Capital Investment Advisors

3 Mistakes of Unhappy Retirees

There’s so much talk today about the financial side of retirement. Save more, invest more, have more, but for what?

For you the answer may be financial independence, or maybe just the ability to stop working at a job you don’t like.  There’s more to retirement than just saving a certain amount of money, though, and there are plenty of people who have money to retire but are still not happy.

How can you avoid an unhappy retirement, and what can we learn from unhappy retirees?

My questions on retirement and what makes retirees happy vs. unhappy have long been on my mind.  The subject prompted my intensive research on this seemingly confusing matter.  In a quest to find some answers, I conducted a comprehensive study which consisted of more than 1,350 retirees across 46 states.  My findings became the basis for my new book, You Can Retire Sooner  Than You Think.  My study and questions were not just focused on the financial situations of these people, but on their overall quality of life.

Among the many interesting conclusions I was able to make was the fact that there were significant differences in how happy vs. unhappy retirees spent their money and found purpose for their money.

Below are 3 major mistakes that the unhappy retirees in my study had in common:

1.  Unhappy Retirees Can’t Define the Purpose of Their Money

A lot of people moving into the retirement years are under the (false) impression that the money that they have saved alone is going to make them happy once the big day comes.  This is a common misconception, and one that I like to alert people to before they fall into the trap of thinking that money alone is going to make them happy.

The happiest retirees understand that the point of saving is to enable them enjoy the things that they love during retirement.  Whether this is traveling or donating to causes closest to their heart, happy retirees have a purpose for their money– and unhappy retirees do not.

2.  Unhappy Retirees Have a “Rich Ratio” That Is Under 1

My Rich Ratio formula is something I created several years ago and have consistently used to give individuals and families an easy way to understand their money.  The Rich Ratio is very simple: It is the amount of money that you have in relation to the amount of money that you need.   (For purposes of illustration note that this calculation should be done with after-tax amounts)

Anyone can calculate their own Rich Ratio.  Simply take the amount of monthly income you should have or do have in retirement (Social Security + pension + any additional steady income streams), including what your nest egg should produce,  and divide it by what you expect to spend each month to live the retirement you want:  Have / Need = Rich Ratio.

This preview article is published on where Wes Moss is a guest contributor. Click here to to read the full article as it originally appears.

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