Proper preparation can lead to a happy retirement

Published 5:38 pm Wednesday, November 20, 2002

By Staff
Here's some information that may interest you: The happiest retirees are those who feel financially prepared for retirement.
This finding, from a study by Harris Interactive, a major polling firm, may not be shocking. After all, you would probably expect that retirees who feel financially prepared would be more content than those who are worried about outliving their income. But you might be surprised by another finding gleaned from the study: Retirement happiness is directly linked to the number of years you've been saving for retirement, rather than your net worth – although the two factors are certainly related.
Just how long do you need to save before you can feel you're financially prepared for retirement? In reality, there's probably no one "right" answer, because everyone has different goals for retirement.
Nonetheless, the Harris survey does point to some interesting numbers:
The lesson seems clear: Start saving for retirement as early as you can. By putting time on your side, you greatly increase your chances of enjoying your retirement years.
The Harris survey didn't just ask respondents about how long they had been saving and investing. Another question was designed to relate retirees' happiness with the type of investments they had accumulated.
The findings? The happiest retirees' investment portfolios were well diversified. Stocks made up of the bulk of these retirees' holdings, with smaller allocations in fixed-income securities and real estate. Apparently, maintaining a diversified array of investments helped contribute to the respondents' feelings of being well prepared for retirement.
The survey's results support many other studies that, over the years, have shown the value of diversification. But you can diversify your portfolio in many different ways. To determine which mix of investments is appropriate for you, consider the following:
There you have it: To be happy during retirement, you need to invest for many years beforehand, and you need to be properly diversified. Take action soon – the future will be here before you know it.

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