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Want a happy retirement? Here’s what experts say you need to do

retired fun

Everyone wants to be happy in retirement.

So what will it take to get there?

It’s not just saving money, although that is key, according to certified financial planner Wes Moss, chief investment strategist at Atlanta-based Capital Investment Advisors and author of the upcoming book, “What the Happiest Retirees Know.”

“Does more money buy more happiness?” he said. “Yes, it does, actually, but only up to a certain point.”

That point is $500,000 in retirement savings; after that, happiness plateaus, Moss said his research shows.

Here are financial strategies you can employ now and in retirement to attain happiness, according to experts.

Start saving now

Saving money can make you feel happier, according to researcher Elizabeth Dunn, chief science officer for financial technology firm Happy Money and co-author of “Happy Money: The Science of Happier Spending.”

Break your large saving goals, such as those for retirement, into bite-size pieces that feel doable, she said. Small steps are an easy way to form habits that stick.

“Just taking the time to create a savings account may have an immediate impact on your overall happiness,” added Dunn, a professor in the Department of Psychology at the University of British Columbia.

As your habits stick, increase your contributions to your retirement plan so that you can have the money you’ll ultimately need later in life.

Focus on paying down your mortgage

Some financial experts may suggest paying off a mortgage isn’t a high priority, thanks to low interest rates.

Yet people who pay off their mortgage within five years of retirement are four times more likely to end up happier than those who don’t, Moss said his research shows.

“The psychological side of not having a mortgage, perhaps is even more powerful [than the money side], and kind of outweighs the financial argument to not pay it off,” he said.

Making extra payments or sending in more than the monthly amount due can help shave years off the life of the loan.

What you spend on matters

You may think you want to buy your dream home in a new locale or splurge on a recreational vehicle to tour the country.

Yet what makes retirees happiest is spending money socializing with other people, according to CFP Michael Finke, a professor of wealth management at The American College of Financial Services.


Spending on things like durable goods, cars, clothes and gifts doesn’t significantly increase life satisfaction in retirement, according to his research. Time at the beach may be great when you are on vacation, but it could become boring after a while, he said.

“What makes us happy during our working lives are not necessarily the things that will make us happy when we retire,” Finke said.

“Oftentimes what makes us happy is being around other people,” he added. “Things like driving around in an RV or buying a home in the mountains can make us less happy if it results in social isolation.”

Have multiple income streams

Three checks are better than one, psychologically speaking, even if they all add up to the same amount, Moss said.

“There’s a real power in this diversification of different income streams,” he said. It also provides comfort to someone who may worry about relying just on one big check.

In addition to investment income, which would come from your retirement account and potentially additional investments accounts, owning a rental property is a great way to earn extra money in retirement, Moss said.

Social Security is also a source of income for many retirees. If you are an entrepreneur and didn’t make contributions, consider getting a small business retirement plan, like a simplified employee pension (SEP) account.

Last, income from part-time work or a hobby you love, like photography or making jewelry, can also help.

“Maybe I’m no longer a 24/7 attorney. I’m no longer consulting and flying over the world,” Moss said. “I’m doing something that I really love and it’s part time and that counts.”