The key drivers of happiness in retirement revealed

When entering your retirement years, you may be left wondering: What does it take to achieve true happiness in this new chapter of life?

In an effort to uncover the secret to retirement happiness, independent research house YouGov and Australia’s leading retirement income provider, Challenger joined forces to conduct a study of over 1000 Australians over 60 to delve into the intricacies of retirement happiness as part of their Retirement Happiness Index.

The study uncovered that indulging in activities and hobbies emerges as the crowning jewel of retirement satisfaction, scoring a lofty 79.5, closely trailed by mental well-being at 77.6. However, when it comes to physical health (61.5) and financial security (56.3) there is some room for improvement to boost overall well-being.

A resounding 66 per cent of Australians over 60 expressed that freedom from financial worries would significantly amplify their retirement joy. Moreover, a staggering 70 per cent believe that a guaranteed income during retirement would be a key catalyst for happiness, with over 40 per cent firmly in agreement.

Overall, good physical and mental health in addition to having enough money to enjoy retirement were revealed to be the most important elements to ensure a happy retirement.

Challenger Chief Executive, Customer, Mandy Mannix, explained why it so important to understand what drives happiness in retirement.

“We’ve launched the Retirement Happiness Index to explore new dimensions of retiree satisfaction. It is fantastic to see majority of Australians are enjoying or expecting a happy, healthy retirement,” Mannix said.

“It is another way that Challenger looks to deliver on its purpose of providing customers with financial security for a better retirement. A better retirement is about so much more than finances but having a degree of confidence that your savings will last plays an important role.

“Almost half of respondents identify financial security as an area they wish to improve, highlighting the work we must do as an industry to safeguard retirees’ golden years and foster a better, happier retirement.

“Reassuringly retirees felt their happiness would improve with access to the right financial education, as well as support through financial advice and a regular income to enjoy a safe, stable retirement. This would empower retirees with the confidence to spend and capacity to pursue their passions.”

While many Aussies revealed that they are “enjoying or expecting a happy, healthy retirement”, there were notable apprehensions surrounding the pressures associated with the cost of living.

2 in 3 Australians over 60 revealed that the rising cost-of-living and affordability concerns impacted their confidence that they would have enough money for retirement.

Those who haven’t received financial advice were more likely to feel that the cost of living significantly impacts their financial security (39 per cent), compared to those who have received financial advice (25 per cent).

“We know the fear of outliving savings is a growing concern among older Australians,” Mannix said.

“Providing retirees with the confidence to convert their retirement savings into a regular income can materially improve their quality of life, supporting better retirement outcomes as well as benefiting broader society and the Australian economy. “