Every retirement is different. Some can’t wait for freedom, some can’t even imagine retiring, and some have it forced upon them.
Now research has found a few common threads for a happy retirement.
A joint study by Macquarie University’s School of Psychological Sciences and investment managers Challenger claims to have found the ‘secret sauce’ to a happy retirement.
Lead researcher Professor Joanne Earl said the timing of when to retire, planning and choice were revealed as crucial for retirement enjoyment and wellbeing.
On your own terms
“It’s all about stepping into retirement on your own terms,” Prof. Earl said.
“Proactively choosing how and when to retire may be the secret ingredients to wellbeing in our golden years.
“The findings demonstrate that feeling empowered to choose when and how you step into this next phase of life results in a healthier transition and greater retirement happiness, retirement adjustment and satisfaction.
“Pleasingly, research respondents are choosing to enter this next stage of life while their health allows them to truly enjoy themselves and explore their passions and purpose.
“Of those surveyed, 22 per cent noted the choice to focus on what you want to do rather than what you have to do was the top retirement benefit.
“This was closely followed by enjoying freedom and flexibility to be spontaneous (20 per cent), family time (17 per cent) and travel (15 per cent).
“Financial security came through strongly as one of the key enablers for Challenger customers to have the peace of mind to take this step with confidence.”
Financial planning
It should be noted, the study surveyed more than 1000 Challenger clients, so people who have already financially planned for their retirement. The story could go a bit differently for older Australians who are not in a position to pay for financial advice and do not get to choose when they retire.
Data from the Australian Bureau of Statistics shows that in 2022-23, 13 per cent of retirees left work because of sickness, injury or disability, while 5 per cent lost their jobs. Almost one-third of retirees leave work simply because they reach pension age or become eligible to access their superannuation.
The latest YourLifeChoices (YLC) Insights survey also found almost 60 per cent of YLC readers believed their savings would not provide an income for life. According to the same survey, almost 35 per cent of YLC readers rely on the Age Pension for their income, while only 24 per cent were living off their savings.
Just over 58 per cent said they would also not consider taking out an annuity, with only just under 6 per cent saying they already had, and only 5.7 saying they would consider it. The remainder were undecided.
Choosing to retire
Challenger customers who proactively chose to retire were found to have significantly fewer worries (51 per cent) compared to those who retired out of necessity (32 per cent). Having the financial security to choose when to retire was also cited as potentially having longer-term benefits.
Challenger customer chief executive Mandy Mannix said the study demonstrated the importance of having a guaranteed income stream in retirement.
“The data clearly indicates that annuities, or some element of guaranteed regular income in retirement, can be a game changer, and we are seeing this in our broader customer base and increase in annuity take-up,” Ms Mannix said.
“When you know a portion of your savings is guaranteed to last a lifetime, it brings an unparalleled sense of security.
“In fact, 60 per cent of our customers surveyed said they lived comfortably, and majority did not think they would outlive their savings, regardless of household income. This confidence in receiving a stable ‘pay cheque’ for life allows you to focus on what truly makes you happy.”
What do you think is the secret to a happy retirement? Why not share your opinion in the comments section below?
Also read: Thinking of retiring overseas? Check out this guide first
