What really matters in retirement

By Liz Pulliam Weston
MSN Money

Watching your retirement accounts dwindle can make you feel panicky and out of control.

As your life savings evaporate, you may be contemplating working longer, saving more and living on less. Perhaps it’s all starting to seem a little overwhelming, frightening and unmanageable.

While it’s true that no one can control the stock market, let’s not forget that there are plenty of other aspects of your future retirement over which you do have some influence.

And many of those might be just as important as (or more important than) money.

The real measures of success
Robust health, close friends, warm family relationships and engaging activities are what really constitute a happy retirement, says Ralph “Jake” Warner, co-founder of Nolo Press, the legal self-help publisher.

Warner’s been singing this particular song for years, but until lately, it was tough to get people to listen. Check out your options.
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“A couple of years ago . . . everyone with a 401(k) plan was sure that they were about to be rich,” Warner said. Now, after a dose of bear market reality, Warner senses more people are receptive to his ideas.

“It's as if people figure that since they are unlikely to become filthy rich, they need to move on to retirement plan No. 2,” Warner said, “which involves embracing more homely virtues, like having good friends, good health and interesting things to do.”

Warner’s perspective comes from interviewing scores of contented retirees for his book, “Get a Life: You Don’t Need a Million to Retire Well,” first published in the mid-1990s and updated not long ago. The interviewees ranged from well-off seniors to some living just on Social Security checks.

Over and over the retirees told him: Money is good, but it takes a lot more to build a fulfilling retirement.

In fact, the single-minded pursuit of money during your working life can actually take the shine off your golden years. The stress, anxiety and single-minded focus, Warner said, can end up undermining your health, relationships and ability to pursue other interests.

Inspired by a father’s death
Who hasn’t heard of the hard-charging executive who retires only to die a few years later, done in by poor health, loneliness or boredom?

That, in fact, describes Warner’s father, whose death was the inspiration for Warner’s book.

And Warner’s book has been an inspiration for me. As someone who thinks and writes about money for a living, “Get a Life” reminds me that money is the means, not the end.

My own research underscores what Warner found. Back when the stock market was rocking and I was a daily news reporter, my colleagues and I queried dozens of retirees to find out what they thought of Warner’s thesis.

A few gave money more emphasis than Warner did, with some saying their retirements would be more stressful if they hadn’t saved as much in their working years.

But we heard the same things Warner did: Money isn’t everything.

So once you’ve got your financial retirement plan in place -- you’ve thought about your goals, started saving, created a diversified investment portfolio -- you might want to think about getting your life plan in place as well.

This may give you the feeling of control you’re lacking right now when it comes to your investments. And if Warner’s right, the work you do now that’s not related to finances may ultimately be more important to your happiness.

Good health
Obviously, some aspects of your health are beyond your control. Disease and accidents can strike the healthiest of us. But you can reduce your chances of serious problems in many ways: Eat right. Get enough exercise. Maintain a healthy weight. Minimize the effects of stress. Go for regular check-ups and health screenings.

Physical health is only part of the picture. Monitoring your mental and intellectual health is important, too.

For example, you can help stave off memory loss and other age-related mental problems by making it a habit to challenge your brain, said researcher Gary Small, director of the Center on Aging at the University of California, Los Angeles.

Doing puzzles, working on brain teasers and reading challenging books throughout your life can help keep your mind sharp and may even ward off Alzheimer’s, said Small, who recently wrote “The Memory Bible: An Innovative Strategy for Keeping Your Brain Young” (Hyperion, 2002).

All of the above can also help you ward off depression, a serious problem among the elderly, according to the National Institute of Mental Health. People 65 and older account for nearly 20% of all suicides, even though they make up just 13% of the population. These are preventable deaths, since medication and therapy are extremely effective at combating depression. If you have depressive tendencies, getting help now can prevent the problem from worsening as you age.

Good friends
Another good way to combat depression and social isolation is by cultivating a wide circle of friends. Yet most of us have a tougher time making friends as we get older. Our lives get busy, our habits get more ingrained, we become less flexible.

Happy retirees say it’s worth the effort. Good friends of all ages can be a huge asset in retirement.

The older friends are important as sounding boards and guides to what’s ahead. Friends our own age get our jokes and pop culture references, while younger friends give us fresh insights, keep us from getting too set in our ways -- and help prevent us from outliving all of our companions.

Warm family relationships
The stereotypical grandparent has a wallet full of grandchildren’s pictures and a bumper sticker that says “If I knew how much fun grandkids were, I would have had them first.”

But good relationships with grandkids typically require good, or at least cordial, relationships with the children’s parents. Most of the happy retirees I talked to also had warm connections with other family members, including spouses, siblings, cousins, aunts, uncles and nieces.

These relationships increase retirees’ feelings of belonging, well-being and stability in a world where friends can move away and life is constantly changing.

Warner himself is a big fan of family and recommends investing in good relationships whenever possible. That may mean mending an estrangement or helping to end a family feud for the sake of future peace.

Engaging activities
The allure of completely unscripted days, with no commutes, bosses to appease or deadlines to meet, pales rather quickly for many retirees.

As one senior gentleman told me, “You can only play so much golf.”

Almost without exception, the successful retirees I interviewed mentioned some activity, hobby or passion that kept their days interesting and gave them a reason to get going in the morning. Some pursued long-delayed dreams to write, paint or teach. Many volunteered. Others were consultants in their pre-retirement fields, or started new businesses.

A good number recommended retiring gradually -- switching to part-time work as a way of getting used to a new lifestyle before kissing the office goodbye.

Leaving a job can feel like losing your identity, one retiree told me. He was glad he had a few years to develop other interests on the side before accepting his gold watch.

The sudden switch from full-time work to full-time leisure can be devastating for many people, Warner agreed.

Warner’s father tried to become a volunteer after moving to a new area. But he had trouble fitting in with people who had been in the community for years. That’s why Warner recommends starting to volunteer well before retirement age, so you can make connections and be an invaluable member of a team before you give up your work identity.

Getting a real life
Warner’s book is full of other interesting ideas, such as the notion that brokerages and mutual fund companies are fueling Americans’ paranoia about not having saved enough for retirement. He asserts, as the title indicates, that $1 million portfolios aren’t necessary for most of us and that many retirees will be able to live on less than 70% of their pre-retirement incomes.

Whether or not you agree with everything Warner writes, his prescription for developing the non-financial side of retirement makes a lot of sense.

So think about what you can do, right now, to bolster your future happiness. And hold on to those thoughts the next time the Dow dips or you start worrying if your retirement funds will ever grow again.

“Who knows? Being a little poorer,” Warner said, “may even be good for some people.”

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

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