The key to happiness in retirement

There's only one thing you need to do if you want to be happy during your retirement years. Plan for it. Yep, that's it. Plan for your retirement, and you'll be happier.

That message comes through loud and clear in the results of a recent survey that studied financial discipline and happiness in retirement, prepared by Northwestern Mutual Life Insurance. People who rate themselves as highly disciplined planners are much more likely than nonplanners to say they're "happy in retirement" (91 percent vs. 63 percent).

Similarly, before retirement, the study found that planners are much more likely than nonplanners to feel very secure financially.

Of people who rate themselves as "highly disciplined planners," 70 percent say they feel "very secure" financially -- the highest rating of all groups. For "disciplined planners," 51 percent say feel "very secure" financially. This percentage drops to 34 percent for "informal planners" and to 17 percent for people who say don't do any planning.

Regular readers of my blog know retirement planning is a theme I frequently write about, urging you to take charge of your future. The reality is that most businesses don't care that much about whether you'll be secure in retirement. Instead, many companies are actively undermining your retirement security by spewing persuasive ads aimed at getting you to part with your money. You -- not these profit-driven entities -- are best able to make a difference in your life.

Only about 18 percent of the Northwestern Mutual survey respondents rated themselves as a "highly disciplined planner," defined as knowing their exact goals, developing specific plans to meet them and rarely deviating from these plans. An additional 36 percent rated themselves as a "disciplined planner," meaning they've developed plans but often don't stay on top of them. Nearly half of all survey respondents (46 percent) rated themselves as "informal planners" or said they did no planning at all.

So why don't more people diligently plan for retirement? The report lists four reasons. Let's take a look and see how you can overcome each one.

Reason 1: "Not having enough time" was cited by 27 percent of respondents. The sad fact is, most people spend more time planning their annual two-week vacation than planning their retirement -- a permanent vacation that could last 20 to 30 years or more.

Here's a suggestion. The average American watches about four hours of TV each day and spends even more time on digital devices. Why not pick your least favorite TV show or Internet activity, and drop it? Then spend the time you've freed to plan for the rest of your life.

Reason 2: "Not knowing where to find help" was cited by 20 percent of respondents. That's a good reason, because retirement planning can be confusing at first for do-it-yourselfers. The best you can do is learn as much as possible on your own, starting with books, magazines and online publications. My free online retirement planning guide is a good place to start (I don't sell insurance or investments -- I'm just trying to help people by providing information).

If you work for a large employer with a 401(k) plan, the plan administrator often has a communications package that can help you get started. One easy solution: You can't go too wrong by saving as much as possible in your employer's 401(k) plan -- 15 percent of your pay or more -- and investing in a low-cost target-date fund (a fund with investments geared for the year you expect to retire, generally becoming more conservative as you near retirement).

If you need help, which is understandable, find a professional who has the necessary training and whom you pay in such a way that he or she has your best interests at heart. Hourly or by the project, for instance, as opposed to taking commissions or earning a percentage of the money you invest.

Realize that learning and planning for retirement takes time and a lifelong commitment to enhancing your knowledge. You may not "get it" at first, but you don't need to learn everything all at once. Make steady progress and persevere, and eventually you'll get where you need to be.

Reason 3: "Not enough interest" was cited by 19 percent of respondents. Here's some motivation. Picture the life you want -- freedom to do what you want, when you want, with whom you want. Commit to attaining your goal because nobody else is going to do it for you. Need more motivation? Check out this retirement savings menu to see what you could be eating and drinking in your retirement years.

Reason 4: "Too confusing" was cited by 18 percent of respondents. See my thoughts regarding Reason No. 2. While planning might take some time and effort, it's not rocket science. Put in just a little effort, and you'll reap the rewards of planning.

In my opinion, the most important reason to focus on is No. 3, not enough interest. If you can find the motivation and energy to improve your life, you'll deal with the other reasons.

That old adage bears repeating: Failing to plan is planning to fail. I hope you begin planning today for a happy rest-of-life.



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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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