Alicia H. Munnell is a columnist for MarketWatch and director of the Center for Retirement Research at Boston College.
Older people have a great ability to adapt and cope.
Much of the work we do suggests that people are not saving enough for retirement. More specifically, since 2006 we have published our National Retirement Risk Index (NRRI), whichuses the Federal Reserve’s triennial Survey of Consumer Finances to compare households’ projected replacement rates – retirement income as a percentage of pre-retirement income – with targets that would maintain their standard of living. Those households with a projected replacement rate that is more than 10 percent below the target are characterized as falling short. After almost two decades of kicking the tire, the NRRI continues to show that almost half of today’s working households will not have enough in retirement.
Some critics don’t like our model or assumptions; others say the results must be wrong because people report being perfectly content in retirement. Recently, as background for a bigger project, we looked at the happiness measures reported in the major longitudinal survey of older households (the Health and Retirement Study). This survey asks three recurring questions about satisfaction:
Please think about your life-as-a-whole. How satisfied are you with it? Are you completely satisfied, very satisfied, somewhat satisfied, not very satisfied, or not at all satisfied?
All in all, would you say that your retirement has turned out to be very satisfying, moderately satisfying, or not at all satisfying?
Thinking about your retirement years compared to the years just before you retired, would you say the retirement years have been better, about the same, or not as good?
We focused on question #2, where the responses were coded as follows: 3 = “retirement is very satisfying; 2 = “moderately satisfying,” and 1 = “not at all satisfying.” The results suggest that not only are the levels of satisfaction high, but they are improving as people age (see Figure 1).
That picture is not quite fair because those who find retirement “not at all satisfying” tend to be poor and sickly and die earlier than the others. When they leave the sample as they die, it raises the level of satisfaction for the remaining group. So maybe controlling for this attrition would change the picture. Indeed, it does a little (see Figure 2). The line slopes down with age, but the level of satisfaction remains well above a 2 – somewhere between “moderately satisfying and very satisfying.” That does not seem like a situation where retirees are in dire straits.
So, what’s going on here? It turns out that older people are generally happier than their younger counterparts, and a whole body of psychological literature is devoted to trying to explain older people’s positivity. It appears that older people have a greater ability to insulate their thoughts and emotional reactions from negative situations and have a great ability to adapt and cope.
Candidly, I find that myself as an older person. The oriental rug in the entryway of our house has worn thin generally, and has actually developed a fairly large hole. Twenty years ago, we would have shopped for a new rug, now we simply put colored paper underneath the hole!
The bottom line is that it is probably not possible to assess the adequacy of savings by asking older people about their level of satisfaction or happiness. They are all really happy. Yet surveys repeatedly show that when people are asked what they should have done differently, they often reply: “I should have saved more” or “I should have started saving earlier.”
We’re off to find other metrics to figure out what’s going on.
77% of pre-retirees anticipate feeling happier on a typical day in retirement compared to 67% of current retirees who say they are happier. 75% of pre-retirees expect to feel less stressed, which matches retirees' experiences.
It appears that older people have a greater ability to insulate their thoughts and emotional reactions from negative situations and have a great ability to adapt and cope.
About 67% of retirees who are 15 years or less into retirement said they're happier since retiring, and 82% said they're more relaxed on a typical day. While only 8% report feeling less happy in retirement, about a third said they're not more happy than they were before leaving the workforce.
The researchers found people reached their happiest when they arrived at the age of 70. Life satisfaction decreased between the ages of nine and 16, increased a little until the age of 70, and then declined again until the age of 96.
Youth happiness is in decline worldwide, due to a combination of social, economic, technological and ecological pressures. This drop-off will have future economic and health consequences. Sustained healthcare, education and social media reforms must be implemented to support young people.
The happiness curve refers to the trajectory that happiness tends to follow as we age. People begin life fairly happy. Around age 18, their happiness begins to decrease, reaching a low point in their 40s. But after age 50, happiness begins to rise again.
67-70 – During this age range, your Social Security benefit, if you haven't already taken it, will increase by 8% for each year you delay taking it until you turn 70. So, if your benefit will be, say, $2,500/month if you start at your full retirement age, it would be more than $3,300/month if you can wait.
One participant, when asked what he missed about being a doctor for nearly 50 years, answered: “Absolutely nothing about the work itself. I miss the people and the friendships.”
Retirement today is more complex than ever before.It is most definitely not your parents' retirement. You will have to make decisions that weren't even part of the picture a generation ago. Without a clear-cut path to manage the money you've saved, you may feel like you're all on your own.
Most Americans retire with nowhere near $1 million in savings. The notion that we need that much money to fund a secure retirement arises from opinion polls, personal finance columns and two or three rules of thumb that suffuse the financial planning business.
We find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly.
Retirement is often seen as a time to relax, enjoy hobbies and spend time with loved ones. However, for many older adults, it can also be a time of loneliness and isolation.
According to their table, for instance, the average remaining lifespan for a 65-year-old woman is 19.66 years, reaching 84.66 years old in total. The remaining lifespan for a 65-year-old man is 16.94 years, reaching 81.94 years in total.
Introduction: My name is Wyatt Volkman LLD, I am a handsome, rich, comfortable, lively, zealous, graceful, gifted person who loves writing and wants to share my knowledge and understanding with you.
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