Discover the 3 Keys to a Happy Retirement (and start planning for your future enjoyment)

We all want to enjoy our time after we’ve stopped work, right?

Well, by giving consideration to the 3 Keys to a Happy Retirement you can start a plan that will enable you to do just that.

Read the sections below and I’ll outline what I consider to be the crucial factors to consider.

1. What are the 3 Keys to a Happy Retirement?

The 3 keys to a happy retirement are:

  • Wealth
  • Health
  • Hobbies

Let’s see why:

1.1 Wealth

Is money important in the pursuit of happiness?

Yes, of course. Ask anybody that is struggling to make ends meet and they’ll tell you just how important it is.

However, there comes a point where having more and more money provides diminishing returns in terms of the amount of additional happiness that it brings.

We need enough for the basics: shelter (be that our own home or rented property), food, and utilities (water, electricity for heat and light).

We may like to have enough for enhancements to the basics: a bigger home or one in a particular location, non-essential foodstuffs, and entertainment-based utilities like internet provision and TV programme subscriptions.

So, when it comes to wealth planning for retirement, what is our strategy?

  1. Plan what things you want to have in retirement.

    Do you want just the basics? Or a little more? Or a lot more?
  2. Calculate how much it will cost to have these things.

    If you are looking to broadly replicate your pre-retirement standard of living, keep a record of all of your expenses for a few months so that you can use this as a guide.

    Don’t forget to remove costs that you may no longer have (eg pension contributions, transfers to savings accounts, mortgage that has been paid off) and reduce costs where applicable (fewer travel costs if no longer commuting).

    And increase provision for costs that may grow in retirement (eg increased utility costs due to spending more time at home, new hobbies, and more frequent holidays).
  3. Make provision to cover these costs.

    Having calculated how much you will need for a happy retirement (your ‘magic number’) you now have a target to aim for in terms of how much you will need to have in your retirement funds and, therefore, how much you will need to be saving before you can retire.

Your wealth plan for retirement:

Plan (how much money you will need)

Calculate (the pension fund needed to meet the plan costs)

Provide (sufficient contributions to obtain the pension fund)

And if you are worried about having not yet started your pension savings – consider this Chinese proverb:

The best time to plant a tree was 20 years ago. The second best time is now.

Chinese Proverb

1.2 Health

You’ve had the day from hell at work.

Constant ‘phone calls. Never-ending emails. Work colleagues needing urgent help. Meetings that over-run. And all the while you are trying to finish the project that your boss wanted yesterday!

You’re stressed. Your head feels like there is a mini Mike Tyson in there trying to punch his way out!

Do you feel happy?

Of course not.

There is a strong correlation between our health, both physically and mentally, and how happy we feel.

So, to maximise our chances of being happy in retirement we need to ensure that we look after our overall health.

Don’t act your age in retirement. Act like the inner young person you have always been.

 J. A. West

1.3 Hobbies

We discussed above, in the wealth section, how having more and more wealth doesn’t necessarily make us happier and happier.

So what does increase our happiness (both in retirement and generally)?

Doing things makes us happier than having things.

Purchasing a new thing – a car, a mobile phone, a watch – provides some instant gratification, but this wanes over time.

However, doing or experiencing something provides much longer-lasting enjoyment.

Think of the pleasure of sharing with friends your experience on a fabulous holiday, hitting a hole-in-one in a game of golf, the monster of a fish that you caught (it was THIS BIG!), the new cue that you taught to your dog.

Men do not quit playing because they grow old; they grow old because they quit playing.

Oliver Wendell Holmes Sr

2. Elements of Wealth

We’ve established that we will need retirement funds of a certain amount (our ‘magic number’).

How do we go about accumulating that amount before we reach retirement?

This will, in part, depend upon the products that are available where you live. Here in the UK the main methods are:

Personal pensions, Individual Savings Accounts (ISAs), Share portfolios, Cash savings accounts

Given the tax advantages associated with the first two, you are probably only going to be looking at the last two if you have reached the contribution limits for those first two.

There are, of course, other financial matters that you will want to consider in addition to the ones used for obtaining your magic number. These may include the following:

Equity release, Avoiding Inheritance Tax, Best credit cards, Best bank accounts, Cashback sites, Paying off a mortgage early

3. Elements of Health

Looking after our physical and mental health is hugely important (and it makes us happy!).

And it encompasses so many different areas.

Things that we’ll look at on this site include:

Fitness, Diet, Private medical insurance, Powers of Attorney (and Wills), Pet ownership

4. Elements of Hobbies

Well, where do we start with this?

We are very fortunate to live at a time when there are so many hobbies and activities available to so many of us.

Want to learn how to fly a plane? You can. Swim with dolphins? No problem.

I’m sure that more topics will come to me as I continue but for now, these are the ones that spring to mind:

Pet ownership, Blogging, Whisky collection, Computer games, Photography, Watch collection

5. FAQ

What are the 3 keys to a happy retirement?

The 3 keys to a happy retirement are wealth, health, and hobbies.

You need enough (whatever that may be for you) wealth to be able to cover all of your planned costs. You will want to be in good health, both physically and mentally, because this is linked to happiness. And you will want to occupy your new found freedom with the things that you enjoy, or plan to enjoy, doing.

Should I retire fully at my chosen date or have a period of part-time work?

This is a very personal question – different people will have different outlooks. Keep in mind that retirement represents a big change to what you have probably been doing for decades. There is some appeal, therefore, to approaching retirement gradually by cutting your hours initially rather than stopping completely.

What is the best age to retire?

Retiring from work means that you need to have an alternative source of funds to meet your living expenses.

For many (in the UK) this means waiting until you are old enough to receive the State Pension (typically around 65 but continuously under review). However, if you have accumulated sufficient personal pension funds you may choose to retire at an earlier date.

It’s a matter of aligning your funds with the lifestyle that you wish to enjoy (and how long you think that you will live in retirement).

6. Conclusion

So, there you have it, the 3 keys to a happy retirement.

Pick one of the following options to learn more about planning for and enjoying your own happy retirement.

About Richie Sills

Richie is the owner of the Retiring Richie blog. An economics graduate and chartered taxation adviser, he has worked in the tax industry for over 30 years. By day he saves tax for his clients - by night he helps people plan for a happy retirement. Why not join them?

14 thoughts on “Discover the 3 Keys to a Happy Retirement (and start planning for your future enjoyment)”

  1. Great information! Planning early what you are going to do in retirement is very important. That way you’re prepared financially and know what activities you want to focus on.

  2. Great post Richie! As someone who is now retired, I couldn’t agree more with the 3 keys. I would also add a fourth- friends. I retired at 55 and still waiting for friends to retire too as I miss the socialization aspect very much. Now to find a hobby (besides reading and blogging…).

    • Hi Jodie, I’m glad that you enjoyed it! Yes, I think that post-retirement socialisation is certainly something that has value. Good luck with the hobby search – I’ll be adding some hobby posts too, in due course, but I’d love to hear about any that you start.

  3. This is a really interesting read. A good read. Preparing for your future in small ways is important to create less pressure in the future. Thank you for sharing.


  4. This was such an interesting read! I think that planning ahead is great advice as well as starting to reduce your hours before going fully retired as it’s a huge change!

  5. While my husband’s priority is definitely the first thing on this list, mine is the third. I have a tough time finding hobbies I enjoy outside of reading, so I’d love to discover some other ways to keep myself entertained once I retire. Great article!

    • Well, that sounds like a good combination – you have 2 of the 3 keys covered already. A joint effort on the health aspect and you’ll be all set. Glad that you enjoyed the article.


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