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One goal many Americans have is to retire. They’ve spent their lives working hard and planning to eventually be able to quit their jobs and live off of their life savings. Retirement wasn’t really recognized until the late 19th century, by German Chancellor Otto von Bismarck. Before then, life expectancy fluctuated between 30 and 40 years. Therefore, there wasn’t so much of a need for life after work.

Von Bismarck introduced the concept of social insurance to improve workers’ well-being and maximize economic efficiency. This later caught on in the United States. Today, we refer to this program as Social Security. So, with life expectancy having increased, retirement has slowly changed over time.

Some retirees are stressed and anxious about the future, while others flourish in retirement. What sets the two groups apart? What does it take to feel secure and confident when heading into retirement? We interviewed several experts who have worked with countless pre- and post-retirees and may have the key to happiness during retirement.

Financial Stability

One of the pillars of a happy retirement is financial stability. Finances play a large role in your well-being and your emotional state. You need to be able to support yourself without income from a job. Living below your means, taking responsibility and being accountable are the first steps toward financial stability.

Living Below Your Means 

Chris Costello, chairman and co-founder of Blooom.com, states, “I have spent over 20 years advising clients that are saving for retirement and, by far, the one common thread that is woven across the vast majority of financial independent Americans is they each found a way to live below their means. Simply translated into six words: They spent less than they earned!”

Costello recommends contributing to your 401(k). Many employer-sponsored plans have a matching program you can participate in. This means that your company will match your contribution up to a certain amount. Let’s say you put in 4% and your company matches up to 3%. This is free money for your future. You can stock away money before the government gets to it.

You could also consider opening a Roth IRA. You can contribute to a Roth IRA with after-tax dollars. This means that when you go to take your money out during retirement, it’s tax-free. Keep in mind there are contribution limits and incomes limits for contributing to an IRA. There are plenty of other ways you can save for retirement if you have maxed out all of your contribution limits.

A good goal would be to save at least 20% of your income every month. If this seems like an overwhelming amount, try increasing your savings percentage each month, a little at a time. After a while, you won’t even miss it.

Taking Responsibility

Robb Hill, president and founder of R Hill Enterprises Inc. and author of “Ask the RIGHT Questions Get the Right ANSWERS for Sound Financial Planning,” states, “Lack of responsibility breeds dependence. The sooner you understand that your retirement is your responsibility and not that of the government or of your employer, the better off you’ll be.”

By creating a personalized financial plan, you can take responsibility for your financial future. You should include pensions, retirement accounts, Social Security, insurance and more into your financial plan. The better you map out your future, the easier it may be to reach your financial goals in retirement.

Being Accountable

Hill also expresses the importance of having accountability. “Accountability is knowing where and why your money is where it is and the benefit of having it there,” says Hill.

As stated above, having a personalized financial plan is imperative to a happy retirement. Part of your financial plan is understanding where your money is going and how it will benefit you in the future.

Hill shares in his book a story about Linda and Dennis. They were financially stable for years until Dennis lost his job as a sales manager. With Dennis having to leave his job, they had to make sure they were still on track to achieve their retirement goals and where to put Dennis’ retirement distribution.

Since they established a strong financial plan years ago, they were actually able to retire without any additional financial burden. They had included tax planning, cash flow, education funding, risk management, company benefits and more into their financial plan and it all paid off. On top of that, they had enough to pay for their youngest daughter’s college costs.

Dennis didn’t have to go back to work, and he could pursue one of his lifelong dreams: owning a fishing shop. This proves that you don’t have to be a millionaire to retire comfortably. You need to work with a financial planner who can help you iron out all aspects of your financial plan. You need to stay consistent and dedicated to your goals, and one day it should pay off so you can live a happy retirement.

Prioritize Relationships

The United States’ 65-and-older population is on target to reach 83.7 million adults in 2050. Americans are retiring daily. Even if they have financially planned for retirement, they may have left out their emotional, mental and relationship needs heading into retirement.

Sara Yogev, Ph.D., and author of “A Couple’s Guide to Happy Retirement and Aging,” states, “Many books and experts emphasize financial planning for the retirement years yet downright neglect the psychological planning for what could very well compromise a quarter of people’s lives.”

Her book addresses the psychological aspects of this stage of life and how to cope with them, including real issues that are not often brought to light. The book also highlights her latest research findings and stories from real couples she’s encountered along her quest to discover what truly makes retirees happy. Some of the topics in her book discuss the importance of the time couples spend together, the division of chores, cohabitation, how technology can impact a couple and socialization.

Building strong relationships now can yield great benefits in the future. Whether you are building your social circle, getting more involved in your community or spending more quality time with your partner, you are setting yourself up for a happy retirement.

Lifestyle

Another pillar of retirement is a retiree’s lifestyle. How do they spend their days? What gets them up in the morning? This can be many different things to different people.

Wes Moss, Chief Investment Strategist at Capital Investment Advisors, bestselling author of “You Can Retire Sooner Than You Think” and host of the radio show “Money Matters,” interviewed and assessed over 1,350 retirees from 46 states to determine that the happiest retirees focus on 3.6 core pursuits. A core pursuit is something that a retiree is excited about and is motivated by – something that they feel energized by. The top pursuits involve the individual’s community and social circles, such as volunteering.

Working on a core pursuit isn’t something that can happen overnight. Just like with saving and planning for retirement, you can’t start the year before and expect to have a sustainable lifestyle. You have to work hard for years to set yourself up for success.

Wes tells a story of one of his clients who decided to develop a side hustle in retirement. He would carve custom wood razor blade handles and sell them all over the world. It turns out, gentlemen from Australia love his product and he can’t keep them in his shop. They sell so fast. He felt fulfilled doing something he loved and was making extra cash as a bonus.

Pre- and post-retirees that focus on their financial needs, personal relationships and lifestyle goals can live a happy and fulfilled life in retirement. All it takes is some planning, dedication and consistency in order to reach happiness in retirement.

What will make you happy in retirement? Let us know in the comments below!

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