Planning to be happy in retirement - Isthmus

Will you feel fulfilled in retirement? What will you do with your time? Will you stay in good health to maximize your resources for as long as possible?

Humans are notoriously bad at predicting the future. We are good at planning, though. And when it comes to retirement, it’s all about the planning—especially the kind you do mentally.

Our recent Modern Retirement Monthly report, “Planning for successful retirement and well-being,” illuminates some of the psychological factors to think about as you contemplate retirement.

The U-shaped curve of happiness in retirement

When it comes to the goal of a happy retirement, the research on well-being and aging is on our side. When you plot happiness against age, you get a nice, U-shaped curve. When we’re in our 20s, we are at the top of the curve (the most happy). Then, we bottom out—become the most unhappy—around the age of 50. Once in our 60s, we start heading back up the curve again, and continue to get happier the longer we live. In fact, according to the 2017 UBS Investor Watch report “Retiring old clichés,” 90% of investors are happiest in their 60s and 70s. A full 86% are still happy in their 90s.

We’re happier in our retirement years for many reasons: We have learned to better deal with stress and tend to have less stress (with children raised and out of the house), we know ourselves better and are more accepting of strengths and weaknesses, and we have time to pursue meaningful interests.

Also, there is this: We can finally enjoy all the effort it took for us to get where we are, including building a career, establishing financial security and raising a family.

Key questions to ask when planning for retirement

Not everyone rides that U-shaped curve in their later years, but you can increase the chances of enjoying your retirement by preparing yourself psychologically, and asking yourself some key questions now.

When do you plan to retire?

Will you slowly transition into retirement or will it be a more abrupt change?
Will it involve downsizing or moving?

What are your overall goals for retirement? Be specific about both financial and quality-of-life objectives for the next 20 to 30 years, such as:

Vacation home and frequent travel
Getting your pilot’s license
Establishing a charitable foundation or trust, also called “giving while living”
Helping your grown children buy their first home
Ability to afford late-in-life care, if needed

What are your biggest worries about retirement? Research on retirees shows that:

73% worry about getting sick
47% worry about not having anyone to take care of them
21% worry about outliving their money or having to downgrade their lifestyle

Have you factored in life expectancy, which is longer than ever? For current 65-year-olds, life expectancy is:

87 years old for men
89 years old for women

Don’t forget about healthcare costs in retirement

Did you know that a 65-year-old couple will need to save between $300,000 and $600,000 for future healthcare expenses?

Even when faced with these numbers, only about 12% of Americans account for healthcare costs when planning for retirement. In fact, we tend to use magical thinking when it comes to our health in retirement. Most of us assume that we won’t need to use any long-term care services, yet our research shows that about 85% of couples will use some type of long-term care services in their lives. To be more specific, on average, a 65-year-old couple in 2016 will incur a total of $184,000 in long-term care expenses during their lifetime and roughly 25% of couples will spend more than $500,000 on long-term care during their lifetime.

In addition to saving enough for healthcare costs, this is also the time to take control of any chronic conditions, like diabetes or high blood pressure. Working with your healthcare provider or a wellness coach to come up with a plan—including adopting more healthy behaviors—can make a big difference in creating a happier retirement.

Retirement readiness is as much financial as it is a state of mind. Will you be mentally ready when it’s time? Why not start thinking about your well-being now? Your future self will thank you.

Sponsored content from The Burish Group. For information about The Burish Group, please visit ubs.com/team/burishgroup or call Andrew Burish at 608-831-4282.

This article has been written and provided by UBS Financial Services Inc. for use by its Financial Advisors.

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