What Factors Related to Overall Well-Being Make Retirees Happy?
Many economic studies of happiness in retirement focus on measures such as income and wealth; these studies assume that more money in retirement leads to better overall well-being. But economic well-being is only one aspect of overall happiness and life satisfaction.
This working paper (and the related issue in brief) examines two noneconomic indicators of well-being among retirees: retiree satisfaction and retirement well-being compared to pre-retirement well-being. The paper measures retiree satisfaction by analyzing responses to this question: “Would you say that your retirement has turned out to be very satisfying, moderately satisfying, or not at all satisfying?” Similarly, to evaluate their well-being in retirement, retirees were asked, “Thinking about your retirement years compared to the years just before you retired, would you say the retirement years have been better, about the same, or not as good?”
The paper finds that noneconomic factors, particularly the reason for retirement and the health of the retiree, have a larger effect on well-being than economic factors. The researchers also noted that retiree well-being for those participating in a defined-benefit (i.e., pension) retirement plan—which provides a lifetime annuity—is greater when compared to the well-being of retirees without a pension or only participating in a defined-contribution plan.