It’s never too late to be a happy retiree

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Do the latest “You Should Have ___ Millions Saved For Retirement By Now” articles make you wince?

You’re not alone.

Fewer Americans are hitting the nest egg numbers shared on financial talk radio or featured in the latest Wall Street Journal retirement-planning article. JP Morgan’s Retirement Savings Checkpoints table recommends that a 50-year-old who earns $100,000 annually have $450,000 invested. It says a 40-year-old making the same should have over a quarter-million saved.

This is crushing to the 62% of working households age 55 to 64 that, according to a study by the National Institute on Retirement Security, have liquid savings less than their average annual incomes. Another study in early 2017 shows that for households between 50 and 55, the median retirement account balance is just $8,000. For those between 56 and 61, it’s $17,000.

Of course, money does matter and diligence in saving is important. But your retirement goal doesn’t have to be the tune of millions of dollars. And for those who are behind the savings curve, there is still hope for a real — and happy — retirement.

The sum total of retirement happiness is more than money.

I recently surveyed nearly 2,000 retirees across the country to better understand their happiness levels. One of my goals is to help my clients understand the relationship between money and happiness — and what factors go into a satisfying second chapter of life. Breathe easy, because having a $2.5 million nest egg is not always one of them. Their responses are truths you typically won’t hear from the hardcore wealth planners.

My research shows that the happiest retirees have 3.6 core pursuits. These are those hobbies that bring you joy and enrich your life. For many, these have been lifelong interests that now finally get the attention they deserve. Don’t underestimate the impact of these. Survey data shows that in many cases the existence of these core pursuits was actually responsible for the difference in happiness and unhappiness in retirement.

So what does this mean for those who are a bit “behind” in the retirement savings chase? It means: don’t kill yourself trying to save every penny at the expense of identifying or cultivating pursuits you love. If you abandon self-care or forget to take time to discover the hobbies that are life-giving to you, you could miss out on the fulfilling retirement you’ve worked towards for all these years. These are the building blocks for retirement happiness. Without them, it doesn’t matter if you have $500,000 or $5 million saved.

Important financial targets (you can actually hit)

While your saving may not be coming along as fast as you’d like, there are still some very doable financial milestones to work toward that don’t mean six or seven zeros in the bank account.

First is targeting $500,000 in savings. To some this might still feel far off. But for most, this is a welcome relief from the eye-popping figures you’ll find on the latest CNN Personal Finance story. My research suggests that this number is common among happy retirees, but was subject to lifestyle and geography. So, yes, there is the opportunity of a happy future for the non-millionaires among us!


By hitting that $500,000 mark, retirees were able to pair investment income with Social Security, pension benefits, rental property income or even part time work to create a very reasonable income stream in the $5,000-per-month range.

Similarly, you don’t have to be a millionaire to reach our other goal: a paid off mortgage. This fixed expense eats away at the likelihood of retirement more than anything else. For those with smaller retirement nest eggs, consider the opportunity that low (or no) housing costs can bring you in retirement. Also, you don’t have to slash your mortgage with a big lump sum payment. You can start to reduce your loan balance by applying a bit more to it each month. Consider this:

  • If you have just started a 30-year mortgage of $250,000 at 5% interest, your scheduled monthly payment is $1,342. By adding $300 per month to that payment, you can slice nearly 10 years of the mortgage ‘ and save $79,684 in interest.

My survey research also shows that people are 5x more likely to be happy if they have less than 5 years left on their mortgage. The saying “You don’t own your house, your house owns you” exists for a reason.

For those closing in on retirement age, but who may have gotten a slow start on savings, here’s another bit of encouragement: While it certainly takes some discipline and perseverance, for the group of retirees that started saving after 55, there is higher percentage of happiness than unhappiness.

At this stage for most, the decks are cleared, kids are gone, the mortgage is winding down and you and your partner can focus together on the task of retirement prep. While financial pundits would never say this, notice how there are more unhappy retirees in the group that started saving between 45 and 54 years old. This is one of the hardest seasons of life: private college tuition for a couple of kids, a mortgage and an awakening to retirement savings realities takes an emotional toll that is hard to recover from. So, of course, start saving as soon as you can. But remember: Even if you’re late to the game, there is still hope for happiness.

A big retirement cushion doesn’t guarantee a happier retirement. Just as starting late or saving less doesn’t mean a future of misery! Pursue some of those critical, but doable benchmarks like $500,000 in investable assets and a paid-off mortgage. Then remember to swing a tennis racket, play some cards or hit the town for drinks and dancing, because happiness in retirement is about so much more than money.

Disclosure: This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations.  Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns.  Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.

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