retirement as much as anyone else, financial planners say.

According to many financial professionals, their clients who are the happiest had a plan for their retirement assets, and saved accordingly.

“The ones who are really happy designed the outline (of their retirement plans),” says Reid Abedeen, managing partner at Safeguard Investment Advisory Group in Corona, Calif. “They had a clear and consistent outline of what they wanted retirement to be. When they did the outline, they sat in front of qualified advisor.”

Abedeen says in the case of happy retirees, their advisors looked at all their finances: income, expenses, debt, and even considered Medicare. And then or she designed a financial plan that was based on all that information, and also took into account that politics may change.

“They are positioned so they’re not forced to sell (equities) just because the markets went down,” he says. “The game plan is staying intact. It allows them to continue to travel because they created a steady stream of income.”

That guaranteed stream of income (which can be from sources such as pensions, Social Security or annuities*) can be key, he says, because that helps keep the retiree from pulling out of the market at the wrong time. In other words, they are living off income other than what is invested in the market.

“Emotional decisions do not generally lead to a successful outcome,” Abedeen says.  “You have a better chance if you make a decision based on an educated decision rather than an emotional one.”

David Blackston, founder of Blackston Financial Advisory Group in The Villages, Florida, says that guaranteed income is a key component of happiness and satisfaction in retirement. “People that are the happiest are the ones who prepared for retirements and set plans up properly, so they have guaranteed income,” says Blackston. “They also stay active.”

Blackston says he estimates that people who retire in warmer climates probably have a five-year longer lifespan because they are generally more active.

“In The Villages, it feels like 85 percent of people at 75 years old are active and they feel 20. “They are sharp as tack mentally and physically active.”

Here are a few other tips.

  1. Keep busy. Whether it’s a part-time job or volunteer activity or a hobby, make sure you have something to do in retirement. Many people find that their identities were defined by their careers. Make sure you have something to fill that vacuum.
  2. Keep a budget. Overspending can be a big source of unhappiness for people on a fixed income. Know what your income and expenses are before you retire. If your expenses are more than your income, you will either have to reduce your costs or do something to increase your income.
  3. Reduce debt. Many financial professionals strongly recommend that you go into retirement debt- free, but they know it’s not possible for everyone. If it is at all possible, pay the mortgage off. Any money in retirement that does not go towards existing debt will go a long way towards improving your lifestyle in retirement.
  4. Have that lifestyle discussion with your significant other. You might be amazed at how often financial professionals see a married couple who have not talked about what their retirement looks like. Make sure you agree on finances, and just importantly, where you will live out your retirement.
  5. Stay healthy. We all know that health issues increase with age. But Baby Boomers have set a new standard for fitness among the 60+ generation. The healthier retirees are, the happier they are.

“People who are happiest are the ones who don’t worry about life,” Blackston says.  “They are prepared. People who are prepared, you don’t’ see them worry about anything. Only thing they think about is where my golf ball goes.”

*Annuities are insurance products that can provide guaranteed income during retirement. They may be subject to surrender charges and holding periods. Guarantees are backed by the financial strength and claims paying ability of the issuing company.  

This article is for general information only and is not intended to provide any specific financial advice. We encourage you to speak with qualified tax, legal, and/or financial professionals regarding your needs.