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I WAS FASCINATED with retirement planning during the final decade of my career. I read many financial books and focused on saving diligently. Yet, after retiring several months ago following a 39-year career as a research and development engineer, I had a rude awakening.
You can plan all you want, but then comes an unexpected situation that derails everything. As boxer Mike Tyson famously said, “Everybody has plans until they get hit for the first time.”
In the brief time I’ve been retired, I’ve quickly learned that money—despite being the centerpiece of most retirement literature—isn’t the sole answer to my retirement needs. Instead, there are many ingredients required for happiness.
Several years ago, before retirement, my wife and I chose to sell our home, downsize and move to a 55-plus retirement community in Atlanta. Now, we’re in another such community in Tampa. From my perch, I’ve observed how seniors older than me, from their late 70s to early 90s, manage their lives. Some are just barely living, while others are thriving.
What makes some resilient and happy, while others struggle? This is not an easy question to answer. Everyone’s situation is different, so there’s no standard prescription that’ll work for everyone. Still, based on what I’ve observed over the past few years and on my own experience over the past few months, I believe these four pillars, presented in order of importance, are crucial ingredients for a happy retirement:
Health. Without health, retirement is a struggle. If one spouse has a health problem and the other functions as a caregiver, the entire retirement plan has to change.
I know of several families in our 55-plus community where the children have assumed the burden of caregiving, with knock-on effects on their own families and careers. I’ve also seen people living alone who struggle with poor health. In some cases, moving closer to children or to a continuing care facility is a great help.
I also see many seniors in their late 80s who are mentally sharp and physically fit, and there’s a great deal to be learned from them. Our health doesn’t have to be perfect, but a daily commitment to practicing healthy habits goes a long way toward slowing or even halting physical deterioration.
Wealth. There are well-known money moves that we should make during our working lives. Prudent saving and investing will get us to retirement’s door. It doesn’t end there, though. In retirement, there are many decisions needed to safeguard our money.
Some of the critical money moves in retirement include waiting to take Social Security to maximize benefits, whether to work part-time for pay, deciding between a pension or lump-sum payout, and whether to downsize and move to a lower-cost location to reduce expenses.
Then there’s the crucial matter of health insurance. It’s not just deciding between traditional Medicare and Medicare Advantage. Buying long-term-care (LTC) insurance can be a great idea. I didn’t think about LTC insurance until a friend suggested 10 years ago that my wife and I buy it. It was expensive—and worth the cost.
Just two months after buying LTC insurance, my wife fell seriously ill. The insurance paid for her care, which was a big relief. According to the Department of Health and Human Services, nearly 70% of 65-year-olds will eventually need some form of LTC, yet many are unprepared.
If purchasing insurance is too expensive—and it has become prohibitively so—consider self-insuring by setting aside money for LTC. When estimating the amount to set aside, be sure to account for ever-increasing health care costs.
Social network. If we have our health and wealth but are often lonely, that won’t lead to a happy retirement. A National Institute of Aging study pointed out that social isolation and loneliness in elderly Americans can hurt our well-being, while other studies have found that social connections are important for maintaining good health.
In the 55-plus community where I lived in Atlanta, singles were happy to live in a community setting where there were many group activities. Those who had lots of friends and who were socially active were the happiest. Even if you’re living alone, it’s important to make every effort to meet regularly with friends, relatives and members of the community.
Purpose. After I retired, I noticed that few people asked about my career. The titles and responsibilities of the past no longer mattered. Stripped of my identity, I had to redefine who I was and what I was comfortable doing.
The fourth key to living well after retirement is having a purpose. It could be volunteering, teaching others, spending more time with family, hobbies, helping the community or anything that energizes you to jump out of bed each morning to accomplish something. This has been the hardest job for me.
I have no interest in watching TV, so I needed to find something to keep myself busy. I’ve found that helping undergraduates at a nearby university with their projects makes me feel useful. I’m also putting more effort into developing several hobbies, including digital painting.
The first few months and years of retirement are the time to explore multiple options and experiences. Eventually, I expect to focus on a few activities, as I learn what I enjoy the most.
Sundar Mohan Rao retired recently after a four-decade career as a research and development engineer. He lives in Tampa in a 55-plus community. His interests include investing, digital painting, reading, writing and gardening.
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Good article, but, but…looking back…
I have been planning for years the big stuff such as career, family, investing, and even what sports I would play as I aged. I planned for the worst and beat the goals and why I’m not surprised…I don’t believe in what Tyson said.
Health: I was always an athlete and played many sports using a ball(soccer, basketball, squash, racquetball, tennis), at age 60 I quit all of them and just walk, hike and go to the gym 3 times a week. I also eat right = Mediterranean diet and why my weight is the same as it was in my early 20s.
Wealth: that’s a biggie for me. We were always frugal, and saved like crazy but still took many long vacations + more. I retired with a portfolio of 25+ our yearly expenses. That allows us to pass on LTC which is not a good idea IMO for most. It costs too much. Taking SS early is usually better for most, I did lots of calculations. The ones who need it must take it. The ones who don’t need it, should invest it, compounding proves you will never catch up or very late in life. We only have SS and I will not not buy any annuity either.
401K vs Roth 401K, usually when your salary is above average, 401K is better since the extra money + compounding make you richer. You never take whole the money out. As a retiree, I pay a lot less taxes.
Social network: I found Bridge. It’s amazing since I don’t like most games because they depend on luck, but Bridge has it all, numbers, strategy, boldness, staying sharp, and lots of friends and it is very cheap. Where can you enjoy 3-4 hours for a $1? I play at least 4 times per week.
Purpose: most don’t care about your job, and even I don’t care about it, it was great being an IT developer and it served me pretty well. It also makes my life easy for the future since IT shapes the world and many retirees have a hard time adjusting. This is what I tell people: when you are about to die and your loved ones ask you what did you miss the most, working or working extra hours isn’t the one. I always had a life outside work.
Wow! You have done it all. You make some great points. Thanks!
Sundar Mohan Rao
Excellent post. I’m probably 5 – 7 years from retirement and have concerns about what my purpose will be. I’m not defined by my work, but it is a large part of my life, for sure.
The Tyson quote is a classic. I’ll add another “A failure to plan is a plan to fail.” I don’t recall who said it, but it resonates.
If you decide to relocate for retirement, be prepared to make all new connections, who will have no knowledge or interest in your prior career. It requires humility, energy and open mindedness to forge new connections and thrive. It opens up more opportunities to learn.
You misquoted Tyson. The actual quote is “Everyone has a plan ’till they get punched in the mouth.”
Agree it is not the most important part of the article but,
Everyone has a plan until they get punched in the mouth.” What Tyson said is similar to the old saying “no plan survives first contact with the enemy”
https://www.youtube.com/watch?v=3QRVEL05BCQ
The quote is accurate. As you’ll read here, the first known use was in 1987:
https://quoteinvestigator.com/2021/08/25/plans-hit/
Subsequently, folks modified the quote, but the words in Mohan’s article reflect those Tyson originally said.
Thanks, Jonathan.. You got me out of hot water!
As someone with 14 years retirement experience and on the downward age slope, I can verify all this. However, time and age change much. The need to jump out of bed and do something wanes. The purpose is just to get out of bed tomorrow.
What you did working becomes unimportant.
LTC can be expensive, but most LTC is rendered in the home and relatively short term. I bought insurance at 45, but it won’t pay much, buying at older ages – if you can – is likely not worth it. Setting aside funds is a good idea.
We live in a 55+ community and enjoy it. Be very involved or not at all as you like. Socialize in groups or with a few friends – my option.
I disagree it’s critical to delay SS to age 70. If it is critical then something is wrong in the planning. For some it’s a viable strategy, but should not be necessary for post age 70 income needs IMO.
“The purpose is just to get out of bed tomorrow.” Agree. Depends on the stage one is in retirement cycle. Go-Go, Slow-Go, or No-Go years!
While 1/3 of today’s 65 year olds will never need LTC, 20% will need it for longer than 5 years.
https://acl.gov/ltc/basic-needs/how-much-care-will-you-need#:~:text=Someone%20turning%20age%2065%20today,for%20longer%20than%205%20years
I see the data, but it’s hard to believe especially the five year part. Of course most is some form of home care. Look up how many seniors are in a nursing home and you get a variety of percentage from 1.7% to 4%. Same variation with the average length of stay. Who knows?
Home care can be as expensive as nursing home care.
The delaying SS to age 70 question has always been a hot button here on HD. My wife and I are delaying until 70 not to “maximize” the payments but as longevity insurance in case my lifespan calculations are too pessimistic. Also, I also don’t want to show up at the Pearly Gates (if I make the cut) and proudly proclaim, “I maximized my social security!”
No right answer or every decision is right. We took ours at FRA and invested both benefits for several years and all earnings reinvested for the last 14 years.
Nice article Sundar, thank you for sharing it – great points! We’ve also found that volunteering or serving others is one of our pillars as you suggested. We often find ways to volunteer at our church. My wife enjoys volunteering at a local repeat boutique free store for immigrants and those who are in need. As a retired engineer, I enjoy building things and go on yearly trips with SP to help build or rebuild homes damaged from various disasters. When you see others in such dire need of help, it really puts perspective on our own small problems and aches and pains. We both find that doing these little things for others helps us count our blessings and be more thankful.
You are fortunate to find your “purpose”. Very impressive. I am trying different things to see which one will work best for me.
I enjoyed this article. I was amused when I read this line, “After I retired, I noticed that few people asked about my career.” Most non-work conversations go dead if I talk about my work because science scares people or they simply don’t understand it. On the other hand, it more than just a job or an identity. I need a lab and very expensive machines to do it, so I wonder if I’ll be able to walk away.
Very hard to walk away from a long career. I wear two hats for now, one doing things where my skill sets are valued and the other where it does not matter at all. Enjoy both.
Michael,
I can relate to your comment about discussing my pre-retirement work with others quite well because I worked on computer chips where we had to figure out why atoms did weird, unexpected things at times, most people have no clue about how tough it was to understand and solve these challenges. I won’t ever forget the various war stories I can tell.
Bill
When I am asked about my line of work I usually say, “Financial Services,” unless my wife is around and makes me confess I was in the insurance business. Personally, I think Financial Services (which is technically correct) sounds a lot sexier than insurance. It also doesn’t kill the conversation like saying, “Insurance.” (smile)
I met this gentleman who had just moved into our 55+ community. He was very curious about my career, but never said anything about his. After a while, I got impatient and asked him what he did. He said, “Normally I do not disclose what I do. I am IRS Auditor.” You can guess that conversation ended pretty quick!
Sundar, congratulations on your retirement. Your article jives with all I have observed in retirement. We’ve moved twice in the past three years and that has required building new social networks. It takes time. Best of luck for a happy retirement.
Thank you. I think it will take 1-2 years to settle down in retirement even if stars are aligned.
Your points are all valid and they resonate. We are in a similar situation and are looking at 55+ communities in both Atlanta and Tampa/Orlando. If you’re comfortable sharing (obviously if this was/is personal, I understand), I am kind of curious why you moved from an ATL 55+ to Tampa since they are (at least in my mind) somewhat similar in terms of the warmth, health care, etc. Was this move area related or community specific in ATL? Thanks!
We had more friends in Tampa plus the traffic in Atlanta was horrific! Lower taxes is an added bonus.
Sundar Mohan Rao is a friend. I enjoyed reading his article, especially his quote from Mike Tyson. His emphasis of the four ingredients – health, wealth, social network and purpose – to be happy in retirements is indeed useful.
T.V, Thanks for recommending Humble Dollar to me. What a great community!
Sundar Mohan Rao