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Is There a Formula for Happiness?

Is There a Formula for Happiness?

November 15, 2022

Is There a Formula for Happiness?

By Howard Pressman, CFP®

Many years ago, several of my clients retired at the same time. As the stock market recovered from the Great Recession, there was a wave of folks who felt the time was right for retirement. As I met with them over the next few years, I was surprised and dismayed that some of them just didn’t seem happy. After getting caught up on how things were going and what they were up to, we would turn our attention to their financial plan – they were in good shape. I kept asking myself, then why aren’t they happy? Then one day it hit me: there’s a difference between a financially secure retirement and a happy retirement. The answer had been staring me right in the face the whole time but, trained to focus exclusively on the financial implications of retirement, I had missed the obvious. Happiness cannot be put on a spreadsheet, and while a net-worth statement tracks your tangible assets, many of the assets that contribute to happiness are intangible.

As I questioned my process and how I could help clients achieve a happy retirement, I spoke with clients and relatives who had retired, with therapists, and with life coaches who focused on helping people navigate major life transitions. I needed to understand the formula for happiness. Interestingly, a huge leap forward in my thinking came from a 2012 article about a program assisting America’s warfighters transitioning from the stresses of the battlefield to a life after combat. While there are no parallels in their experiences, I was struck by the similarities of emotions and challenges the brave men and women of our armed forces and my recently retired clients reported experiencing: loss of identity and purpose, lack of energy, increased stress, and even navigating physical limitations. While the military looked to create balance in a targeted wellness program, I thought the same could be applied to retirement planning. This led me to my focus on what I call Mind, Body, Wallet.

While much of my time with clients is spent discussing the wallet, this should not be mistaken as an indication that the other two elements are any less important. Tremendous peace of mind can be had not just by knowing you have enough money to meet your needs, but also in fully understanding how your finances will work in retirement. Being confident in the wallet removes a lot of stress over how the bills will be paid. But to make the most of this stage of life you must create balance with the other core aspects of a happy retirement. Having mental clarity, satisfaction and feelings of purpose can help us stay engaged with life and enjoy all that being retired and having financial security can offer. Obviously, our health plays a significant role in our enjoyment of life. Some of this is out of our control, especially as we age, but we do have opportunities to maximize our health. A proper diet and exercise have been proven to have positive effects on both our physical health and mental well-being.  Being physically well helps us have the energy and vitality to make the most of mind and wallet – and is less costly over the long run.

In working with my sister-in-law, a clinical therapist, we’ve identified what we consider to be the six core contributors to happiness in retirement. They are: physical well-being, relationships, financial security, feelings of pride, spirituality, and sense of purpose. Our next steps are to create a balance sheet of these intangible assets we feel are so critical to enjoying a happy retirement. I know there is no calculation for happiness, but that doesn’t mean I haven’t searched for one. I am, after all, a numbers guy. But short of that, I hope to develop tools to help our clients make an accounting of these intangible assets in their lives and gain insight into how to create their own happy retirement. If you are interested in this project and would like to be a part of it, please reach out to me. I would love to get your thoughts on what we’ve come up with. EBW has also partnered with a life coach who has helped many of our clients successfully make the transition from full-time work to whatever is next, and to plan this next stage of their lives with intent. If you’re interested in learning more, please let us know.