Maddy Dychtwald is an author and co-founder of Age Wave, a think tank and consultancy.
What is the secret to a happy retirement? With 76 million baby boomers beginning to enter retirement, more and more of us are asking that very question.
My firm, Age Wave, in partnership with Bank of America/Merrill Lynch, recently conducted a study that surveyed 3,694 adults age 25 over from all walks of life and socioeconomic strata.
What did we find? While many of us still think of retirement as a time to wind down and take time for ourselves, two-thirds of today’s retirees have found that retirement is, in fact, the best time in life to give back: their time, their talent and their money. (This finding also echoes in many ways what Marc Agron in describes in his article in The Wall Street Journal this week–that people are happier when they are connected to family, friends and community, than spending on the latest adventure.)
When we drilled down into this finding and asked retirees what brings them greater happiness in retirement, “spending money on themselves” or “helping people in need,” retirees were three times more likely to say “helping people in need.”
Retirees also told us that when they give their time or money—or even better, both— they feel a stronger sense of purpose (59% vs. 43%), higher self-esteem (57% vs. 51%), and are both happier (66% vs. 52%) and healthier (50% vs. 43%) than those who do not volunteer or donate.
Even retirees’ definition of success relates strongly to giving back. When we think about retirement and planning for it, too many of us focus almost exclusively on money: “Will I have enough money to do the things I want for as long as I live?” There’s no doubt this is an important question. But, as it turns out, at all income levels, the study shows that retirees are almost six times more likely to define their own personal success in retirement by their generosity rather than their wealth.
So giving back may just be the secret ingredient to a happier retirement. And retirees don’t want to simply write checks. They want to be hands-on, utilizing their skills and talents to help organizations that matter to them. Compared to before they retired, the majority of retirees (59%) say they are more likely to do just that: give in a way that is more focused, hands-on and impactful.
As you plan for retirement, heed the advice of those already there—think about what will bring you a sense of purpose and meaning. When it comes to happiness in retirement, it seems generosity trumps wealth.