What Constitutes a Successful Retirement?
Sustained affluence? Personal growth? A feeling of contentment?
Provided by Mike Fassi, CLU, CHFC
How do you know if your retirement is living up to its potential? There isn’t a standard definition of a successful retirement. (Maybe there should be, but there isn’t.) It is interesting to see how different people define it.
Maybe income is the yardstick. Make that income replacement. A recent article in Financial Advisor Magazine put it this way: “Successful retirement is defined as the ability to replace current income in retirement.” The Employee Benefit Research Institute, which tracks workplace retirement savings trends in America, defines retirement success in similar, if narrower, terms. To EBRI, “success” equals a combination of Social Security income and 401(k) savings that replace 80% of preretirement income after adjusting for inflation.1,2
Maybe health matters most. Perhaps a successful retirement equates to successful aging – staving off mental and physical decline. In a poll of 768 non-retired investors conducted for the John Hancock Financial Network, 49% of respondents said being healthy best signifies retirement success. (Just 27% said having enough income represented success.) While we’d all like to feel like we are 30 when we reach 80, MarketWatch’s Elizabeth O’Brien notes that physical and mental independence shouldn’t be the only definition of successful aging: “We lionize the person living alone at 95, and while that’s certainly laudatory, we could also celebrate those who remain connected to their communities despite their infirmities, or those who have saved enough to afford whatever care is needed.3,4
Or maybe our capacity to make a difference or grow matters most. We can make the most of the “second act” in many ways – through service, through adventure, through learning, via some blend of personal growth and leaving a legacy. Many baby boomers expect nothing less.
A successful retirement is ultimately one meeting your expectations. Within months or years after you retire, you will probably consider how things are proceeding – and if your retirement looks something like the life you had in mind or the life you planned for, then you can call it a success.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 – fa-mag.com/news/working-with-advisor-important-to-retirement–success–study-shows-14074.html [4/25/13]
2 – kiplinger.com/article/retirement/T001-C022-S001-automatic-401k-saving-features-no-fail-safe-to-ret.html [5/14/13]
3 – johnhancockfinancialnetwork.com/blog-entry/survey-non-retired-investors [1/11/13]
4 – marketwatch.com/story/successful-aging-protects-health-and-wealth-2013-05-31 [5/31/13]