But here’s a contrarian thought: How about willingly working well past retirement age? It turns out that could actually prolong your life!
Read more: How much money do I need to retire?
Want to live longer? Work longer!
A study out of Oregon State University found that working just one year past age 65 meant people had an 11% lower risk of death from all causes. The study even accounted for demographic, lifestyle and health issues.
From a financial perspective, working for as long as you can past traditional retirement age has a lot of benefits.
You become eligible to take Social Security at age 62. But for every year you don’t take that monthly check, you get an 8% imputed return on your monthly benefit. So delaying Social Security means you’ll permanently lock in a bigger benefit.
Also by working longer, you have more time to make catch-up contributions to your 401(k) or IRA. Beginning at age 50, you can actually start playing catch up by stashing an extra $6,500 per year in your 401(k) and an extra $1,000 in your IRA.
6 traits of happy retirees
When it does come time when you want to retire, be sure you give yourself the best chance to enjoy your time away from work!
Last year, our contributor Wes Moss wrote a book about what makes a happy retiree and what makes somebody unhappy in retirement.
Wes also has a ‘Money & Happiness Quiz‘ available on his website, which is free for you to take.
The 11-question quiz asks some basics you would expect — about your purpose in life, your activities and interests, how much time you spend planning for retirement, how much you have saved and how much you’re planning to spend in retirement.
But there are a few oddball questions that actually can yield some deep insights into the lifestyles of happy retirees…
Do happy retirees live in McMansions? Not exactly. The research points to happy retirees having an average home value of $355K. Unhappy retirees, meanwhile, have an average home value of $273K.
Lesson: Don’t buy too much house. But don’t buy too little either! Either way, here’s why should buy a home below your means.
Mortgage pay-off date
You never want to take on a big financial obligation like a mortgage when you’re getting ready to work less or stop working altogether. Research shows that the happiest retirees have no more than a five-year horizon until their mortgage is paid off when they decide to hang it up at work.
Lesson: Pay down your mortgage steadily during your working lifetime and don’t do anything to stretch the debt. Read Clark’s advice on everything to do with mortgages here.
Sources of income
Too many people retire with Social Security as their only form of income. Not a good idea! The happiest retirees have 2.6 different income sources. Unhappy retirees, meanwhile, have only 1.85 different income sources.
Sources of income to consider other than just Social Security include a pension, income from investments, rental properties, part-time work and more.
Lesson: Working past retirement age if you’re able is a great idea. So is picking up a little side work to fatten your wallet!
Your vehicle of choice matters
This may sound strange, but the wheels you drive can have a big impact on your happiness in retirement. Research shows happy retirees favor Asian brands like Toyota, Nissan, Honda and Hyundai. By contrast, people who drive BMWs in retirement tend to be the unhappiest of all retirees.
If luxury cars are your style, you might consider a Lexus instead. It’s the favorite luxury brand of happy retirees, according to research!
Lesson: A good basic ride — preferably used — is your best bet as you go into your golden years.
Pick where you shop wisely
Wes Moss notes that the happiest retirees shop at stores like Macy’s, Chico’s, Kohl’s and Nordstrom. Unhappy retirees, meanwhile, shop at super high-end stores like Neiman Marcus.
Whatever you do, just don’t fall into the trap of shopping entirely at thrift stores; that won’t bring happiness (just shabbiness!) according to Wes’ research.
Lesson: The Goldilocks rule seems to apply here. Not too expensive and not too cheap. Just right is what you’re looking for! Clark’s advice on saving money on clothing and fashion can come in handy.
Vacation time: Find the sweet spot
Research shows the happiest retirees take an average of 2.4 vacations each year. So they’re not traveling constantly, but they’re not skimping on travel either. On the other hand, the unhappy bunch typically vacations 1.4 times a year.
Lesson: Travel is doable — and necessary for your happiness — even on a modest retirement budget. Let’s Clark’s travel advice help you find a deal!
Read more: 5 costly retirement planning mistakes