Ep # 126 - The Art of Retirement: Balancing Money, Health and Happiness with Dr. Michael Finke
Joe sits down with Michael Finke, PhD, from the American College of Financial Services, to explore how retirees can shift their mindset from saving to spending and embrace a fulfilling retirement. They discuss the importance of guaranteed income, social connections, and maintaining health as key pillars of retirement happiness. Michael shares actionable strategies for overcoming emotional barriers to spending, planning for cognitive decline, and creating goal-based retirement plans that maximize enjoyment.
What You'll Learn in Today's Episode
Balancing Money, Health, and Relationships: Successful retirement is about more than just financial security—it also requires investments in health and social connections. Retirees who focus on these areas tend to experience higher life satisfaction.
Overcoming Emotional Barriers to Spending: Many retirees struggle to transition from a saving mindset to spending their retirement funds. Strategies like guaranteed income streams or automated withdrawals can help create confidence and clarity.
The Role of Guaranteed Income: Retirees with guaranteed income sources, such as pensions or annuities, often feel more comfortable spending money, enabling them to enjoy their retirement more fully without fear of running out.
Planning for Cognitive Decline: Preparing for potential cognitive decline is essential, including automating finances, transitioning decision-making to trusted individuals, and planning for supportive living arrangements as needs change.
Living a Fulfilling Retirement: Retirement success is defined by creating habits that align with personal goals and values. Developing a structure for social, physical, and financial activities is crucial for maximizing happiness and fulfillment.
Ideas Worth Sharing
"Retirement isn’t just about money—it’s about finding purpose and planning how you’ll spend your time." – Michael Finke
"Health, relationships, and guaranteed income are the true pillars of a fulfilling retirement." – Michael Finke
"Sometimes, retirees just need permission to spend the money they’ve worked so hard to save." – Joe Curry
"Your habits will define the quality of your retirement—plan deliberately and live intentionally." – Michael Finke
"We spend our whole lives saving, but the real challenge is learning how to enjoy what we’ve built." – Joe Curry
Resources
Retirement Planning Decoded: All the Essentials in One Course - a retirement-ready course offered by Joe through Trent University School of Continuing Education
Unlocking a Joyful Retirement: Key Strategies for Financial and Personal Fulfillment
Retirement is a time of life that many plan for and dream about. However, achieving a fulfilling retirement requires more than financial security—it demands thoughtful planning for both your finances and your lifestyle. Below we provide some key suggestions from Michael Finke, PhD, a leading retirement researcher, to discuss how retirees can shift their mindset from saving to spending.
1. Transitioning from Saving to Spending
Many retirees struggle with the transition from decades of saving to spending in retirement. This mindset shift is not easy for those who have been disciplined savers. Finke notes that retirees often need permission to spend. Guaranteed income products, such as pensions or annuities, can play a pivotal role by providing a steady, predictable stream of income.
2. The Importance of Social Connections and Health
Retirement happiness is not only about dollars in the bank or investments. Finke’s research highlights the critical roles of social connections and health. Maintaining strong relationships with a spouse, friends, and family contributes significantly to life satisfaction. Retirees with positive social relationships are often more resilient during life’s transitions.
Health is another essential part of retirement. It’s an investment that allows retirees to enjoy activities like travel, physical activities, or simply spending time with loved ones. For pre-retirees, prioritizing fitness and well-being is as important as saving for the future.
3. Goal-Based Retirement Planning
Traditional retirement strategies, like the 4% withdrawal rule, often don’t consider the personal goals and values of retirees. Finke advocates for a goal or value based approach to retirement planning. This involves aligning your spending and savings with your priorities—whether that’s travel, supporting your family, or enjoying leisure activities. A goals-based plan allows retirees to use their money in ways that bring the most joy and satisfaction during the early, more active years of retirement.
4. Planning for Cognitive Decline
One of the less-discussed aspects of retirement planning is preparing for cognitive decline. By age 85, nearly 1 in 3 adults experience some form of dementia. Finke emphasizes the importance of automating finances and selecting a trusted person to manage decisions if needed. Proactive planning ensures retirees maintain financial security and independence as long as possible.
5. Developing Healthy Retirement Habits
Habits are the foundation of a fulfilling retirement. Whether it’s joining a fitness group, volunteering, or setting up regular social activities, retirees benefit from routines that provide purpose and structure. Habit will define the quality of your retirement.