The pursuit of happiness
Researchers at Liverpool Victoria, a UK insurance company, recently assessed the cost of a "happy retirement" at nearly $400,000. Their estimate is for maintaining a fairly ordinary standard of living consisting of essential living costs plus the cost of the "pursuit of happiness".
The calculation assumes a retirement age of 65 and lifestyle expenses lasting for the remaining life expectancy of 17 years. The cost estimate represents funds required in addition to the average state pension payable in the UK.
What is unique about their research is that they conducted a survey to find out what people close to retiring consider necessary to feel content in retirement.
They found a list of recurring themes that led to compiling this list of essential ingredients:
- Holidays outside the country each year,
- Time with children and grandchildren, and periodic gifts to them,
- Socializing with friends,
- Indulging in hobbies,
- Retirement at age 65,
- Living in a house with a garden, possibly outside the city,
- Living close to children and grandchildren, and
- Convenient transportation and walking distance to amenities.
I suspect we Canadians are not so different.
Many of these items are at no cost, but others come with a price tag. While the research focused on the "bare bone" cost of happiness, many will find that they need far more to achieve contentment in retirement. For example, holidays are to be frequent and long, hobbies numerous and expensive (golf, cottage, boating, etc...).
Sadly, the survey found that 8% of pre-retirees had no retirement funds whatsoever and almost 30% would fall short of their pursuit. Of those with retirement funds, over a quarter didn't know how much income to expect.
For many, the true shortfall in their pension will not become apparent until they are ready to retire.
And then it will be too late.
What is your list of ingredients to be content in retirement? Drawing up your own list will make it easier to build your post-retirement budget. Planning retirement is not only about figuring out how to keep the lights on and put food on the table, it's also about figuring out the price tag of retirement happiness!
What people want during retirement is generally the same for everyone. These “ingredients” point to one thing which is preserving the quality of life. Also, we love how you encourage people to make their own list of what they want in retirement. That’s one of the practical ways to lay out goals. This is a very good post so we included it in our Weekly Digest. You can read it here www.ltcoptions.com/weekly-digest-baby-boomers-retirement.
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