The fact that you need to be saving money for retirement isn't exactly news. But what are you actually saving for?
According to William Bernstein, a neurologist and co-founder of investment management firm Efficient Frontier Advisors, having a good idea of how you'll spend those post-work years is critical to how happy you'll be. As he says in the Wall Street Journal, "'Golf' is not a plan."
Bernstein provides a simple equation to predict how happy you'll be after leaving the workforce:
Retirement Happiness = [How Much You Dislike Your Job] x [How Much You Want to Do Something Else]
In Bernstein's opinion, you need both factors in order to be a happy retiree. Love your job? Then one of your factors is zero. Have no idea what your days will look like after retiring? There goes the other factor.
Of course, let's not discount the role retirement savings play in the happiness equation: We can't imagine you'd be thrilled if you were struggling to pay your bills every month. That's why it's so important to lay the groundwork for robust savings as soon as possible — so you can afford to leave a job you don't love or pursue the activities you do.
Still, your happiness is more complex than an account balance. If you adore what you're doing now, or you're at a loss for what you would rather do instead, you might not be ready to retire — or at least, you probably won't be happy once you do.
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