Retirement Wellness: Toward A More Complete Framework

By Anna Rappaport
Anna Rappaport is an internationally-recognized business leader and actuary who has numerous awards, recognizing her accomplishments as an actuary, a futurist, an executive and a trailblazer. The framework and ideas presented here are her own.

While many Americans are focused on providing a financially successful retirement for themselves, I believe that we also should also be aware of the importance of retirement wellness.

The U.S. Consumer Financial Protection Bureau defines financial well-being as “a state of being wherein you:

  • Have control over day-to-day, month-to-month finances;
  • Have the capacity to absorb a financial shock;
  • Are on track to meet your financial goals; and
  • Have the financial freedom to make the choices that allow you to enjoy life.”

Therefore retirement planning must begin to focus on more than money.

A Stanford Center on Longevity project with support from the Society of Actuaries recently drew up a road map for thinking about living long and living well in America. Results identified three domains for successful living in old age:  healthy living, financial security and social engagement.

Photo by on Unsplash

My own approach to retirement wellness includes these three domains, but I also believe it’s critical to add two more: having suitable housing, and being passionate about something.  In overview, here are the key elements in my Framework for Retirement Wellness:

  • Having a financial structure to build on. Before retirement, it’s most important to have and keep the right job, become banked, and participate in the mainstream financial system.  As well, having an appropriate emergency fund and keeping debt under control are crucial.  These strategies create a solid foundation on which to build retirement saving.
  • Having sufficient financial resources and a system to manage retirement drawdowns. While it may seem obvious, there is still wide disagreement about what it means to have sufficient money to retire.  I propose that one should accumulate enough financial resources to ensure a satisfactory The Society of Actuaries recently reported retirees can be resilient and adaptable, and many would be satisfied with something less than maintaining their pre-retirement lifestyle. Others will not. Your retirement wellness framework should also involve reasonable risk protection, as well as a method of drawing down your resources gradually enough to support your expected activities and interests over your and partner’s, if any, remaining lifetimes.
  • Being aware of what it takes to implement the framework. Many people quit working without setting goals for what might be two decades or more in retirement. Others anticipate being able to work longer than they do in fact, and fewer actually do work during retirement than they expected to. Moreover, some retirees find their pre-retirement expectations are not met, according to studies by the Society of Actuaries. For all these reasons, good retirement planning should include a number of goals – financial, social, health management, housing – and find ways to make these goals come true, while incorporating activities that create a sense of personal worth and engagement.
  • Focusing on ways to pursue passions and activities that bring meaning to one’s life. Retirement wellness including doing things that make one feel worthwhile and important, and having a passion can help define what’s important. Some people focus on family and grandchildren, travel, creative activities, or volunteer work. I have volunteered to work in the profession where I spent my career, and this is an important part of my retirement.  While pursuing any particular passion may depend on one’s economic resources, having something that brings meaning to your days is a universal need.
  • Retaining and strengthening one’s network of personal contacts. Social isolation is a risk to health and longevity, so retirement wellness must work to maintain social interactions. Sometimes community centers and churches facilitate programs and local activities; often colleges and universities offer free (or modest cost) classes to retirees. Some neighborhoods encourage “aging in place,” reducing the need for older persons to move into assisted living and nursing homes. Intergenerational contact is especially important, to keep a healthy perspective on new ideas and new opportunities.
  • Maintaining the discipline to protect one’s health. Retirement wellness requires that we do the best we can to adopt healthy behaviors, and eight action steps toward this end are outlined here. Of course some people will already be frail by the time they retire, so health investments require maintenance as well as efforts to improve. Others can enhance their health markedly by sleeping well, eating well, exercising moderately, and avoiding certain known risky behaviors (smoking, drinking in excess, etc).
  • Having affordable housing that supports life activities and personal needs. Many older people own their homes, which can be their largest source of expenditures as well as their largest asset. And local transportation, safety and accessibility can also influence how easy it is to engage in social interactions and activities. Those with health limitations may need to adapt the home or move, to ensure that they can live with their limitations. Even when healthy, many retirees don’t want to spend time cleaning and repairing a house, driving to the supermarket, and gardening, and when one becomes frail, these can be even more burdensome.

All this requires much deliberation and thinking! What to do next? If you’re young, start on a path to financial wellness and start saving early – if possible, via a company 401(k) plan. Though retirement may seem a long time away, it will be here sooner than you think! If you’re middle-aged or older, understand that retirement can last longer than you might think.  Use the actuarial longevity calculator to help you estimate how long you need to plan for. Also an increasing number of employers are now aware that financial wellbeing is crucial for their employees, and they are starting to provide help at the workplace.

Paying attention and staying focused are very important in this big endeavor.  For more reading on retirement wellness, Benefits Quarterly had a special section on this topic in its 4th Q, 2016 issue.


This piece was originally posted on December 16, 2016, on the Pension Research Council’s curated Forbes blog. To view the original posting, click here.
Views of our Guest Bloggers are theirs alone, and not of the Pension Research Council, the Wharton School, or the University of Pennsylvania.