10 tips for a happy retirement

DECEMBER 27th, 2023

By Sun Life Staff

 Hoping for a happy retirement? These 10 tips (plus a bonus tip) can help. 

A few years ago, Sun Life commissioned a survey of retired people*. We asked them for their top tips for a happy retirement.  

Here’s the list, in ascending order of importance:

10. Don’t retire until you pay your debts.

9. Improve your financial literacy.  

8. Plan how you’ll spend your time.

7. Take full advantage of your employee pension plan. 

6. Have a financial plan. 

5. Find new hobbies to keep busy. 

4. Write a will. 

3. Live within your means. 

2. Start saving and investing early. 

1. Take care of your health. 

At the time, my retirement was far down the road. Now, I’m retired and looking at things through a different lens. So here’s what I think the top ten tips for a happy retirement are, coming from someone who has a fresh perspective on the topic. I’m going to start with the number-one tip for a happy retirement that didn’t even make the original list:

1. Keep your social network healthy

Harvard has been running an ongoing happiness survey for 85 years. They’ve found the biggest obstacle to happiness for retirees is not replacing the social connections they enjoyed at work. Those who fare best in retirement, says Harvard, find ways to keep up their social connections. 

Making connections at work is relatively easy. You go for coffee or lunch with someone in your department. You share vacation stories. You talk about your kids. But after you retire, it takes a bit more effort. You’ll have less in common with your friends from work – and you’ll have a different schedule. You’re no longer limited to working hours, but they still are.

So, it may be a good idea to expand your circle of friends. Look for areas of common ground with people who are also retired. You could take a class in a subject you enjoy; you’ll meet people interested in the same topic. If you volunteer for a cause you believe in, your fellow volunteers may share your commitment.

If you’ve downsized and moved recently, talk to your new neighbours. You may find several who are also in retirement. If any seem like potential friend material, invite them for coffee to get to know them better. Most retired people I’ve met are happy to make new friends.

2. Take care of your health

This seems self-evident, but I can’t stress it enough. Too many friends and relatives in my age group are in poor health; some have even died prematurely. The older I get, the more I value my good health, and the more I strive to maintain it. It’s all well and good to have plans for a happy retirement. But if your health fails, you may have to change your plans.

3. Improve your financial literacy

I’ve found it’s way easier to manage your income before you retire than after. Dealing with employment income is simple for most people: one job and maybe one side hustle to keep track of. But there are a lot more moving parts in retirement income. 

Know about your difference sources of retirement income, like: 

• the Canada or Quebec Pension Plan, 
• Old Age Security, 
• a company pension, 
• a registered retirement savings plan (RRSP), which you need to covert to a registered retirement income fund (RRIF) by December 31st of the year you turned 71, 
• a tax-free savings account (TFSA), and
• non-registered investments.

Each of these income sources has different withdrawal rules, tax implications and degrees of security. 

The best way to become financially literate is to read and ask questions of credible sources. “Credible” meaning your advisor, first and foremost. 

And don’t be shy about asking your advisor questions if you’re not clear about your options. That’s what you pay them for.  

You don’t have to become a financial expert, but it pays to understand your situation. After all, it’s your money and your future.

4. Plan how you’ll spend your time

Retirees joke about how much busier they are than when they were working. Maybe, but I know time passes just as quickly as it did before I retired. 

Sure, it’s great not to have to get up early to catch a train to work. But it turns out I’m happier with at least the semblance of a schedule. I still want the satisfaction of having accomplished something. But without externally imposed deadlines, I need to set my own. 

It's also true that the months and years fly by faster than they used to. Since retiring, I’ve become acutely aware that I don’t have an unlimited amount of time. There are only so many years left to learn to tap dance, for example, or to see the northern lights. And there’s even less time to spend with the surviving members of my parents’ generation. If I want anything important to happen, I’ve got to put it in my calendar.

So, how will you spend your time? There are many scenarios where you may still be busy. You may be caring for an ailing partner. Or helping with your grandchildren. Otherwise, the only limits are your imagination and your bank account. (And it may surprise you how much cheaper some things are for seniors.) 

One key to health and happiness is an active mind and body. That could mean learning a new language or attending a university course. It could also mean regular long walks, or taking up tai chi, pickleball, or even senior hockey.

Decide what’s most important to you and plan your time to reflect those priorities.

5. Don’t retire until you’ve paid your debts

This one is maybe a bit aspirational. It’s ideal, but if you can’t manage it, don’t beat yourself up. Aim to clear your credit cards and pay off your car and student loans before you retire. But today, many people are carrying mortgage debt past retirement age. Does that mean they have to keep slogging for many more years? Not necessarily. 

I would rephrase this tip as follows: 

Retire when: 

(a) You’ve cleared off your credit cards (and can consistently keep them clear), loans, lines of credit and other debts.

(b) The end of your mortgage has arrived or is at least within sight. In the meantime, your payments are low enough to manage within your retirement budget.

Once you’re within a few years of your target retirement date, be very wary of taking on new debt. You don’t want to add long-term responsibilities. That said, credit can be tough to get after you stop working. That’s true even if you own your home outright or have other assets. So, consider keeping an existing line of credit, or applying for one before you retire. That way, you’ll have access to funds in case of an emergency.

Also, having life insurance in retirement can be beneficial. Talk to an advisor and see if it makes sense for your situation. They can also help you develop a realistic retirement spending budget.

6. Find new hobbies 

This one is straightforward. If there’s something you’ve always wanted to do, now may be the time to do it. And while it’s not a hobby, as such, you could volunteer for a cause close to your heart. Many charities depend on the time and energy of retired volunteers.

7. Live within your means 

If your spending doesn’t exceed your income, you’ll be less likely to lie awake at night worrying about money. However, don’t be afraid to live up to your means. After a lifetime of saving, it may go against the grain to spend more freely. 

So, with your advisor’s help, draw up a realistic picture of what you can afford to spend. Then spend it! You don’t have to throw money around carelessly, but you can live a little. Go out for dinner now and then. Replace that ratty old sofa. Buy something nice for your kids. (Or yourself.) You worked hard for your money, so enjoy it now, while you can.

8. Write a will

Will having a will make you happy? I think so¬, if it means you know you’ve provided for the people you love. Once you realize that you’ll need a will sooner rather than later, you’ll be more likely to write one. 

9. Have a financial roadmap

I hope you see by now that none of this stuff will happen by accident. If you want to be well prepared for and happy in your retirement, you need a financial roadmap. I’ll say it again: talk to your advisor.

10. Start saving and investing early

By the time you read this, “early” is probably not so early any longer. Still, it’s not too late. Even five or 10 years of serious saving before you retire can make a difference. Your advisor can help you find the most efficient ways to save.

And here’s a tip I’m removing from the top 10. It’s still important, so think of it as a bonus:

11. Take full advantage of your employee pension plan

If you’re still working for an employer with a pension plan, take advantage of it. If your employer matches some of your contributions, that’s free money. If you haven’t retired yet, it’s not too late to join your employer’s plan. If you’re about to retire with an employee pension, get some expert advice from your pension provider. You’ll want to think about how best to balance the size of your monthly payment with any available guarantees. It’s a major decision, so get all the advice you can. In the end, though, the choice is yours alone.

*From the 2016 Sun Life Financial Retirement Now Report.

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.