If Money Can't Buy Happiness, What Can it Buy? (Week 6)

 

 

 

As much as we’d like it to, money can’t buy happiness.  Yet, we save over our entire working career so that we will be “OK” in retirement.  In fact, it takes a lot of money to be “OK” in retirement.  A recent Northwestern Mutual survey found that American’s “magic number” to retire is $1.26 million (https://news.northwesternmutual.com/planning-and-progress-study-2025).  That’s a lot of money.  Yet, the average retirement savings are only about $330,000.  No wonder this same survey also found that 1 in 2 Americans worry that they will outlive their savings. 

If money can’t buy happiness, what can it buy?  It can buy us options and time.  During my last 10 working years, I diligently contributed to my Health Savings Account (HSA).  Since I’ve been fortunate to be relatively healthy over those years, I was able to cover my out-of-pocket health expenses without tapping those HSA funds, thereby allowing me to build a healthy (no pun intended) balance.  I now have the option to use these funds to cover any unexpected health care costs I incur during my retirement. Around the same time, I started funding my HSA, I used the cash value of my variable universal life insurance policy to fund an Asset Based Long Term Care Life Insurance Policy from Lincoln National.   If you are turning 65 this year like I did, you have a 70% chance of incurring a long-term care expense during your lifetime.  If you don’t have some kind of long-term care coverage, you will have few options on how you manage this expense.  More importantly, your options for assistance with this need will also be limited.  The bottom line is that part of feeling “OK” during retirement is having enough money to give you options not only on how you spend your money each month, but how you manage those unexpected expenses that we will all incur.

The other thing money can buy you is time.  Time to do the things you’ve always wanted to do but didn’t have time to do while you were busy building that retirement nest egg.  Ironically, one of my biggest concerns about retirement is that I will have too much time.  How will I fill each day now that I don’t have an office to go to or steady supply of zoom meetings to attend?  Thus far, between the birth of my second grandchild and the fact that my wife and I are (finally) getting ready to move into our new place, I’ve had plenty on my plate.  And while the St. Pete Half-Century Softball Club’s next season doesn’t start until October, they organize a pickup game every Monday, Wednesday, and Friday morning at 9:00.  If you’re in the area, grab your mit and come join us.  Yes, it’s hot, but we have the good sense to find ways to shorten the games in the summer.  And this summer the club spent some of its reserves on buying a big electric fan to put in the dugout.  But let’s get back to the concept that money can buy you time.  The bottom line is that because I’ve not only diligently saved for retirement, but I’ve also used annuities to create my own personal pension, I now have the time to do things like play softball three days a week.  In addition, I also have the option to work on my terms – should I chose to work at all.  And that’s one of the reason’s I fully expect to be “OK” during retirement.

Perhaps the real question is if money buys you options and time, does that in itself lead to happiness?  I’m quite sure that question is too deep for this blog.  But here’s one thing I’m fairly sure about.  It’s far easier to be happy (and less stressed) when you have options and time than when you don’t.