Wednesday, October 21, 2015

Having Money in Retirement can make you happier according to a new study

Guess what, if you have money you will have a happier retirement than those without money. No surprise, common sense, backed up by a study of  1,000 newly retired baby boomers with at least $100,000 in liquid assets (assets they could use to invest). 

The study, conducted by Ameriprise Financial (AMP), polled boomers ages 60 to 73 who retired in the last five years to find out why they decided to retire. About 50% said they decided it was time to enjoy life or they didn't want to work any longer. 

About 17 percent said they had enough retirement savings to make the leap, and 16 percent said they lost their jobs or were pushed into retirement by their employers.

Few in the group regretted the decision to retire. 

In fact 75% were very satisfied" with their lives and that they were doing what they had imagined. About 33% thought the move into retirement was easy and about 40% said they were having more fun than they had thought.

How to save for retirement when work doesn't have a plan

However, the survey only talked to newly retired boomers with at least $100,000 in investable assets.  We know that about 40% of Boomers have no plan and no retirement savings. For these folks the picture is very different. These people expect to work, not because they want to but because they have to work. 

About 37 percent of people in a 2013 Wells Fargo study said they don't expect to retire at all. Instead, they plan to "work until I'm too sick or die." And nearly half of those polled said they weren't confident they'd be able to save enough for a comfortable retirement.

How to plan for a successful retirement
I am one of the few who fits into the first group and in addition I have a good pension, so I can use my savings for the important things in life. But one of my fears is that even thought I have at least $100,000 in liquid assets it might not be enough to survive retirement. 

But most of the first group is confident and feel in control, about 75% of us felt "in control" of their decision to retire, according to the Ameriprise survey, while more than half said they were very satisfied with their financial situation in retirement.

I am also part of the one in 10 of these retirees who returned to some form of a job during retirement, but like others who in the first group, I did it because the work presented great opportunities to keep my mind active, I and members of the first group did not go back to work for the money.

The takeaway here?  I started to save for retirement about 10 years before I finally retired. I was lucky and I invested well and was able to build up assets quickly, but I would not recommend following my path. If you can start saving for retirement earlier than later. It could mean the difference between a life straight out of a commercial or a life spent mostly on the clock, worried about paying the bills.

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