Five Factors That Determine Success in Retirement

Some people fail at retirement. They quit work, try to fill their days with stuff that is fun, meaningful, or useful, but eventually realize that they were happier when they had a job that gave them most of those things five-plus days a week.

Other people leave their careers and never look back. Finally, their time is their own, and they make the most of it.

Finding success in retirement and determining what it means to be successful in retirement are individual pursuits, and there is no one-size-fits-all formula that guarantees retirement bliss.

There are, however, a handful of important considerations that will help lay the foundation for a lengthy and joyful retirement.

1. Money

We’ll start with the painfully obvious observation that having money makes retirement better. This wouldn’t be much of a personal finance site if we ignored the almighty dollar.

As obvious as this fact may be, most people don’t have all that much money saved for retirement. At Physician on FIRE, we like to talk about a 4% safe withdrawal rate and how many millions we plan to accumulate before thinking about retirement, but that’s far from the norm.

According to the Federal Reserve’s most recent data, in 2022, American 55-64 year olds had a median net worth of $364,000 with $260,000 of that being home equity. That leaves just over $100,000 in other assets. Not great.

What that statistic does not account for is income streams, and, for better or worse, that’s what most retirees will largely rely on — Social Security and increasingly scarce and sometimes tenuous pension plans.

Since most of us have no pension plan and Social Security won’t afford you many luxuries, a seven-figure nest egg is key in ensuring you can continue living the lifestyle you want to lead. How much money, exactly? We’ve covered that elsewhere, but in short, figure out how much you’ll want to spend annually, subtract income streams like Social Security and pensions, and multiply the result by 25 to 30.

It’s been said that if you have a problem, and money can solve that problem, then you don’t really have a problem. This can only be true, of course, if you also have money. Not all problems can be solved by money, and money-solvable problems can still be headaches, but an abundance of money can make life much easier and more enjoyable.

I’m well aware of Kahneman’s study that shows that happiness doesn’t go up all that much above a certain income, but that income was $75,000 and that was way back in 2010. That looks like a six-figure income today thanks to inflation, and to support that kind of spending, you will want to have at least a couple million in retirement savings.

Money buys things. Money buys experiences. Money given away makes us happier. Money makes the world go round, so make sure you’ve got plenty of it for a truly successful retirement.

2. Health & Fitness

As obvious as this one ought to be, health doesn’t get nearly as much attention as money when it comes to retirement preparedness, but it’d be tough to argue that it’s not equally important.

How can a retirement be considered successful if you’re not healthy enough to fully enjoy it? Most of us have some aspirations of hiking, biking, or at least keeping up with grandkids one day. None of us dream of someday monitoring our own glucose, tossing out clothes that no longer fit, or huffing and puffing halfway up the bleacher stairs to our 23rd row stadium seats. If you had saved more, you could be sitting much lower!

Health impacts wealth, too. We know from the rule of 72 that our money doubles with time, and if your investment returns outpace your withdrawal rate by 6% later in life, you’ll leave twice as much money for heirs or charity if you make it to 88 rather than 76.

Some health issues are beyond our control, but there’s plenty you should be able to control, like how much you move, eat, and drink, for example, or how well you follow your good doctor’s advice.

Retirement affords us an abundance of time, and you can use that time to get the exercise or prepare the healthier meals you never seemed to have time for before. Yeah, you no longer get to use that time constraint excuse. Sorry.

I retired from medicine in 2019 and ran my first half marathon in 2020. I’ve run about five more since then. I ran my first full 26.2 mile marathon in 2022, and I plan to run another this fall. I started a daily routine of pushups, situps, and body-weight squats in the spring of 2020 and haven’t missed a day, not counting the month I took off after breaking a rib. I have more time than excuses, so I always find time to get it done. I don’t mean to brag, but I like to boast, and I had a much tougher time keeping a consistent exercise routine in my working years.

My family and I love to travel — another thing that’s way better and easier without a job — and it’s not unusual for us to put 5 to 10 miles on the sneakers just sightseeing and exploring a city. I often pull up a Strava heat map when visiting new places to see where other people like to run, hike, and bike, and I follow their lead. AllTrails is another great app for finding ways to incorporate some fitness into our travel itinerary.

In my mind, a successful retirement requires not only a lot of years, but good years where you’re able to make the most of your time. If you’re physically limited by issues that could benefit from self-improvement or you’re tied down based on a loaded appointment schedule, you may not have the true freedom you were anticipating as a retiree.

3. How You Spend Your Time

Initially, I titled this section “Hobbies & Activities” and those are important time-fillers, but it’s all about how you spend your time.

Everyone needs something to do, and gaining 40-plus hours a week by retiring from a full-time job gives you a lot more time for whatever it is that you choose to do. There is only so much time in a day, and we’ll only get so many years of retirement. You can aim for more years by heeding my advice in the health and fitness section above, but the only certainties in life are death and maybe taxes, so to be successful in retirement, spend your time wisely.

What do you like to do? In retirement, you’ll have time to do that more often. I can’t promise that you will — some activities require a willing partner, for example, but the point is that you’ll have time to devote to all sorts of pursuits that you couldn’t find time for in your working years.

In The Purpose Code, Dr. Jordan Grumet talks all about — you guessed it — purpose. He differentiates between “Big P Purpose,” the anxiety-provoking feeling that we need some grandiose sort of calling in life, and “little p purpose,” which can be the simple day-to-day activities that sustain us and connect us to our communities.

You’re not likely going to cure cancer or negotiate peace in the Middle East, but it’s worthwhile to be pursuing some sort of purpose as part of a joyful retirement. Making life easier for your still-working spouse can be a purpose. Being available to help with your kid’s pre-calculus can be a purpose if you know pre-calculus (or are willing to relearn it) and just being there for their soccer or hockey games might be enough.

For me, a combination of intellectual and athletic pursuits, along with being a pretty good Dad, decent cook, and enthusiastic travel planner gives me plenty of purpose. Sprinkle in a bit of work around the house, some writing time, and the occasional daily Angry Birds Dream Blast session*, and I find that my days are pretty full.

4. Friends and Family

Friends and family isn’t just the name of a wireless discount plan; they’re what’s crucial to your retirement success. The people, not the cell phone plan.

Year by year, we’re becoming more isolated and lonely. We spend less time with one another when the workday is over. It’s happening at work, too, with more jobs becoming partially or fully remote. Jobs do remain a prominent source of social contact, especially for physicians (ok, maybe not you, pathologist). In retirement, people often realize how close they once were to their coworkers when they abruptly go from seeing them almost daily to seeing them almost never.

There’s plenty of data to support this increasing social isolation in the U.S.

From a paper by Kannan and Veazie, “Using the 2003-2020 American Time Use Survey, this study finds that, nationally, social isolation increased, social engagement with family, friends, and ‘others’ (roommates, neighbors, acquaintances, coworkers, clients, etc.) decreased, and companionship (shared leisure and recreation) decreased. Joinpoint analysis showed that the pandemic exacerbated upward trends in social isolation and downward trends in non-household family, friends, and ‘others’ social engagement.”

These aren’t new trends, though. They’ve existed for at least two decades. The advent of the internet and the placement of it in our pockets has somehow made us both more and less connected. Superficially, we email and text and interact in a myriad of other ways online, but at the expense of true face-to-face interaction.

Social isolation leads not only to poorer mental health, but also to worse physical health, including cardiovascular disease.

What’s a retiree to do? Find a way to replace the social interaction you may have gotten at work. Volunteer work is an easy choice, as you’re also helping your community and presumably feeling good about the work you do.

Maintain the friendships you have. Make new ones. Join new clubs or teams and say “yes” to invitations that you might have declined when you were busier. If possible, attempt to mend broken relationships with family members. Go to a conference; I’ll be there. Don’t spend all your time alone playing Angry Birds.

Retirement isn’t much fun as a solo project, and the science suggests you’ll live longer and be happier in retirement if you have quality close relationships with fellow humans.

5. An Open and Curious Mind

You may not have seen this one coming, and I don’t have the data to back it up. Advocating for an open and curious mind is based upon my personal experience as a father, friend, and five-year retiree.

There’s a saying that you can’t teach an old dog new tricks. This is simply untrue, according to veterinarian Krista Williams, who says “Older dogs are not as easily distracted as pups and can focus for longer periods of time. This ability to concentrate helps them learn new routines more easily.”

In that same vein, retirees are not young pups, and they’ve typically got fewer distractions than the working crowd. Retirment is prime time for learning new tricks. I recently took in the audiobook version of Ultralearning by Scott Young, who shares how he essentially took MIT’s entire computer science curriculum in one calendar year.

His approach to mastery of a subject is to dive into the deep end and swim in the pool all day, every day until you’re an amazing swimmer. That may not be my preferred approach, but I do indeed have the time to dig deep on topics that interest me, and retirees often discover entirely new avenues and activities that excite them. That is, if they are open-minded to them.

Older people tend to be “set in their ways,” is an easy story to tell yourself, and it keeps you from leaving your comfort zone. Plenty of growth and good times happen outside of your comfort zone, though. It’s a safe but uninspiring place to be.

I’ve heard the horror stories about electric cars. People getting stranded due to broken chargers, the tires wearing out every 10,000 miles, and garages and homes burning down. I read a lot about these issues and electric cars in general, and I learned that with improved battery technology, not driving like an F-1 race car driver, and a little route planning, these calamities are easily avoided.

We bought our first true EV (we already owned a plug-in hybrid) this summer. I could have listened to the naysayers and avoided an EV like the plague, but I’ve learned enough to become comfortable with my choice, and I look forward to spending nothing on gasoline and oil changes for our Kia EV6.

Fifteen years ago, I was close-minded to running. My wife signed me up for races, and I walked them. I got to like racewalking and became good enough at it that I walked a full marathon, jogging maybe a mile toward the end to hit my goal time of under 5 hours. After that, I started running, and it turned out to be a heck of a lot easier to jog at the same pace as a fast walker.  It would have been a lot easier to just start running from the get-go, but my stubbornness got the best of me.

Nowadays, I like to be more open-minded in various ways. I try to be less judgmental. I don’t know what other people are going through or why they make the decisions they make.

I still don’t like Aaron Rodgers, but maybe he had a good reason to say he was immunized when he was actually just taking some homeopathic concoction some quack cooked up. Okay, I still struggle, but I do believe having some empathy and compassion for people not named Aaron Rodgers can make life easier and open doors that might otherwise remain closed.

Some of the more miserable people I know are those who maintain fixed beliefs and can’t imagine how or why anyone could think differently. I like to minimize how upset I get and how often, so getting riled up over someone else’s opinions simply does not benefit me.

“Progress is not possible without change, and those who cannot change their mind cannot change anything.” – George Bernard Shaw
“It’s good to keep changing your mind. It shows you’re thinking. I’ll only stop changing my mind when I’m dead. And maybe not even then.” – John Marsden

If you maintain an open and curious mind, you may discover ways to earn more money with your investments or time, you may engage in new activities to keep you healthy and fill your time productively. You may find new and better friends. These are the things that, ultimately, will lead you to success in retirement.

* I just passed Angry Birds Dream Blast Level 6,725 as I write this, and it’s not a good habit, but it gives me the dopamine hits that Rovio Entertainment somehow knows that I need. If I hadn’t managed to give up this game and all games for Lent a few months back, I’d suspect I’m addicted, but I can quit at any time, I swear. Yes, I can sense your judgment. It’s fair. 🙂