The bucket list. Everyone’s heard of it. It’s your list of to-do’s after you retire. Retirement planning is also a common phrase. When combined, “retirement planning” and “bucket list” can be a simple approach to achieving a happy post-work life.
Create a financial plan around happiness
Some experts believe it’s best to make the pursuit of happiness the focus of your retirement planning.
“A lot of research says you get excited about getting stuff. Then you get it and it doesn’t do anything for you. But there are other things you can do that will make you happier when you spend your money,” said Michael I. Norton, co-author of Happy money: The science of smarter spending, in the Harvard Business School podcast, “The Business.”
Norton and his co-author, Elizabeth Dunn, began researching how you should spend your money to get the most happiness out of it.
How to make the plan work
If your bucket list includes buying a boat and learning to sail, Norton and Dunn suggest you not only save for that boat, but you actually use it. Otherwise, the authors found, people would buy a boat, dock it and never use it. That made the purchase almost pointless; and left you not as happy as you thought you would be. According to the authors, the experiences you create after having saved the money, purchased the boat and learned to sail it, make your purchase more worthwhile.
“When you use money to buy experiences, like a trip on a boat … those are things that really do make people happier,” said Norton in the podcast.
Norton and Dunn encourage you to think about what you would need every month to be happy when you retire, instead of how much you’ll need to retire. Start by making a bucket list of specific experiences you want in retirement. Keep your experiences in a visible place like your desktop picture or tape it to your refrigerator.
Then tell your spouse or friend. Be sure to talk about it, often. Plus, the more you talk about it, the more flexible you can be should something happen and you need to modify your plan. After all, life happens and bucket lists need to adjust to change.
So, think about your bucket list. Then plan for the experiences that will make you happy in retirement; not a projected number from a calculator.
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only. For additional guidance contact your financial advisor.