The Four Behaviors That Help Retirees Thrive
By Brian Famigletti, Managing Director & Head of Marketing
From Surviving to Thriving
It’s one thing to save enough money to survive financially in retirement. It’s another thing to set yourself up to thrive.
Of course, both outcomes require smart financial preparation. But achieving the latter takes more than just money.
These four behaviors — economic and otherwise — are common among retirees who aren’t just surviving, but thriving.
1. Financial Foresight
Start by getting your financial house in order.
When preparing to retire, it’s wise to begin investing early to take advantage of compound interest. Early additions to the nest egg will have more time to accrue interest, and eventually, that interest will accrue interest of its own, increasing your gains exponentially over time.
Keeping a portfolio of stocks, bonds, mutual funds, and other assets that fit your risk tolerance can help you achieve this goal. This diversification helps combat downturns in the economy while generating the income required to lead a full life in retirement.
Additionally, don’t underestimate the power of retirement accounts, including 401(k), IRAs, and other plans. The more money, the more growth. This becomes increasingly important as you approach retirement. When your time horizon shortens, so does the window for your funds to gather interest. But you can compensate by increasing the amount you contribute, if able.
In short, sacrificing some money in the short term can pay off big time in the long run. But financial foresight is just one piece to the puzzle of a comfortable and fulfilling retirement.
Related reading: New Job, New Approach: Your Guide to a Smarter 2025 Retirement Strategy
2. Wise Withdrawals
It can be easy to burn through savings when you no longer have income to replenish it. That’s why it’s important to be judicious with withdrawals.
Even when you reach normal retirement age, the funds in your retirement account will continue to experience compound growth. But this naturally does not apply to the money you withdraw. If retirees take a measured approach to making withdrawals, they may have more money at their disposal in the long run.
Calculating your retirement income can be a helpful tool. A common rule of thumb says that spending about 4% of your portfolio annually may enable your career earnings to last through retirement.
3. Healthy Habits
Health is just as important as wealth. In fact, the two are actually very much intertwined.
Establishing healthy habits early — such as staying active, eating well, driving safely, and using tobacco and alcohol responsibly — can help protect against chronic illness later in life.
That can be one of the biggest stressors to your quality of life as you age. But health also matters when it comes to safeguarding the money in your accounts.
Healthcare can be a major source of financial pressure that can quickly drain your nest egg, or even the savings of your family and loved ones. Help avoid these high costs to the best of your ability by being mindful of your health. And be realistic about the challenges ahead so the necessary funds can be set aside.
4. Beyond the Money
Many people feel a loss of identity when they retire. It’s only natural for our jobs to influence our sense of self. Working is how we spend much of our time, after all. But that’s not all there is to life.
To help retirees thrive, most advisors recommend aligning financial planning with lifestyle and goals. In other words, it’s not just about saving enough money or strategically timing withdrawals. Retirement opens new avenues for personal fulfillment. But to thrive in it, it is crucial to take stock of what exactly you want out of the next stage of life.
Starting new hobbies, joining clubs, or taking an active role in charities are just a few common ways retirees find contentment with a new (and sometimes dauntingly open) schedule. So when planning for retirement, be sure to think through exactly how you want to spend your time, not just what you’ll be able to afford.
Think you might need a helping hand to thrive in retirement? Schedule a quick call with Griffin Asset Management today. We’ve got you covered.
Sources:
Harvard Business Review: Retire Without Regrets
Merril: 7 steps to prepare for your upcoming retirement
Athene: 4 Habits of Happy Retirees
