Forward Thinking:  What Makes for a Fulfilling Retirement?

Can you predict what makes for a happy retirement? Research conducted among current retirees by Keith Bender, associate professor of economics at the University of Wisconsin — Milwaukee, suggests the answer is yes.

Get a Plan

One of the keys to retirement satisfaction is thorough preparation. “Retirees were asked whether they’d taken steps to learn about retirement, like attending seminars,” Bender says. “Those who did were more likely to be in that top retirement satisfaction category.”

Of course, part of responsible planning includes taking action, and that means investing for your later years. “The impact of an extra annual $1,000 once you’ve retired may not seem like much, but you’ll still need a minimum amount to cover living expenses,” says Bender. “The earlier you begin investing, the longer you can take advantage of

compounding [when earnings from an investment remain invested and potentially build upon themselves].”

Manage Risk

“Certainly more savings is better, but it’s also really important to be well-diversified,” continues Bender. “You also need to understand what the risks are with different investments. Usually with greater risk, you may potentially receive better returns, but you need to balance that with what you expect in returns and what’s well suited for your needs.”

And for those concerned about the stability of Social Security? “Anything that adds more risk to income sources in retirement would have negative effects on retiree well-being,” says Bender. For someone who is concerned about risk, it’s even more important to save as much and as early in life as possible.

Stay Mentally and Physically Fit

Another issue: Time management in retirement. Psychological preparation is important because you’ll have a lot more free time after working for many years, according to Bender. “When you’re around 55 years old, start thinking about how you might want to spend your time during retirement.”

For example, many people get extra benefits by continuing to work part

time in retirement, he notes. “It’s the connection of having a reason to get up and interact with individuals.” Part-time work — paid or volunteer — increased retirees’ happiness by 13%, he found.