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You Should Know What You are Going to Do in Retirement BEFORE You Retire

Richmond Hill Inn Porch
I advise against this.

“Don’t underestimate the value of Doing Nothing, of just going along, listening to all the things you can’t hear, and not bothering.”
Pooh’s Little Instruction Book (#aff) by A.A. Milne

Recently, I got a small taste of what retirement could look like for me.

My wife was on a business trip for the week. I only had a couple of client engagements, and I was hyper-efficient with the rest of the work that I felt like I needed to do (note: one of the benefits of being an entrepreneur is that you get to say what work needs to be done, and then you get to work to the task, not to time). Therefore, I had a lot of free time on my hands.

Normally, I would take the dog for a bunch of walks, but he was still recovering from ACL reconstruction, which I detailed in “Financial Independence Means Avoiding Tough Money Decisions.”

So, I worked out. I rode my bike. A lot. I met a friend for dinner almost every night. I read. A lot.

But, I also wasted a lot of time. I did a lot of the “Internet loop.” I slept longer than I usually do. There were times when I was on the brink of boredom before I’d snap out and find something useful or rewarding to do.

While my wife and I have discussed what our retirement will look like once we reach PIRE in generalities, we haven’t been very specific in our planning. Given the week that I recently experienced, we’ll need to be much more specific in our discussions before we pull the trigger to retire, or else the first couple of months may be filled with puttering and tinkering until we find our groove.

Two studies have revealed what makes people in retirement happiest. The Harvard Study of Adult Development and the National Institute of Health’s Growing Older in America: The Health and Retirement Study point out some common factors of happy retirees.

Retirement Happiness Isn’t Kicking Back on the Porch and Watching Traffic Go By

Between the two studies, there are three common factors pointing to happiness in retirement, as well as some surprising statistics.

Healthy Retirees are Happy Retirees

While aches and pains are expected as one gets older, functional ability leads to not being stuck at the house all day every day. As we saw in “Preventive Medicine Costs Less Than Reactive Medicine,” it’s also cheaper to stay healthy than it is to treat ailments when they occur. This doesn’t mean running a triathlon every day. Instead, it means getting 30 minutes of moderate exercise in at least three times a week.

As the saying goes, mens sana in corpore sano (a sound mind in a sound body). However, having a sound body doesn’t do you any good if your mind goes to rot.

Happy Retirees Keep Mentally Sharp

Those retirees who are engaged in mentally stimulating activities are happier over the long run. However, the key is not to be so mentally engaged that it becomes stressful. There’s a difference between having deep discussions amongst friends or learning a new language and having to figure out why the software still isn’t working an hour before it’s supposed to be launched to the public. One is stimulating and invigorating. The other causes premature gray hairs. According to Dr. Robert Waldinger of the Massachusetts General Hospital, learning and being mentally stimulated in ways that are intrinsically rewarding make the retirees he has studied the happiest.

Happy Retirees Find Meaning in Life

When we ask the existential questions of why we are here and why we exist, we’re often seeking a meaning in life. While we’re working or our kids are at home, we find that meaning through our jobs and through raising kids. In retirement, those foundations of meaning disappear, and if we have not discovered a purpose in life outside of our work environment, we will struggle to find happiness when we retire. Lacking meaning, we will lose a reason to get out of bed or to get off of the couch every day. More bed and couch time = less happiness.

Some Surprising Numbers

In the previously cited National Institute of Health study, some of the results were surprising, both to the retirees and to me.

    More than 20% of men and 10% of women work into their mid-70s. It appears that many older Americans still derive their meaning and their raison d’etre out of the workplace.

    Percentage of People in the Workforce by Age by Fort Worth Retirement Planner Hull Financial Planning

  • Retirees plan to travel more than they do. When asked before retirement about how much more they’d travel, 32.5% said that it would be the same amount, and 29% expected travel and vacation spending to increase. In reality, once they were retired, 44.7% reported a decrease in travel spending, and only 24.9% reported an increase in spending.
  • Retirees planned to eat at home more, and they do not. 52.5% of retirees expected to spend less on dining out and 38.6% of them expected their spending to be the same. Once they were retired, only 40.4% decreased spending and only 36.3% of them saw the same amount of spending on dining out. 23.3% increased their spending, compared to only 8.8% of them expecting to spend more. I suspect that retirees who had sufficient retirement income saw a causal link between these two spending numbers.
  • Volunteer activities took up more time per month as retirees aged, but fewer retirees volunteered as they aged. Between ages 51-59, 26% of retirees volunteered, averaging 110 hours per month. For those aged 80 and older, the percentage of participation in volunteer activities decreased to 12%, but the average hours spent per month increased to 140. I suspect there are two reasons for this: 1) physical limitations reduced the number of people who actually could volunteer, and 2) the social groups of the 80+ cohort had passed away, leaving the volunteer activities as a place of social interaction for the physically capable survivors.

An Untapped Resource for Retirees

One underutilized resource that was mentioned repeatedly in the write-ups I read about these studies was Meetup. Meetup is a great way to meet like-minded people for activities and topics that you’re interested in. In Fort Worth, there are meetups for a range of interests, from a social running club that even has mimosas after their monthly 5K Saturday morning fun runs to book clubs to political interest groups. I’d caution retirees against the political interest groups; politics can be stressful, and as we saw above, stimulating but not stressful activities are the key to retirement happiness.

I suspect that for people who haven’t figured out what they want to be when they retire, they experience a happiness dip for a period of time until they get into an active groove. Those who never leave the couch continue to be unhappy. For those of you who are retired, if you didn’t think ahead, did you experience this happiness dip? For those of you who are planning on someday being retired, have you thought about what exactly you want to do when you’re retired? Your happiness may depend on it!

By

Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

7 replies on “You Should Know What You are Going to Do in Retirement BEFORE You Retire”

That’s an interesting travel statistic. I wonder if retirees really travel less in retirement (fewer days per year) or if our flexible travel schedules let us spend fewer dollars to travel more days per year.

Our travel schedule used to be locked in to our daughter’s college calendar, but that ended last month. Now we can work the off-season rates and flexible dates!

I suspect that it’s the former, because I doubt that many of them are truly the travel-savvy hacker types that can optimize vacations around the cheapest shoulder times to go. Some do, but the average retiree probably doesn’t

You, on the other hand, will probably be a master travel and rewards hacker!

You make some very good points Jason. I have been preparing for my eventual retirement for some years now and find a critical element is taking the time to actually plan for your future. If you just roll into retirement with a smile and hope for happy days, you are selling yourself short. A little effort now to better understand what you will do to stay engaged and active to enjoy your second act can pay big dividends. Today you have time to make adjustments and fine tune your retirement to be what you hope for.

Hi Dave–Thanks for commenting! A big factor in solving this question is to understand yourself. I don’t think that many of us (myself included) take the time and brainpower needed to truly understand ourselves and what makes us happy. It sounds like you’ve put in a lot of that effort and will make the psychological transition smoothly.

My mom just retired (literally, her last day of work was May 30th!) and when I spoke to her this weekend I asked how things were going in retirement. Her answer: “I’m bored.” Of course I laughed because she’d been giddy with excitement about her retirement for about 6 months leading up to the day but now that it’s here she’s unsure what to do. I reminded her that when dad retired (over 10 years ago!) he nearly drove my mom insane because he was so bored. Now he’s got lots of hobbies and he’s always on the go. I know my mom will hit her stride, but I think it’ll take a while to figure out what to do with all her time.

Also, I just sent this article to my mom. =p

It makes me realize that I need to think about what I envision my retirement to be – like most I have only vague ideas: travel, write, take some classes… Clearly a more specific idea of how I want to spend my golden years is needed.

I think that there are some analogues to having a baby. No matter how much you mentally prepare, nothing can quite prepare you for when the time comes. Even vacations don’t really prepare you for retirement, unless you’re going to live your retirement just like you’re on vacation. Otherwise, it is a process of trial and error to figure out what you want your day-to-day schedule to look like. It helps greatly, though, to have a list of things to try for that trial and error process to happen. I’m with you at this point – it’s still far too vague. I suspect there will be a lot of biking, hiking, and travel, but those are broad generalizations. I’m much less clear on what an average day or even an average week will look like.

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