Four Secrets to a Happy Retirement
Even if you absolutely love your day job, there's likely a part of you that has thought about what it would be like to retire: You're envisioning a departure away from the day-to-day work schedule towards one that gives you more time for fun and leisure. Surely, eliminating the need for a morning alarm clock and having more time for new, exciting hobbies and time spent with loved ones are some of the draws of retirement, but it's important to be prepared—financially and emotionally—for this time. If not, the start of your retirement can be a jarring, uncomfortable transition.
Whether you are a ways off from hitting the retirement benchmark age or looking to settle into a slower schedule soon, there are a variety of things you can do now to ensure the most happiness when you finally retreat from the workforce.
A Strong Investment Portfolio
According to Lorna Kapusta, Head of Women Investor at Fidelity Investments, half of working women are saving an estimated $20k in cash. While that might sound great, the truth is, a big sum in your savings isn't doing you a lot of good. She says that a large cash savings isn't advisable because it's better to invest your dollars, especially if you're planning on one day retiring. She says, "Cash savings do not make your money work as hard as it could, and can often lose value depending on interest rates, as it may not even keep up with inflation."
By investing your money now, while you work, you are capitalizing on the opportunity to build a sustainable and happy retirement fund. Kapusta adds, "Investing in and outside of your retirement savings can be a powerful way to add growth potential and help provide financial flexibility during your retirement to meet goals such travel or a second home."
Plan Ahead and Expect the Unexpected
Maybe you've been building a retirement fund with enough excess to buy your dream home on the beach or plan an incredible trip around the world. These are expected costs, and while they're important to save for, it's crucial to think about the unexpected, too. Having a savings cushion to cover the surprise costs of doctor bills or unexpected home improvements increases the odds that you'll have a prosperous and less stressful retirement.
A Comfortable Savings
Smartly investing your money, as well as setting aside a certain percentage of your earnings for retirement, go hand-in-hand, and the time to start doing so is now. No matter if you just started your career or are about five years out from retiring, putting away money for the future—no matter how much—is essential. "The key to a happy retirement is to start saving as soon as possible. The sooner you start saving for retirement, the sooner you are setting your future self up for success" shares Collen McCreary, Chief People Officer and financial advocate at Credit Karma.
McCreary adds that "compound interests" are your friend. This type of interest increases in value with time. Meaning, the sooner you start saving, the better. If you're new to savings, you're not alone. A recent Credit Karma survey shares that 42% of millennials stress over not saving enough come to their retirement. However, saving doesn't have to be stressful. Taking small steps to save will not only add value to your bank account but your lifestyle post-work life. "A smart first step is to take another look at your budget and see where you can reduce your expenses. Even if that means cutting a couple of things out each week or each month and rerouting that money toward your retirement, that could be huge," McCreary says.
Small steps, even setting aside $25 from each paycheck to put toward your retirement will be worth it as it will earn interest over time. In addition to setting personal saving goals, inquire with your employer if you're eligible to contribute to an employer-sponsored savings plan, like a 401k.
An Active Lifestyle and Social Schedule
Retiring from work doesn't mean retiring from life. In fact, post-retirement is the ideal time of life to begin new endeavors, workout routines, hobbies, and socialize. Socializing, especially among senior citizens, is essential to maintaining strong mental and physical health. "Our biggest tip is to ritualize movement by making it social. Daily movement is essential for both physical, mental, and emotional wellbeing, and as fitness instructors, we love the accountability and energizing boost that [workout] classes provide" shares Michelle Razavi and Nikki Elliot, fitness instructors and ELAVI Co-founders.
If exercise has never been an interest, consider join a morning walking group; it's a great way to ease into an active retirement as well as make new friends ahead of this new life chapter. Group walking sessions aside, taking up other hobbies, such as gardening, swimming, cooking, or joining a book club, will help fuel your mind and body with new knowledge. Remember, you're not closing the book, but penning a new chapter.