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WE LIKE TO ESCAPE the Northeast’s cold each winter, so we just spent 10 days in Sarasota, Florida. Like many others when they’re on vacation, we found our noses pressed against the windows of real-estate offices, perusing the listings and musing about whether we’d want to live there.
Fantasizing about the future is fun and free, but it can also be dangerous. It’s how folks end up buying timeshares and second homes during wonderfully relaxing vacations. But vacation, of course, isn’t real life. When you live somewhere, what seems special quickly becomes unremarkable. You stop noticing how cute Main Street is—because you’re hustling to get to the grocery store before the after-work crowd.
This is also the reason I’m skeptical of those lists of the best places to retire, which are often built around a quantitative assessment of things like crime, tax burden, weather, medical care and so on. Yes, those are important issues. But I don’t think they’re the keys to a happy retirement.
So, what should we focus on? I’d zero in on three factors—the same three factors that I think are crucial to happiness for everybody, retired or not.
Purpose. We won’t spend our retirement simply being. Instead, we’ll be doing. But what will we do each day that’ll make our retirement meaningful and fulfilling? That notion got me to thinking about categories of doing: exercise, hobbies, learning, reading, writing, chores, watching TV, volunteering, worship, working part-time, socializing, cooking, eating out, live entertainment, visiting museums, travel and so on.
Some of these activities—chores, reading, writing, worship, watching TV, cooking—can occupy our time no matter where we live. Location doesn’t much matter. But others depend on the community we’re in. How many theaters, museums and live music venues are nearby? How many decent restaurants? If we want to get outside and exercise, what are our choices? How close are the nearest airport and train station?
Each of us will have a different list of activities we want to engage in. But the crucial thing is to focus on the doing, not the being. We won’t be happy for long simply sitting on the deck and admiring the gorgeous view.
Friends and family. Next, there’s the all-important issue of social connections. We may not want to see others every day. But there’s great joy in spending an occasional evening with family and friends.
Will that be possible wherever we choose to retire? If we head to parts unknown, we’ll likely make friends—eventually. But it’s worth pondering how easy we find it to make new acquaintances, and how easy it’ll be for family and old friends to visit.
And, of course, there will likely be a time when our physical or cognitive deterioration demands help from others. That help can be purchased. But it’ll be a lot cheaper and probably more pleasant if at least some of that help comes from those we love.
Financial contentment. I think money—if used thoughtfully—can buy happiness, though I don’t think it can garner as much happiness as, say, a great night’s sleep or an hour spent at the playground with a grandchild. Good health and social connections are so much more important to happiness than money.
Instead, I believe money is most useful in helping us to avoid worry, especially worries about not having enough money. Yes, that’s the great irony of money: We should accumulate it mostly so we don’t have to think about it.
What does that mean for retirement? I think there are two key implications. First, we should organize our financial life with an eye to minimizing money concerns. That might mean downsizing to a less expensive home so we have ample breathing room in our monthly budget. It might also mean delaying Social Security, buying income annuities and holding plenty of cash so our monthly income is less dependent on the vagaries of the financial markets.
Second, if we move in retirement, we shouldn’t move to an area where we’re surrounded by far wealthier neighbors. Even if we have more than enough money for a comfortable retirement, we may find ourselves comparing our lifestyle to those around us—and suffering a gnawing sense of dissatisfaction.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on Twitter @ClementsMoney and on Facebook, and check out his earlier articles.
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‘we won’t be happy for long simply sitting on the deck and enjoying the gorgeous view.’ going on 5 years in retirement, i am happy and, i believe, more importantly, i am content.
I find being married to the right person is the single biggest factor in determining your happiness. I’ve been fortunate to still be on my first wife going on 45 years.
My Dad suggested to me that it is better to buy a modest house in the best neighborhood than the most expensive house in a crummy neighbor. And, that advice still makes sense to me.
Your house will appreciate more in the better neighbor and the social benefits for you and your kids should outweigh any negative effects of social jealously.
I was just rereading Stop Acting Rich by Thomas Stanley (co-author of The Millionaire Next Door) and he talked about living in wealthy neighborhoods.
Jonathan’s comment “Second, if we move in retirement, we shouldn’t move to an area where we’re surrounded by far wealthier neighbors” tied into Dr. Stanley’s.
Great minds…
We have been retired seven years now and are still living in the small town where I worked my entire 38year career. I am only tied to this area because of purpose. I chair the local college board, and the local hospital board and the largest local charitable foundation board. All of that sometimes feels like a full time paid job, but without any pay. We are building a small house on a 25 acre plot in a wilderness area in the Arkansas mountains. We are doing it out of spare cash with no mortgage and it isn’t a material cost to us, just an interesting project and perhaps an investment as well. Retirement has been pretty awesome with ample time to give back to help those less fortunate and still plenty of time for our sports and outdoor recreational hobbies. I really second the idea that purpose is a big part of being happy in retirement. I will age out of some of my governance volunteering most likely eventually and we may find ourselves splitting our time between the mountains and the wetlands we live in today.
Like the focus on doing versus being. Good way to think about retirement.
We knew we wanted to leave our homebase of 10 long years when we retired, and we didn’t take long to get gone once we could. Where to became secondary.
We used to think all the time about where we’d live, but since leaving our undesired status quo, we’re much more focused on enjoying the present than trying to figure out the future. We don’t know where we’ll end up, but we’ll address that question in due course.
Of course we also still look at real estate! And we read those best places to retire articles, but they don’t send us down a “where do we retire?” rabbit hole anymore.
For readers who want some background on Michael’s comments, check out his recent article:
https://humbledollar.com/2022/11/free-in-the-world/
With respect to an annuity for income, remember that the insurance company, and especially the agents selling its annuities, gets your money before you get yours. You are paying for the profit of the insurance company AND the agent’s commission. Whatever of YOUR money is left after these payments, the insurance company gives back to you. If this makes you feel comfortable, then by all means, buy one. But be careful. Annuity products are complicated. All terms of an annuity contract favor the insurance company. Every additional “protection” of the contract, YOU pay. And The agent gets his cut right off the top. That money (again, it was once yours) will never be invested for your benefit.
My attitude towards annuities (formed after I became an actuary – FCAS – ) is, if I had $32 million bucks, I would buy an annuity. With the 32nd million. Otherwise, not so much.
Ed (dornsped)
i still remember when my wife and i recv’d $234,000 from the
sale of my mother’s home. SO MANY individuals and institutions
wanted us to hand it over. we kept thinking, ‘why would we give all our money to you just to have it doled back out to us at 6% a year? just sounded INSANE to us. we spent it on buying a house in colo. so we wouldn’t have a mortgage. best decision we ever made. ten years later and ready to get out of this new blue, ‘tax and fee me state’. we are walking away just under the 500 k mark.
I once worked for a chief actuary . I remember him buying an annuity only because his wife insisted on it. She was already quite wealthy from an inheritance.
If we’re talking about, say, variable annuities or equity-indexed annuities, I’d agree with you. But immediate-fixed annuities are a different beast. In fact, the reason they aren’t sold more widely is because the commission received by salesmen is modest compared to other annuity products.
Florida politics suck, and their weather is too hot and too humid 6-7 months a year. Also, it is not as cheap as many think, unless you move to towns the average retiree wouldn’t live in. Auto and homeowners insurance are very high because of hurricanes and under or uninsured drivers. Pick your poison
Good comment – FL has more than enough complainers from places doing everything so well as it is, so a big shout out to those choosing to stay put and keeping away.
i am going to go out on a limb here and say our friend boomerst3
is not a fan of Desantis [2024!]. as an ex floridian [temporarity] living in colo., i can say i miss the humidity. as my granny used to say when i complained about dinsmore in august, ‘ why boy, that’s just god giving you a big ‘ole hug’.
California politics and taxes suck, but the weather and recreational opportunities are the best that we’ve found after 20 years of travel with the military. Born in the midwest (Missouri and Illinois), it wasn’t hard to find better weather. Living in the foothills of the Sierra Nevada mountain range two hours from the ocean and an hour from snow skiing and Tahoe is our ideal. Jonathan is an excellent writer and nailed it with his Financial contentment paragraph.
John Deam
Reading all the comments reminded of something I heard when snowbirds move south; they like to give their opinion on how things are done or said where they are from, rather than adapting to the lifestyle of the natives of the state they moved to.
Some southern states have a nickname for northerners who moved to FL and then ended up in a state just north of FL. They’re called “halfbacks” because they moved half way back home.
Thanks for the thoughtful essay Johnathan. Good framework for thinking about the future. I’ve been retired from full-time work in academia for two years. My wife and I have sold the large suburban house in which we lived and raised three children. We’re contemplating next steps and I’m struggling with disconnecting from work-related activities. I’m finding too much purpose in work I love even as I do it very part-time. We’re feel quite secure as we’ve been living below our means and saving for retirement for years. For us, the next step is where do we move and for me, how do I get in sync with my wife who retired a year before me.
As far as purpose goes, it has been my observation and experience that finding a purpose that you can share with a partner is much more important than the actual activity. When my parents retired, my dad thought he’d use his engineering expertise as a consultant. Within a few months, he’d ditched all of his neckties and business cards to join my mom in her hobby of bird watching. They spent the next many years traveling together adding to their “life lists” and enjoying each others company.
In terms of skills at cutting to the chase, with simple and helpful—and thought-provoking writing—Jonathan Clements may top the list. The three points here in this essay speak directly to the primary considerations one might best engage when thinking of relocating—whether for retirement or for most other reasons.
____________________
About money in relation to happiness, one could hardly put it more-directly than this:
“I believe money is most useful in helping us to avoid worry, especially worries about not having enough money….We should accumulate it mostly so we don’t have to think about it.”
____________________
Now that my household has entered its seventh or eighth year of post-retirement life, our sense of having, not so much financial wealth that we can buy yachts or islands, but more than enough wealth so money is no constraint to anything we truly wish to do, I can second the assessment.
That is, if we had not already learned where Happiness actually is, and how to find it, we get to live economic contentment in our retirement, which shows us—without doubt—the relationship between having money and being happy without any related worries.
____________________
Thanks to Jonathan Clement for yet another thought-focusing piece.
Regards,
(($; -)}™
Gozo
I usually agree with Jonathan Clements most of the time. Indeed I have learned much from him even though he is much younger than me. But it is my opinion that filing state tax returns is a chore. And paying high taxes as in New Jersey, New York and California is a drain in your financial life. I am not forgetting the fact that I did not want to move from New Jersey to Florida when my wife suggested such a move. Inertia and not wanting to lose friends are powerful motives. In spite of that I would say that moving to Florida was one of the best decisions we took in our life.
Today with software filing state returns is a breeze. Before tax software I used to work in one state while living in another and filed in both states quarterly – doing it by pen and paper. It wasn’t that hard but it’s easier now.
I read a lot of articles and books on “where to retire”, and North Carolina (where I live) was frequently at or near the top of the list. I always figured they were written by northerners seduced by warmer winters, or the beautiful (but brief) springs and falls. They must not have visited in the looong summers with miserably high heat and humidity. That said, I wound up staying put.
Nice piece. I have found purpose in retirement and have the most amazing group of friends here and family not too far away. Financial contentment, not so much, even though my SS and pension now exceed what I made in my last job. Nothing extravagant in my lifestyle brought me to this point, just the challenges of a competitive and relatively poorly paid career, raising two children, a divorce and some bad luck.
Thanks for another insightful article, Jonathan. I really like that you have “Purpose” list first, because it is indeed the most important one (and most difficult to nail down sometime). In term of where we want to live, I think we know that special place once our hearts tell us this place is the home. Obviously as our life stage advances, the place for home may and likely also evolve. However, I will suggest to always listen to our heart. Everyone’s answer could be different, and rightly so.
Kudos for one of the best articles I have read on the retirement issue!
Particularly interesting in my opinion is the final paragraph concerning living in an area more suited to your “station” in life.
I’ll just say that I live in the southeastern US, and the “where to live” topic is interesting to me. When I graduated from high school, I went to college 60 miles away, but the culture between the two places couldn’t have been more different – – – noticeable even to a clueless 18-year-old. I stayed, and that was almost 52 years ago. The attitude, demographics, and “feel” of here is so much different from where I came from, even now.
We have relatively easy access to both the mountains and the beach, access to cultural & musical venues, educational stimulation, and many other opportunities. It is often picked as one of those “best places to live/work/play” communities, too. You could argue that a town only 60 miles away offers similar access – but the attitude continues to be so very different. I managed to stay in my chosen home city through several jobs and career changes, a traumatic divorce, and kid issues. I even stayed when I was informed one day that my job was being transferred to the northeastern US. By the time the dust settled on that one, I was working from home in 2015, well before the pandemic hit and changed working cultures. We’ve been retired for a few years.
When my wife and I met we discussed and agreed that this would be home for us. Our friends and existing social support network are here. Our worship community is here. My kids are in the military, so there’s no point in moving to be near them, as they’re always on the move. Her kids have made specific choices about where they wish to live (not here), but I can imagine conditions that would contribute to future moves closer to this area. We’re good here.
Thanks Jonathan for an insightful article regarding retirement. Yes, the F.I.R.E. movement sounds like the ultimate goal, but is it really? Those that aspire to quit work in their 40s and 50s and retire, well you have a long time left to live. So, you better have at least five million in investments and a large passive stream of income for rent, mortgage, taxes, medical expenses (Insurance ain’t cheap and forget the ACA coverage), college costs for your kids, if you have any, cost-of-living expenses, well you name it.
Work gives you purpose, physical, and mental well-being. If you are in the wrong job, find the right one and move on. And, as I learned, if you are a boss or supervisor your job is to foster good will for your team and train the next person or persons to “take” your job. If you don’t do this, then you are just “retired in place”.
Unless you have a debilitating medical condition or conditions, retiring at your FRA is maximum to me, it gives you time to amass investments, pay off your mortgage, if you want, keep your mind sharp, and plan/decide the next phase of life.
There is no “one size fits all” answer. I retired in 2000 at 53, with nothing even close to five million. I still have nothing even close to five million (although somewhat more than I had then) and I am quite comfortable, thank you. I did have a pension, although no COLA, retiree medical and a paid off mortgage. I retired early so I could travel, and I had sixteen very good years before I was grounded by ill-health and then Covid. (I am immuno-compromised, so I am still grounded.) If I had taken your advice I would have missed out on some marvelous experiences for no good reason.
Having a pension and retiring early is still a bit of a risk IMO, but it’s not really the same as those FIRE folk who think they will live fifty years starting with $2,000,000 in investments – some raising a family while doing so.
I neither expect, nor probably want, a fifty year retirement – I’d be 103 (although my paternal grandfather made it to two weeks short of his 100th birthday and my financial plan does go out to 100). But forty years certainly seems feasible – and I didn’t have close to two million, either.
The second one is the big question for us, in our early 60s and 2-3 years from retirement. We live in a town that we’ve always felt would be great to be a senior in—college town, safe, easy to get around, lots to do because of the university, has a train station and is close to a nice airport. And we’ve lived here for over 30 years, so this is our place—we have friends, neighbors we like, a church we’re involved in, doctors/dentists/hairstylists, etc. all sorted.
So what’s the catch? First of all, it’s extremely hot in the summer, and we long to be closer to the ocean, always have. Second, our daughter just moved 450 miles away (and near the ocean). At some point, even if we’re comfortable and happy where we are, should we move closer to her? And if we do, will we be able to recreate the connections and comfort we have now?
This may be a decision that is 5-10 years away in terms of urgency, but we think about it a lot and have a Realtor.com search ongoing for the beach area.
Are you going to down-size your house? If so, you could try renting in her area for a year before deciding. Or you could rent your house for that year.
Before you make such a move I’d think about the probability that your daughter might move again someday.
I moved to FL in retirement and couldn’t be happier. We spend Oct to May in FL and see our daughters Jun through Sep plus Thanksgiving and Easter. It is a great balance. After 35 years spent in an office, I need to be outside in the susnshine and walking in nature with my wife of 34 years to be happy. Plus I am in an environment where most people share my values. We are much more active in FL than we are in Philadelphia. The winter in Philadelphia is depressing for me.
Thank you for another enjoyable read. The “where” is a real dilemma for me, as I HATE (yes we’re talking all-caps passionate hate!) the climate and culture where I was born and have lived for 6+ decades. It’s never been a fit at all for me mentally or physically, but I had to stay as a caregiver to older family members who had no one else to turn to.
Now, I’d love to get out, but have no relatives or friends who live anywhere else. The thought of starting over alone at this age with no safety net or support system is too scary to contemplate.
So here I still sit…hating where I live,but not brave enough to leave. Sigh.
We didn’t like where we were stuck either. We unstuck ourselves once we could.
We’re all different, but I’d challenge yourself to be braver, as you put it. You hopefully have many years ahead. Those can be in a place you really dislike, or somewhere better.
I’d also think about how important it really is to have relatives in your chosen place. They may not always be there for one reason or another. I know it’s unlikely we’ll end up where ours are, as they just don’t live in places where we want to settle. We can all visit.
It may also be that your house is paid for since you’ve been there a long time, and leaving would cost some $ and bring some instability, but might the change be worth it?
Have you thought about moving temporarily? Maybe spend some significant time in a place so you can really know if it would appeal to you longer term? You can always go back to where you are now.
Hope you make a decision you’re happy with.
Thought provoking article! For some, when to retire is difficult. I lost a very close friend last week, age 65. No known health issues and his profession required a medical checkup twice a year. He did not want to retire because he loved his job. Lived a healthy lifestyle by eating right, did not drink or smoke and walked at least 5 miles every day. He wanted to wait until age 70 to collect social security. There were no plans to move away if he did retire.
One can think of retirement and plan for it, but we never know for sure what tomorrow brings.
I am shocked by how many services I go to where the deceased had been a healthy 65-70 year old and their parents (90 to 99) are at the funeral , still living independently. Some of these parents have lost more than one adult child- to stroke, heart attack , cancer.
Spot on Jonathan- but that’s no surprise, of course. You have pretty much described our retirement so far, 13 years.
We have been though those issues and decisions and your suggestions are exactly right.
Sufficient money does help lower stress, relocating should consider more than just being warm in winter. We are shortly off to Florida for six weeks so you don’t have to relocate to be comfortable in the winter.
We are close to family all year, they help us and we help them as needed. We spend the summer at the beach, but other times if we choose we could be in Manhattan in 20 minutes outside rush hour- we never do though it’s not our thing.
As I said you nailed the assessment. Money may not buy the essence of happiness, but having a sufficient income can bring pleasure, comfort, a sense of wellbeing and the ability when necessary to help others; family and beyond.
Jonathan,
Thanks for an excellent article. It is also quite timely for me and my wife – we ae considering moving to be closer to our children and grandsons. We’ve been having discussions about all three factors, but this article provided some needed perspective and clarity – especially about the third factor.
And thanks for reminding me about my timeshare experience. It’s important to stay Humble!
Best
Rick
i usually have several residents from a 55+ community on my PT schedule each week. Many are from the Northeast. I eventually ask each of them why they moved to Georgia. A frequent answer is to be near children. Another is the busy schedule of activities in their community, with people from their “pod” of homes similar to theirs. Most mention the lower cost of living here, including the price of their home. My informal polling bears out the points of your article.
This leads to a question why retire? I have a job that fulfills needs of competence, relatedness and autonomy. Plus, it pays. If I were to retire, I’d have to recreate a framework of competance and relatedness.
Yes, you do not “have to” retire. It sounds like your work is giving you a lot of your needs now. But know that something will change in the future. Re-read that sentence. Unless you drop dead suddenly, something will happen that will force you to quit working. So, go ahead now and do some prep for that eventuality. (I suggest).
Why retire indeed? No need at all, the point I think is to do what makes your life fulfilling. If that means work so be it. I would not have retired when I did except that my work life changed and it was no longer rewarding and fun as it had been for decades.