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Retirement Weekly: How to make the most of your retirement

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The definition of retirement has vastly changed from that of previous generations. Most of today’s retirees and pre-retirees (55%) view retirement as a new chapter in life. In fact, only 27% see it as a time for rest and relaxation.

This comes from Edward Jones’ and Age Wave’s latest representative study of more than 11,000 North American adults, “Longevity and the New Journey of Retirement.” The study offers some key insights about the changing definition of retirement, the patterns of people’s experience in retirement and, most importantly, the keys to thriving along the way.

Today’s retirees and pre-retirees would like to spend close to 30 years in retirement. And they enjoy a growing array of opportunities to stay engaged, possibly reinvent themselves and enjoy the freedoms of this next stage of life. This is definitely not their parents’ or grandparents’ retirement.

But creating a fulfilling, healthy, happy retirement marked by a sense of purpose doesn’t just happen.

According to the research, retirees who report better quality of life took more steps decades in advance to prepare and plan across what we’ve identified as the four interconnected pillars for living well in retirement: finances, health, family and purpose. From saving early and consistently and developing healthy habits to communicating with close family and discovering passions and interests, pre-retirees and those in early retirement can take several steps to make the most of their retirement.

Read MarketWatch’s Help Me Retire column

Saving early really does make a difference

Traditionally, we’ve talked about funding retirement in terms of a “three-legged stool” that consists of pensions, Social Security and personal savings and investments. As two of the three legs have become increasingly wobbly, Americans must shore up the third: their personal savings and investments.

We know those who save early and often reap vast rewards later in life — and our latest study with Age Wave, Longevity and the New Journey of Retirement, reveals that retirees who didn’t heed this advice when they were younger now have regrets. According to the study, retirees say they started saving at age 38, on average, but wish they had started saving nearly a decade earlier, at age 29. Our research shows that those who started saving the earliest, at an average age of 34, felt the most financially prepared for retirement. They also reported feeling happier, more fulfilled and less anxious than retirees who started saving later in life.

Beyond saving, people can prepare for retirement by taking care of their ongoing health and preventive care, discussing retirement plans and goals with family and friends, beginning or expanding volunteer activity — and working with a financial advisor.

While the research does not show a direct cause-and-effect relationship, the evidence is compelling: retirees who report better quality of life today took more steps to prepare across all four pillars and they started their preparations early in their adult lives.

Connecting the four pillars to thriving in retirement

Understanding the way people today view retirement — and what changes retirees wish they could have made — provides some valuable lessons we can share with younger generations about the proven value of early preparation for retirement.

The research shows that nearly all retirees — nine out of 10 — know that they should be paying attention to all four pillars when planning for an optimal retirement. Yet very few pre-retirees are thinking about retirement in this holistic way. Only about a third of pre-retirees (37%) have thought a great deal about saving enough for retirement. And the percentage drops even further when it comes to thinking about health (21%), purpose (16%) and family relationships (12%).

We all know how easy it is for the day-to-day stresses and demands of everyday life to take priority over the long-term preparations we all should be making. This research is a wake-up call reminding us that our long-term health and happiness — and how we are feeling about life years from now — is largely dependent on the steps we take to prepare today.

Advice from your future self

All of us can be doing more to get ready for retirement — and more to improve our lives across all four pillars. No matter where you are on the journey to retirement, now is the time to take stock:

·       Are you saving as much as you can, staying out of debt and avoiding early withdrawals from your retirement accounts?

·       Have you discussed your retirement hopes, dreams, plans and goals with your partner and immediate family?

·       Do you have a contingency plan in case life throws you a curveball and you are forced to retire early due to health problems or caregiving responsibilities?

·       Are you taking care of your health by exercising, eating healthier, challenging yourself mentally and paying attention to preventive care?

·       Have you thought about how you will find purpose in life without a career or children at home — exploring new activities, volunteering and learning new skills such as how to work with technology? Do you have work you enjoy and can continue to do part time in retirement, if you need to or want to?

Greater longevity means today’s retirees have more opportunity than at any previous time to make the most of their years, activities, contributions and relationships. But the results of this study make it clear: thriving in retirement requires focused preparations across all four pillars for living well in this new chapter in life.

Are you ready?

Ken Cella is principal of branch development at Edward Jones.

: The truckers’ triumph: The incredible story of how a scrappy group of blue-collar retirees rescued their pensions

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